PAXAR CORP, 8-K, 1995-07-14

PAXAR CORP
8-K, 1995-07-14
COMMERCIAL PRINTING

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 29, 1995
- --------------------------------------------------------------------------------

PAXAR Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

New York 0-5610 13-5670050
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)

275 North Middletown Road, Pearl River, New York 10965
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (914) 735-9200
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)

<PAGE> 2

Item 2. Acquisition or Disposition of Assets.

On June 29, 1995, Monarch Acquisition Corp. (the "Buyer"), a
corporation in which Paxar Corporation (the "Company") owns a 49.5% interest,
completed the acquisition of Monarch Marking Systems, Inc. and related companies
("Monarch") from Pitney Bowes Inc. and certain related companies ("Pitney
Bowes"). The other owners of the Buyer are Odyssey Partners, L.P., which has a
49.5% interest in the Buyer, and Thomas Loemker, a Director of the Company, who
has a 1% interest in the Buyer. The Buyer paid $127 million to Pitney Bowes in
consideration for Monarch. The $127 million used to purchase Monarch was
comprised of: (i) $30 million consisting of $15 million paid by each of the
Company and Odyssey in consideration for their respective interests in the
Buyer; (ii) $303,030 from Mr. Loemker in consideration for his interest; and
(iii) the balance of approximately $97 million of the purchase price plus
approximately $3 million in acquisition costs from a private placement of the
Buyer's debt securities. The holders of the aforementioned debt securities are
without recourse to the Company, Odyssey or Mr. Loemker in the event of default
by Buyer.

Monarch is the leading manufacturer and marketer of marking equipment
and supplies in the United States. Monarch also sells, directly and through
distributors, marking equipment and supplies in 75 other countries around the
world. Monarch manufactures, markets and distributes (i) tabletop label
dispensers and handheld, mechanical labeling guns which print pressure-sensitive
(i.e., adhesive-backed) price and other identification labels and affix them
onto merchandise for retailers (collectively, "conventional labelers"), and (ii)
electronic bar code printers ("bar code printers"), which are used in a wide
range of retail and industrial applications, including inventory management and
distribution systems. Monarch also manufactures and markets supplies used in
both its conventional labelers and bar code printers and provides extensive
service to its installed base of machines. The breadth of Monarch's machine,
supplies and service offerings allows it to meet most of its customers' marking
needs.

At Closing, the Company and Odyssey executed a Stockholders' Agreement
(the "Stockholders' Agreement"). The Stockholders' Agreement provides that the
Buyer's Board of Directors shall be comprised of eight members, three of whom
are designated by the Company ("Company Directors"), three of whom are
designated by Odyssey ("Odyssey Directors"), with the remaining two Directors
selected by a majority of the Company Directors and the Odyssey Directors. It is
anticipated that Mr. Loemker will serve as Chairman of the Board of Directors
and, until a suitable replacement can be obtained, as the initial chief
executive officer of Monarch. The Company and Odyssey have agreed that Mr.
Loemker will not be considered a director designated by either the Company or
Odyssey. Substantially all significant corporate actions of the Buyer will
require the approval of a majority of the Buyer's Board of Directors, including
the affirmative vote of at least two of the Directors designated by the Company
and at least two of the Directors designated by Odyssey.

-2-
<PAGE> 3

The Stockholders' Agreement provides that during calendar year 1997 the
Company and Odyssey shall each have the single right to offer to sell all but
not less than all of their respective shares of the Buyer to the other. If the
parties are unable to agree upon the terms of sale for the shares offered, the
offering party may place the Buyer up for sale.

At anytime commencing January 1, 1998, independent of the rights set
forth in the previous paragraph, the Company and Odyssey shall have the right,
exercisable on one occasion each, to offer to sell all, but not less than all,
of their respective shares of the Buyer to the other. The Stockholders'
Agreement provides that the terms of sale of the shares shall be established by
up to three different appraisers, if necessary. If the parties are unable to
agree upon the terms of the sale of the shares offered, the Buyer must be placed
up for sale.

On one occasion on or after July 1, 1999, the Company shall have the
right to purchase all but not less than all of Odyssey's shares of the Buyer.
The Stockholders' Agreement provides that the terms of the Company's offer to
buy Odyssey's shares shall be established by up to three different appraisers if
necessary. If the Company does not agree with the final appraised value, the
Buyer must be placed up for sale.

Any sale of the Buyer pursuant to the aforementioned conditions shall
take place under the direction of the Board of Directors. Neither the Company
nor Odyssey shall have the right to acquire Buyer if it is so placed up for sale
without the consent of the other.

Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.

(a) Financial Statements of Business Acquired. It is impracticable for
the Registrant to file the financial information of the business acquired
hereunder at this time and such information will be filed by amendment to this
Form 8-K within sixty days from the date hereof.

(b) Pro-forma Financial Information. It is impracticable for the
Registrant to file the pro-forma financial information required hereunder at
this time and such information will be filed by amendment to this Form 8-K
within sixty days from the date hereof.

2.1 Omnibus Purchase and Sale Agreement dated June 6, 1995 by and
between Pitney Bowes Inc., Monarch Marking Systems, Inc.,
Pitney Bowes Marking Systems Ltd., Pitney Bowes International
Holdings Inc., Pitney Bowes France S.A. and Monarch
Acquisition Corp. Exhibits and Schedules to this Agreement
have been omitted, but will be furnished supplementally by
the Registrant to the Commission upon request.

-3-

<PAGE> 4

10.1 Stockholders' Agreement dated June 29, 1995 among Monarch
Acquisition Corp., Paxar Corporation and Odyssey Partners,
L.P.

-4-
<PAGE> 5
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

PAXAR Corporation

Registrant

Dated: July 13, 1995 By: /s/ Jack R. Plaxe
-------------------
Jack R. Plaxe, Vice
President and Chief
Financial Officer

-5-
<PAGE> 6
EXHIBIT INDEX

10.1 Stockholders' Agreement dated June 29, 1995 among Monarch
Acquisition Corp., Paxar Corporation and Odyssey Partners,
L.P.

<PAGE> 1
EXHIBIT 2.1

OMNIBUS PURCHASE AND SALE AGREEMENT

dated as of June 6, 1995

among

PITNEY BOWES INC.,

MONARCH MARKING SYSTEMS, INC.,

PITNEY BOWES MARKING SYSTEMS LTD.,

PITNEY BOWES INTERNATIONAL HOLDINGS INC.,

PITNEY BOWES FRANCE S.A.

and

MONARCH ACQUISITION CORP.

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1 - PURCHASE AND SALE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 Subsidiary Purchase Agreements . . . . . . . . . . . . . . . . . . . . . 6
1.3 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.4 Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . . 8
1.5 Allocation of Consideration . . . . . . . . . . . . . . . . . . . . . . 13
1.6 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.7 Exchange Rate Determinations . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE 2 - LIABILITIES, OBLIGATIONS AND INDEMNIFICATION . . . . . . . . . . . . . . . . 16
2.1 Liabilities and Indemnity . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 Indemnification Procedure. . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE 3 - EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.1 Employees and Employee Benefits . . . . . . . . . . . . . . . . . . . . 23
3.2 Subsidiary Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE 4 - REPRESENTATIONS. WARRANTIES AND COVENANTS OF PBI . . . . . . . . . . . . . . 27
4.1 Organization and Corporate Power . . . . . . . . . . . . . . . . . . . . 27
4.2 Due Authorization; No Breach . . . . . . . . . . . . . . . . . . . . . . 28
4.3 Organization, Corporate Power and Capital Stock of Affiliates . . . . . 30
4.4 Tax Returns and Other Tax Matters . . . . . . . . . . . . . . . . . . . 34
4.5 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.6 Location of Personal Property . . . . . . . . . . . . . . . . . . . . . 37
4.7 Title and Condition of Assets . . . . . . . . . . . . . . . . . . . . . 38
4.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.9 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.10 Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . 40
4.12 Litigation and Proceedings . . . . . . . . . . . . . . . . . . . . . . . 44
4.13 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.14 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.15 Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.16 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.17 Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.18 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.19 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.20 Employee Loans and Interests in Affiliates' Assets . . . . . . . . . . . 51
</TABLE>

i
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<TABLE>
<S> <C>
4.21 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.22 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.23 Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.24 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.25 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . 53
4.26 Material Misstatements Or Omissions . . . . . . . . . . . . . . . . . . . . . 55
4.27 Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE 5 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER . . . . . . . . . . . . . . . . 59
5.1 Organization and Corporate Power . . . . . . . . . . . . . . . . . . . . . . . 59
5.2 Due Authorization; No Breach . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.4 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.5 Investment Intention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.6 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

ARTICLE 6 - SELLERS' CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 62

ARTICLE 7 - BUYER'S CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

ARTICLE 8 - TERMINATION; SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.2 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

ARTICLE 9 - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2 PBI's Obligations and Closing Deliveries . . . . . . . . . . . . . . . . . . . 71
9.3 Buyer's Obligations and Closing Deliveries . . . . . . . . . . . . . . . . . . 72

ARTICLE 10 - POST CLOSING OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1 Taxes and Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.2 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.3 Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.4 Preservation of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.5 Transitional Use of Trademarks and Corporate Name . . . . . . . . . . . . . . 83
10.6 Non-Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

ARTICLE 11 - PUBLICITY; CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
11.1 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
11.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

ARTICLE 12 - NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

ARTICLE 13 - BROKERAGE FEES; FEES AND EXPENSES OF THE PARTIES . . . . . . . . . . . . . . . . . 94
</TABLE>

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<TABLE>
<S> <C>
13.1 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
13.2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

ARTICLE 14 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
14.1 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 95
14.2 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
14.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
14.5 Amendments; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
14.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
14.7 Governing Law and Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
14.8 Bulk Sale Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
14.9 Insurance Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
14.10 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . 98
14.11 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
14.12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
14.13 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
</TABLE>

EXHIBITS

Exhibit A - Forms of Subsidiary Purchase Agreements
Exhibit B - Form of Instrument of Assumption
Exhibit C - Form of German Transitional Services Agreement
Exhibit D - Form of French Transitional Services Agreement
Exhibit E - Form of Pitney Bowes Purchasing Agreement (Equipment and Supplies)
Exhibit F - Form of Specialty Ink Agreement
Exhibit G - Form of Dictaphone Supply Agreement
Exhibit H - Form of French Contribution Agreement
Exhibit I - Forms of Documents Regarding Transfer of Base Materials Business
Exhibit J - Form of Lease for Lamination and Service Bureau Operations
Exhibit K - Form of French Lease
Exhibit L - Form of PBI License Agreement
Exhibit M - Form of Distributorship Agreement
Exhibit N - Form of PVC License Agreement
Exhibit O - Form of Seestrom License Agreement

SCHEDULES

3.1(c) Monarch Pension Plans, etc.
3.1(e) Monarch Severance Benefits
3.1(g) Monarch United Kingdom Pensions
4.1(c) Organization of Asset Sellers
4.3(a) Charter Documents
4.3(b) Capital Stock of the Affiliates

iii
<PAGE> 5

4.3(c) Stock Holdings of the Affiliates
4.4 Tax Matters
4.5(a) Real Property
4.5(b) Real Property Not to Be Transferred
4.5(c) Property Disposed of After 12/31/94
4.6 Location of Personal Property
4.7(a) Liens
4.7(b) Assets Not Transferred
4.8 PBI's Consents
4.9 Compliance with Laws
4.10 Permits and Licenses
4.11 Environmental Conditions
4.12 Litigation
4.13 Intellectual Property
4.14 Contracts
4.15 Employee Relations
4.16 Conditions of Employment and Employee Benefits
4.17 Insurance Coverage
4.18 Bank Accounts
4.19 Directors and Officers
4.20 Employee Loans
4.22 Financial Data
4.23 Customers and Suppliers
4.24 Other Liabilities
4.25 Certain Changes and Events
4.27 Permitted Transactions
5.2 Buyer's Liens
5.3 Buyer's Consents
10.6(d) Impermissible Investments

iv
<PAGE> 6

OMNIBUS PURCHASE AND SALE AGREEMENT

OMNIBUS PURCHASE AND SALE AGREEMENT (the "Agreement"), made as
of June 6, 1995, among PITNEY BOWES INC., a Delaware corporation ("PBI"),
MONARCH MARKING SYSTEMS, INC., a Delaware corporation ("Monarch"), PITNEY BOWES
MARKING SYSTEMS LTD., a Delaware corporation ("PB Marking"), PITNEY BOWES
INTERNATIONAL HOLDINGS INC., a Delaware corporation ("PBIH"), PITNEY BOWES
FRANCE S.A., a corporation organized and existing under the laws of the French
Republic ("PB France"), and MONARCH ACQUISITION CORP., a Delaware corporation
("Buyer").

W I T N E S E T H:

WHEREAS, PBI owns one thousand (1,000) shares of common stock,
par value $1.00 per share (the "Monarch Shares"), representing one hundred
percent (100%) of the issued and outstanding shares of capital stock, of
Monarch; and

WHEREAS, PB Marking, PBIH, PB France, Pitney Bowes Deutschland
GmbH, a corporation organized and existing under the laws of the Federal
Republic of Germany ("Monarch Germany") and Monarch Marking Systems Australia
Pty. Limited, a corporation organized and existing under the laws of the
Commonwealth of Australia ("Monarch Australia"), are each a wholly-owned direct
subsidiary of PBI; and

WHEREAS, Monarch Marking Systems LTD, a corporation organized
and existing under the laws of the Canadian Province of Ontario ("Monarch
Canada"), is a wholly-owned direct subsidiary of PBIH; and

WHEREAS, Pitney Bowes Location, S.A., a corporation organized
and existing under the laws of the French Republic ("Monarch France"), is a
wholly owned

<PAGE> 7

subsidiary of PB France (PB Marking, PBIH, Monarch Canada, Monarch Australia, PB
France and Monarch Germany are collectively referred to herein as the "Selling
Subsidiaries" and individually as a "Selling Subsidiary"); and

WHEREAS, PB Marking owns Ninety-Nine (99) shares of common
stock, par value pound sterling.1.00 per share, representing ninety-nine
percent of the issued and outstanding shares of capital stock, of Pitney Bowes
Marking Systems Ltd. ("Monarch United Kingdom") and PBIH owns One (1) share,
representing one percent (1%) of the issued and outstanding shares of capital
stock of Monarch United Kingdom (the "UK Shares"); and

WHEREAS, Monarch owns One Million Two Hundred Thirty-Three
Thousand Eight Hundred Fifty-Three (1,233,853) shares of common stock, par value
HK $10.00 per share, representing ninety-nine and ninety-nine one hundreds of
one percent (99.99%) of the issued and outstanding shares of capital stock of
Monarch Service Bureau Limited ("Monarch Hong Kong"), and PB Marking owns Ten
(10) shares, representing one one-hundredth of one percent (.01%) of the issued
and outstanding shares of capital stock of Monarch Hong Kong (the "Hong Kong
Shares"); and

WHEREAS, PB France owns two thousand four hundred and
ninety-four (2,494) shares of common stock, par value FF one-hundred per share
(the "Present French Shares") representing in excess of ninety-nine percent (all
but seven (7) shares) of the issued and outstanding shares of capital stock of
Monarch France; and

WHEREAS, prior to or simultaneously with the consummation of
the sale, assignment, transfer and conveyance to Buyer of the Purchased Business
(as hereinafter defined) as contemplated by this Agreement, the assets currently
owned by PB France relating to the Business (as hereinafter defined) will be
transferred to Monarch France, so

2
<PAGE> 8

that at the Closing (as defined in Section 9.1 hereof), Monarch France
will own all such assets now owned by PB France and PB France will own an
additional number of shares of capital stock of Monarch France (the "Additional
French Shares") which will be issued in connection with such contribution of
assets to Monarch France (the Present French Shares and the Additional French
Shares are collectively referred to as the "French Shares"; and the French
Shares together with the Monarch Shares, the UK Shares and the Hong Kong Shares
are sometimes collectively referred to hereinafter as the "Shares"); and

WHEREAS, Monarch owns One Hundred Fifty Seven Thousand Four
Hundred and Five (157,405) out of One Hundred Fifty Seven Thousand Four Hundred
and Nine (157,409) shares of the outstanding capital stock of Monarch Marking
Systems de Mexico, S.A. de C.V., a Mexican corporation ("Monarch Mexico"), with
four shares of the capital stock of Monarch Mexico being held by Thomas S.
Karth, Daniel Teich, Ernest Rillman & Rafael Caraza, respectively, Ninety Nine
Thousand Nine Hundred Ninety-Nine (99,999) out of One Hundred Thousand (100,000)
shares of the outstanding capital stock of Monarch Marking Systems New Zealand
Limited, a New Zealand corporation which is currently inactive ("Monarch New
Zealand"), with one share of the capital stock of Monarch New Zealand being held
by Peter Doogue, Four Hundred and Twelve Thousand, Four Hundred Forty-Five
(412,445) shares, representing fifty-five percent (55%) of the issued and
outstanding shares of capital stock of Monarch Marking Systems (S.E.A.) Pte.
Ltd., a Singapore private company ("Monarch Singapore"), and shares of the
capital stock of Monarch Marking System S/A-Indcstria E Comercio ("Monarch
Brazil"), representing between ten and fifteen percent (10-15%) of the issued
and outstanding shares of capital stock of Monarch Brazil; and

3
<PAGE> 9

WHEREAS, Monarch is engaged, directly and through subsidiaries
and affiliates, in the business of manufacturing and marketing bar code printing
and data collection systems, handheld mechanical labelers and marking services,
labels, tags and supplies, for both retail and industrial uses, and related
businesses, in the United States, Mexico, Canada, England, Australia, Italy,
Sweden, Germany, France, Hong Kong, Singapore and, through a dealer network, in
other international locations; and

WHEREAS, the Selling Subsidiaries are engaged, in each of their
respective countries, in various aspects of the foregoing businesses of Monarch
(the foregoing businesses of Monarch, together with such activities of the
Selling Subsidiaries, Monarch United Kingdom and Monarch France which relate to
the businesses of Monarch, are hereinafter collectively referred to as the
"Business"); and

WHEREAS, Monarch Australia, Monarch Canada and Monarch Germany
(these three Selling Subsidiaries are sometimes collectively referred to as the
"Asset Sellers"), each own certain assets relating to the Business; and

WHEREAS, upon the terms and conditions of this Agreement, Buyer
is willing to purchase and PBI is willing to sell, all of the right, title and
interest of PBI in and to the Monarch Shares; and

WHEREAS, upon the terms and conditions of this Agreement, Buyer
is willing to purchase and PB Marking and PBIH are willing to sell all of the
right, title and interest of PB Marking and PBIH in and to the UK Shares and the
Hong Kong Shares which they respectively own; and

WHEREAS, upon the terms and conditions of this Agreement, Buyer
is willing to purchase or cause a wholly-owned subsidiary of Buyer (a
"Purchasing Subsidiary")

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<PAGE> 10

to purchase and PB France is willing to sell all of the right, title and
interest of PB France in and to the French Shares; and

WHEREAS, upon the terms and conditions of this Agreement, Buyer
is willing to purchase or cause a Purchasing Subsidiary to purchase, and PBI and
PBIH are willing to cause each of the Asset Sellers to sell, all of the
respective right, title and interest of such Asset Seller in and to the
Purchased Assets (as defined in Section 1.2).

NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1 - PURCHASE AND SALE OF SHARES AND ASSETS

1.1 Transfer of Shares.

(a) Transfer of Monarch Shares. Subject to the terms
and conditions of this Agreement, at the Closing, PBI shall sell, assign,
transfer and convey to Buyer, and Buyer shall purchase, acquire and accept from
PBI, all of the right, title and interest of PBI in and to all of the then
issued and outstanding Monarch Shares.

(b) Transfer of UK Shares. Subject to the terms and
conditions of this Agreement, at the Closing, PB Marking and PBIH shall sell,
assign, transfer and convey to Buyer or a Purchasing Subsidiary designated by
Buyer, and Buyer shall or shall cause the Purchasing Subsidiary to purchase,
acquire and accept from PB Marking and PBIH, all of the right, title and
interest of PB Marking and PBIH in and to all of the then issued and outstanding
UK Shares.

(c) Transfer of French Shares. Subject to the terms and
conditions of this Agreement, at the Closing, PB France shall sell, assign,
transfer and convey to Buyer or a Purchasing Subsidiary designated by Buyer, and
Buyer shall or shall cause the Purchasing

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<PAGE> 11

Subsidiary to purchase, acquire and accept from PB France, all of the right,
title and interest of PB France in and to all of the then issued and outstanding
French Shares.

(d) Transfer of Hong Kong Shares. Subject to the terms
and conditions of this Agreement, at the Closing, PB Marking shall sell, assign,
transfer and convey to Buyer or a Purchasing Subsidiary designated by Buyer, and
Buyer shall or shall cause the Purchasing Subsidiary to purchase, acquire and
accept from PB Marking, all of the right, title and interest of PB Marking in
and to its Hong Kong Shares.

1.2 Subsidiary Purchase Agreements. (a) Subject to the
terms and conditions of this Agreement and the terms and conditions of each
Subsidiary Purchase Agreement (as defined in Section 1.2(b)), at the
Closing, PBI and PBIH shall cause each Asset Seller to sell, assign, transfer
and convey to Buyer or a Purchasing Subsidiary designated by Buyer, and Buyer
shall or shall cause such Purchasing Subsidiary to purchase, acquire and accept
from such Asset Seller, all of the respective right, title and interest of such
Asset Seller in and to all of such Asset Seller's assets existing as of the
Closing which are reflected on the December 31, 1994 balance sheets referred to
in Section 4.22 hereof or are used or held for use in the Business (the
"Purchased Assets"), including without limitation all machinery, equipment,
accounts and notes receivable, refunds, deposits and prepaid expenses (including
without limitation prepaid insurance premiums), contract rights, real property,
improvements, leasehold estates and leasehold improvements, fixtures, books and
records, intellectual property rights, claims, licenses and permits (to the
extent transferable) and other assets, properties, rights and interests of
whatever kind or nature, personal, tangible and intangible, except for assets,
properties, rights and interests that (i) are not reflected on the December 31,
1994 balance sheet referred to in Section 4.22 hereof and

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<PAGE> 12

(ii) are used primarily or held for use primarily by the businesses and
operations of such Asset Seller which do not comprise part of the Business (the
"Excluded Assets").

(b) Within two weeks of the execution and delivery of this
Agreement, (i) PBI and PBIH shall cause each Asset Seller the stock of which it
currently owns to enter into, and (ii) Buyer shall or shall cause a Purchasing
Subsidiary to enter into, separate agreements (collectively the "Subsidiary
Purchase Agreements") which separate agreements will, subject to the exceptions
provided for therein, provide for the purchase and sale of the Purchased Assets
of the Asset Sellers. The Subsidiary Purchase Agreements will be substantially
in the forms of Exhibit A1 - A3 attached hereto.

(c) Prior to or simultaneously with the Closing, PBI shall
cause the assets relating to the Business which are owned by PB France and which
are to be owned by Monarch France to be transferred by PB France to Monarch
France, all in a manner which is not inconsistent with this Agreement or any
Subsidiary Purchase Agreement.

1.3 Consideration. As consideration for the sale, assignment,
transfer and conveyance to Buyer and the Purchasing Subsidiaries of the Shares
and the Purchased Assets (collectively, the "Purchased Business"), Buyer and the
Purchasing Subsidiaries shall (a) pay to PBI or, to the extent provided in each
Subsidiary Purchase Agreement, to a Selling Subsidiary, for the account of PBI
and each such Selling Subsidiary, in full the aggregate amount of One Hundred
Twenty-Seven Million United States Dollars (US$127,000,000.00) (the "Purchase
Price"), which shall be subject to adjustment in accordance with Section 1.4 and
Section 1.7 hereof, and (b) assume, hold harmless and indemnify, or cause to be
assumed, held harmless and indemnified, from and against all Assumed Liabilities
(as defined in Section 2.1(b) hereof) each PBI Indemnified Person (as defined in
Section 2.1(a)),

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<PAGE> 13

in accordance with Section 2.1 hereof. The Purchase Price and any amount
payable under Section 1.4(a) hereof shall be paid in full, without any
adjustment, deduction, dilution, set-off or counterclaim, at the Closing to PBI
in United States dollars (unless otherwise provided in the Subsidiary Purchase
Agreements) by wire transfer of immediately available funds to such accounts as
PBI or each such Selling Subsidiary shall designate; provided, however, that
with respect to any portion of the Purchase Price to be allocated towards the
payment by the Buyer for the French Shares in accordance with Section
1.5 hereof, such payment shall be made by wire transfer directly to PB
France in French Francs in accordance with Section 1.7 hereof. Monarch,
PB Marking and PBIH respectively agree that payment to PBI of the Purchase Price
and any amount payable by Buyer and the Purchasing Subsidiaries under Section
1.4 hereof in accordance with this Agreement shall discharge Buyer's or
any Purchasing Subsidiary's obligations to Monarch, PB Marking and PBIH with
respect thereto. PB France agrees that payment to PB France of its allocated
portion of the Purchase Price in accordance with Section 1.5 hereof shall
discharge Buyer's or any Purchasing Subsidiary's obligations to PB France.

1.4 Adjustment to Purchase Price. (a) PBI shall deliver to
Buyer, not later than five (5) business days prior to the Closing, on both a
consolidated and consolidating basis, the balance sheet, income statement and
statement of cash flow of the Purchased Business as of, and for the period
beginning January 1, 1995 and ended on, the close of business on the last day of
the most recent calendar month immediately preceding the day of the Closing (the
"Estimated Financial Statements"). The Estimated Financial Statements shall be
prepared in accordance with generally accepted accounting principles applied
consistently with the consolidated balance sheet of the Purchased Business as of

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<PAGE> 14

December 31, 1994 set forth in Schedule 4.22 hereto, and shall present
fairly the financial position of the Purchased Business as of the end of such
month and the results of the Purchased Business' operations and cash flows for
the period then ended, except as otherwise set forth in Section 1.4(h).
If the total assets less the total liabilities of the Purchased Business,
without regard to assets or liabilities retained by PBI or a Selling Subsidiary
after the Closing (the "Book Value"), of the Purchased Business as set forth on
the balance sheet included in the Estimated Financial Statements (the "Estimated
Book Value") exceeds the total assets less the total liabilities of the
Purchased Business as reflected on the December 31, 1994 balance sheet set forth
in Schedule 4.22 hereto, as the same is adjusted pursuant to Section
1.4(h) below (the "December 31 Book Value"), by more than one percent
(1%), at the Closing, in addition to the Purchase Price, the Buyer shall pay to
PBI, for the account of PBI and each Selling Subsidiary, in accordance with
Section 1.3 hereof, an amount equal to such excess. If the Estimated
Book Value is less than the December 31 Book Value by more than one percent
(1%), the Buyer shall deduct from the amount of the Purchase Price paid at the
Closing an amount equal to the difference between the Estimated Book Value and
the December 31 Book Value.

(b) Buyer shall deliver to PBI, not later than ninety (90)
days after the Closing, on both a consolidated and consolidating basis, an
audited balance sheet of the Purchased Business as of the close of business on
the day of the Closing, prior to any purchase accounting adjustments (the
"Closing Balance Sheet"). Except as set forth in Section 1.4(h) below,
the Closing Balance Sheet shall be prepared in accordance with generally
accepted accounting principles applied consistently with the financial
statements set forth in Schedule 4.22 hereto (provided that the Closing
Balance Sheet must be prepared in

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<PAGE> 15

accordance with generally accepted accounting principles and need not be
prepared consistently with the financial statements set forth in Schedule
4.22 to the extent and only to the extent, if any, such financial
statements were not prepared in accordance with generally accepted accounting
principles), and shall be certified by a "Big Six" or other firm of independent
certified public accountants reasonably satisfactory to PBI as presenting
fairly, in all material respects, the financial position of the Purchased
Business as of the Closing, except as provided in Section 1.4(h).

(c) Buyer will cooperate with PBI and PBI's independent
certified public accountants and will ensure that PBI and PBI's independent
certified public accountants will be able to review the Closing Balance Sheet as
soon as practicable after they are delivered to PBI and, in connection
therewith, have full access to (i) the personnel and records of the Purchased
Business and (ii) all personnel and work papers of Buyer's independent certified
public accountants related to the audit of the Closing Balance Sheet and any
prior audits of the Purchased Business. Within thirty (30) days following PBI's
receipt of the Closing Balance Sheet, PBI will notify Buyer in writing whether
it concurs with the Closing Balance Sheet or whether it has any objections
thereto, stating in reasonable detail the basis for any such objections;
provided, that the only bases for objection shall be (i) non-compliance with the
standards set forth in Section 1.4(b) for the preparation of the Closing Balance
Sheet and (ii) computational errors. If PBI fails to notify Buyer of any such
objections in writing within such thirty (30) day period, PBI will be deemed to
have concurred with the Closing Balance Sheet.

(d) If PBI does not concur with the Closing Balance Sheet and
timely notifies the Buyer of its objections in accordance with Section
1.4(c), Buyer and PBI shall

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<PAGE> 16

cause their respective independent certified public accountants promptly to
consult with each other in good faith and to exercise reasonable efforts to
attempt to resolve differences in their respective analyses of the Closing
Balance Sheet within ten (10) days after PBI notifies Buyer of its objections.
If such independent certified public accountants are unable to resolve their
differences within such ten (10) day period, the matter shall be promptly
referred to a mutually satisfactory "Big Six" or other accounting firm who shall
resolve such differences within ten (10) days after the matter is referred to it
on the basis of the standards set forth above in Section 1.4(b). The
determination of such accounting firm will be final, binding and conclusive on
the parties.

(e) Each party shall bear the fees and expenses of its
respective independent certified public accountants incurred in performing
services pursuant to this Section 1.4. If a third accounting firm is selected to
resolve differences between PBI and the Buyer in accordance with Section 1.4(d),
PBI and the Buyer shall each pay one-half of the fees and expenses of such firm
in performing services pursuant to Section 1.4(d).

(f) Subject to the terms and conditions of this Agreement, the
following adjustments and payments shall be made:

(i) If the Book Value of the Purchased Business as set
forth on the Closing Balance Sheet as concurred with by PBI or as finally
resolved in the manner set forth above (the "Closing Book Value") exceeds the
December 31 Book Value, the Purchase Price shall be increased by the amount of
such excess.

(ii) If the Closing Book Value is less than the
December 31 Book Value, the Purchase Price shall be reduced by the amount by
which the December 31 Book Value exceeds the Closing Book Value.

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<PAGE> 17

(iii) If the aggregate amount paid at the Closing by the
Buyer in accordance with Section 1.3 and Section 1.4(a) exceeded the final
Purchase Price, as adjusted pursuant to this Section 1.4(f), PBI shall promptly
pay to Buyer, by wire transfer of immediately available funds to an account
designated by Buyer, an amount equal to such excess. If the aggregate amount
paid at the Closing by the Buyer in accordance with Section 1.3 and Section
1.4(a) was less than the final Purchase Price, as adjusted pursuant to this
Section 1.4(f), Buyer shall promptly pay to PBI, for the account of PBI and each
Selling Subsidiary, in accordance with Section 1.3 hereof, an amount equal to
the difference between such final Purchase Price and the aggregate amount so
paid by the Buyer at the Closing. Any payment made pursuant to this Section
1.4(f)(iii) shall be accompanied by the payment of interest on the amount so
paid, from and including the date of the Closing to but excluding the date of
the payment, calculated at the prime, reference, base or comparable rate of
interest announced by Chemical Bank in New York from time to time during the
period beginning on the date of the Closing and ending on the date of payment.

(g) Any adjustment made pursuant to this Section 1.4 shall, at
the time such adjustment is made, be appropriately allocated to the Shares of
Monarch, Monarch United Kingdom, Monarch Hong Kong or Monarch France or to the
Purchased Assets of one or more Asset Sellers, as the case may be, in which the
change in Book Value occurred.

(h) Notwithstanding anything in this Agreement to the contrary,
the following adjustments shall be made to the Book Value as of December 31,
1994, to the Estimated Book Value and to the Closing Book Value in order to
reflect the intention of the parties that certain items are not intended to
result in a purchase price adjustment pursuant to this Section 1.4:

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<PAGE> 18

(i) Buyer shall not be required to pay any additional
amount in respect of real property that was disposed of since
December 31, 1994 or that is disposed of after the date hereof
and on or prior to the Closing, and PBI shall not be permitted
to remove the net proceeds therefrom (after deducting all
reasonable and necessary expenses of such disposal) from
Monarch or any Affiliate by way of a pre-Closing dividend or
otherwise; and

(ii) All balance sheet calculations for purposes of
this Section 1.4 shall be made without regard to
liabilities and assets that are to be retained or assumed by
PBI, whether by virtue of not being transferred pursuant
hereto, or as a result of provisions hereof providing for such
retention or assumption (for example, no reserve for retiree
medical benefits in the United States and Canada shall be taken
into account as of December 31, 1994 or as of the date of the
Estimated Balance Sheet or the Closing Balance Sheet in making
the calculations contemplated by this Section 1.4).

(i) Buyer shall be entitled to specify on any day that is at
least three business days prior to the Closing that PBI cause Monarch and each
Affiliate to retain up to an aggregate of $1.2 million in cash at the Closing
(over and above any cash resulting from sales of real estate) in order that such
entities will have sufficient current assets to meet their current liquidity
needs as of the Closing; provided however, that any such additional cash shall
be included in any purchase price adjustment contemplated by this Section 1.4.

1.5 Allocation of Consideration. The total consideration for
the Purchased Business (which is the sum of the Purchase Price (including any
adjustments to the Purchase Price in accordance with Section 1.4 and Section
1.7) and the amount of the Assumed

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<PAGE> 19

Liabilities, and is hereinafter referred to as the "Total Consideration") shall
be allocated to this Agreement and the Subsidiary Purchase Agreements and the
Shares and the portion of the Purchased Business described herein and therein as
PBI and Buyer shall agree prior to the Closing. PBI and Buyer shall reflect or
cause their Selling Subsidiaries or Purchasing Subsidiaries, respectively, to
reflect their respective portion of the Purchased Business in their books and
for tax reporting purposes in accordance with and based upon such allocation.

1.6 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, PBI, Monarch, PB Marking, PB France, PBIH and Buyer shall each
use all commercially reasonable efforts, and cause the Asset Sellers and the
Purchasing Subsidiaries, as the case may be, to use all commercially reasonable
efforts, to execute and deliver or cause to be executed and delivered all
agreements, documents and instruments, to take or cause to be taken all
appropriate actions and to do or cause to be done all things necessary, proper
or advisable to consummate and make effective at the Closing the transactions
contemplated by this Agreement and the Subsidiary Purchase Agreements, and to
cooperate with one another in connection with any and all of the foregoing,
including without limitation (a) obtaining promptly all waivers, permits,
consents, authorizations, acquiescence and approvals from, and to effect all
registrations, filings and notices with or to, any Person (as defined in Section
4.3(b)) (collectively "Consents") necessary or appropriate to be obtained under
(i) any note, bond, mortgage, indenture, deed of trust, lease, license,
Intellectual Property (as defined in Section 4.13) agreement or other instrument
or obligation, (ii) any judgment, order, writ, injunction, award or decree, or
(iii) any federal, state, local, municipal or foreign statute, law, ordinance,
rule or regulation, including without limitation

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<PAGE> 20

filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Fair Trading Act of 1973 and Council Regulation
(EEC) 4064/89 required in connection with the sale of the UK Shares (the "UK
Acts"), notification in Germany to the Federal Cartel Office, compliance with
the Investment Canada Act, and authorization by the French Ministry of the
Economy of direct investments in France pursuant to Decree No. 89-938 of
December 29, 1989 relating to financial relations with foreign countries (the
"French Exchange Control Law"), and (b) the defense by any party hereto who is
subject to any investigation, suit, action, claim or other proceeding or
litigation which challenges this Agreement or any Subsidiary Purchase Agreement
or which could in any way prevent or delay the consummation of the transactions
contemplated hereby or thereby.

1.7 Exchange Rate Determinations. The parties acknowledge that
they intend that the aggregate Purchase Price for the Purchased Business shall
be the United States dollar equivalent as of the date hereof of the Purchase
Price set forth in Section 1.3, as adjusted pursuant to Section 1.4. In
furtherance of this intention, in addition to any adjustments to the Purchase
Price pursuant to Section 1.4, the following adjustments and payments shall be
made:

(a) If by reason of a change in exchange rates, the United
States dollar equivalent of a payment on account of a Purchase Price, as
adjusted in accordance with Section 1.4 of this Agreement, to be made in a
currency other than United States dollars under this Agreement or a Subsidiary
Purchase Agreement by Buyer and/or any Purchasing Subsidiary to PBI, PB France
or an Asset Seller at the Closing, as determined in accordance with Section
1.7(c) hereof as of the date of this Agreement (a "U.S. Dollar Price"), exceeds
the United States dollar equivalent of such Purchase Price, as adjusted in
accordance with

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<PAGE> 21

Section 1.4 of this Agreement and as determined in accordance with Section
1.7(c) hereof as of the business day immediately preceding the Closing (a
"Closing Purchase Price"), the Purchase Price to be paid in United States
dollars at the Closing under this Agreement shall be increased by an amount
equal to such excess.

(b) If by reason of a change in exchange rates, a
Closing Purchase Price exceeds a U.S. Dollar Price, the Purchase Price to be
paid in United States dollars at the Closing under this Agreement shall be
reduced by an amount equal to such excess.

(c) In this Agreement, the United States dollar
equivalent for any currency other than United States dollars will be determined
by reference to the spot currency rate of exchange (bid side, if bid and asked
prices are quoted) for such currency as quoted by Bankers Trust Company as of
noon New York Time on the business day which is three business days prior to the
Closing or such other date as of which such calculation is required.

ARTICLE 2 - LIABILITIES, OBLIGATIONS AND INDEMNIFICATION

2.1 Liabilities and Indemnity.

(a) Subject to the terms and conditions of this Agreement,
effective as of the Closing, Buyer shall indemnify, hold harmless and defend,
and hereby releases, PBI, the Selling Subsidiaries, any subsidiaries or
affiliates of PBI or the Selling Subsidiaries or any present and future
directors, shareholders, officers, employees, attorneys, agents, contractors,
consultants and representatives of PBI, a Selling Subsidiary or any subsidiary
or affiliate of any thereof, and the successors, transferees and assigns of any
thereof (collectively the "PBI Indemnified Persons"), from and against, and
shall reimburse them for, any and all direct or indirect indebtedness,
investigations, suits, actions, proceedings,

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<PAGE> 22

litigation, judgments, orders, writs, injunctions, awards, decrees, claims,
liabilities, obligations, losses, costs, expenses (including, without
limitation, remediation expenses and other costs of response under Environmental
Laws), levies, imposts, duties, deficiencies, assessments, charges, allegations,
demands and damages (whether currently known or unknown) of any kind or nature
whatsoever, including without limitation, all legal fees and other expenses
incurred in connection with enforcing this indemnity or with defending,
preparing to defend, settling or investigating any third party action or claim
or governmental action, claim or proceeding (collectively, "Liabilities")
related to or arising from (i) the Assumed Liabilities (as defined in Section
2.1(b) hereof), (ii) any breach of any representation, warranty or
covenant of, or any misstatement or omission by, the Buyer or a Purchasing
Subsidiary in this Agreement, a Subsidiary Purchase Agreement or any document,
exhibit, agreement, instrument, written statement, certificate or schedule
furnished or to be furnished to a PBI Indemnified Person pursuant to the terms
of this Agreement or a Subsidiary Purchase Agreement, or (iii) any third party
claims with respect to the Purchased Business, other than a third party claim
relating to an Excluded Liability or a Liability or other matter for which PBI
is obligated to indemnify a Buyer Indemnified Person (as defined in Section
2.1(c) hereof) pursuant to this Article 2 or that PBI has otherwise
agreed to assume pursuant to this Agreement or any Subsidiary Purchase
Agreement, regardless of (A) when such claims arose or arise, (B) by whom
asserted, (C) whether the facts on which any such claims are based occurred
prior or subsequent to the Closing, (D) whether any such claims are asserted
prior or subsequent to the Closing, and (E) whether known or unknown, fixed or
unfixed, asserted or unasserted, choate or inchoate, liquidated or unliquidated,
secured or unsecured, matured or unmatured, accrued, absolute, contingent or
otherwise,

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<PAGE> 23

including without limitation any and all claims with respect to environment,
health, safety, personal injury, property damage or employment claims arising
out of contracts, product liability, merchantability or fitness for any
particular purpose of goods or conformity of goods to contractual requirements.
The right to be indemnified and held harmless set forth in this Section
2.1(a) shall survive the Closing.

(b) Effective as of the Closing, Buyer and the Purchasing
Subsidiaries shall assume, and thereafter perform and discharge as and when due,
only the following liabilities and obligations of the Asset Sellers, as the same
shall exist at the Closing (collectively, the "Assumed Liabilities"): (i) the
liabilities of such Asset Sellers relating to the Business to the extent and in
the amounts set forth on or properly reserved against in accordance with
generally accepted accounting principles on the Closing Balance Sheet; (ii) all
liabilities and obligations of the Asset Sellers accruing and to be performed
after the Closing under Contracts that were assumed by the Buyer or a Purchasing
Subsidiary at the Closing; and (iii) all other liabilities expressly to be
assumed by Buyer or a Purchasing Subsidiary under this Agreement or a Subsidiary
Purchase Agreement. Except for the Assumed Liabilities, Buyer shall not assume
and shall not be obligated to discharge or perform any claim, indebtedness,
pledge, guarantee, liability or obligation of any kind existing prior to the
Closing, whether secured or unsecured, known or unknown, absolute, accrued or
contingent, whatsoever of the Asset Sellers arising from any matter whatsoever,
including any other business or activity of the Asset Sellers or the
consummation of the transactions contemplated hereby (collectively, the
"Excluded Liabilities"). Excluded Liabilities shall also be deemed to include
any liabilities that accrue to Buyer or its subsidiaries as a result of
employees of PB France who were employed in the Business but are being retained
by PB France. The

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<PAGE> 24

Asset Sellers shall retain all Excluded Liabilities and shall fully discharge
the Excluded Liabilities as and when due.

(c) Except as to any Assumed Liabilities, subject to the terms
and conditions of this Agreement, effective as of the Closing, PBI shall
indemnify, hold harmless and defend Buyer, any subsidiaries and affiliates of
Buyer and any directors, shareholders, officers, employees, attorneys, agents,
contractors, consultants and representatives of Buyer or any subsidiary or
affiliate of Buyer, and the successors, transferees and assigns of any thereof
(collectively, the "Buyer Indemnified Persons"), from and against, and shall
reimburse them for, all direct and indirect Liabilities related to or arising
from (i) the Excluded Liabilities; (ii) any breach of any representation,
warranty or covenant of, or any misstatement or omission by, PBI, Monarch or any
Selling Subsidiary in this Agreement, the Subsidiary Purchase Agreements or in
any document, exhibit, agreement, instrument, written statement, certificate or
schedule furnished or to be furnished to a Buyer Indemnified Person pursuant to
the terms of this Agreement or a Subsidiary Purchase Agreement; (iii) any
liability or other obligation expressly retained or assumed by PBI pursuant to
this Agreement or any Subsidiary Purchase Agreement; (iv) any and all
Environmental Claims or Environmental Conditions arising out of or in connection
with the Base Materials Facility located at Kohnle Drive, Miamisburg, Ohio,
whether arising before or after the Closing, but excluding any Liabilities
arising out of or in connection with any Environmental Claims or Environmental
Conditions caused by the Buyer subsequent to the Closing, (v) any of the
Environmental Claims, Environmental Conditions or other matters set forth on
Schedule 4.11; and (vi) any other Liabilities, whether known or unknown as of
the Closing, arising from Environmental Claims or Environmental Conditions
resulting from activities of or

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<PAGE> 25

existing on properties of Monarch or PBI or any of their respective affiliates
on or prior to the date of the Closing; provided, however, that this Section
2.1(c)(vi) shall survive only until the fifth anniversary of the Closing (except
as to Liabilities arising out of Environmental Claims or Environmental
Conditions as to which the notice required to be delivered pursuant to Section
2.2 shall have been delivered on or before such date, in which case the Claim
(as defined in Section 2.2 hereof) which is the subject of such notice
shall continue to survive and remain a basis for indemnity as to the related
Claim until such Claim is finally resolved or disposed of).

(d) The obligations of PBI to indemnify the Buyer Indemnified
Persons for Liabilities arising from Environmental Claims or Environmental
Conditions shall not extend (i) to Liabilities that are the sole result of
Environmental Conditions caused exclusively by a Buyer Indemnified Person or an
affiliate or subsidiary thereof or that portion of Liabilities that arise from
or are the result of Environmental Conditions exclusively caused by a Buyer
Indemnified Person or an affiliate or subsidiary thereof; (ii) to remedial or
similar activities that are not reasonably necessary or appropriate to comply
with the requirements of Environmental Laws; (iii) to the repair, replacement,
or upgrade of equipment or the decommissioning, decontamination or disposal of
equipment or inventory or to the alteration or change of manufacturing
processes, in each case to the extent that such activities are not reasonably
necessary or appropriate in order to comply with the requirements of such
Environmental Laws as may be in effect on the date of the Closing; (iv) to
remedial actions or measures to remove or otherwise abate asbestos-containing
materials that were not friable on the date of the Closing; and (v) to the
internal costs and overhead of the Buyer Indemnified Persons arising from their
oversight of remedial activities conducted by PBI,

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including wages, salaries and benefits of employees, and internal expenses
related to photocopying and production or reproduction of documents and
materials.

2.2 Indemnification Procedure. Subject to the last sentence of
this Section 2.2, the obligation of Buyer or PBI, as applicable (the
"Indemnifying Party"), to indemnify, hold harmless, defend and reimburse the
other party (the "Indemnified Party", which with respect to PBI shall also
include all PBI Indemnified Persons and with respect to the Buyer shall also
include all Buyer Indemnified Persons) under Section 2.1 hereof with respect to
any claim for which such indemnification is sought (a "Claim") is conditioned
upon receiving from such Indemnified Party written notice of such Claim,
promptly after such Indemnified Party becomes aware of such Claim; provided that
any delay in giving such notice shall not release an Indemnifying Party from its
obligations under this Article 2 except to the extent and only to the extent
that such Indemnified Party was prejudiced by such delay. The Indemnifying Party
shall at its sole expense defend, contest, settle or otherwise protect against
any Claim (including without limitation by taking reasonably necessary or
appropriate action to remediate) with legal counsel or other appropriate
consultants or experts (collectively, "Experts") of its own selection that are
reasonably satisfactory to such Indemnified Party. The Indemnified Party shall
have the right, but not the obligation, to (i) elect to defend, contest, settle
or otherwise protect against such claims with Experts of its own choice, (ii)
participate in the defense, contest, settlement or other protection of such
Claim with Experts of its own choice, and (iii) assert any and all defenses,
crossclaims or counterclaims it may have; provided, however, that such election,
participation and assertion shall be at the Indemnified Party's sole cost and
expense, notwithstanding anything in this Agreement to the contrary, unless (x)
the Indemnified and Indemnifying Parties have agreed

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<PAGE> 27

otherwise, (y) representation of both parties by the same Experts would be
inappropriate due to actual or potential differing interests between them or (z)
the Indemnifying Party fails to take reasonably necessary or appropriate action
and employ appropriate Experts that are reasonably satisfactory to the
Indemnified Party within a reasonable period of time. The Indemnifying Party
shall not be liable for any settlement of a Claim effected without its prior
written consent (which shall not be unreasonably withheld, delayed or
conditioned). The Indemnifying Party shall not settle any Claim without the
relevant Indemnified Party's prior written consent (which shall not be
unreasonably withheld, conditioned or delayed) unless the settlement includes an
unconditional general release of such Indemnified Party from all Liabilities
that are the subject matter of the proceeding. The Indemnified Party shall
cooperate, and shall cause each other Indemnified Party to at all times
cooperate, in all reasonable ways with, make (subject to the assertion of
attorney-client and other applicable privileges) its respective relevant files
and records available for inspection and copying by, and make its employees
available or otherwise render reasonable assistance to, the Indemnifying Party
in its defense, contest, settlement or protection of any Claim subject to
indemnification hereunder. Notwithstanding anything in this Agreement to the
contrary, as a condition precedent to any Indemnified Party's right to be
indemnified or held harmless with respect to any Claim based on a breach of a
representation or warranty, the written notice required under the first sentence
of this Section 2.2 with respect to such Claim must be received by the
Indemnifying Party prior to the time such representation or warranty ceases to
survive under this Agreement in accordance with Section 14.9. In
connection with any remedial or investigative activities required to be
undertaken by PBI under this Agreement, (i) the Buyer Indemnified Persons shall
allow PBI and its Experts to have reasonable access

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<PAGE> 28

to the property at reasonable times in order to carry out PBI's investigative
and remedial responsibilities; (ii) PBI shall inform the affected Buyer
Indemnified Persons of all substantive developments with respect to such
remedial or investigative activities on at least a quarterly basis; and (iii)
PBI will accept reasonable proposals from any Buyer Indemnified Person to modify
any remedial plan prepared by PBI or its Experts; provided that PBI will not be
required to make modifications to such remediation plans if such modifications
(x) would significantly increase PBI's costs of such remediation or
investigation unless reasonably necessary or appropriate to comply with
Environmental Laws, or (y) are not reasonably necessary or appropriate to comply
with the requirements of Environmental Laws and if the failure to make such
modifications will not have a material impact on the normal conduct of the
Purchased Business.

ARTICLE 3 - EMPLOYEES

3.1 Employees and Employee Benefits

(a) Employee Retention. Effective as of the Closing,
Buyer shall cause Monarch and Monarch United Kingdom to offer to continue the
employment of each of their respective employees employed as of the Closing,
including those on short-term or long-term disability and those on workers'
compensation (collectively the "Employees"), in an equivalent or more senior
position and with wages and benefits (other than a defined benefit plan, profit
incentive plan, absentee policy, retiree medical plan and equivalent medical
plan) comparable to or greater than those currently enjoyed by each such
Employee for a period of not less than sixty (60) days from the date of this
Agreement, but in no event less than thirty (30) days from the Closing (the
"Employee Retention Period"); provided, however, that this sentence shall not be
applicable with respect to senior executive officers who report to the

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<PAGE> 29

highest ranking officer (including such highest ranking officer) of Monarch,
Monarch United Kingdom, Monarch France or any of their subsidiaries. With
respect to a medical plan, Employees will be covered under a competitive medical
plan offered by Buyer immediately upon Closing. During the Employee Retention
Period, such employment shall be subject to termination only for cause
(including failure to perform adequately the duties assigned to an Employee, but
not including reductions in Monarch's or Monarch United Kingdom's respective
workforces).

(b) Service Crediting. For a period of one year after the
Closing, Buyer shall cause Monarch to accept and credit all employees of
Monarch, for purposes of eligibility and vesting (but not benefit accrual) under
all benefit plans and compensation practices, all previous service recognized by
Monarch for benefit and compensation purposes.

(c) Monarch Pension Plan and other Defined Benefit Pension
Plans. Prior to the Closing, PBI shall cause Monarch to transfer to PBI, and PBI
shall accept, the sponsorship of the Monarch Pension Plan, the status as settlor
under the trust agreement pursuant thereto and all obligations and liabilities
with respect to such Plan. Prior to the Closing, PBI shall cause each Affiliate
(which solely for purposes of this Section 3.1, includes any subsidiary
thereof), PB France and each Selling Subsidiary to transfer to PBI, and PBI
shall accept, sponsorship of any other defined benefit, supplemental or Code
Section 415 excess, pension plan maintained thereby that covers any employee of
the Business, the status as settlor under any funding arrangement pursuant
thereto and all obligations and liabilities with respect to each such Plan,
except for plans described in Schedule 3.1(c). Neither PBI nor any pension plan
maintained by PBI shall recognize any service with Buyer

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<PAGE> 30

for any purpose. All Employees will become fully vested in their benefit under
the Monarch Pension Plan as of the Closing. Any Employee who, as of the Closing,
has satisfied the age and service requirements for an early retirement subsidy,
shall be entitled to the same such subsidy (rather than being considered a
terminated vested participant) upon commencing receipt of a pension under the
Monarch Pension Plan.

(d)(i) Retiree Welfare Obligations. Prior to the Closing, PBI
shall cause each Affiliate, PB France and each Selling Subsidiary to transfer to
PBI, and PBI shall accept, any and all present or future obligations or
liabilities of any Affiliate, PB France or any Selling Subsidiary (or any
predecessor) to make any payments to or with respect to any former employee of
any Affiliate, PB France or any Selling Subsidiary (or any predecessor) pursuant
to any retiree medical benefit or other retiree "welfare plan" (as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")). PBI shall assume such obligations only to the extent that any such
employee or former employee has satisfied the eligibility requirements for such
benefits as of the Closing (the "Retiree Welfare Obligations").

(ii) PBI shall continue to provide all benefits under the
Retiree Welfare Obligations to each person who has retired from any Affiliate,
PB France or any Selling Subsidiary as of the Closing. Any individual who has
not retired as of the Closing shall be eligible for medical coverage under
Buyer's medical plan while employed by Buyer (or a subsidiary of Buyer) and
shall become eligible for benefits under the Retiree Medical Obligations from
PBI upon retirement from Buyer (or such subsidiary). Any such individual who
retires between the date this Agreement is signed and the Closing, but who
becomes employed by Buyer (or such subsidiary) within three (3) months after the
Closing, will be

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<PAGE> 31

covered by Buyer's medical plan as primary payor and PBI's plan as secondary
payor during the course of such employment provided if such individual
terminates coverage under PBI's plan for failure to pay premiums, such coverage
will not be reinstated in the future.

(iii) Nothing in this Agreement shall limit PBI's ability to
amend or terminate retiree medical benefits, except that PBI shall not amend,
reduce, place additional conditions on the receipt of, or otherwise adversely
affect any person's entitlement to the benefits under paragraph (d)(ii) above
except pursuant to an overall amendment to the Retiree Welfare Obligations of
general applicability to all participants.

(e) Severance. Except with respect to non-U.S. employees as may
otherwise be provided by a Subsidiary Purchase Agreement, Monarch shall be
obligated to provide severance benefits to all employees of the Affiliates
pursuant to the written terms described in Schedule 3.1(e). Prior to the
Closing, PBI shall cause each Affiliate, PB France and each Selling Subsidiary
to transfer to PBI, and PBI shall accept, any other present or future
obligations or liabilities of any Affiliate, PB France or any Selling Subsidiary
to make (or provide) any severance, salary continuation or other similar
payments (or benefits) to or with respect to any present or former employee of
any Affiliate, PB France or any Selling Subsidiary (or any predecessor) on
account of the present or future termination of their employment, including any
such payments (or benefits) pursuant to written or oral employment contracts or
understandings in effect on or before the Closing, other than those described in
Schedule 3.1(e).

(f) Effective as of the Closing, to the extent required by law,
Buyer shall cause Monarch France to continue to be subject to the Collective
Bargaining Agreement for Metallurgical Industries.

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<PAGE> 32

(g) Effective as of the Closing, Buyer shall cause Monarch U.K.
to comply with the terms of Schedule 3.1(g) hereto.

3.2 Subsidiary Employees. Effective at the Closing or as
promptly thereafter as practicable, Buyer shall comply, or shall cause the
relevant Purchasing Subsidiary to comply, with any agreements relating to the
Employees of each Asset Seller set forth in the Subsidiary Purchase Agreement
relating to such Asset Seller.

ARTICLE 4 - REPRESENTATIONS. WARRANTIES AND COVENANTS OF PBI

PBI hereby represents, warrants and covenants to Buyer, as of
the date of this Agreement and as of the Closing, that:

4.1 Organization and Corporate Power. (a) PBI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power and authority to
own the Monarch Shares, and to enter into and perform this Agreement and the
transactions contemplated hereunder;

(b) PB Marking and PBIH are each corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and each has all requisite corporate power and authority to own the UK
Shares and Hong Kong Shares it respectively owns, and to enter into and perform
this Agreement and the transactions contemplated hereunder;

(c) Each Asset Seller is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization set forth on Schedule 4.1(c) hereto, and has all
requisite corporate power and authority to own the Purchased Assets it
respectively owns, to conduct the Business as now conducted by it

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<PAGE> 33

and to enter into and perform the Subsidiary Purchase Agreement to which it is a
party and the transactions contemplated hereunder or thereunder; and

(d) PB France is a corporation duly organized, validly
existing and in good standing under the laws of the French Republic, and has all
requisite corporate power and authority to own the Present French Shares and, as
of the Closing, the Additional French Shares and to enter into and perform this
Agreement and the transactions contemplated hereunder.

4.2 Due Authorization; No Breach. (a) The execution, delivery
and performance by PBI, Monarch and each Selling Subsidiary of this Agreement or
the Subsidiary Purchase Agreement to which it is a party, as the case may be,
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by the respective Boards of Directors of PBI,
Monarch and the Selling Subsidiaries, as the case may be, and no further
corporate action is required to be taken by PBI, Monarch or the Selling
Subsidiaries in order to execute, deliver and perform this Agreement or the
Subsidiary Purchase Agreements or to sell, assign, transfer and convey the
Purchased Business to Buyer and the Purchasing Subsidiaries.

(b) This Agreement has been duly and validly executed and
delivered by PBI, Monarch, PB Marking, PB France and PBIH, and, assuming this
Agreement constitutes the legal, valid and binding obligation of Buyer, this
Agreement constitutes the legal, valid and binding obligations of PBI, Monarch,
PB Marking, PB France and PBIH, enforceable against PBI, Monarch, PB Marking, PB
France and PBIH in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws from time to time in effect which affect the enforcement of
creditors'

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<PAGE> 34

rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

(c) Each Subsidiary Purchase Agreement has been duly and
validly executed and delivered by the Asset Seller which is a party thereto and,
assuming each such Subsidiary Purchase Agreement constitutes the legal, valid
and binding obligation of the Buyer or the Purchasing Subsidiary which is a
party thereto, such Subsidiary Purchase Agreement constitutes the legal, valid
and binding obligations of such Asset Seller, enforceable against such Asset
Seller in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other similar
laws from time to time in effect which affect the enforcement of creditors'
rights generally and by general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law).

(d) Neither the execution and delivery of this Agreement or any
of the Subsidiary Purchase Agreements nor the consummation of the transactions
contemplated hereby or thereby will (i) violate or conflict with any provision
of the Certificate of Incorporation, By-Laws or other charter document of PBI,
the Selling Subsidiaries, Monarch, Monarch France or Monarch United Kingdom
(Monarch, the Asset Sellers only to the extent related to the Business, PB
France only to the extent related to the Business, Monarch France, Monarch
Mexico, Monarch Singapore, Monarch Hong Kong, and Monarch United Kingdom are
sometimes collectively referred to herein as the "Affiliates"), (ii) violate,
conflict with, result in a breach of any provisions of, constitute a default or
require consent under, result in the termination of, accelerate the performance
required by, or result in the creation of any security interest, lien, pledge,
encumbrance, claim, equity, mortgage, right of

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<PAGE> 35

first refusal, redemption right or condition of any kind or nature whatsoever
(collectively "Liens") upon any of the Shares or Assets under, any note, bond,
mortgage, indenture, deed of trust, lease, license, Contract or other instrument
to which PBI, the Selling Subsidiaries, or an Affiliate is a party or by which
any of them is bound or to which any portion of the Purchased Business is
subject (except that the foregoing shall not apply to Consents or other
restrictions on transfer described in Schedules 4.3(b) or 4.8 attached hereto or
to Liens created by the Buyer or a Purchasing Subsidiary), or (iii) violate or
conflict with any federal, state, local, municipal or foreign statute, law,
ordinance, rule or regulation or any judgment, order, writ, injunction, award or
decree of any Person or other authority applicable to PBI, the Selling
Subsidiaries, an Affiliate or the Purchased Business, except for violations
which in the aggregate would not have a Material Adverse Effect (as hereinafter
defined) or materially adversely affect the ability of PBI, Monarch or the
Selling Subsidiaries to consummate the transactions contemplated by this
Agreement.

(e) For the purposes of this Agreement, "Material Adverse
Effect" shall mean any adverse change in the financial condition, business or
operations of the Purchased Business, which is material to the Purchased
Business taken as a whole, or would materially adversely affect the ability of
the Buyer and the Purchasing Subsidiaries to conduct the Purchased Business
after the Closing in the same manner as heretofore conducted.

4.3 Organization, Corporate Power and Capital Stock of
Affiliates.

(a) (i) Monarch is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own its assets and properties and
to conduct the Business as now conducted by it.

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<PAGE> 36

(ii) Monarch United Kingdom is a corporation duly organized,
validly existing and in good standing under the laws of the United Kingdom and
has all requisite corporate power and authority to own its assets and properties
and to conduct the Business as now conducted by it.

(iii) Monarch Mexico is a corporation duly organized, validly
existing and in good standing under the laws of Mexico and has all requisite
corporate power and authority to own its assets and properties and to conduct
the Business as now conducted by it.

(iv) Monarch Singapore is a private company duly organized,
validly existing and in good standing under the laws of Singapore and has all
requisite corporate power and authority to own its assets and properties and to
conduct the Business as now conducted by it.

(v) Monarch Hong Kong is a corporation duly organized, validly
existing and in good standing under the laws of Hong Kong and has all requisite
corporate power and authority to own its assets and properties and to conduct
the Business as now conducted by it.

(vi) Monarch France is a corporation duly organized, validly
existing and in good standing under the laws of the French Republic and has all
requisite corporate power and authority to own its assets and properties and to
conduct the Business as now conducted by it. As of the Closing, Monarch France
will have all requisite corporate power and authority to own its assets and
properties and to conduct the Business to the extent now being conducted by PB
France.

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<PAGE> 37

(vii) Except where the failure to be so qualified and in good
standing would not have a Material Adverse Effect, each of Monarch, Monarch
United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong and Monarch
France is duly qualified and in good standing as a foreign corporation to do
business in each of the jurisdictions in which the character of the assets or
properties owned or held under lease by it or the nature of the business it
transacts therein makes such qualification necessary. Attached hereto as
Schedule 4.3(a) are true and complete copies of the Certificate of Incorporation
and By-Laws or other relevant charter documents of each of Monarch, Monarch
United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong and Monarch
France, each as amended to date.

(b) Set forth in Schedule 4.3(b) hereto is a description of the
authorized capital stock of each of Monarch, Monarch United Kingdom, Monarch
Mexico, Monarch Singapore, Monarch Hong Kong and Monarch France, identifying
with respect to such capital stock the number of shares authorized and
outstanding. All of the outstanding Monarch Shares are owned of record and
beneficially by PBI. All of the outstanding UK Shares are owned of record and
beneficially by PB Marking and PBIH. All of the outstanding Hong Kong Shares are
owned of record and beneficially by PB Marking and Monarch. All of the
outstanding Present French Shares are owned of record and beneficially by PB
France. As of the Closing, all of the then outstanding French Shares will be
owned by PB France. The Additional French Shares have not been issued as of the
date of this Agreement. One hundred fifty-seven thousand four hundred and five
(157,405) of the 157,409 outstanding shares of Monarch Mexico are owned of
record and beneficially by Monarch. Between ten and fifteen percent of the
outstanding shares of Monarch Brazil are

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<PAGE> 38

owned of record and beneficially by Monarch. Fifty-five percent of the
outstanding shares of Monarch Singapore are owned of record and beneficially by
Monarch. All of the shares of Monarch Mexico and Monarch Singapore held by
Monarch, and all of the Shares, have been duly authorized and validly issued,
are fully paid and non-assessable and, except with respect to seven (7) shares
of Monarch France and four (4) shares of Monarch Mexico, are owned by PBI, PB
France, PB Marking, PBIH, or Monarch as the case may be, free and clear of all
Liens, and, upon consummation of the transactions contemplated by this Agreement
will be owned by the Buyer or Monarch free and clear of all Liens (except Liens
created by the Buyer or a Purchasing Subsidiary). Except as set forth on
Schedule 4.3(b), there are not, as of the date hereof, any existing contracts,
commitments, rights, calls, options, warrants or other agreements of any
character of an Affiliate or any other Person, directly or indirectly, involving
the authorization, sale or issue by Monarch, Monarch United Kingdom, Monarch
Mexico, Monarch Singapore, Monarch Hong Kong and Monarch France of any
additional shares of its respective capital stock, or any security or obligation
convertible into or exchangeable for any such additional shares, or entitling
the holder thereof to subscribe for, purchase or receive any such additional
shares, except for the issuance to PB France of the Additional French Shares in
accordance with this Agreement. For the purposes of this Agreement, the term
"Person" means any individual, firm, corporation, partnership, association,
trust, estate, court, arbitrator, tribunal, governmental, quasi-governmental or
public agency, commission, board, bureau, instrumentality, authority or other
entity.

(c) Except as set forth in Schedule 4.3(c) hereto and except
for the stock of Monarch New Zealand held by Monarch, none of Monarch, Monarch
United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong or Monarch
France owns of

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<PAGE> 39

record or beneficially or controls, directly or indirectly, in whole or in part,
any Person or any stock interest therein in excess of 5% of such Person's stock.

4.4 Tax Returns and Other Tax Matters. Except as disclosed on
Schedule 4.4 attached hereto:

(a) All returns ("Returns") relating to Taxes (as hereinafter
defined) of each Affiliate and Asset Seller and any subsidiaries thereof
required to be filed (taking into account any extensions of time for filing such
Returns) have been properly and timely filed and all liabilities for Taxes (as
hereinafter defined) for which each Affiliate, each Asset Seller, or each such
subsidiary is or may be liable, or imposed with respect to any of their
respective properties, assets or income which were due and payable have been
duly paid and satisfied, except where (a) such Taxes are being contested in good
faith by appropriate proceedings or (b) the failure to do so would not, in the
aggregate, have a Material Adverse Effect. For the purposes of this Agreement,
the term "Taxes" means all net income, gross income, gross receipts, sales, use,
transfer, franchise, profits, withholding, payroll, employment, excise,
severance, property or windfall profits taxes, or other taxes, duties, imposts,
levies or assessments of any kind whatsoever, together with any interest,
penalties, deficiencies, assessments and additions on or to any of the
foregoing, imposed by any taxing authority (whether federal, state, local,
municipal or foreign).

(b) There are no Liens for Taxes (other than for current Taxes
not yet due and payable) on any of the Assets or the Shares.

(c) No claim or proposed claim for assessment or collection of
Taxes for which any Affiliate or its subsidiaries is or may be liable has been
asserted by any tax authority, and there are no pending or, to the best of PBI's
knowledge, threatened audits,

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<PAGE> 40

investigations or claims for or relating to any such Taxes. No extension of a
statute of limitation relating to Taxes is in effect with respect to any of the
Affiliates.

(d) None of the Assets or the Shares (i) is property subject to
the so-called safe harbor lease provisions of former Section 168(f)(8) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) is property subject
to a provision analogous to the safe harbor lease provisions of former Code
Section 168(f)(8) under state, local or foreign law if resulting in a Material
Adverse Effect to Buyer, (iii) directly or indirectly secures any debt the
interest on which is tax exempt under Section 103(a) of the Code or (iv) is
tax-exempt use property within the meaning of Section 168(h) of the Code.

(e) None of the Affiliates (i) has consented at any time to
apply Section 341(f)(2) of the Code (or any similar state, local or foreign tax
provision) to any disposition of its assets, (ii) has agreed, or is required,
under Section 481(a) of the Code (or any similar state, local or foreign tax
provision), to make any adjustment by reason of a change in accounting method or
otherwise or (iii) has participated in or cooperated with an international
boycott or has been requested to do so in connection with any transaction or
proposed transaction.

(f) All tax-sharing agreements or similar arrangements with
respect to or involving an Affiliate shall be terminated on or prior to the
Closing and, after the Closing, the Affiliates shall not be bound thereby or
have any liability thereunder for amounts due in respect of periods prior to the
Closing.

(g) All material elections with respect to Taxes affecting the
Affiliates as of the date hereof are set forth in Schedule 4.4.

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<PAGE> 41

(h) There is no material amount of Taxes for which any of the
Affiliates is liable that will apply in a period or a portion thereof beginning
on or after the Closing and that is attributable to income earned before the
Closing, and there has not been (i) any transaction for which an installment
method of reporting gain or income is applicable, (ii) any election or (iii) any
other agreement with any taxing authority, with respect to any Affiliate that in
any such case has the effect of deferring Taxes that would otherwise be
attributable to a period or portion thereof before the Closing to a period or
periods after the Closing.

4.5 Real Property. (a) Schedule 4.5(a) hereto sets forth all of
the real property (including leasehold estates, improvements and fixtures)
owned, used or occupied by PBI or any affiliate of PBI as of December 31, 1994
or as of the date hereof which is used in connection with the Business
(including without limitation such real property which was or is owned by a
Person the stock of which is being sold, assigned, transferred and conveyed
pursuant to this Agreement or by an Asset Seller) including all land, easements
or rights of way granted to an Affiliate or any Asset Seller and all significant
plants and buildings located thereon.

(b) Except as set forth on Schedule 4.5(b) hereto, (i) all of
the right, title and interest of Monarch, Monarch United Kingdom, Monarch
Mexico, Monarch Singapore, Monarch Hong Kong and PB France in and to such real
property and leasehold estates will continue to be held by each of them, as the
case may be, following the Closing (provided that upon consummation of the
contribution by PB France to Monarch France of the assets allocated to the
Business, Monarch France will hold all the right, title and interest of PB
France in and to such real property and leasehold estates) and (ii) all right,
title and interest

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<PAGE> 42

of each Asset Seller in and to such real property and leasehold estates will be
transferred to Buyer or a Purchasing Subsidiary, at the Closing (all right,
title and interest of any of the foregoing referred to in this sentence is
hereinafter called the "Property").

(c) The Property is sufficient for the Buyer and the Purchasing
Subsidiaries to conduct the Business after the Closing in the same manner as
heretofore conducted and, except as set forth on Schedule 4.5(c), includes all
of the real property and leasehold estates reflected on the December 31, 1994
balance sheet referred to in Section 4.22.

(d) Each Affiliate and PB France (A) has good and marketable
title to each such parcel of Property owned, respectively, by such Affiliate or
PB France (the "Owned Real Property") or (B) holds by valid and existing lease
or license each such parcel of Property (i) which is leased by such Affiliate or
PB France (the "Leased Real Property") or (ii) consisting of roadway and other
ancillary rights, in each case as set forth in Schedule 4.5(a). All of the
Property is free and clear of all material Liens, except as set forth on
Schedule 4.5(a) hereto, and, upon consummation of the transactions contemplated
by this Agreement, will be owned or held by lease or other valid rights, as set
forth in Schedule 4.5(b), by Buyer or a subsidiary of Buyer free and clear of
all Liens (except Liens created by Buyer or a Purchasing Subsidiary and Liens
other than Liens for borrowed money which do not in the aggregate interfere with
the use or enjoyment of the Property).

4.6 Location of Personal Property. Except as disclosed in
Schedule 4.6 attached hereto, all of each Affiliate's and PB France's fixed
assets, machinery, equipment, inventory and other personal property used in
connection with the Business are located at the Property, except for motor
vehicles or capital equipment in use and immaterial quantities of inventory
which may be located elsewhere.

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4.7 Title and Condition of Assets. (a) The assets of each of
Monarch, Monarch Hong Kong, Monarch France, Monarch United Kingdom, Monarch
Mexico and Monarch Singapore, the assets of PB France used in connection with
the Business and the Purchased Assets (collectively, the "Assets") have been
maintained in accordance with normal industry practice, are in reasonable
operating condition and repair (ordinary wear and tear excepted) and are
sufficient for the operation of the Business on a basis that is consistent with
past practices as reflected in the audited financial statements referred to in
Section 4.22. Except as disclosed on Schedule 4.7 (a) attached hereto, (i) each
Affiliate has good and marketable title to, or holds by valid and existing lease
or license, all of its Assets and (ii) as of the Closing, Monarch France will
have good and marketable title to, or will hold by valid and existing lease or
license, all of the assets relating to the Business which are to be owned by
Monarch France as of the Closing. Such assets are free and clear of all Liens,
except:

(A) those listed in Schedule 4.7 (a) hereto;

(B) those reflected or reserved against in the December
31, 1994 balance sheet included in the financial statements
attached hereto as Schedule 4.22;

(D) Liens which, in the aggregate, do not and will not
have a Material Adverse Effect or which will be released prior
to or at the Closing.

The assets of PB France that on or before the Closing will be
transferred to Monarch France constitute all of the French assets of PBI or any
of its affiliates reflected on

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<PAGE> 44

the December 31, 1994 balance sheet referred to in Section 4.22 hereof
or which are primarily used or held for use primarily in the Business as it is
conducted in France.

(b) Except as set forth in Schedule 4.7(b), upon consummation
of the transactions contemplated by this Agreement and the Subsidiary Purchase
Agreements, the Buyer or a subsidiary of the Buyer will own all of the assets
owned by PBI or any of its affiliates as of December 31, 1994 or that were
acquired since that date that either (i) were reflected on the December 31, 1994
balance sheet referred to in Section 4.22 or (ii) were used or held for use by
any such entities in connection with the Business, free and clear of all Liens
(except Liens created by the Buyer or a Purchasing Subsidiary), except for
assets, properties, rights and interests not reflected in the December 31, 1994
balance sheet referred to in Section 4.22 hereof and that are primarily used or
held for use primarily in the business and operations of the Asset Sellers which
do not comprise part of the Business.

4.8 Consents. Except for those Consents (i) set forth in
Schedule 4.8 hereto, including without limitation any Consent required in
connection with the HSR Act or the UK Acts or the sale of the Monarch Shares,
the UK Shares, the Hong Kong Shares or the French Shares, or (ii) the failure of
which to obtain would not, in the aggregate, have a Material Adverse Effect or
materially adversely affect the ability of PBI, Monarch or the Selling
Subsidiaries to consummate the transactions contemplated by this Agreement or
the Subsidiary Purchase Agreements, no Consent of or from any Person is legally
required to be obtained by PBI, Monarch or the Selling Subsidiaries, to
consummate the transactions contemplated hereby or thereby.

4.9 Compliance With Laws. Subject to Section 4.11 hereof,
except as disclosed in Schedule 4.9 attached hereto, no Affiliate nor PB France
is in default under or

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in violation of any federal, state, local, municipal or foreign statute, law,
ordinance, rule or regulation, or any judgment, order, writ, injunction, award
or decree of any court, governmental, quasi-governmental or public agency,
arbitrator, tribunal, commission, board, bureau, instrumentality or other
authority, except for such defaults or violations, if any, that in the aggregate
do not and will not have a Material Adverse Effect or materially adversely
affect the ability of PBI, Monarch or the Selling Subsidiaries to consummate the
transactions contemplated by this Agreement or the Subsidiary Purchase
Agreements.

4.10 Permits and Licenses. Schedule 4.10 attached hereto sets
forth all governmental licenses, permits, franchises and other governmental
authorizations (i) which are issued to, held or used by PBI or any affiliate of
PBI or for which PBI or any affiliate of PBI has applied, and (ii) which are
material to the current operation of the Business. Except to the extent set
forth on Schedule 4.10, each such license, permit, franchise or other
authorization has been duly obtained, is valid and in full force and effect and
is not subject to any pending or threatened administrative or judicial
proceeding to revoke, cancel or declare such license, permit, franchise or other
authorization invalid in any respect. Such licenses, permits, franchises and
other authorizations are sufficient in all respects to permit the lawful
operation of the Business in the manner now conducted, and the Business is not
being operated in a manner that violates any of the terms under which any such
license, permit, franchise or other authorization was granted.

4.11 Environmental Conditions. (a) Except as set forth in
Schedule 4.11 hereto, the Affiliates and PB France (to the extent related to
assets being transferred to Monarch France pursuant to the French Contribution
Agreement set forth in Exhibit H hereto) are in material compliance with all
Environmental Laws;

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<PAGE> 46

(b) Except as set forth in Schedule 4.11 hereto, there are no
existing or, to the best of PBI's knowledge, potential Environmental Claims
against any of the Affiliates or PB France, nor has any Affiliate or PB France
received any written notification of any actual or potential responsibility for,
or any governmental investigation regarding, any disposal, release, or
threatened release at any location of any Hazardous Substance generated or
transported by any Affiliate or PB France;

(c) Except as set forth in Schedule 4.11 hereto, (i) no
underground tank and, as to owned properties, no underground storage tank or
other similar underground storage receptacle containing Hazardous Substances is
currently located on the properties of the Affiliates or PB France and there
have been no releases of any reportable quantities of Hazardous Substances from
any such underground tank or related piping, (ii) there have been no releases
(i.e., any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping) of Hazardous Substances in quantities exceeding the reportable
quantities as defined under any Environmental Law by any Affiliate or PB France
on, upon, or into the properties of the Affiliates, PB France, any of their
subsidiaries, Electronic Articles Surveillance, Presto Adhesive Paper Company,
Inc. or Monarch's Scanner business, and (iii) there have been no such releases
of a material nature by any predecessor of any Affiliate or PB France on the
real properties subject to this Agreement;

(d) Except as set forth in Schedule 4.11 hereto and as to any
premises or properties subject to a leasehold interest held by Affiliates or PB
France, there are no uncontained PCBs or friable asbestos located at or on
properties of any of the Affiliates or PB France;

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<PAGE> 47

(e) Except as set forth in Schedule 4.11 hereto, there are no
consent decrees, consent orders, judgments, judicial or administrative orders,
agreements with, or liens by, any governmental authority or quasi-governmental
entity relating to any Environmental Law which regulate, obligate, or bind any
Affiliate or PB France;

(f) True, complete and accurate copies of all written reports
of environmental assessments and audits which have been conducted since January
1, 1985 and which are in the possession of PBI or its affiliates, either by PBI
or any of its affiliates or any person managed by them for such purposes, at any
facility owned or formerly owned by any Affiliates or PB France, have been
delivered to the Buyer and a list of all such audits and assessments is set
forth in Schedule 4.11; and

(g) The New Jersey Industrial Site Recovery Act (N.J.S.A.
13:1K-6 et. seq.), and the regulations promulgated thereunder, are not
applicable to any of the transactions contemplated hereby.

"Environmental Claims" means all written notices of violations,
liens, claims, demands, suits, or causes of action for any damage or
remediation, including without limitation, personal injury, property damage
(including any depreciation of property values), lost use of property, or
consequential damages (including, without limitation, costs of investigation and
remediation), arising directly or indirectly out of Environmental Conditions or
Environmental Laws.

"Environmental Conditions" means the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any present or potential drinking water supply, subsurface strata, or
ambient air, relating to or arising out of the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling,

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<PAGE> 48

leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching,
disposal, dumping, or threatened release of Hazardous Substances by any
Affiliate or PB France or any of their predecessors or subsidiaries, or by any
of their agents, representatives, employees, or independent contractors when
acting in such capacity on behalf of any Affiliate or PB France. With respect to
Environmental Claims by third parties, Environmental Conditions also include the
exposure of persons to Hazardous Substances at the work place or the exposure of
persons or property to Hazardous Substances migrating from or otherwise
emanating from or located on property owned or occupied by any Affiliate or PB
France.

"Environmental Laws" means any and all federal, state, local,
municipal and foreign laws, statutes, ordinances, rules, regulations and other
legal requirements in effect from time to time imposing liability or standards
of conduct for or relating to environmental matters, including, but not limited
to, the Resource Conservation and Recovery Act of 1976, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, the Hazardous Materials Transportation Act of
1975, the Toxic Substances Control Act, the Federal Water Pollution Control Act,
the Clean Air Act and the Safe Drinking Water Act.

"Hazardous Substances" means all pollutants, contaminants,
chemicals, wastes, and any other carcinogenic, ignitable, corrosive, reactive,
toxic, or otherwise hazardous substances or materials (whether solids, liquids
or gases), subject to regulation, control, or remediation under Environmental
Laws, including but not limited to petroleum, urea

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<PAGE> 49

formaldehyde, flammable, explosive, and radioactive materials, PCBs, pesticides,
herbicides, asbestos, sludge, slag, acids, metals or solvents.

4.12 Litigation and Proceedings. Except as set forth in
Schedule 4.12 hereto, there are no (a) existing judgments, orders, writs,
injunctions, awards, or decrees of any court, governmental, quasi-governmental
or public agency, arbitrator, tribunal commission, board, bureau,
instrumentality or other authority, or (b) investigations, suits, actions,
proceedings or litigation presently pending or, to the best of PBI's knowledge,
threatened in writing which (in the case of (a) or (b) above) relates to the
Business or the Assets and which, if adversely determined, could have an effect
on the Business or Assets involving costs to Monarch or an Affiliate which could
exceed $100,000 individually.

4.13 Intellectual Property. Schedule 4.13 hereto sets forth all
patents, patent applications, proprietary technology, service marks, trademarks,
applications therefor, trade names, registered copyrights, material unregistered
copyrights, and licensee rights under the same, (i) which are owned or are
licensed or are being used by each such Affiliate or PB France or are necessary
for the conduct of the Business and (ii) which are being transferred as part of
the Purchased Business ("Intellectual Property").

(a) Trademarks, Copyrights. Except as set forth on Schedule
4.13 hereto, all of the trademarks and service marks listed have been duly
registered or applications to register same are pending in the jurisdictions
indicated therein, and all right, title and interest in and to said
registrations and applications is owned by each such Affiliate, PB France, or
Asset Seller, and all the aforesaid registered copyrights, material unregistered
copyrights, trademarks and service marks are free and clear of any material
Liens except as set forth in Schedule 4.13, and to the best of PBI's knowledge,
the aforesaid parties have the sole and

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<PAGE> 50

exclusive right to use said trademarks, service marks, registered copyrights,
and material unregistered copyrights in connection with the Business as it is
presently being conducted and except as otherwise indicated, the registrations
of the aforesaid trademarks and service marks are valid and subsisting, and the
aforesaid parties have no knowledge of a conflicting registration or claim to
the trademarks, service marks, registered copyrights, or material unregistered
copyrights. All trademarks, service marks and copyrights that any third party
owns (i) which are used under license in connection with the Business (other
than licenses for commercially available software and databases) and (ii) which
are being transferred as part of the Purchased Business are set forth separately
in Schedule 4.13 and identified as such and each such Affiliate, PB
France or Asset Seller possess adequate, transferable and enforceable licenses
or other rights to use said trademarks, service marks, and copyrights and, to
the best of PBI's knowledge, have taken all reasonably necessary or appropriate
action to protect such rights. Except as set forth on Schedule 4.13,
neither PB France nor any Affiliate or Asset Seller has had any proceedings
instituted against or has received any notice alleging that their use of any
such trademarks, service marks or copyrights infringes upon or otherwise
violates any rights of a third party in or to such trademarks or copyrights.

(b) Patents. Except as set forth on Schedule 4.13 hereto, each
such Affiliate, PB France or Asset Seller is the licensee or the holder of
record title in or otherwise has the right to use in the manner now being used
the subject matter of all patent, patent applications, and proprietary
technology set forth in Schedule 4.13, and all the aforesaid patents, patent
applications, and proprietary technology are free and clear of any material
Liens, except as set forth in Schedule 4.13 hereto. Except as disclosed on
Schedule 4.13 hereto, there are, to the best of PBI's knowledge, no claims or
demands of any other

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<PAGE> 51

third party pertaining to the aforesaid patents or patent applications, and none
has been declared invalid, null, or void, or its subject matter declared
unpatentable, in whole or in part, by any judicial or government authority, or
is currently being challenged in, or is the subject of, any pending
administrative or judicial proceeding or is subject to any outstanding judgment,
order, writ, injunction, award or decree. All patents or proprietary technology
owned by third parties (i) which are being used under license in connection with
the Business and (ii) which are being transferred as part of the Purchased
Business are set forth separately in Schedule 4.13 and identified as such and
except as otherwise set forth on Schedule 4.13, each such Affiliate, PB France,
or Asset Seller possess adequate, transferable and enforceable licenses or other
rights to use all such patents or proprietary technology and to the best of
PBI's knowledge, have taken all reasonably necessary or appropriate action to
protect such rights. Except as set forth on Schedule 4.13, neither PB France nor
any Affiliate or Asset Seller has had any proceedings instituted against or has
received any notice alleging that their use of any of the foregoing patents or
patent applications or licensed patent rights or proprietary technology in
connection with the Business as it presently is being conducted infringes upon
or otherywise violates any rights of a third party in or to such patent rights
or proprietary technology.

There is no Intellectual Property owned by (i) Pitney Bowes
Italia S.r.l., a corporation organized and existing under the laws of the
Italian Republic ("PB Italy"), (ii) Pitney Bowes Svenska Aktiebolag, a
corporation organized and existing under the laws of the Kingdom of Sweden ("PB
Sweden"), or (iii) PB France.

4.14 Contracts. Schedule 4.14 hereto sets forth, as of the date
of this Agreement, all written contracts, agreements, arrangements, commitments
and leases to

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<PAGE> 52

which (i) an Affiliate is a party or (ii) PB France is a party and which relates
to the Business to be owned by Monarch France as of the Closing (collectively
"Contracts"), which:

(a) involve future expenditures or receipts or other
performance with respect to goods or services having a total value in excess of
$250,000; or

(b) involve a lease, sublease, installment purchase or similar
arrangement for the use of personal property owned by an Affiliate or PB France
or used in connection with the Business which involves a total consideration of
$100,000 or more; or

(d) compel the employment of any Person in the status of
"employee" or "employees"; or

(e) involve a consulting relationship; or

(f) involve the handling, treatment, storage, transportation,
recycling, reclamation or disposal of hazardous waste or substances; or

(g) contain commitments of suretyship, guaranty or
indemnification in an amount in excess of $100,000 (except for endorsements,
product guarantees, warranties and indemnities provided by an Affiliate or PB
France in the ordinary course of business); or

(h) contain a mortgage, pledge, credit (other than credit terms
offered to customers in the ordinary course of business) or other financing
commitment for the borrowing or lending of funds, in any case involving more
than $100,000, from or to any Person; or

(i) was entered into with or for the benefit of PBI or any
subsidiary of PBI; or

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<PAGE> 53

(j) involves a commitment or obligation to supply products or
services to customers in which the price or prices are fixed (by formula or
otherwise) for a period ending after September 30, 1995; or

(k) contain any indemnification obligations with respect to
asset sales; or

(l) involve a direct or indirect currency exchange risk; or

(m) cannot be terminated by the Affiliate that is a party
thereto on ninety (90) days' notice or less without financial or other penalty;
or

(n) is to be transferred by an Asset Seller to Buyer or a
Purchasing Subsidiary at the Closing.

Except as set forth in Schedule 4.14 hereto, none of the
Affiliates and, to the best of PBI's knowledge, no other party to any Contract
set forth in Schedule 4.14 is in default in the performance of any obligation
under any such Contract or has given a notice of default to the other party
thereunder or has repudiated any term of any such Contract in a manner which
would have a Material Adverse Effect. Except as set forth on Schedule 4.14
hereto, each such Contract (i) is legal, valid, binding and enforceable on the
relevant Affiliate or PB France (to the extent such Contract is being
transferred to Monarch France pursuant to the French Contribution Agreement set
forth in Exhibit H hereto) and, to the best of PBI's knowledge, each other party
thereto and in full force and effect and (ii) each such Contract which will not
be fully performed as of the Closing will be transferred unaltered to the Buyer,
Monarch France or a Purchasing Subsidiary at the Closing and will continue to be
legal, valid, binding and enforceable in accordance with its terms after the
Closing. PBI has heretofore delivered or made available to the Buyer a true and
correct copy of each Contract set forth in Schedule 4.14. PBI is not aware of
any oral contract, agreement, arrangement,

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<PAGE> 54

commitment or lease which, if written, would be required to be set forth on
Schedule 4.14 hereto.

4.15 Employee Relations. Except as set forth on Schedule 4.15
hereto, there are no existing agreements with any labor unions, collective
bargaining units or associations representing employees of an Affiliate or PB
France that are connected with the Business, and no strike, slowdown, picketing,
work stoppage or labor trouble or other occurrence, event or condition of a
similar character currently pending or, to the best of PBI's knowledge,
threatened, in which the employees of an Affiliate or PB France who are employed
in connection with the Business are participating or have threatened to
participate and which has had or might have a Material Adverse Effect. No
activity or proceeding of any labor organization (or representative thereof) to
organize any unorganized employees of the Business is currently in progress or,
to the best of PBI's knowledge, has been threatened.

4.16 Employee Benefits. Schedule 4.16 contains a listing of
each plan or arrangement (including each "employee benefit plan" as defined in
Section 3(3) of ERISA) maintained or contributed to by any Affiliate (which,
solely for the purposes of this Section 4.16, include any subsidiary thereof),
PB France or any Selling Subsidiary or which provides benefits to or with
respect to any present or former employee of any Affiliate, PB France or any
Selling Subsidiary (or any predecessor) (collectively a "Plan"). Each Plan
complies in form and operation in all material respects with all applicable law
including ERISA and the Code. Each Plan which is intended to be qualified under
Code Section 401(a) is so qualified. No Plan is a "multiemployer plan" (as
defined in Section 3(37) of ERISA. No Plan (either individually or collectively)
could give rise to the payment of any amount that would not be deductible
pursuant to Code Sections 162(a)(1), 162(m) or 280G. No Affiliate,

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PB France or any Selling Subsidiary has any liability pursuant to ERISA Section
502 or Code Section 4975 or 4980B with respect to any Plan. There is no material
litigation pending (or to the knowledge of PBI, any Affiliate, PB France or any
Selling Subsidiary, threatened) with respect to any Plan. No Affiliate, PB
France or any Selling Subsidiary has any liability under ERISA or the Code with
respect to the employee benefit plans of any other entity that is in a
"controlled group of corporations" with, under "common control" with or
otherwise required to be aggregated with any of them as set forth in Code
Section 414(b), (c), (m) or (o).

4.17 Insurance Coverage. Schedule 4.17 hereto sets forth all
insurance coverage covering the Business that is in effect, including without
limitation, public liability, property damage, product liability insurance and
worker's compensation coverage. Each such policy of insurance is in full force
and effect and PBI does not know of any condition existing in violation of the
terms of any such insurance policies. Buyer acknowledges that none of such
insurance will be assigned to Buyer or a Purchasing Subsidiary at the Closing.

4.18 Bank Accounts. Schedule 4.18 hereto sets forth the name
and location of each bank or other institution in which Monarch, Monarch United
Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong or Monarch France
maintains a bank account, certificate or instrument of deposit or safe deposit
box, indicating the nature of the account and the names of all Persons
authorized to draw thereon or have access thereto.

4.19 Directors and Officers. Schedule 4.19 hereto sets forth
all officers and directors of Monarch, Monarch United Kingdom, Monarch Mexico,
Monarch Singapore, Monarch Hong Kong or Monarch France in office as of the date
of this Agreement.

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4.20 Employee Loans and Interests in Affiliates' Assets. Except
as set forth in Schedule 4.20, there are no outstanding loans by or to Monarch,
Monarch United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong, PB
France (with respect to employees devoting all or the primary part of their time
to the Business) or Monarch France to or from any employee of PBI, another
Affiliate, or any Selling Subsidiary, and, to the best of PBI's knowledge, no
employee of PBI, another Affiliate, or any Selling Subsidiary involved in the
Business, has any interest, direct or indirect, in any material lease,
agreement, obligation or right of an Affiliate.

4.21 Inventories. All inventories of each Affiliate and PB
France relating to the Purchased Business are reflected on the financial
statements attached hereto as Schedule 4.22 as of the date of such financial
statements, excluding inventories reflected as not in good condition or not
saleable in the ordinary course of business, to the extent the same have not
been disposed of in the ordinary course of business. All additions thereto since
that date are in good condition and are saleable in the ordinary course of
business, except to the extent any such inventories will be properly reflected
in accordance with generally accepted accounting principles on the Closing
Balance Sheet as not being in good condition or so saleable.

4.22 Financial Statements. The audited consolidated balance
sheets of the Purchased Business as of, and the related consolidated statements
of operations, stockholders' equity and changes in cash flows for the periods
ended, December 31, 1992, December 31, 1993 and December 31, 1994 (including the
related notes thereto), and the unaudited consolidated balance sheets of the
Purchased Business as of, and the related consolidated statements of operations,
stockholders' equity and changes in cash flow for (i) the periods

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<PAGE> 57

ended, April 30, 1994 and April 30, 1995 respectively, set forth in Schedule
4.22 hereto and (ii) the periods referred to in Section 4.27(xiv), present
fairly or will, when delivered pursuant to Section 4.27(xiv), present fairly the
financial position of the Purchased Business as of their respective dates, and
the results of operations and the cash flows, as the case may be, of the
Purchased Business for the periods presented therein, all in conformity with
generally accepted accounting principles applied on a consistent basis except as
otherwise noted therein (subject, in the case of unaudited statements, to normal
year-end adjustments). There have been no costs incurred in the operation of the
Purchased Business which are not properly reflected to the extent required by
generally accepted accounting principles in the audited consolidated statements
of operations and in the unaudited consolidated statements of operations set
forth in Schedule 4.22 during the periods respectively covered by such
statements.

4.23 Customers and Suppliers. Schedule 4.23 attached hereto
contains a complete and accurate list of (i) all customers of the Business
during the last fiscal year who purchased $1,000,000 or more from the Business
in the last fiscal year, showing the approximate total sales by each Affiliate
and PB France to each such customer during such fiscal year; and (ii) all
suppliers of the Business from whom any Affiliate or PB France has made
aggregate purchases in excess of $1,000,000 during the last fiscal year, showing
the approximate total purchases by such Affiliate or Asset Seller from each such
supplier during such fiscal year. Except as set forth in Schedule 4.23 hereto,
to the best knowledge of PBI and the Affiliates, since December 31, 1994, there
has been no material adverse change in the business relationship with any such
customer or supplier named in Schedule 4.23.

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4.24 Undisclosed Liabilities. Except as set forth on Schedule
4.24 attached hereto, there are no liabilities or obligations (absolute,
accrued, contingent or otherwise) of the Purchased Business, whether or not
required to be reflected on a balance sheet prepared in accordance with
generally accepted accounting principles, except liabilities that will be
reflected on or properly reserved against in accordance with generally accepted
accounting principles on the Closing Balance Sheet (none of which individually
or in the aggregate could have a Material Adverse Effect) and (ii) obligations
and liabilities explicitly disclosed in this Agreement or a Subsidiary Purchase
Agreement.

4.25 Absence of Certain Changes or Events. Except as set forth
on Schedule 4.25 hereto, since December 31, 1994:

(a) there has not occurred any Material Adverse Effect;

(b) except as permitted by Section 4.27, there has not
occurred any dividends or other intercompany transfer except cash sweeps
consistent with past practice; or

(c) there occurred no (i) increase in the compensation payable
or to become payable by any Affiliate to any of its officers, employees, former
employees or agents (collectively, "Personnel"), except for normal periodic
increases in the ordinary course of business consistent with past practice, (ii)
grant, payment or accrual, contingent or otherwise, for or to the credit of any
of the Personnel with respect to any bonus, incentive compensation, service
award or other like benefit by an Affiliate, (iii) adoption, creation or
amendment of any Employee Plan of such Affiliate, (iv) employment agreement made
by any Affiliate or (v) other material change in employment terms for any of
such Affiliate's officers, employees or agents;

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<PAGE> 59

(d) there has not occurred any sale, lease, assignment or
transfer of any asset constituting a part of the Business, other than to Persons
that are not affiliates of any Affiliate for fair consideration and in the
ordinary course consistent with past practice;

(e) no Affiliate has entered into any transaction or modified
any Contract with, or released any claim against, PBI or any of PBI's
affiliates;

(f) except as permitted by Section 4.27, there has been no
failure to operate the Business in the ordinary course consistent with past
practice or to use all commercially reasonable efforts to preserve the Business
intact, to keep available to Buyer the services of Personnel, and to preserve
for Buyer the goodwill of the Business' suppliers, customers, distributors and
others having business relations with it;

(g) there has been no revaluation by PBI or any Affiliate of
any of the assets constituting the Business, including without limitation,
writing off notes or accounts receivable other than in the ordinary course of
business consistent with past practice;

(h) except as permitted by Section 4.27, there has been no
granting of any material Lien on any of the assets constituting the Business or
indebtedness incurred by any Affiliate for borrowed money or any commitment to
borrow money entered into by any Affiliate, or any loans or guarantees made or
agreed to be made by such Affiliate;

(i) except as permitted by Section 4.27, there has been no
agreement (either oral or written) by any Affiliate or any of its Personnel to
do any of the foregoing; and

(j) there has been no event or condition (other than events or
conditions affecting the economy generally) known to PBI or any of its
subsidiaries that has had or that

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PBI reasonably expects will have, in any one case or in the aggregate, a
Material Adverse Effect.

4.26 Material Misstatements Or Omissions. No representations or
warranties by PBI in this Agreement, nor any document, exhibit, agreement,
instrument, statement, certificate or schedule furnished or to be furnished to
Buyer pursuant to the terms of this Agreement, contains or will contain any
untrue statement of a material fact, or omits or will omit to state any material
fact necessary to make the statements or facts contained therein not misleading.

4.27 Pre-Closing Covenants. PBI and Monarch covenant that,
without the Buyer's prior written consent (which consent shall not be
unreasonably withheld, delayed or conditioned), from the date hereof until the
Closing, except as (a) prohibited or required by law, (b) contemplated by this
Agreement or a Subsidiary Purchase Agreement (including without limitation any
corporate reorganizations and transfers of assets between affiliates in
contemplation of this Agreement as set forth on Schedule 4.27 hereto) or (c)
prevented by acts of God, fire, flood, war, civil insurrection, sabotage,
accidents, laws, ordinances, rules, regulations, orders, decrees or writs of
governmental or judicial entities or other events or circumstances beyond the
control of PBI or any Affiliate or Selling Subsidiary, they will cause each
Affiliate, each Selling Subsidiary and PB France:

(i) to continue to carry on the Business in the ordinary course
and consistent with past practice and not to take any action inconsistent
therewith or with the consummation of the transactions contemplated hereby.
Without limiting the generality of the foregoing, each Affiliate and PB France
shall (a) maintain its Assets in their current state of repair and will not
transfer or dispose of any Assets, excepting disposition of assets in the

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ordinary course of business consistent with past practices and normal wear and
tear; (b) maintain insurance covering such Assets similar to that in effect on
the date hereof; (c) use all commercially reasonable efforts to preserve its
current business organization intact; (d) fund capital expenditures in
accordance with the business plan, as from time to time amended, of the
Business; (e) use all commercially reasonable efforts to keep available the
services of its current employees, agents and independent contractors except as
otherwise done in the ordinary course of business consistent with past
practices; (f) use all commercially reasonable efforts to preserve its current
business relationships with customers, suppliers, distributors and others having
business dealings with it; and (g) not grant discounts to customers or extend
payment terms to customers or vendors, or fail to take advantage of vendor
discounts for prompt payment; except (in any case covered by this paragraph (i))
in the ordinary course of business consistent with past practices;

(ii) not to engage in any practice, take any action, embark on
any course of action or enter into any transaction that would cause or result in
any of PBI's representations and warranties set forth in Article 4 to be untrue
as of the Closing;

(iii) to refrain from (A) entering into any transaction
relating to real property (including leasehold estates) used in connection with
the Business or (B) entering into any contract, agreement, commitment or lease
which, if existing as of the date hereof would have to be set forth on Schedules
4.14 or 4.15 hereto;

(iv) not to enter into, assume or create any new Lien on the
Assets of or incur any indebtedness, liabilities or obligations relating to the
Business other than those incurred (a) pursuant to existing contracts,
agreements or commitments, (b) in the ordinary course of business consistent
with past practices, (c) in doing acts and things contemplated by

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this Agreement, or (d) arising from personal injuries or property damage or from
involuntary circumstances;

(v) in the case of Monarch, Monarch Mexico, Monarch Singapore,
Monarch Hong Kong, Monarch France and Monarch United Kingdom and except as
contemplated by this Agreement (including without limitation the contribution of
assets of the Business by PB France to Monarch France in accordance with this
Agreement), not to amend its Certificate of Incorporation or By-Laws or any
other relevant charter document or to issue any capital stock or any contracts,
calls, commitments, rights, options, warrants or other agreements of any
character involving the authorization, sale or issue of any shares of its
capital stock or any security or obligation convertible into or exchangeable for
any such additional shares, or entitling the holder thereof to subscribe for,
purchase or receive any such additional shares;

(vi) to file correctly and timely file all Returns and pay all
Taxes of whatever kind, nature and type which are required to be filed or paid
by an Affiliate, PB France or any Asset Seller prior to the Closing, except
where a failure to do so would not adversely affect the Purchased Business after
the Closing and except for such Returns and Taxes which are being contested in
good faith by appropriate proceedings;

(vii) except as set forth on Schedule 4.27, not to declare or
pay any dividends or make any other distributions of any kind to PBI or any of
its affiliates, other than cash sweeps in the ordinary course of business
consistent with past practices (except as set forth in Sections 1.4(h) and
1.4(i));

(viii) not to take any positions or make new elections
inconsistent with past practice with respect to Taxes or to change its current
tax elections affecting any of the

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Affiliates or the Purchased Business without the prior written consent of Buyer
(which consent shall not be unreasonably withheld, delayed or conditioned) if
such inconsistent positions, new elections or change in tax elections could
reasonably be expected to have a Material Adverse Tax Effect. "Material Adverse
Tax Effect" shall mean with respect to any Tax at issue, an adverse effect that
is material in relation to the aggregate amount of liability for all Taxes
attributable to the Purchased Business for the first fiscal year ending on or
after the close of the period to which the Tax at issue relates;

(ix) to have each relevant Person provide Buyer with an
appropriate certificate pursuant to Section 1445 of the Code (or any similar
provisions of state or other tax law);

(x) to notify Buyer of any occurrence known to PBI, any Selling
Subsidiary or an Affiliate which has had or which PBI reasonably expects will,
either individually or in the aggregate, have a Material Adverse Effect;

(xi) to furnish to Buyer or its representatives such additional
financial and operating data and other information relating to the Business as
may be readily available and reasonably requested, to the extent that such
access and disclosure would not violate the terms of any agreement to which PBI,
an Affiliate or PB France is bound or any applicable law or regulation. PBI and
Monarch will make or cause each Affiliate and each Selling Subsidiary to make
available to Buyer for inspection and review the originals or copies of all
documents, and all files, records and papers of any and all proceedings and
matters, listed in the Schedules attached hereto. Buyer shall keep any
information provided or caused to be provided by PBI or Monarch to Buyer
pursuant to this Section 4.27(xi) confidential pursuant to the terms and
conditions of (i) the confidentiality agreement dated October 14, 1994

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between CS First Boston Corporation, on behalf of PBI, and Paxar Corporation and
(ii) the confidentiality agreement dated November 15, 1994 between CS First
Boston Corporation, on behalf of PBI, and Odyssey Partners L.P. (collectively
the "Confidentiality Agreements");

(xii) provide all commercially reasonable assistance to the
Buyer and the Purchasing Subsidiaries to obtain all governmental licenses,
permits, franchises and other governmental authorizations necessary or
appropriate for the Buyer and the Purchasing Subsidiaries to conduct the
Purchased Business after the Closing in the same manner as heretofore conducted;

(xiii) deliver to Buyer all of the monthly and quarterly
financial statements for periods and dates subsequent to April 30, 1995 of the
Purchased Business as soon as the same are available; provided, however, that
this clause (xiii) shall not require any financial statement to be prepared
other than in the ordinary course of business.

ARTICLE 5 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER

Buyer hereby represents, warrants and covenants to PBI, as of
the date of this Agreement and as of the Closing that:

5.1 Organization and Corporate Power. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and to conduct its business as it is now being
conducted and to enter into and perform this Agreement and the transactions
contemplated hereby. Each Purchasing Subsidiary will, as of the Closing, be a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation and has all requisite corporate
power and authority to own its properties and to conduct its business as it is
now being conducted and to

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enter into and perform the Subsidiary Purchase Agreement to which it is a party
and the transactions contemplated hereby and thereby.

5.2 Due Authorization; No Breach. (a) The execution, delivery
and performance by Buyer of this Agreement and by each Purchasing Subsidiary of
the Subsidiary Purchase Agreement to which it is a party and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by the respective Board of Directors and shareholders, if required by
applicable law, of Buyer and each Purchasing Subsidiary, and no further
corporate action is required to be taken by Buyer or any Purchasing Subsidiary
in order to execute, deliver and perform this Agreement and the Subsidiary
Purchase Agreements and to acquire and pay for all of the Purchased Business.

(b) This Agreement has been duly and validly executed and
delivered by Buyer, and, assuming this Agreement constitutes the legal, valid
and binding obligations of PBI, Monarch, PB Marking, PB France and PBIH, this
Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
from time to time in effect which affect the enforcement of creditors' rights
generally and by general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law).

(c) Each Subsidiary Purchase Agreement has been duly and
validly executed and delivered by the Purchasing Subsidiary which is a party
thereto, and, assuming such Subsidiary Purchase Agreement constitutes the legal,
valid and binding obligations of the Asset Seller which is a party thereto, such
Subsidiary Purchase Agreement constitutes the

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legal, valid and binding obligation of such Purchasing Subsidiary, enforceable
against such Purchasing Subsidiary in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
from time to time in effect which affect the enforcement of creditors' rights
generally and by general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at law).

(d) Except as set forth in Schedule 5.2 hereto, neither the
execution and delivery of this Agreement or the Subsidiary Purchase Agreements
nor the consummation of the transactions contemplated hereby or thereby will (i)
violate or conflict with any provision of Buyer's or any Purchasing Subsidiary's
Certificate of Incorporation, By-Laws or other relevant charter document, (ii)
violate, conflict with, result in a breach of any provisions of, constitute a
default or require consent under, result in the termination of, accelerate the
performance required by, or result in the creation of any Lien upon any of the
properties or assets of Buyer or any Purchasing Subsidiary under any note, bond,
mortgage, indenture, deed of trust, lease, license, agreement or other
instrument or obligation to which Buyer or a Purchasing Subsidiary is a party or
by which it is bound, or (iii) violate or conflict with any federal, state,
local, municipal or foreign statute, law, ordinance, rule or regulation, or any
judgment, order, writ, injunction, award or decree of any Person or other
authority applicable to Buyer or a Purchasing Subsidiary.

5.3 Consents. Except for those Consents required for the
purchase of and payment for the Purchased Business as set forth in Schedule 5.3
hereto, including without limitation any Consent required in connection with the
HSR Act, the French Exchange Control Law and the UK Acts, no Consent of or from
any Person is legally required to be

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obtained by Buyer or a Purchasing Subsidiary to consummate the transactions
contemplated hereby.

5.4 Financing. Buyer has funds available or has written firm
commitments or highly confident letters from reputable financial institutions
(copies of which have been delivered to PBI) for funds, sufficient to acquire
and pay for all of the Purchased Business and otherwise to consummate the
transactions contemplated by this Agreement and the Subsidiary Purchase
Agreements on the terms and conditions contemplated hereby and thereby.

5.5 Investment Intention. Buyer (a) is acquiring the Shares for
its own account for investment purposes only and not with a view to, or for sale
in connection with, any distribution thereof, (b) is an Accredited Investor as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended, and (c) does not have any contract,
commitment, obligation, understanding, agreement or arrangement with any Person,
or any present intention, to sell, transfer or otherwise distribute any of the
Shares.

5.6 Claims. No litigation or claims have been brought or
threatened in writing against Buyer or any Purchasing Subsidiary respecting the
transactions contemplated by this Agreement or the Subsidiary Purchase
Agreements.

ARTICLE 6 - SELLERS' CONDITIONS OF CLOSING

The obligations of PBI, Monarch, PB Marking, PBIH and PB France
to consummate the transactions contemplated by this Agreement are, unless waived
by them, subject to the fulfillment, on or before the Closing, of each of the
following conditions:

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(a) No applicable federal, state, local, municipal or foreign
statute, law, ordinance, rule or regulation and no judgment, order, writ,
injunction, award or decree of a court, governmental, quasi-governmental or
public agency, arbitrator, tribunal, commission, board, bureau, instrumentality
or other authority of competent jurisdiction shall be in effect to forbid,
enjoin or place any condition reasonably unacceptable to PBI on the consummation
of the transactions contemplated by this Agreement or the Subsidiary Purchase
Agreements;

(b) PBI and the Asset Sellers shall have received all
certificates, instruments, agreements and other documents to be delivered by
Buyer or a Purchasing Subsidiary at or before Closing as provided in this
Agreement and the Subsidiary Purchase Agreements;

(c) PBI shall have received copies of all necessary Consents or
waivers thereof legally required to be obtained by PBI or Buyer under any
applicable law in connection with the consummation of the transactions
contemplated hereby, including without limitation the termination or expiration
of the applicable waiting period under the HSR Act or the UK Acts;

(d) Buyer shall have delivered to PBI, in form and substance
satisfactory to PBI, (i) an opinion of counsel to Buyer with respect to the
legal matters related to the representations and warranties made by Buyer in
Sections 5.1, 5.2 and 5.3 hereof, (ii) a certificate signed by the Chief
Financial Officer and another executive officer of Buyer confirming that the
conditions set forth in Section 6(e) have been satisfied and (iii) such other
certificates, instruments, agreements and documents as PBI may reasonably
request to evidence the authority and power of Buyer and the Purchasing
Subsidiaries to consummate the transactions contemplated by this Agreement and
the Subsidiary Purchase Agreements;

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(e) All covenants and obligations of Buyer and the Purchasing
Subsidiaries under this Agreement and the Subsidiary Purchase Agreements to be
performed at or prior to Closing (including without limitation the payment of
the Purchase Price in full and any additional amounts, if any, required to be
paid at the Closing in accordance with Section 1.4 and Section 1.7 hereof, and
any other covenants and obligations set forth in Article 9 hereof) shall have
been performed, and the representations and warranties of Buyer and the
Purchasing Subsidiaries contained in this Agreement and the Subsidiary Purchase
Agreements shall be true and correct on and as of the Closing in all material
respects with the same effect as though such representations and warranties had
been made on and as of such date, except to the extent attributable to actions
permitted or consented to by PBI in writing;

(f) No action by any governmental authority shall have been
instituted or threatened (i) for the purpose of enjoining or preventing the
transactions contemplated by this Agreement or (ii) that questions the validity
or legality of the transactions contemplated hereby;

(g) One or more Instruments of Assumption pursuant to which the
Buyer and/or one or more Purchasing Subsidiaries assume the Assumed Liabilities,
substantially in the form attached hereto as Exhibit B shall have been executed
and delivered to PBI; and

(h) A license exactly in the form of Exhibit L hereto shall
have been entered into (the "PBI License Agreement").

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ARTICLE 7 - BUYER'S CONDITIONS OF CLOSING

The obligation of Buyer to consummate the transactions
contemplated by this Agreement are, unless waived by Buyer, subject to the
fulfillment, on or before the Closing, of each of the following conditions:

(a) No applicable federal, state, local, municipal or foreign
statute, law, ordinance, rule or regulation and no judgment, order, writ,
injunction, award or decree of a court, governmental, quasi-governmental or
public agency, arbitrator, tribunal, commission, board, bureau, instrumentality
or other authority of competent jurisdiction shall be in effect to forbid,
enjoin or place any condition reasonably unacceptable to Buyer on the
consummation of the transactions contemplated by this Agreement or the
Subsidiary Purchase Agreements;

(b) Buyer and the Purchasing Subsidiaries shall have received
all certificates, instruments, agreements and other documents to be delivered by
PBI, an Asset Seller, PB France and Monarch at or before Closing as provided in
this Agreement and the Subsidiary Purchase Agreements;

(c) Buyer shall have received copies of all necessary Consents
or waivers thereof legally required to be obtained by Buyer or PBI, a Selling
Subsidiary or an Affiliate under any applicable law in connection with the
consummation of the transactions contemplated hereby, including without
limitation the termination or expiration of the applicable waiting period under
the HSR Act or the UK Acts;

(d) PBI shall have delivered to Buyer and, if so requested, to
Buyer's lenders and placement agents (i) an opinion of Douglas A. Riggs, Esq.,
General Counsel of Seller, with respect to the legal matters related to the
representations and warranties made by

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PBI concerning PBI in Sections 4.1, 4.2 and 4.3 hereof and the legal, valid and
binding nature of the Agreements attached hereto as Exhibits E, F, G (provided
Dictaphone Corporation is a subsidiary of PBI at the Closing), I, J, N and O,
(ii) certificates signed by the Chief Financial Officer and another executive
officer of each of PBI and Monarch confirming that the conditions set forth in
Section 7(e) have been satisfied, and (iii) such other certificates,
instruments, agreements and documents as Buyer may reasonably request to
evidence the authority and power of PBI and the Selling Subsidiaries to
consummate the transactions contemplated by this Agreement and the Subsidiary
Purchase Agreements;

(e) All covenants and obligations of PBI and the Selling
Subsidiaries under this Agreement and the Subsidiary Purchase Agreements to be
performed at or prior to Closing (including, without limitation, those set forth
in Article 9 hereof) shall have been performed, and the representations and
warranties of PBI and the Asset Sellers contained in this Agreement and the
Subsidiary Purchase Agreements shall be true and complete on and as of the
Closing in all material respects with the same effect as though such
representations and warranties had been made on and as of such date, except to
the extent attributable to actions permitted or consented to by Buyer in
writing;

(f) No action by any governmental authority shall have been
instituted or threatened (i) for the purpose of enjoining or preventing the
transactions contemplated by this Agreement, or (ii) that questions the validity
or legality of the transactions contemplated hereby;

(g) The German Transitional Services Agreement, French
Transitional Service Agreement, Pitney Bowes Purchasing Agreement (Equipment and
Supplies), Specialty Ink Agreement, and Dictaphone Supply Agreement,
substantially in the forms

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attached hereto as Exhibits C through G, respectively (with such changes, in the
case of the Pitney Bowes Purchasing Agreement (Equipment and Supplies) only, as
shall be necessary to make such Agreement reasonably satisfactory to Buyer),
shall have been executed and delivered by the parties thereto. PBI and Buyer
shall have agreed on the prices to be specified in the Schedules to the Pitney
Bowes Purchasing Agreement (Equipment and Supplies). PBI and Buyer shall have
agreed on the dollar amount of purchases to be specified in Section 2(a) of the
Specialty Ink Agreement;

(h) The Buyer shall have received at least $108,000,000 of
proceeds of a debt financing on substantially the terms set forth in the letters
referred to in Section 5.4 hereof, more favorable terms or other terms which are
reasonably satisfactory to Buyer;

(i) The Buyer and the Purchasing Subsidiaries shall have
obtained all governmental licenses, permits, franchises and other governmental
authorizations which are necessary to conduct the Purchased Business after the
Closing in the manner heretofore conducted;

(j) Buyer shall be reasonably satisfied that PB France has
transferred to Monarch France, in accordance with a Contribution Agreement
substantially in the form attached hereto as Exhibit H, the Assets and
liabilities to be transferred to Monarch France as contemplated by this
Agreement;

(k) Buyer shall be reasonably satisfied that Monarch's Base
Materials Business has been transferred to PBI, in accordance with the documents
substantially in the form attached hereto as Exhibit I; PBI and Buyer shall have
agreed on the list of assets to be transferred and to be excluded from such
transfer;

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(l) Buyer shall have received all the books and records of each
Asset Seller and all the Assets required to be transferred by an Asset Seller
pursuant to this Agreement or the Subsidiary Purchase Agreements;

(m) An Instrument of Assignment, assigning the Contracts to be
assigned pursuant to the Subsidiary Purchase Agreements, shall have been
executed, in form and substance reasonably satisfactory to Buyer;

(n) Consents required to be obtained for the assignment of all
material Contracts to be assumed by Buyer or a Purchasing Subsidiary shall have
been obtained;

(o) Leases or sub-leases, as the case may be, shall have been
entered into with respect to (1) Monarch's lamination and service business
operation's occupancy in the Kohnle Drive facility, Miamisburg, Ohio
substantially in the form of Exhibit J hereto; and (2) Monarch France's
occupation of building #1 of PB France's leasehold in Fontenay-sous-Bois,
France, substantially in the form of Exhibit K hereto (and the landlord's
consent shall have been obtained or some other satisfactory arrangement shall
have been made);

(p) The PVC Materials License shall have been entered into
exactly in the form set forth in Exhibit N hereto;

(q) A Distributorship Agreement with PB Sweden, substantially
in the form of Exhibit M hereto, shall have been entered into;

(r) One or more Bills of Sale for the Purchased Assets shall
have been executed and delivered to Buyer in form and substance reasonably
satisfactory to Buyer;

(s) The four (4) shares of Monarch Mexico's stock and the one
(1) share of Monarch New Zealand's stock not currently owned by Monarch and the
seven shares of

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Monarch France not then owned by PB France will have been transferred to a
designee of Buyer;

(t) Seller shall have caused the auditors of the various
Monarch companies to resign concurrently with the Closing;

(u) Any notification period with respect to German employees
shall have lapsed; and

(v) The Seestrom License Agreement shall have been entered into
exactly in the form set forth in Exhibit O hereto.

ARTICLE 8 - TERMINATION; SURVIVAL

8.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to or at the Closing:

(a) By mutual consent of PBI and Buyer upon express approval of
their respective Boards of Directors;

(b) By PBI if any of the conditions set forth in Article 6
hereof shall not have been met and shall not have been waived by PBI as of July
31, 1995 because Buyer has failed to perform in any material respect any of its
obligations under this Agreement (following notice and a 30 day opportunity to
cure);

(c) By Buyer if any of the conditions set forth in Article
7 hereof shall not have been met and shall not have been waived by Buyer
as of July 31, 1995 because PBI or Monarch has failed to perform in any material
respect any of its obligations under this Agreement (following notice and a 30
day opportunity to cure); or

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(d) By PBI or Buyer, if the Closing has not taken place on or
before July 31, 1995 and the failure of the Closing to take place on or before
such date did not result from the failure by any party to fulfill any
undertaking or commitment, or to satisfy any condition, provided for herein
which is required to be fulfilled or satisfied prior to or at Closing.

8.2 Survival. If this Agreement is terminated pursuant to
Section 8.1 hereof, this Agreement, except for Articles 11 and 13 hereof and as
otherwise provided in this Section 8.2, shall become null and void and of no
further force and effect. Subject to the foregoing sentence, (i) if any such
termination is pursuant to Section 8.1(a) or (d) hereof, none of the parties
shall have any liability in respect of such termination, and (ii) if termination
is pursuant to Section 8.1(b) or (c) hereof, such termination will not affect
any party's rights or remedies with respect to another party's breach of this
Agreement. Promptly following termination of this Agreement, Buyer will return
to PBI all written information received from any officers, directors, employees
and/or agents of PBI, any Affiliate or Selling Subsidiary in connection with the
transactions contemplated hereby, except documents which have been publicly
distributed and drafts of any agreements contemplated hereunder.

ARTICLE 9 - CLOSING

9.1 Closing. The closing of the transactions contemplated by
this Agreement shall take place at the offices of Latham & Watkins, special
counsel to the Buyer, located at 885 Third Avenue, New York, New York 10022, on
June 29, 1995, or at such other time and place as Buyer and PBI may mutually
agree in writing (such time being

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referred to herein as the "Closing"), and shall be deemed effective as of 12:01
A.M. on the date of the Closing.

9.2 PBI's Obligations and Closing Deliveries. At the Closing,
PBI shall deliver, or cause to be delivered, to Buyer the following;

(i) Certificates representing (a) one thousand (1,000) Monarch
Shares, (b) one hundred (100) UK Shares and (c) ten (10) Hong Kong Shares, all
accompanied by duly executed blank stock powers or properly endorsed for
transfer with all required governmental stock transfer stamps attached;

(ii) Certificates representing all of the French Shares,
accompanied by share transfer forms (Ordres de mouvements) for the French
Shares, duly executed by PB France, and evidence that title to the French Shares
has been transferred in the "Registre des Mouvements de Titres";

(iii) The corporate minute books and stock transfer books of
Monarch, Monarch United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong
Kong and Monarch France;

(iv) A shareholders' meeting shall have been called by PB
France for Monarch France, and Buyer's designees shall have been elected as
Directors;

(v) Written resignations of all officers and directors of
Monarch, Monarch United Kingdom, Monarch Mexico, Monarch Singapore (to the
extent controlled by Monarch), Monarch Hong Kong and Monarch France in office
immediately prior to the Closing whose resignations shall be requested by Buyer;

(vi) The opinion of counsel and officer's certificate required
pursuant to Section 7(d) hereof;

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(vii) All Consents described in Schedules 4.3(b) and 4.8
attached hereto;

(viii) Any other material Consents, instruments or documents
which are contemplated by this Agreement or necessary or appropriate to sell and
convey the Shares or the Purchased Assets to Buyer;

(ix) One certified copy each of the resolutions of the Boards
of Directors of PBI, Monarch and the Selling Subsidiaries evidencing the
authorizations set forth in Section 4.2 hereof;

(x) A written receipt for payment of the Purchase Price (and
any additional amounts, if any, required to be paid by Buyer in accordance with
Section 1.4 and Section 1.7 hereof) duly executed by PBI on
behalf of itself, PBIH and PB Marking;

(xi) A written receipt for payment of its allocated share of
the Purchase Price duly executed by PB France;

(xii) Certified copies of the minutes of the meetings at the
Worker's Committee of PB France at which the transactions contemplated herein
have been reviewed; and

(xiii) The documents set forth in Sections 7(g), (m), (o),
(p), (q), (r) and (x).

9.3 Buyer's Obligations and Closing Deliveries. At the Closing,
Buyer shall deliver to PBI the following:

(i) The full Purchase Price in accordance with Section 1.3
hereof;

(ii) Any additional amounts required to be paid in accordance
with Section 1.4 and Section 1.7 hereof;

(iii) The opinion of counsel and officer's certificate required
pursuant to Section 6(d) hereof;

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(iv) All material Consents required to be obtained by Buyer
described in Schedule 5.3 attached hereto;

(v) One certified copy each of the resolutions of the Board of
Directors and stockholders, if required by applicable law, of Buyer and each
Purchasing Subsidiary evidencing the authorizations set forth in Section 5.2
hereof;

(vi) A written receipt for the certificates representing the
Monarch Shares, the UK Shares, the Hong Kong Shares, the French Shares and the
shares of Monarch Mexico and Monarch Singapore owned by Monarch and for the
Purchased Assets duly executed by Buyer and the Purchasing Subsidiaries, as
applicable; and

(vii) The document set forth in Sections 6(g) and 6(h).

ARTICLE 10 - POST CLOSING OBLIGATIONS

10.1 Taxes and Adjustments.

(a) Buyer and PBI (or a Selling Subsidiary) shall each be
liable for 50% of (i) all sales, use, transfer, recording, value-added, excise
or similar Taxes (other than Taxes on net or gross income or gross receipts or
Taxes imposed in lieu thereof) and (ii) all recording fees, notarial fees, stamp
duties arising on the transfer of any of the Shares (all of the foregoing are
hereinafter referred to as "Transactional Taxes") imposed by any jurisdiction
with respect to the sale, assignment, transfer and conveyance of the Purchased
Business or otherwise on account of this Agreement, the Subsidiary Purchase
Agreements or the transactions contemplated herein or therein (excluding any
sale, assignment, transfer or conveyance between PBI and its affiliates that is
described on Schedule 4.27 hereof, other than the transfer of assets relating to
the Business by PB France to Monarch France as described in item 3 of Schedule
4.27); provided, however, that notwithstanding the

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foregoing, PBI (or a Selling Subsidiary) shall not be liable for any value-added
or similar Transactional Taxes if and to the extent that Buyer or a Purchasing
Subsidiary obtains a tax credit or other tax relief in respect of such
value-added or similar Transactional Taxes. Buyer shall provide PBI (or the
Selling Subsidiary) with appropriate exemption certificates or direct pay
certificates where possible. In the event PBI (or a Selling Subsidiary) or Buyer
pays more than its share of liability with respect to Transactional Taxes, Buyer
or PBI (or a Selling Subsidiary), as the case may be, shall reimburse PBI (or
the Selling Subsidiary) or Buyer, as the case may be, no later than three (3)
days from receipt of notice and documentation reasonably substantiating such
payment of such excess payment thereof, for any Transactional Taxes paid by the
other party.

(b) All Taxes attributable to an Affiliate (or any subsidiary
thereof) or properties, assets, operations, capital stock or surplus of an
Affiliate (or any subsidiary thereof) (i) for periods or portions thereof from
the Closing shall be the responsibility of Buyer and (ii) for periods or
portions thereof ending on or prior to the Closing shall be the responsibility
of PBI except to the extent reflected and reserved against on the Closing
Balance Sheet.

(c) Except as otherwise provided herein, PBI shall pay and be
responsible for, shall indemnify and hold Buyer harmless against, and shall be
entitled to all refunds and credits (regardless of when the appropriate Return
is filed) of, all Taxes which are payable with respect to Monarch for any
taxable year or any portion thereof ending on or before the Closing (including a
portion of a taxable year up to and including the date of the Closing);
provided, however, that notwithstanding the foregoing or anything to the
contrary contained in this Agreement, PBI (and its affiliates) shall not be
responsible for any Taxes payable with

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respect to any period ending on or before the Closing if and to the extent that
the liability for such Taxes is reflected and adequately reserved on the Closing
Balance Sheet.

(d) Buyer shall pay and be responsible for, and shall indemnify
and hold PBI (and all affiliates of PBI) harmless against, and shall be entitled
to all refunds and credits (regardless of when the appropriate Return is filed)
of, all Taxes for any taxable year or taxable period (including any portion
thereof) of Monarch commencing on or after the Closing which are due or payable
by Monarch or by Buyer with respect to Monarch.

(e) Buyer will join with PBI in making an election under
Section 338(h)(10) of the Code, (and any corresponding elections under state,
local or foreign Tax law) (collectively, a "Section 338(h)(10) Election") with
respect to the purchase and sale of the Monarch Shares. PBI will pay any
federal, state or local income tax attributable to the making of this Section
338(h)(10) Election. Buyer shall have the option to make an election under
Section 338(g) of the Code with respect to the foreign subsidiaries of Monarch.
If both PBI and Buyer agree, an election under any foreign law similar to the
election available under Section 338(g) of the Code with respect to the purchase
and sale of the Monarch Shares hereunder where the foreign tax jurisdiction does
not provide or recognize a Section 338(h)(10) Election, will be made with
respect to the foreign subsidiaries of Monarch. Buyer will pay federal, state,
local and foreign taxes (and indemnify PBI and its affiliates against any
adverse consequences arising out of any failure to pay such tax) attributable to
an election under Section 338(g) or an election corresponding to Section 338(g)
of the Code made under any foreign law; provided, however, that Buyer's total
liability under the preceding sentence shall be limited to the amount of tax
liability resulting from an election under Section 338(g) (or a corresponding
election under foreign law) and Section 338(h)(10)

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Election over and above the tax liability that would be imposed as a result of
Section 338(h)(10) Election without an election under Section 338(g) (or a
corresponding election under foreign law).

(f) PBI and Buyer shall execute and file such forms, returns,
elections and other documents, and take such other actions consistent with or
necessary to effect and preserve the Section 338(h)(10) Election. In connection
with such Section 338(h)(10) Election, no later than 90 days after the Closing,
PBI and Buyer shall act together in good faith to (i) determine and agree upon
the amount of the "adjusted gross-up basis" of Monarch's assets within the
meaning of Section 338 of the Code and Treasury regulations thereunder, which
"adjusted grossed-up basis" shall be determined in a manner consistent with the
Purchase Price allocated to the Monarch Shares, and (ii) agree upon the proper
allocations of the "adjusted grossed-up basis" of Monarch's assets among
Monarch's assets in accordance with section 338(b)(5) of the Code and the
Treasury regulations promulgated thereunder. In addition, PBI and Buyer shall
report consistently on their Returns the amount of consideration paid by Buyer
for the Shares, which is allocated among the assets in accordance with the
allocations made pursuant to Section 1.5 hereof and this Section 10.1(f).

(g) Neither Buyer nor any member of the affiliated group
(within the meaning of Section 1504 of the Code) which includes the Buyer shall
make an election (hereinafter a "Regular Section 338 Election") under Section
338(g) of the Code with respect to Monarch (other than the Section 338(h)(10)
Election) or take or omit to take any action, the taking or omission of which
causes Buyer or any member of the affiliated group which includes Buyer to be
treated as having made a Regular Section 338 Election with respect to Monarch.
In the event Buyer makes or is treated as having made a Regular Section 338

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Election with respect to Monarch due to actions or errors on the part of Buyer,
then, Buyer, notwithstanding anything contained in this Agreement to the
contrary, shall pay and be responsible for, and shall indemnify and hold PBI
(and all affiliates of PBI) harmless against, all Taxes payable with respect to
Monarch which arise from such Regular Section 338 Election.

(h) PBI will include the income of Monarch in the PBI
consolidated federal income tax returns for all periods through the Closing and
pay any federal income taxes attributable to such income. Monarch shall furnish
Tax information to PBI for inclusion in PBI's federal consolidated income Tax
return for the period which includes the Closing in accordance with Monarch's
past custom and practice. The income of Monarch and its subsidiaries will be
apportioned for the period up to and including the Closing and the period after
the Closing by closing the books of Monarch as of the Closing.

(i) PBI shall have the right, at its own expense, to control
any audit or examination by any taxing authority ("Tax Audit"), initiate any
claim for refund or amended return, and contest, resolve and defend against any
assessment, notice of deficiency or other adjustment or proposed adjustment of
Taxes with respect to Monarch for any taxable period ending on or before the
Closing. Buyer shall promptly forward to PBI all written notification and other
written communications from any taxing authority received by Buyer or Monarch
relating to any liability for Taxes for any such taxable period, and Buyer shall
execute or cause to be executed any powers of attorney or other documents
requested by PBI to enable PBI (or any of its affiliates) to take any and all
reasonable actions PBI desires to take subject to the provisions of this Section
10.1(i) with respect to any Tax Audit for any such period. Notwithstanding the
foregoing, (i) PBI shall not settle or otherwise resolve any

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assessment, notice of deficiency or adjustment of Taxes of Monarch for any
taxable period ending on or before the Closing where such settlement or
resolution could reasonably be expected to result in a Material Adverse Tax
Effect without the consent of Buyer, which consent shall not be unreasonably
withheld, delayed or conditioned; and (ii) in the event the results of a Tax
Audit or proceeding involving a taxable period ending within three (3) years
after the date of the Closing could reasonably be expected to have a Material
Adverse Tax Effect for periods ending on or before the date of the Closing,
there shall be no settlement or other agreement with respect thereto without the
written consent of PBI (which consent shall not be unreasonably withheld,
conditioned or delayed).

(j) For any taxable year or Tax period beginning after the
Closing, Buyer and Monarch shall be liable for, and shall hold PBI (and all its
affiliates) harmless from and against, any and all Taxes due or payable by Buyer
or by Monarch with respect to Monarch.

(k) Any Taxes for a tax period beginning before the Closing and
ending after the Closing shall be apportioned between PBI and Buyer, in the case
of any Taxes other than gross receipts, sales or use Taxes and Taxes based upon
or related to income, on a per diem basis and, in the case of any Tax based upon
or related to income and any gross receipts, sales or use Tax, based on the
actual operations of Affiliate during the portion of such period ending on the
Closing and the portion of such period beginning on the day following the
Closing, and each such portion of such period shall be deemed to be a Tax period
subject to the provisions of this Section 10.1. All determinations necessary to
give effect to the foregoing apportionment shall be made in a manner consistent
with generally accepted accounting principles. Buyer shall cause Affiliate to
file any required separate (non-consolidated or non-combined) federal, state,
local and foreign tax returns for any such

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period, and Buyer shall pay, or cause its subsidiaries or affiliates to pay, all
federal, state, local or foreign Taxes shown as due on any such return with
respect to Monarch. Buyer will notify PBI of any amount of Taxes (or a portion
thereof) due on such return for which PBI is liable pursuant to Sections
10.1(b) or 10.1(c) hereof within 10 days after such amount is
determined, and PBI will pay such amount to Buyer within 10 days after receipt
of such notice.

(l) Subsequent to the date hereof, the parties hereto shall
provide, and cause their respective subsidiaries to provide, each other, with
such cooperation and information relating to the Business as the parties
reasonably deem necessary in (i) filing any Return, amended Return, claim for
refund, election or consent, (ii) determining any liability for Taxes or a right
to refund of Taxes, or (iii) conducting or defending any audit or other
proceedings in respect of Taxes. Such cooperation and information shall include
providing copies of all relevant Tax Returns, together with accompanying
schedules and related work papers, documents relating to rulings or other
determinations by taxing authorities and records concerning the ownership and
tax basis of property which the Affiliates or any of the Selling Subsidiaries
may possess. The parties shall make, and shall cause their respective
subsidiaries to make, their employees, accountants and other advisors available
on a mutually convenient basis to provide explanations of any documents or
information required to be provided hereunder. The parties shall retain, and
shall cause their respective subsidiaries to retain, all Returns, schedules and
work papers, and all material records and other documents relating thereto,
until the later of (x) the date which is ten (10) years after the last day of
the taxable year to which such Returns, schedules, work papers, records or
documents relate or (y) the expiration of the statute of limitations (and to the
extent notified by any party, any

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extensions thereof) of the taxable years to which such Returns and other
documents relate and, unless such Returns and other documents are offered and
delivered to PBI or Buyer, as applicable, until the final determination of any
Tax in respect of such years. In addition, the parties shall comply, and shall
cause their respective subsidiaries to comply, with all applicable governmental
record retention agreements entered into with any taxing authority with respect
to the Affiliates, the Purchasing Subsidiaries and/or the Selling Subsidiaries.

(m) All refunds or over-payment credits of Taxes, to the extent
that such refunds or credits arise from events occurring on or before the
Closing, shall be for the account of PBI, and Buyer shall promptly forward to or
reimburse PBI for any such refunds or over-payment credits due PBI after the
receipt thereof. Notwithstanding the preceding sentence, however, Buyer shall
not be entitled to any refund or credit of Taxes resulting from the carryback of
any item to a taxable year or Tax period ending on or before the Closing if an
election could have been made to relinquish such carryback.

(n) PBI and Buyer jointly shall represent the interests of the
Affiliates in any Tax Audit or administration or court proceeding relating to
any taxable period of the Affiliate which includes (but does not begin or end
on) the date of the Closing. All costs, fees and expenses paid to third parties
in the course of such proceeding shall be borne by PBI and Buyer in the same
ratio in which, pursuant to the terms of this Agreement, PBI and Buyer would
share the responsibility for payment of the Taxes asserted by the taxing
authority in such claim or assessment if such claim or assessment were sustained
in its entirety.

(o) Without prejudice to any rights of PBI under Section
10.1(m), Buyer and PBI have agreed in relation to Monarch United Kingdom,
Monarch France, Monarch

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Mexico, Monarch Singapore and Monarch Hong Kong that in respect of all taxable
periods or portions thereof ended on or before the Closing (the "Relevant
Periods") PBI shall (i) pay and be responsible for, and shall indemnify and hold
Buyer (and all affiliates of Buyer) harmless against, Taxes for the Relevant
Periods (if and to the extent not reserved for in the Closing Balance Sheet) and
(ii) have the right to solely conduct the Tax affairs for the Relevant Periods
(excluding taxable periods beginning prior to and ending after the date of the
Closing). Buyer agrees that (i) PBI (or such professional advisers as PBI may
elect) shall have the right to conduct the preparation, submission to the taxing
authorities, negotiation, correspondence and agreement of the profits or losses
for taxation purposes for the Relevant Periods (excluding taxable periods
beginning prior to and ending after the date of the Closing) and that PBI and
its advisers shall be provided on a timely basis with such information and
assistance and access to such documents and records as it may reasonably require
and Buyer may reasonably deem necessary in connection therewith, and (ii) except
as directed by PBI in writing from time to time, neither Buyer nor any affiliate
of Buyer shall do any act or thing after Closing which would reduce or
extinguish any relief or allowance in respect of any Relevant Period and neither
Buyer nor any affiliate of Buyer shall amend, disregard, withdraw or disclaim
any elections, claims or benefits in relation to any Relevant Period.
Notwithstanding the foregoing, PBI shall obtain Buyer's prior consent (which
consent shall not be unreasonably withheld, delayed or conditioned) in any
submission to the taxing authorities or any settlement or other resolution of
tax issues relating to the Relevant Periods where the resolution of such Tax
issue or issues could reasonably be expected to have a Material Adverse Tax
Effect.

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10.2 Further Assurances. At any time and from time to time
after the Closing, the parties agree to cooperate with each other, to execute
and deliver such other documents, instruments of transfer or assignment, and do
all such further acts and things as may be reasonably required to carry out the
transactions contemplated hereunder.

10.3 Access to Records. Following the Closing, at the
reasonable request of PBI, Buyer shall give and cause each Affiliate and each
Purchasing Subsidiary to give to PBI, each Selling Subsidiary and their
respective authorized representatives full access, during regular business
hours, to any and all of the premises, properties, contracts, books, records and
data of each Affiliate or to the extent relevant, any contracts, books, records
and data relating to the Purchased Assets relating to periods on or prior to the
Closing and to make copies thereof or extracts therefrom, and will cause its, an
Affiliate's or a Purchasing Subsidiary's officers, directors, employees, agents
and other representatives to furnish to PBI, each Selling Subsidiary and their
respective authorized representatives, any and all data and information
pertaining to an Affiliate or to the Purchased Assets or the operation thereof
relating to periods on or prior to the Closing that PBI shall from time to time
reasonably request. At Buyer's reasonable request, PBI shall give and cause each
Selling Subsidiary to give Buyer, an Affiliate, or a Purchasing Subsidiary and
their authorized representatives full access, during regular business hours, to
their sales records exclusively related to the Business (other than those in the
possession of an Affiliate after the Closing), and shall permit Buyer to make a
copy or extracts from any such documents as Buyer shall reasonably designate.

10.4 Preservation of Records. Buyer agrees that it shall, and
shall cause each Affiliate and each Purchasing Subsidiary to, preserve and keep
the records of such

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Affiliate or an Asset Seller delivered to Buyer or a Purchasing Subsidiary
hereunder (including Tax related documents and agreements under Section
10.3(m) hereof) for a period of ten (10) years from Closing, or for any
longer period as may be required by any Person or other authority or any ongoing
investigation, claim, suit, action, proceeding or litigation, and shall make
such records available to PBI as may be reasonably required by PBI in connection
therewith or in connection with any tax examination or audit of PBI. If Buyer,
an Affiliate or a Purchasing Subsidiary wishes to destroy or discard such
records after that time, Buyer shall first give or cause to be given ninety (90)
days' prior written notice to PBI and PBI shall have the right, at its option
and expense, upon prior written notice given to Buyer within said ninety (90)
day period, to take possession of said records within one hundred and eighty
(180) days after the date of the notice from Buyer.

10.5 Transitional Use of Trademarks and Corporate Name.

(a) Except as expressly permitted by Section 10.5(b) hereof,
Buyer shall not use, and shall not permit any Affiliate, any Purchasing
Subsidiary or any other subsidiary or affiliate of the Buyer, to directly or
indirectly, in any manner whatsoever, use the names and service marks "Pitney
Bowes," "Pitney Bowes Inc.," "PBI" or "PB", or any corporate logo or design,
name, trade name, trademark, assumed name, corporate name or service mark which
contains or is confusingly similar to the names "Pitney Bowes," "PBI," "PB" or
"Pitney Bowes Inc.," or to PBI's corporate logo or design ("PBI Names and
Marks"), including but not limited to use as a corporate logo or design, name,
trade name, trademark, assumed name, corporate name or service mark, and shall
not attempt to register said PBI Names and Marks in any federal, state, or
foreign trademark office. Buyer acknowledges that PBI owns all right, title and
interest in said PBI Names and Marks and agrees that PBI

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shall not have an adequate remedy at law for any actual or attempted breach or
violation of this Section 10.5(a), and that PBI shall, in addition to
any other rights or remedies, be entitled to specific performance, injunction or
any other equitable remedy for any such actual or attempted breach or violation.

(b) PBI recognizes that certain labels, containers therefor,
stationery, signs, forms, supplies, items of inventories, documents and other
materials that comprise the Purchased Assets or are or will be in the possession
or control of Monarch, Monarch France, Monarch United Kingdom, Monarch Mexico,
Monarch Singapore, Monarch Hong Kong and/or the Purchasing Subsidiaries, as well
as promotional material relating to such inventory, will bear reference to PBI
Names and Marks. PBI agrees that Buyer, Monarch, Monarch France, Monarch United
Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong and the Purchasing
Subsidiaries may (i) sell or dispose of any inventory bearing reference to the
PBI Names and Marks in the ordinary course of business (including without
limitation packaging and containers) until such inventory is sold or disposed of
and (ii) use up, for a period of six (6) months after the Closing in North
America and one (1) year after the Closing in the rest of the world, any labels,
containers, stationery, signs, forms, supplies, documents and materials bearing
reference to the PBI Names and Marks which do not constitute inventory for
internal purposes only and not for sale, dissemination, transmission or other
distribution to any Person other than the Buyer, Monarch, Monarch France,
Monarch United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong or
a Purchasing Subsidiary unless said reference is overstamped to the extent
practicable without unreasonable expense but only in each such case set forth in
clauses (i) or (ii) above if such inventory, labels, containers, stationery,
signs, forms, supplies, documents

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and materials were in the possession of the Monarch, Monarch France, Monarch
United Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong or Asset
Sellers as of the Closing or, to the extent inventory was in the possession of
any of their respective suppliers as of the Closing or was manufactured after
the Closing and within the period of time required to retool and permit its
suppliers to retool, or were returned by customers after the Closing.
Notwithstanding the above, Buyer, Monarch, Monarch France, Monarch United
Kingdom, Monarch Mexico, Monarch Singapore, Monarch Hong Kong and the Purchasing
Subsidiaries shall not have any rights to any blank check stock bearing a
reference to the PBI Names and Marks and shall return any such checks to PBI as
soon as practicable. Buyer, Monarch, Monarch France, Monarch United Kingdom,
Monarch Mexico, Monarch Singapore, Monarch Hong Kong and the Purchasing
Subsidiaries shall not use or permit the use of any such labels, containers,
stationery, signs, forms, supplies, documents or materials except in strict
compliance with this Section 10.5 and shall instruct their respective
suppliers to retool so as to comply with this Section 10.5 promptly
after the Closing.

(c) After the Closing, except in connection with the resale of
products of the Purchased Business as expressly authorized to PBI or its
subsidiaries, PBI will not, and will not permit any of its subsidiaries, to
directly or indirectly, in any manner, use or register the name "Monarch" or
"Monarch Marking", or any corporate logo or design, name, trade name, trademark,
assumed name, corporate name or service mark which contains or is confusingly
similar to the names "Monarch", "Marking Systems" or "Monarch Marking", which in
each case shall include any foreign translation thereof, for advertising or
promotion or in any other fashion. PBI acknowledges that Buyer shall not have an
adequate remedy at

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law for any actual or attempted breach or violation of this Section 10.5(c), and
that Buyer shall, in addition to any other rights or remedies, be entitled to
specific performance, injunction or any other equitable remedy for any such
actual or attempted breach or violation.

10.6 Non-Competition.

(a) PBI acknowledges that the Buyer would be irreparably harmed
if the Intellectual Property or any proprietary information that primarily
relates to the Business or the business and affairs of Monarch or the Buyer or
their subsidiaries (all of which is collectively called the "Buyer Proprietary
Information") were disclosed to or utilized on behalf of any Person that is in
competition in any material respects with any line or lines of business of
Monarch or the Buyer. PBI covenants and agrees that it will not at any time,
without the prior written consent of Buyer, disclose or use such Buyer
Proprietary Information or assist any Person through the use or disclosure of
such Buyer Proprietary Information to compete with the Purchased Business.
Promptly after the Closing, PBI shall inform and cause each of its subsidiaries
to inform their respective employees of the provisions of this Section 10.6(a)
and, except as otherwise expressly permitted by Buyer or its subsidiaries, to
return to Monarch or destroy all Buyer Proprietary Information in their
possession as of the Closing as well as all excerpts or reproductions or studies
or other derivatives therefrom in existence as of the Closing.

(b) In order that the Buyer may have and enjoy the full benefit
of the Purchased Business, and in order to protect its invaluable business
reputation and goodwill and to protect the confidential business information of
Monarch and to prevent the use of intellectual property by Persons not entitled
to the use thereof, PBI agrees for a period of

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seven years from the Closing (the "Restricted Period") to comply with the
following terms, all of which are reasonable and necessary to protect the
confidential business information of the Purchased Business and to prevent any
unfair advantage from being conferred upon a competing business of the Purchased
Business:

(i) PBI will not, and will not permit any of its
subsidiaries to, directly or indirectly, persuade or attempt to
persuade, any customer or supplier of the Purchased Business to
cease doing business with the Purchased Business or reduce the
amount of its prior business with respect to the existing lines
of Monarch products;

(ii) Except as expressly set forth in Section
10.6(d), PBI will not, directly or indirectly, compete
with, or become an investor or partner in, or supplier of ink
or ink rollers to, any person who competes in the field of
manufacturing, or marketing of bar code printing or data
collection devices, handheld, electronic or mechanical printers
or labelers, or components of any of the foregoing or marking
services or supplies (including but not limited to tickets,
tags and labels) for retail marking applications, industrial,
trade or governmental applications or inventory management or
distribution systems worldwide, provided, however, that nothing
herein shall prevent PBI or its subsidiaries from developing,
manufacturing, marketing or distributing (either directly or
through third party distributors) systems which integrate bar
code printers and data collection devices for any applications
including industrial, trade, government, and inventory
management or distribution systems; and

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(iii) Unless otherwise agreed to in a writing signed by
Buyer and PBI, PBI will not permit any of its subsidiaries to,
at any time, use or disclose any Buyer Proprietary Information
to any Person whatsoever. PBI further agrees to take all
commercially reasonable steps to prevent its affiliates and
agents from using or disclosing any Buyer Proprietary
Information in violation of this Section 10.6.

(c) The Buyer acknowledges that PBI would be irreparably harmed
if any of the intellectual property or any proprietary information that
primarily relates to the business or affairs of PBI and its subsidiaries (all of
which is collectively called the "PBI Proprietary Information") were disclosed
to or utilized on behalf of any Person that is in competition in any material
respects with any line or lines of business of PBI or its subsidiaries. The
Buyer covenants and agrees that it will not at any time, without the prior
written consent of PBI, disclose or use such PBI Proprietary Information or
assist any Person through the use or disclosure of such PBI Proprietary
Information to compete with the business of PBI or any of its subsidiaries.
Promptly after the Closing, the Buyer shall inform and cause each of its
subsidiaries to inform their respective employees of the provisions of this
Section 10.6(b) and, except as otherwise expressly permitted by PBI or its
subsidiaries, to return to PBI or destroy all PBI Proprietary Information in
their possession as of the Closing as well as excerpts or reproductions or
studies or other derivatives, therefrom in existence as of the Closing.

(d) Notwithstanding anything in this Section 10.6 to the
contrary, except for those Persons set forth on Schedule 10.6(d) hereto and any
Person manufacturing or selling hand held labeling devices, nothing in this
Agreement shall prohibit (i) any Person

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from owning not more than ten percent (10%) of any class of securities of any
Person which is registered under the Securities Exchange Act of 1934, as
amended, (ii) any Person in which PBI, the Buyer or any subsidiary of either
thereof acquires an interest after the date hereof and which as of the date of
such acquisition is engaged in activities which, if engaged in by PBI, the Buyer
or any subsidiary of either thereof, would otherwise be prohibited under this
Section 10.6, from continuing to engage in such activities, provided
that all such activities permitted under this clause (ii) in which such Person
engages do not (x) in any fiscal year following the acquisition and during the
Restricted Period or (y) in either of the two (2) fiscal years preceding the
acquisition produce gross revenues (A) of more than fifteen percent (15%) of
such Person's consolidated gross revenues or (B) exceeding $10,000,000 or (iii)
any Person from entering into or acquiring an interest in any partnership, joint
venture, strategic alliance or other similar arrangement, agreement or
understanding with another Person who is independently engaged in activities
which, if engaged in by PBI, the Buyer or any subsidiary of either thereof,
would otherwise be prohibited under this Section 10.6 (including without
limitation a Person set forth on Schedule 10.6(d) hereto), provided that
such partnership, joint venture, strategic alliance, arrangement, agreement or
understanding does not engage in any such activities. If PBI, the Buyer or any
subsidiary of either thereof acquires an interest in a Person engaged in
activities which would otherwise be prohibited under this Section 10.6
beyond what is permitted under this Section 10.6(d), or if any
previously acquired Person exceeds the permitted amounts in any fiscal year
during the Restricted Period, it shall within one hundred twenty (120) days take
such action as is necessary to bring such Person's activities into compliance
with this Section 10.6(d).

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(e) In order that PBI may have and enjoy the full benefit of
the exclusive licenses retained by PBI and protect its invaluable business
reputation and goodwill and to protect the confidential business information of
PBI and to prevent the use of intellectual property licensed exclusively to PBI
by persons not entitled to the use thereof:

(i) Subject to license rights and other rights to the
MONARCH PATENTS (as defined in the License Agreement) held by
third parties as of the Closing, during the Restricted Period,
the Buyer will not, and will not permit any Affiliate or any of
its other subsidiaries to, directly or indirectly, engage in
the manufacture or sale of products in violation of the
exclusive patent rights granted to PBI, under the License
Agreement, in FIELD I (as defined in the License Agreement).

(ii) Unless otherwise agreed to in a writing signed by
Buyer and PBI, the Buyer will not, and will not permit any
Affiliate or any of its other subsidiaries to, at any time, use
or disclose any PBI Proprietary Information to any Person
whatsoever. The Buyer further agrees to take commercially
reasonable steps to prevent its affiliates and agents from
using or disclosing any PBI Proprietary Information; and

(iii) Buyer will not, and will not permit any of its
subsidiaries to, directly or indirectly, persuade or attempt to
persuade, any customer or supplier of PBI, in contravention of
PBI's license rights in FIELD I, to cease doing or reduce the
amount of its business with PBI.

(f) The parties acknowledge and agree that the covenants set
forth in this Section 10.6 (the "Section 10.6 Covenants") are reasonable and
valid in duration, geographical

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scope and in all other respects. If at the time of enforcement of this Section
10.6, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope, or area. The
parties hereto intend to and hereby confer jurisdiction to enforce the Section
10.6 Covenants upon the federal and state courts of the State of New
York. If any court determines that any, or any part of any, Section 10.6
Covenant is unenforceable or invalid, the remainder of the Section 10.6
Covenants shall not be thereby effected and shall be given full effect without
regard to the invalid portions. The parties acknowledge and agree that (i) the
consideration being paid hereunder is intended to and does compensate the
parties and their affiliates for any inconveniences or economic deprivation
resulting from the Section 10.6 Covenants and (ii) the Section
10.6 Covenants are essential to protect their respective businesses and
goodwill.

(g) PBI and the Buyer agree that if either of them or any of
their respective subsidiaries commits or threatens to commit a breach of any of
the Section 10.6 Covenants, the other party shall have the right to seek and
obtain all appropriate injunctive and other equitable remedies therefor, without
the necessity of posting bond, in addition to any other rights and remedies that
may be available at law, it being acknowledged and agreed that any such breach
would cause irreparable injury and that money damages alone would not provide an
adequate remedy therefor.

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ARTICLE 11 - PUBLICITY; CONFIDENTIALITY

11.1 Publicity. The parties agree that, prior to and including
the Closing, no publicity, release or announcement concerning the execution of
this Agreement, any of the provisions of this Agreement or the transactions
contemplated hereby shall be issued without the prior written approval of the
form and content of same by each of the parties hereto; provided, however, that
no such approval shall be required when such disclosure is required by
applicable law or the rules or regulations of a national or foreign stock
exchange or self-regulatory organization.

11.2 Confidentiality. Until the Closing and the consummation of
the transactions contemplated by this Agreement, subject to the next sentence,
each of the parties hereto shall continue to be bound by all of the terms and
conditions of the Confidentiality Agreement. In accordance with Paragraph 8 of
the Confidentiality Agreement, this Agreement constitutes a definitive
Transaction Agreement for purposes of the Confidentiality Agreement and, to the
extent and only to the extent inconsistent with this Agreement, the
Confidentiality Agreement is hereby amended and waived. As of the Closing, the
Confidentiality Agreement will automatically terminate and be of no further
force or effect. PBI agrees that it will request all other parties who executed
confidentiality agreements relating to the sale of the Monarch business to
return to PBI or to destroy all informational material relating to Monarch
provided to such parties. Upon receipt of such informational material, PBI will
return to Monarch any such informational material relating to the Business or
destroy same.

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<PAGE> 98

ARTICLE 12 - NOTICES

Except as expressly set forth in this Agreement, any notices or
communications permitted or required hereunder shall be in writing and shall be
deemed sufficiently given if hand-delivered or sent (i) postage prepaid by
registered or certified mail - return receipt requested, (ii) by nationally
recognized overnight courier service or (iii) by facsimile, with receipt
confirmed, to the respective parties as set forth below, or to such other
address of which any party may notify the other in writing:

if to PBI or any of
the Selling Subsidiaries, to:

PITNEY BOWES INC.
World Headquarters
One Elmcroft Road
Stamford, Connecticut 06926-0700
Attn: Douglas A. Riggs, Esq.,
Vice President, Communications, Planning,
Secretary and General Counsel
Facsimile: (203) 351-7756

with a copy to:

KELLEY DRYE & WARREN
101 Park Avenue
New York, New York 10178
Attn: John M. Callagy, Esq. and
Merrill B. Stone, Esq.
Facsimile: (212) 808-7897

if to Buyer, to:

MONARCH ACQUISITION CORP.
170 Monarch Lane
Miamisburg, Ohio 45342
Attn: Corporate Secretary
Facsimile: 513-865-2073

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<PAGE> 99

with a copy to:

LATHAM & WATKINS
885 Third Avenue
New York, New York 10022
Attn: Kirk A. Davenport, Esq.
Facsimile: 212-751-4864

and

SNOW BECKER KRAUS
605 Third Avenue
28th Floor
New York, New York 10158
Attn: Jack Becker, Esq.
Facsimile: 212-949-7052

All such notices shall be deemed to have been given on the date
delivered, mailed in the manner provided above or sent by facsimile.

ARTICLE 13 - BROKERAGE FEES; FEES AND EXPENSES OF THE PARTIES

13.1 Brokers. Each of the parties hereto represents and
warrants to the other that, except for PBI's retention of CS First Boston
Corporation for its own account, and Buyer's retention of Oppenheimer & Co. for
its own account, no broker or finder has acted on its behalf in connection with
the transactions contemplated by this Agreement. Each of the parties agrees to
indemnify, defend and hold the other party harmless from and against any claim
or demand for any commission, compensation or other payment by any other broker,
finder or similar agent claiming to have been or that was in fact employed by or
on behalf of it.

13.2 Fees and Expenses. Regardless of whether the transactions
contemplated hereby are consummated, each party shall pay its own respective
expenses including, without limitation, the fees, disbursements and expenses of
its attorneys,

94
<PAGE> 100

accountants, financial institutions and financial and investment advisors)
in connection with the negotiation, preparation and execution of this
Agreement and any amendments hereto and the transactions contemplated hereby,
except as provided in Section 8.2 hereof. The Purchased Business has not
and will not be required to bear any such expenses incurred by or on behalf of
PBI or a Selling Subsidiary prior to the Closing.

ARTICLE 14 - MISCELLANEOUS

14.1 Binding Effect; Assignment. This Agreement shall be
binding upon, and inure to the benefit of each of the parties and their
respective successors, legal representatives and assigns permitted in accordance
with this Section 14.1. Except as expressly set forth in Article 2 regarding PBI
Indemnified Persons and Buyer Indemnified Persons, all of whom are third party
beneficiaries of Article 2, nothing herein shall create or be deemed to create
any third party beneficiary rights in any Person not a party to this Agreement.
Subject to the next sentence, no assignment or delegation of this Agreement or
of any rights or obligations hereunder may be made by any party (by operation of
law or otherwise) without the prior written consent of each other party, and any
attempted assignment or delegation without such consent shall be null and void.
Notwithstanding the foregoing, no such consent shall be required for Buyer to
assign part or all of its rights under this Agreement (i) to a financial
institution as security for the debt financing referred to in Section 7(h)
hereof, (ii) to an affiliate of the Buyer or (iii) following the Closing to a
bona fide purchaser of all or a portion of the Business or to one or more
corporations owned or controlled by Buyer, provided that prior to any such
assignment pursuant to clauses (ii) or (iii) above, the assignee agrees in
writing, in form and substance subsequently to PBI, to be bound by this
Agreement and Buyer's obligations hereunder to the extent of such assignment.

95
<PAGE> 101

No assignment or agreement, whether or not permitted by this Section 14.1, shall
relieve or discharge Buyer of any of its obligations under this Agreement.

14.2 Schedules. All Schedules attached hereto and the documents
and agreements referred to herein to be delivered at or subsequent to the
Closing ("Items") are incorporated herein and expressly made a part of this
Agreement as fully as though completely set forth herein. Disclosure of any fact
or item in any Schedule hereto referenced by a particular paragraph or section
in this Agreement shall not, should the existence of the fact or item or its
contents be relevant to any other paragraph or section, be deemed to be
disclosed with respect to such other paragraph or section.

14.3 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto. In pleading or proving any provision of
this Agreement, it shall not be necessary to produce more than one such
counterpart.

14.4 Headings. The Article, Section and Schedule headings
contained in this Agreement are inserted for convenience of reference only and
shall not otherwise affect the meaning or interpretation or be deemed a
substantive part of this Agreement.

14.5 Amendments; Waiver. No provision of this Agreement may be
amended, modified or waived, except in writing signed by all parties. Any such
amendment, modification or waiver shall be limited to its express terms. The
failure of any party at any time or times to enforce fully or require strict
performance of any provision hereof shall in no way operate as a waiver of or
affect the right of such party at a later time to enforce fully

96
<PAGE> 102

or require strict performance of the same. No waiver of any term, covenant,
condition, representation or warranty in this Agreement, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver
of any such term, covenant, condition, representation or warranty, or any other
term, covenant, condition, representation or warranty.

14.6 Severability. If any provision of this Agreement shall
hereafter be held to be invalid or unenforceable for any reason, such provision
shall be reformed to the maximum extent permitted to preserve the parties'
original intent, failing which, it shall be severed from this Agreement with the
balance of this Agreement continuing in full force and effect. Such occurrence
shall not have the effect of rendering the provision in question invalid in any
other jurisdiction or in any other case or circumstance, or of rendering invalid
any other provisions contained herein to the extent that such other provisions
are not themselves actually in conflict with any applicable law.

14.7 Governing Law and Forum. This Agreement shall be governed
by and construed in all respects under the laws of the State of New York,
without reference to its conflict of laws rules or principles. Any suit, action,
proceeding or litigation arising out of or relating to this Agreement shall be
brought and prosecuted in such federal or state court or courts located within
the State of New York as provided by law. The parties hereby irrevocably and
unconditionally consent to the jurisdiction of each such court or courts located
within the State of New York and to service of process by registered or
certified mail, return receipt requested, or by any other manner provided by
applicable law, and hereby irrevocably and unconditionally waive any right to
claim that any suit, action, proceeding or litigation so commenced has been
commenced in an inconvenient forum.

97
<PAGE> 103

14.8 Bulk Sale Laws. The parties hereby waive compliance with
the bulk sales and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement.

14.9 Insurance Covenant. PBI covenants that, to the extent
Buyer can legitimately make a claim on behalf of Monarch under a PBI policy in
effect prior to the Closing, it will diligently prosecute such claim or assist
Buyer in making such claim.

14.10 Survival of Representations and Warranties. The
respective representations, warranties and covenants of each of the parties to
this Agreement shall survive the Closing and the consummation of the
transactions contemplated hereby, regardless of any investigation made by or on
behalf of, or disclosure to, any party to whom such representations, warranties
or covenants have been made; provided, however, that (a) any representation,
warranty or covenant set forth in Article 4, other than Sections 4.1, 4.2, 4.3,
4.4, 4.11, 4.16 or matters as to title to assets or property, shall survive
until April 30, 1997 (the "Expiration Date"), except (i) as to any matter as to
which the notice required by Section 2.2 is provided to PBI prior to the
Expiration Date, in which case the representations, warranties and covenants
that are the subject of such notice shall continue to survive and remain a basis
for indemnity as to the relevant Claim until such Claim is finally resolved or
disposed of and (ii) as to any matter that is based upon fraud by PBI, Monarch
or any Selling Subsidiary, in which case the representations, warranties and
covenants that are the subject of such fraud shall not expire prior to the
expiration of the applicable statute of limitations, (b) any representation,
warranty or covenant set forth in Article 3, Section 4.4 or Section 4.16 shall
survive until the expiration of any applicable statute of limitations, except as
to any matter as to which the notice required by Section 2.2 is provided to PBI

98
<PAGE> 104

prior to such date, in which case the representations, warranties and covenants
that are the subject of such notice shall continue to survive and remain a basis
for indemnity as to the related Claim until such Claim is finally resolved or
disposed of, (c) any representation, warranty or covenant set forth in Section
4.11 shall survive for a period of five years from the Closing, except as to any
matter as to which the notice required by Section 2.2 is provided to PBI prior
to such date, in which case the representations, warranties and covenants that
are the subject of such notice shall continue to survive and remain a basis for
indemnity as to the related Claim until such Claim is finally resolved or
disposed of, and (d) any representation, warranty or covenant set forth in
Section 4.1, 4.2, or 4.3 or matters as to title to assets or property shall
survive without any limitations.

14.11 Definitions. The following terms are defined this
Agreement at the locations indicated below:

<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Additional French Shares 8th Recital
Affiliates 4.2(d)
Agreement Title
Asset Sellers 12th Recital
Assets 4.7
Assumed Liabilities 2.1(b)
Book Value 1.4(a)
Business 11th Recital
Buyer Title
Buyer Indemnified Person 2.1(c)
Buyer Proprietary Information 10.6(a)
Claim 2.2
Closing 9.1
Closing Balance Sheet 1.4(b)
Closing Book Value 1.4(f)
Closing Purchase Price 1.7(a)
Code 4.4(d)
Confidentiality Agreements 4.27(xi)
Contracts 4.14
</TABLE>

99
<PAGE> 105

<TABLE>
<S> <C>
Consents 1.6
December 31 Book Value 1.4(a)
Employee Retention Period 3.1(a)
Employees 3.1(a)
Environmental Claims 4.11
Environmental Conditions 4.11
Environmental Laws 4.11
ERISA 3.1(d)
Estimated Book Value 1.4(a)
Estimated Financial Statements 1.4(a)
Excluded Assets 1.2(a)
Excluded Liabilities 2.1(b)
Expenses 13.2(c)
Experts 2.2
Expiration Date 14.10
French Exchange Control Law 1.6
French Shares 8th Recital
HSR Act 1.6
Hazardous Substances 4.11
Hong Kong Shares 6th Recital
Indemnified Party 2.2
Indemnifying Party 2.2
Intellectual Property 4.13
Items 14.2
Leased Real Property 4.5(d)
Liabilities 2.1(a)
License Agreement 6(h)
Liens 4.2(d)
Material Adverse Effect 4.2(e)
Material Adverse Tax Effect 4.27(viii)
Monarch Title
Monarch Australia 2nd Recital
Monarch Brazil 9th Recital
Monarch Canada 3rd Recital
Monarch France 4th Recital
Monarch Germany 2nd Recital
Monarch Hong Kong 6th Recital
Monarch Mexico 9th Recital
Monarch New Zealand 9th Recital
Monarch Shares 1st Recital
Monarch Singapore 9th Recital
Monarch United Kingdom 5th Recital
Owned Real Property 4.5(d)
PB France Title
PB Italy 4.13
</TABLE>

100
<PAGE> 106

<TABLE>
<S> <C>
PB Marking Title
PB Sweden 4.13
PBI Title
PBI Indemnified Person 2.1(a)
PBI Names and Marks 10.5(a)
PBI Proprietary Information 10.6(c)
PBIH Title

Person 4.3(b)
Personnel 4.25(c)
Plan 4.16
Present French Shares 7th Recital
Property 4.5(b)
Purchased Assets 1.2
Purchased Business 1.3
Purchase Price 1.3
Purchasing Subsidiary 15th Recital
Regular Section 338 Election 10.1(g)
Relevant Period 10.1(o)
Restricted Period 10.6(b)
Retiree Welfare Obligations 3.1(d)
Returns 4.4
Section 10.6 Covenants 10.6(f)
Section 338(h)(10) Election 10.1(e)
Shares 8th Recital
Selling Subsidiary 4th Recital
Subsidiary Purchase Agreements 1.2(b)
Tax Audit 10.1(i)
Taxes 4.4(a)
Total Consideration 1.5
Transactional Taxes 10.1(a)
UK Acts 1.6
UK Shares 5th Recital
U.S. Dollar Price 1.7(a)
</TABLE>

14.12 Entire Agreement. This Agreement, all agreements
ancillary hereto or executed in connection herewith, all Schedules attached
hereto or thereto and all other documents and certificates referred to herein or
therein constitute the entire understanding of the parties concerning the sale
and purchase of the Purchased Business and the operation of each Affiliate, and
cancel and supersede all previous agreements and understandings, oral or

101
<PAGE> 107

written, between the parties with respect to the subject matter hereof, except
for the Confidentiality Agreement. Except for the representations and warranties
set forth in this Agreement or in the Schedules attached hereto, Buyer disclaims
reliance upon any representations, warranties or guarantees, express or implied,
by PBI or Monarch, their employees, agents, attorneys in fact or other
representatives, including without limitation, any projections of future sales
or earnings, or any other information with respect to an Affiliate or the
Business provided to Buyer by PBI or Monarch.

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<PAGE> 108

14.13 Accounting Principles. References herein to
generally accepted accounting principles shall be to generally accepted
accounting principles in the United States.

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.

PITNEY BOWES INC.

By: /s/ Carmine F. Adimando
-----------------------------------
Name:
Title:

MONARCH MARKING SYSTEMS, INC.

By: /s/ Carol St. Mark
-----------------------------------
Name:
Title:

PITNEY BOWES MARKING SYSTEMS LTD.

By: /s/ Carol St. Mark
-----------------------------------
Name:
Title:

PITNEY BOWES INTERNATIONAL HOLDINGS INC.

By: /s/ Carmine F. Adimando
-----------------------------------
Name:
Title:

103
<PAGE> 109

PITNEY BOWES FRANCE S.A.

By: /s/ R. C. Gray
------------------------------------
Name:
Title:

MONARCH ACQUISITION CORP.

By: /s/ Paul D. Barnett
-----------------------------------
Name:
Title:

104

<PAGE> 1
EXHIBIT 10.1

STOCKHOLDERS' AGREEMENT

among

MONARCH HOLDINGS, INC.

PAXAR CORPORATION

and

ODYSSEY PARTNERS, L.P.

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

June 29, 1995

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

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Definitions and Incorporation by Reference.................................................. 1
1.1 Definitions................................................................ 1
1.2 Other Definitions.......................................................... 2

2. Board of Directors.......................................................................... 2
2.1 Election of Directors...................................................... 2
2.2 Eligibility................................................................ 3
2.3 Committees; Subsidiary Board of Directors.................................. 3

3. Transfer and Purchase of Common Stock....................................................... 3
3.1 Restrictions on Transfer of Common Stock................................... 3
3.2 Affiliates Bound........................................................... 3
3.3 Restriction on Purchase of Common Stock.................................... 4

4. Put and Call; Sale of the Company........................................................... 4
4.1 Initial Put................................................................ 4
4.2 Valuation Put.............................................................. 5
4.3 Call....................................................................... 6
4.4 Sale of the Company........................................................ 8
4.5 Closing of Purchase and Sale of the Offered Shares......................... 9
4.6 Limitation on Offers....................................................... 9

5. Major Actions............................................................................... 9

6. Formation of the Company.................................................................... 11

7. Miscellaneous............................................................................... 11
7.1 Legend..................................................................... 11
7.2 Binding on Transferees..................................................... 11
7.3 Notices.................................................................... 11
7.4 Severability............................................................... 12
7.5 Confidentiality............................................................ 12
7.6 Further Assurances......................................................... 13
7.7 Remedies................................................................... 13
7.8 Entire Agreement........................................................... 13
7.9 Waiver..................................................................... 13
7.10 Amendments................................................................. 13
7.11 Variations in Pronouns..................................................... 13
7.12 Term....................................................................... 13
7.13 Governing Law.............................................................. 13
7.14 Counterparts............................................................... 14

EXECUTION COPY
</TABLE>

<PAGE> 3
STOCKHOLDERS' AGREEMENT

Stockholders' Agreement, dated as of June 29, 1995, among
Monarch Holdings, Inc., a Delaware corporation (the "Company"), Paxar
Corporation, a New York corporation ("Paxar"), and Odyssey Partners, L.P., a
Delaware limited partnership ("Odyssey"). Paxar and Odyssey are referred to
collectively as the "Stockholders" and individually as a "Stockholder."

STATEMENT OF PURPOSE

The Stockholders own substantially all of the outstanding
shares of common stock, par value $.01 per share (the "Common Stock"), of the
Company. This Stockholders' Agreement sets forth provisions governing (a) the
composition of the Board of Directors of the Company, (b) items that will
require the consent of directors designated by both Paxar and Odyssey, and (c)
the transfer of Common Stock between Stockholders and to third parties.

Accordingly, the Company and the Stockholders agree as follows:

1. Definitions and Incorporation by Reference.

1.1 Definitions. Capitalized terms not otherwise defined
herein shall have the following meanings:

"Affiliate" of any person means any individual, partnership,
corporation, group, trust or other person that directly or indirectly controls,
is controlled by, or is under common control with, such person.

"Board of Directors" means the Board of Directors of the
Company.

"Monarch" means Monarch Acquisition Corp., a wholly owned
subsidiary of the Company.

"Shares" means any and all shares of Common Stock.

"Subsidiary Board of Directors" means the Board of Directors of
each direct and indirect subsidiary of the Company.

<PAGE> 4

1.2 Other Definitions.

<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Call Exercise Notice" 4.3
"Common Stock" Second paragraph of Agreement
"Company" First paragraph of Agreement
"Company Director" 2.1
"Counteroffer" 4.2 and 4.3
"Independent Appraiser" 4.2 and 4.3
"Independent Valuation" 4.2 and 4.3
"Initial Sale Offer" 4.1
"Initial Sale Right" 4.1
"Negotiation Period" 4.1
"Odyssey" First paragraph of Agreement.
"Odyssey Appraiser" 4.3
"Odyssey Director" 2.1
"Odyssey Valuation" 4.3
"Offered Shares" 4.1, 4.2 and 4.3
"Offered Shares Purchase Price" 4.2
"Offeree" 4.1 and 4.2
"Offeree Appraiser" 4.2
"Offeree Valuation" 4.2
"Offeror" 4.1 and 4.2
"Offeror Appraiser" 4.2
"Offeror Valuation" 4.2
"Paxar" First paragraph of Agreement.
"Paxar Appraiser" 4.3
"Paxar Director" 2.1
"Paxar Valuation" 4.3
"Purchase Offer" 4.3
"Purchase Right" 4.3
"Put Exercise Notice" 4.2
"Sale Offer" 4.2
"Valuation Put Right" 4.2
</TABLE>

2. Board of Directors.

2.1 Election of Directors. Except as otherwise agreed by
the Stockholders, the Stockholders agree to vote their Shares so that the Board
of Directors shall be comprised of eight members, including three persons
designated by Paxar (each, a "Paxar Director") and three persons designated by
Odyssey (each, an "Odyssey Director"). The remaining two members of the Board of
Directors (each, a "Company Director") shall be selected by a majority of the
Paxar Directors and the Odyssey Directors (including at least two Paxar

<PAGE> 5
Directors and two Odyssey Directors), and may include members of the Company's
senior management, but which shall not include any Affiliate of Paxar or
Odyssey. The Stockholders shall take, at any time and from time to time, all
action, including voting the Shares owned by them, calling special meetings of
the Company's stockholders, and executing and delivering written consents,
consistent with the terms of this Section 2.1. Any Paxar Director or Odyssey
Director may be removed at any time with or without cause by the respective
designor, who shall then appoint a new director. Any Company Director may be
removed by a majority of the Board of Directors, which shall include at least
two Paxar Directors and two Odyssey Directors. Each Stockholder shall cooperate
fully to fill any vacancies in the Board of Directors as promptly as possible
with a person designated in accordance with this Section 2.1. The Company
Directors shall be considered independent of Paxar and Odyssey. For all purposes
of this Agreement, the parties agree that Thomas R. Loemker, who may serve as a
member of the Board of Directors, will be considered a Company Director and not
an Affiliate of Odyssey or Paxar.

2.2 Eligibility. No director shall be eligible to vote on
any matter in which he or any Affiliate has any direct or indirect interest.

2.3 Committees; Subsidiary Board of Directors. All
committees of the Board of Directors shall have an equal number of Paxar
Directors and Odyssey Directors. Except as required by applicable law in the
relevant jurisdiction or as Paxar and Odyssey may otherwise agree, the Company
and Monarch shall cause (a) the Board of Directors of Monarch to be comprised of
those persons (and only those persons) serving as directors of the Company and
(b) each other Subsidiary Board of Directors to have either no representatives
of Paxar or Odyssey, or equal numbers of such representatives.

3. Transfer and Purchase of Common Stock.

3.1 Restrictions on Transfer of Common Stock. A
Stockholder may sell, assign, transfer, give, pledge or otherwise dispose of
Common Stock only (i) to an Affiliate of such Stockholder, (ii) with the consent
of the Board of Directors (including at least two Paxar Directors and two
Odyssey Directors) in its sole discretion or (iii) pursuant to Section 4. Any
sale, assignment, transfer, gift, pledge or other disposition of Common Stock
not in compliance with this Agreement shall be null and void.

3.2 Affiliates Bound. Except as otherwise agreed by the
Board of Directors (including at least two Paxar Directors and two Odyssey
Directors), it shall be a condition to the effectiveness of any sale,
assignment, transfer, gift, pledge or other disposition of Common Stock to an
Affiliate of a Stockholder (pursuant to clause (i) of Section 3.1) that (i) such
Stockholder give notice to the Company and the other Stockholder of the sale,
assignment, transfer, gift, pledge or other disposition and (ii) such Affiliate
agree to be bound by the terms of this Agreement. For all purposes of this
Agreement, Shares held by an Affiliate of a Stockholder shall be deemed to
continue to be held by such Stockholder.

3.3 Restriction on Purchase of Common Stock. Neither
Stockholder

3
<PAGE> 6
may purchase shares of Common Stock without the consent of the other
Stockholder, other than pursuant to Section 4.

4. Put and Call; Sale of the Company.

4.1 Initial Put. Each Stockholder (for purposes of this
Section 4.1, the "Offeror") shall have a single right (an "Initial Sale Right"),
to offer to sell all, but not less than all, of its Shares (for purposes of this
Section 4.1, the "Offered Shares") to the other Stockholder (for purposes of
this Section 4.1, the "Offeree") in accordance with the terms of this Section
4.1.

(a) Exercise. To exercise its Initial Sale Right, the Offeror
shall make a written offer (the "Initial Sale Offer") to the Offeree (with a
copy to the Company), specifying the material terms and conditions (including
the purchase price and the date of closing) on which the Offeror proposes to
sell the Offered Shares to the Offeree. The Initial Sale Offer may be made at
any time during calender year 1997. An Initial Sale Offer shall be irrevocable
until it is accepted or rejected in accordance with this Section 4.1.

(b) Negotiation Period. Following delivery of an Initial Sale
Offer, the Stockholders shall discuss in good faith the terms of a sale of the
Offered Shares (provided that nothing in this Section 4.1 shall be deemed to
require the Offeree to purchase the Offered Shares prior to acceptance of the
Initial Sale Offer). The Offeree shall have 90 days from the delivery of the
Initial Sale Offer (as the same may be extended by mutual written consent, the
"Negotiation Period") to accept the Initial Sale Offer. Each party shall bear
its own expenses relating to the Initial Sale Offer.

(c) Acceptance of Initial Sale Offer; Sale of Offered Shares.
In the event that, prior to the expiration of the Negotiation Period, the
Offeree gives the Offeror written notice (with a copy to the Company) of
acceptance of the Initial Sale Offer (as the same may be amended or modified
during the Negotiation Period), then the Offeror shall sell, and the Offeree
shall purchase, the Offered Shares in accordance with Section 4.5 and the terms
of the Initial Sale Offer (as so amended or modified).

(d) Rejection of Initial Sale Offer; Sale of the Company. In
the event that the Offeree fails to given written notice of acceptance of the
Initial Sale Offer (as the same may be amended or modified during the
Negotiation Period) prior to the expiration of the Negotiation Period, and the
Stockholders are otherwise unable to agree upon the terms of a sale of the
Offered Shares, then the Offeror shall have the right, but not the obligation,
to put the Company up for sale in accordance with Section 4.4. To exercise its
right to put the Company up for sale in accordance with Section 4.4, the Offeror
shall notify the Company and the Offeree in writing of its election within 30
days following the expiration of the Negotiation Period. The Offeror's election
to sell the Company shall be irrevocable, except as the Stockholders may
otherwise agree. The Offeree may notify the Offeror prior to the expiration of
the Negotiation Period that it definitively rejects the Sale Offer, in which
case the Negotiation Period shall expire effective upon the delivery of such
notice.

4
<PAGE> 7

4.2 Valuation Put. Each Stockholder (for purposes of this
Section 4.2, the "Offeror") shall have the right (a "Valuation Put Right"),
exercisable on one occasion each at any time on or after January 1, 1998, to
offer to sell to the other Stockholder (for purposes of this Section 4.2, the
"Offeree") all, but not less than all, of the Offeror's Shares (for purposes of
this Section 4.2, the "Offered Shares") in accordance with the terms of this
Section 4.2.

(a) Exercise; Offeror Valuation; Valuation Sale
Offer. To exercise its Valuation Sale Right, the Offeror shall give written
notice thereof to the Offeree (a "Put Exercise Notice"). A Put Exercise Notice
shall be irrevocable once delivered. Within five business days of delivery of a
Put Exercise Notice, the Offeror shall retain at its expense an investment
banking firm of recognized national standing (the "Offeror Appraiser") to
determine the value of the entire Company. The Offeror Appraiser shall use such
valuation methods as are customary and appropriate in connection with the
valuation of entire businesses by nationally recognized investment banking firms
and other valuation firms, including the amount that the stockholders of the
Company would receive if the Company were sold in accordance with Section 4.4
(taking into account all potential purchasers and without applying any discount
for minority interests), or, where appropriate, public market valuations. The
Offeror Appraiser shall arrive at its determination (the "Offeror Valuation") of
the value of the Company as soon as possible, and in no event later than 45 days
following the date on which it is retained by the Offeror. The Offeror Appraiser
shall provide copies of the Offeror Valuation to Paxar, Odyssey and the Company,
and upon delivery of the Offeror Valuation, the Offeror shall be deemed to have
made an offer (the "Sale Offer") to the Offeree to sell to the Offeree for cash
all of the Offered Shares at a per-share purchase price determined in accordance
with the Offeror Valuation.

(b) Acceptance of Sale Offer. The Offeree may accept
the Sale Offer by giving the Offeror notice of acceptance within 10 business
days of delivery of the Sale Offer. In the event that the Offeree elects to
accept the Sale Offer (as the same may be amended or modified as a result of
negotiations between the parties), then the Offeree shall purchase, and the
Offeror shall sell, the Offered Shares in accordance with Section 4.5 and the
terms of the Sale Offer (as so amended or modified).

(c) Offeree Valuation. In the event that the Offeree
fails to accept the Sale Offer, then within 15 business days of delivery of the
Sale Offer, the Offeree shall either (i) retain at its expense an investment
banking firm of recognized national standing (the "Offeree Appraiser") to
determine the value of the entire Company or (ii) give the Offeror notice that
it elects to cause a sale of the entire Company in accordance with Section 4.4.
In the event that the Offeree retains an Offeree Appraiser, the Offeree
Appraiser shall determine the value of the entire Company using such valuation
methods as are customary and appropriate in connection with the valuation of
entire businesses by nationally recognized investment banking firms and other
valuation firms, including the amount that the stockholders of the Company would
receive if the Company were sold in accordance with Section 4.4 (taking into
account all potential purchasers and without applying any discount for minority
interests), or, where appropriate, public market valuations. The Offeree
Appraiser shall arrive at its determination (the "Offeree Valuation") of the
value of the Company as soon as possible, and in no event later than

<PAGE> 8
45 days following the date on which it is retained by the Offeree. The Offeree
Appraiser shall provide copies of the Offeree Valuation to Paxar, Odyssey and
the Company. Within 10 business days of delivery of the Offeree Valuation, the
Offeree shall either (i) make an offer (for purposes of this Section 4.2, the
"Counteroffer") to the Offeror to purchase all of the Offered Shares at a
per-share purchase price determined in accordance with the Offeree Valuation or
(ii) inform the Offeror and the Company that it elects to sell the Company in
accordance with Section 4.4.

(d) Acceptance of Counteroffer. To accept the
Counteroffer, the Offeror shall give the Offeree written notice of acceptance
within 10 business days of delivery of the Counteroffer. In the event that the
Offeror elects to accept the Counteroffer (as the same may be amended or
modified as a result of negotiations between the parties), then the Offeree
shall purchase, and the Offeror shall sell, the Offered Shares in accordance
with Section 4.5 and the terms of the Counteroffer (as so amended or modified).

(e) Rejection of Counteroffer; Final Appraisal. In the
event that the Offeree makes a Counteroffer as provided in Section 4.2(c) and
the Offeror fails to accept the Counteroffer as provided in Section 4.2(d), then
within 15 business days of delivery of the Counteroffer, the Stockholders shall
cause the Company to retain at the Company's expense an independent, nationally
recognized investment firm (for purposes of this Section 4.2, the "Independent
Appraiser") jointly selected by the Offeror Appraiser and the Offeree Appraiser
to arrive at a valuation of the entire Company, applying the valuation mechanism
described in Section 4.2(a) and Section 4.2(c). The Independent Appraiser shall
arrive at its determination (for purposes of this Section 4.2, the "Independent
Valuation") of the value of the Company as soon as possible, and in no event
later than 45 days following the date on which it is retained by the Company.
The Independent Appraiser shall provide copies of the Independent Valuation to
Paxar, Odyssey and the Company. By written notice to the Offeror within 10
business days of delivery of the Independent Valuation, the Offeree shall either
(i) notify the Offeror that it elects to purchase all of the Offered Shares at a
purchase price (the "Offered Shares Purchase Price") equal to the Offeror
Valuation or the Offeree Valuation, whichever is closer to the Independent
Valuation (or if they are equally close, then at a purchase price equal to the
Independent Valuation) or (ii) notify the Offeror that it elects to sell the
Company in accordance with Section 4.4. In the event that the Offeree elects to
purchase all of the Offered Shares in accordance with clause (i), then the
Offeror shall sell, and the Offeree shall purchase, all of the Offered Shares in
accordance with Section 4.5 at the Offered Shares Purchase Price. In the event
that the Offeree elects to sell the Company in accordance with clause (ii), then
the Board of Directors shall cause the sale of the Company in accordance with
Section 4.4.

4.3 Call. Paxar shall have the right (a "Purchase Right"),
exercisable on one occasion at any time on or after July 1, 1999, to offer to
purchase from Odyssey all, but not less than all, of Odyssey's Shares (for
purposes of this Section 4.3, the "Offered Shares") in accordance with the terms
of this Section 4.3.

(a) Exercise; Paxar Valuation; Purchase Offer. To exercise
its Purchase Right, Paxar shall give written notice thereof to Odyssey (the
"Call Exercise Notice").

<PAGE> 9
A Call Exercise Notice shall be irrevocable once made. Within five business days
of delivery of a Call Exercise Notice, Paxar shall retain at its expense an
investment banking firm of recognized national standing (the "Paxar Appraiser")
to determine the value of the entire Company. The Paxar Appraiser shall use such
valuation methods as are customary and appropriate in connection with the
valuation of entire businesses by nationally recognized investment banking firms
and other valuation firms, including the amount that the stockholders of the
Company would receive if the Company were sold in accordance with Section 4.4
(taking into account all potential purchasers and without applying any discount
for minority interests), or, where appropriate, public market valuations. The
Paxar Appraiser shall arrive at its determination (the "Paxar Valuation") of the
value of the Company as soon as possible, and in no event later than 45 days
following the date on which it is retained by Paxar. The Paxar Appraiser shall
provide copies of the Paxar Valuation to Paxar, Odyssey and the Company, and
upon delivery of the Paxar Valuation, Paxar shall be deemed to have made a cash
offer (the "Purchase Offer") to Odyssey to purchase all of the Offered Shares at
a per-share purchase price determined in accordance with the Paxar Valuation.

(b) Acceptance of Purchase Offer. Odyssey may accept
Paxar's Purchase Offer by giving Paxar notice of acceptance within 10 business
days of delivery of the Purchase Offer. In the event that Odyssey elects to
accept the Purchase Offer (as the same may be amended or modified as a result of
negotiations between the parties), then Paxar shall purchase, and Odyssey shall
sell, the Offered Shares in accordance with Section 4.5 and the terms of the
Purchase Offer (as so amended or modified).

(c) Odyssey Valuation. In the event that Odyssey fails to
accept the Purchase Offer, then within 15 business days of delivery of the
Purchase Offer, Odyssey shall retain at its expense an investment banking firm
of recognized national standing (the "Odyssey Appraiser") to determine the value
of the entire Company. The Odyssey Appraiser shall use such valuation methods as
are customary and appropriate in connection with the valuation of entire
businesses by nationally recognized investment banking firms and other valuation
firms, including the amount that the stockholders of the Company would receive
if the Company were sold in accordance with Section 4.4 (taking into account all
potential purchasers and without applying any discount for minority interests),
or, where appropriate, public market valuations. The Odyssey Appraiser shall
arrive at its determination (the "Odyssey Valuation") of the value of the
Company as soon as possible, and in no event later than 45 days following the
date on which it is retained by Odyssey. The Odyssey Appraiser shall provide
copies of the Odyssey Valuation to Paxar, Odyssey and the Company, and upon
delivery of such valuation Odyssey shall be deemed to have made an offer (for
purposes of this Section 4.3, the "Counteroffer") to Paxar to sell all of the
Offered Shares to Paxar at a per-share purchase price determined in accordance
with the Odyssey Valuation.

(d) Acceptance of Counteroffer. Paxar may accept the
Counteroffer by giving Odyssey written notice of acceptance within 10 business
days of delivery of the Counteroffer. In the event that Paxar elects to accept
the Counteroffer (as the same may be amended or modified as a result of
negotiations between the parties), then Paxar shall

7
<PAGE> 10
purchase, and Odyssey shall sell, the Offered Shares in accordance with Section
4.5 and the terms of the Counteroffer (as so amended or modified).

(e) Rejection of Counteroffer; Final Appraisal. In the
event that Paxar fails to accept the Counteroffer, then within 15 business days
of delivery of the Counteroffer, Paxar and Odyssey shall cause the Company to
retain at its expense an independent, nationally recognized investment firm (for
purposes of this Section 4.3, the "Independent Appraiser") jointly selected by
the Paxar Appraiser and the Odyssey Appraiser to arrive at a valuation of the
entire Company, applying the valuation mechanism described in Section 4.3(a) and
Section 4.3(c). The Independent Appraiser shall arrive at its determination (for
purposes of this Section 4.3, the "Independent Valuation") of the value of the
Company as soon as possible, and in no event later than 45 days following the
date on which it is retained by the Company. The Independent Appraiser shall
provide copies of the Independent Valuation to Paxar, Odyssey and the Company.
By written notice to Odyssey within 10 business days of delivery of the
Independent Valuation, Paxar shall either (i) notify Odyssey that it elects to
purchase all of the Offered Shares at a purchase price (the "Offered Shares
Purchase Price") equal to the Paxar Valuation or the Odyssey Valuation,
whichever is closer to the Independent Valuation (or if they are equally close,
then at a purchase price equal to the Independent Valuation) or (ii) notify
Odyssey that it elects to sell the Company in accordance with Section 4.4. In
the event that Paxar elects to purchase all of the Offered Shares in accordance
with clause (i), then Odyssey shall sell and Paxar shall purchase all of the
Offered Shares in accordance with Section 4.5 at the Offered Shares Purchase
Price. In the event that Paxar elects to sell the Company in accordance with
clause (ii), then the Board of Directors shall cause the sale of the Company in
accordance with Section 4.4.

4.4 Sale of the Company. In the event that (i) the Offeror
elects to cause a sale of the entire Company in accordance with Section 4.1,
(ii) the Offeree elects to cause a sale of the entire Company in accordance with
Section 4.2, or (iii) Paxar elects to cause a sale of the entire Company in
accordance with Section 4.3, then the entire Company shall be put up for sale as
provided in this Section 4.4. The sale process shall take place under the
direction of the Board of Directors, in a manner intended to maximize the value
of all Shares.

(a) Manner of Sale. The sale will be conducted by the
Board of Directors with the advice of an independent investment banking firm or
other financial advisor of recognized national standing selected by the Board of
Directors. The fees of such investment banking firm or other financial advisor
shall be paid by the Company. The sale of the Company will be conducted in the
form of an auction or through such other procedures deemed appropriate by the
Board of Directors. The Independent Appraiser selected in accordance with
Section 4.2 or Section 4.3 may act as the Company's financial advisor for this
purpose. Unless otherwise agreed to by the Stockholders and the Company, no
investment banking firm selected by Paxar or Odyssey in accordance with Section
4.2 or Section 4.3 may act as the Company's financial adviser for this purpose.
Neither Stockholder shall bid or otherwise participate as a purchaser in the
sale process. Any member of the Board of Directors who, directly or indirectly,
participates as a bidder in the sale process shall not be eligible to review
proposed bids or otherwise act on behalf of the Company or the Board of
Directors in the sale process.

8
<PAGE> 11

(b) Evaluation of Bids; Acceptance. At the conclusion
of the sale process, the Company's financial advisor and counsel shall present
the Board of Directors with those bids that it considers superior. The Board of
Directors will select the one or more bids determined by them as being most
likely to maximize value for all Shares. In determining which bid to accept, the
Board of Directors shall take into account the proposed purchase price for the
Company, as well as all other terms that it determines to be material, including
the ability of the proposed purchaser to close the transaction, certainty of
financing, that portion of the purchase price consideration that is comprised of
cash, and the terms of any acquisition agreement. The Board of Directors may
determine to work on a preliminary basis with more than one bidder pending the
execution of a definitive purchase agreement.

(c) Further Assurances. The Board of Directors shall
have the authority to do all things necessary to effectuate the sale of the
Company in accordance with this Section 4.4. The Stockholders will fully
cooperate in this process and will take all action necessary to effect the sale
of the Company in accordance with the decision of the Board of Directors,
including a sale of their Shares in any stock purchase transaction and voting
all Shares owned by them to be voted in favor of the determination of the Board
of Directors. The Stockholders will not take any action that is intended to, or
will have the effect of, delaying or preventing consummation of any transaction
so selected and approved.

4.5 Closing of Purchase and Sale of the Offered Shares.
Any purchase of Offered Shares pursuant to Sections 4.1, 4.2 or 4.3 shall be "as
is," other than customary representations and warranties as to the parties'
authority and as to the seller's title to the Offered Shares. The Company and
the Stockholders shall take all other actions necessary to effect the sale of
the Offered Shares. The purchaser of the Offered Shares shall be required to
purchase the Offered Shares within 90 days of the date on which it agrees to
purchase such shares in accordance with Section 4.1, 4.2, or 4.3.

4.6 Limitation on Offers. No Initial Sale Offer, Put
Exercise Notice, or Call Exercise Notice may be made while another Initial Sale
Offer, Put Exercise Notice or Call Exercise Notice is pending, or while the
Company is up for sale in accordance with Section 4.4.

5. Major Actions. The Company shall not (and shall not permit
any of its direct and indirect subsidiaries to) take any of the following
actions, except in accordance with Section 4 or pursuant to a vote of the
majority of the Board of Directors, which shall include the affirmative vote of
at least two Paxar Directors and two Odyssey Directors:

(a) the adoption and approval of (i) annual operating
and capital budgets and (ii) business and strategic plans, including in each
case any material amendments thereto or deviations therefrom;

(b) the issuance of any form of capital stock or equity
rights

<PAGE> 12

(including warrants, options, convertible debt and convertible securities), or
the grant of any preemptive rights or rights of first refusal, or commitments in
respect of any of the foregoing;

(d) the purchase or redemption of any capital stock or
indebtedness, other than in accordance with a stock option or similar employee
equity compensation plan adopted in accordance with this Section 5;

(e) the declaration or payment of any dividend or
distribution, other than dividends and distributions payable by a direct or
indirect subsidiary of the Company to its shareholder;

(f) the issuance or incurrence of any form of
indebtedness for borrowed money, or any guaranty of indebtedness, other than
pursuant to debt facilities existing or incurred as of the date hereof;

(g) the sale, merger, liquidation or dissolution of the
Company or any subsidiary;

(h) any acquisition or disposition involving aggregate
consideration in excess of $100,000, or the sale, lease or other disposition of
assets outside the ordinary course of business, or the lease of any real
property; or capital leases involving aggregate consideration in excess of
$100,000;

(i) all decisions as to the selection, termination,
compensation (including grants of stock options or other forms of equity rights)
and employment terms of officers of the Company and its subsidiaries;

(j) any amendment to the Certificate of Incorporation
or By-laws of the Company and its subsidiaries;

(k) any change in the Company's or such subsidiary's
accounting methods or policies and the approval of (or any change in) the
Company's or such subsdidiary's independent auditors;

(l) formation of any committee of the Board of
Directors of the Company or such subsidiary;

(m) registration of any securities under the Securities
Act of 1933, as amended;

(n) the appointment and removal of members of a
Subsidiary

<PAGE> 13

Board of Directors;

(o) filing of a petition for bankruptcy, insolvency,
receivership or similar relief; and

(p) any other material transaction not in the ordinary
course of business.

6. Formation of the Company. Each Stockholder agrees,
concurrently with the execution and delivery of this Agreement, to subscribe for
49.5% of the issued and outstanding shares of Common Stock for a purchase price
of $15 million.

7. Miscellaneous.

7.1 Legend. Each certificate of Common Stock shall bear a
legend as follows:

"The sale, assignment, transfer, gift, pledge,
other disposition and voting of any of the
securities represented by this certificate is
restricted by the terms of a certain Stockholders'
Agreement, dated as of June 29, 1995. The
securities represented by this certificate have
not been registered under the Securities Act of
1933 (the "Act"), as amended, or applicable state
securities laws and may not be sold, assigned,
transferred, pledged or otherwise disposed of
except in compliance with the requirements of the
Act and until the Company shall have received the
written opinion of counsel satisfactory to the
Company to that effect."

7.2 Binding on Transferees. Subject to Section 3 hereof, a
party may not assign its rights or delegate its obligations hereunder.

7.3 Notices. Notices hereunder shall be given only by
personal delivery, registered or certified mail, return receipt requested,
overnight courier service, and shall be deemed transmitted on the fifth day
following the date of delivery to a courier service (postage or charges prepaid)
or when personally delivered, and addressed to the particular party to whom the
notice is to be sent as follows:

<PAGE> 14

(i) in the case of the Company:

Monarch Holdings, Inc.
170 Monarch Lane
Miamisburg, Ohio 45342
Attention: President
Telecopier No.: (513) 865-2073

(ii) in the case of Paxar:

Paxar Corporation
275 North Middletown Road
Pearl River, N.Y. 10965
Telecopier No.: (914) 735-9037
Attention: Arthur Hershaft

with a copy to:

Snow Becker Krauss P.C.
605 Third Avenue
New York, N.Y. 10158-3860
Telecopier No.: (212) 949-7052
Attention: Jack Becker, Esq.

(iii) in the case of Odyssey:

Odyssey Partners, L.P.
31 W. 52nd Street
New York, N.Y. 10019
Telecopier No.: (212)708-0735
Attention: Stephen Berger

or to such other address as a party may instruct by notice to the other parties
hereto in accordance with this Section 7.3.

7.4 Severability. In the event any provision hereof is
held void or unenforceable by any court, then such provisions shall be severable
and shall not affect the remaining provisions hereof.

7.5 Confidentiality. Each Stockholder will, so long as it
holds any Common Stock and thereafter, hold strictly confidential, and will
refrain from using such information or disclosing or disseminating (other than
to its employees, affiliates, agents or partners having a need to know), any
information obtained by it with respect to the Company, unless the Company has
made such information available to the public generally or such

<PAGE> 15

information must be disclosed under applicable law, or such use is not
detrimental to the Company.

7.6 Further Assurances. Each party shall execute and
deliver such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of the terms of this Agreement and the transactions contemplated
hereby.

7.7 Remedies. The parties acknowledge that money damages
may not be an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to any court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.

7.8 Entire Agreement. This Agreement is the entire
agreement among the parties with respect to the subject matter hereof, and, when
executed by the parties hereto, supersedes all prior agreements and
communications, either oral or in writing, among the parties hereto with respect
to the subject matter contained herein. None of the Stockholders shall have any
power to legally bind the other Stockholders, except as specifically provided in
this Agreement.

7.9 Waiver. Any failure by a party hereto to comply with
any obligation, agreement or condition herein may by waived only be a written
instrument executed by each party adversely affected by such failure to comply,
with such waiver or failure to insist upon strict compliance with such
obligation, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any such subsequent or other failure.

7.10 Amendments. This amendment may be modified, amended
or waived only pursuant to a written instrument executed by the Company and the
Stockholders or, in the case of a waiver, by the party to be charged.

7.11 Variations in Pronouns. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the antecedent person or persons
or entity or entities may require.

7.12 Term. This Agreement shall terminate upon the earlier
of (a) the tenth anniversary hereof and (b) the sale of the Offered Shares or
the entire Company in accordance with Section 4.4 or 4.5 hereof.

7.13 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.

<PAGE> 16

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

IN WITNESS WHEREOF, the undersigned have executed
this Agreement on the date first above written.

PAXAR CORPORATION ODYSSEY PARTNERS, L.P.

By: /s/ Arthur Hershaft By: /s/ Stephen Berger
----------------------- -------------------
Arthur Hershaft Stephen Berger
Chief Executive Officer General Partner

MONARCH HOLDINGS, INC.

By: /s/ Paul D. Barnett
-----------------------
Paul D. Barnett
President