ASSET PURCHASE AGREEMENT by and among Deringer Acquisition Corp., Deringer Mfg. Company, The J.M. Ney Company and Andersen Group, Inc. Dated as of November 8, 2001

Exhibit 99.1

TABLE OF CONTENTS

Page

1.1. Purchase and Sale of Assets 1

1.2. Excluded Assets 2

1.3. Assumption of Liabilities 4

1.4. Excluded Liabilities 4

Section 2. Closing; Purchase Price 6

2.1. Time and Place of Closing 6

2.2. Deliveries by the Seller and the Stockholder 6

2.3. Deliveries by the Buyer 6

2.4. Purchase Price 7

2.5. Allocation of Purchase Price 7

2.6. Closing Statement 7

2.7. Payment of the Cash Portion of the Purchase Price 7

2.8. Purchase Price Defined Terms 7

Section 3. Representations and Warranties of the Seller and the Stockholder 8

3.1. Organization 8

3.2. Authority 8

3.3. No Conflicts 8

3.4. Financial Statements; Inventory 9

3.5. Absence of Undisclosed Liabilities 9

3.6. Absence of Certain Changes 9

3.7. Title to Purchased Assets 9

3.8. Personal Property 10

3.9. Real Property 10

3.10. Accounts and Notes Receivable 10

3.11. Contracts and Leases 10

3.12. Customer List 10

3.13. Compliance with Law; Licenses 11

3.14. Litigation and Orders 11

3.15. Environmental Matters 11

3.16. Taxes 12

3.17. Insurance 12

3.18. Organized Labor Matters 12

3.19. Employee Plans 12

3.20. Compliance with ERISA 13

3.21. Capitalization and Subsidiaries 14

3.22. Predecessor Status; Etc. 14

3.23. Intellectual Property 14

3.24. Warranty and Sales Return Claims 15

3.25. Names 15

3.26. Adequacy of Purchased Assets 15

Section 4. Representations and Warranties of the Stockholder. 15

4.1. Organization 15

4.2. Authority 15

4.3. No Conflicts 16

4.4. Shareholder Reports 16

Section 5. Representations and Warranties of the Buyer 16

5.1. Organization 16

5.2. Authority 16

5.3. No Conflicts 16

5.4. Full Disclosure 16

Section 6. Employee Matters 17

6.1. Offers of Employment 17

6.2. Obligations of the Seller 17

6.3. Employee Plans 17

Section 7. Covenants Prior to Closing 18

7.1. Access and Cooperation 18

7.2. Best Efforts; Consents 18

7.3. Conduct of Business Pending Closing 18

7.4. Prohibited Activities 19

7.5. No Shop 20

7.6. Stockholder Stockholders Meeting 20

7.7. Agreements to be Terminated 21

7.8. Notification of Certain Matters 21

7.9. Inventory 21

7.10. Further Assurances 22

7.11. Noncompetition By Seller and Stockholder 22

Section 8. Conditions Precedent to the Obligations of the

Stockholder and the Seller 22

8.1. Representations and Warranties; Performance of Obligations 22

8.2. No Litigation 23

8.3. Consents and Approvals 23

8.4. Certificates of Incorporation; Good Standing Certificates 23

8.5. Secretary's Certificates 23

8.6. Closing Deliveries 23

8.7. Approval of the Stockholders 23

Section 9. Conditions Precedent to Obligations of the Buyer 23

9.1. Representations and Warranties; Performance of Obligations 23

9.2. No Litigation 24

9.3. Consents and Approvals 24

9.4. No Material Adverse Effect 24

9.5. Charters and Good Standing Certificates 24

9.6. Secretary's Certificate 24

9.7. Closing Deliveries 24

9.8. Updated Schedules 24

9.9. Approval of the Stockholders 24

Section 10. Additional Agreements 24

10.1. Turnover of Payments 24

10.2. Warranty, Customer Returns and Accounts Receivable 25

10.3. Tax Returns 25

10.4. Cooperation 25

10.5. Finished Goods Inventory Margin 25

10.6. Post Closing Adjustments 26

10.7. Insurance 26

10.8. Soft Inventory 26

10.9. Ney Name 26

Section 11. Indemnification 27

11.1. Survival 27

11.2. Indemnification 27

11.3. Third Person Claims 27

11.4. Escrow 28

Section 12. Termination of Agreement 28

12.1. Termination 28

12.2. Liabilities in Event of Termination 29

Section 13. Miscellaneous 29

13.1. Expenses and Taxes 29

13.2. No Brokers or Finders 29

13.3. Notices 29

13.4. Severability 30

13.5. Interpretation 30

13.6. Exercise of Rights and Remedies 30

13.7. Remedies Cumulative 30

13.8. Governing Law 31

13.9. Assignment, Binding Effect and Entire Agreement 31

13.10. No Third Party Beneficiaries 31

13.11. Counterparts 31

13.12. Captions 31

13.13. Parent Guarantee 31

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated as of November 8, 2001, is among ▇▇▇▇▇▇▇▇ Acquisition Corp., an Illinois corporation (the "Buyer"), ▇▇▇▇▇▇▇▇ Mfg. Company, an Illinois corporation ("Parent"), the ▇.▇. ▇▇▇ Company, a Delaware corporation (the "Seller"), and ▇▇▇▇▇▇▇▇ Group, Inc. (the "Stockholder").

RECITALS:

WHEREAS, the Seller is engaged in the business of custom engineering, design and manufacturing of precision metal contacts and insert molded contact assemblies and connectors for various automotive, medical, industrial electronics, telecommunications and military market applications and related services and goods (the "Business"); and

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, substantially all of the assets (other than the Excluded Assets as defined below) of the Seller, including without limitation those used in connection with the Business, on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereby agree as follows:

(a) All rights under contracts, agreements, instruments, understandings, leases for personal property, commitments and other arrangements, whether oral or written, including without limitation contracts or orders for the sale or lease of goods and services and further including without limitation any and all warranties (express or implied) or product agreements of any manufacturer, supplier, vendor or other person or entity relating to any Purchased Assets;

(b) All Inventory (as defined in Section 3.4(b));

(c) All rights in connection with deposits, prepayments and prepaid expenses identified on Schedule 1.2(k);

(d) All machinery, equipment, attachments and parts therefor, tools, computer hardware, fixtures, office furniture, supplies and tangible personal property of every kind and nature, excluding the Dodge Ram Truck;

(e) All Intellectual Property (as defined in Section 3.23), including all patents, trademarks, service marks, trade names and trade styles (including, without limitation, all applications with respect thereto and the names "The ▇.▇. ▇▇▇ Company" and "Ney" and all variations thereof), and all logos, drawings, technical data, product specifications, computer software, source codes, object codes, computer files, programs, blueprints, know-how, trade secrets and other proprietary rights and all goodwill associated therewith;

(f) All rights in incomplete or unfilled contracts, commitments and orders issued for the purchase or lease of inventory or other goods or services by the Seller, including without limitation parts, components and supplies;

(g) All rights against suppliers of inventory or other goods or services, including without limitation any express or implied warranties and any entitlement to discounts or rebates;

(h) All authorizations, permits, franchises and licenses;

(i) All claims, refunds, causes of action, choses in action, rights of recovery and rights of set-off or offset of every kind and nature;

(j) ll proceeds and other rights and benefits relating to insurance coverages with respect to the Purchased Assets and the Assumed Liabilities, excluding any unearned or prepaid insurance premiums or any dividends on insurance policies in effect as of the Closing Date;

(k) All goodwill and all other intangible property;

(l) All construction in process;

(m) All marketing plans, marketing manuals, sales materials, promotional materials, catalogues and advertising and marketing literature and materials;

(n) All business records and files relating to the Purchased Assets and Assumed Liabilities, including without limitation customer lists and other identifications of former, existing and potential customers and suppliers, mailing lists, sales information, customer and supplier records, cost and pricing information, billing records, employment and personnel records and other records (including without limitation those maintained in computer tapes, disks or other computer retrievable formats), in each case whether maintained by the Seller or by others for the Seller, and the Seller's main telephone number and post office boxes at which the Seller receives correspondence or remittances from customers, but excluding tax returns and any communication sent or received by Seller, Stockholder or their respective attorneys or other professional representatives relating to this transaction to the extent not previously provided to Buyer; and

(o) All lockbox addresses and related lockbox accounts for the payment of accounts receivable (but not including any other bank accounts, and subject to the provisions of Section 10.2(b).)

(a) The Seller's rights under this Agreement;

(b) The Seller's cash, cash equivalents, short-term investments and marketable securities;

(c) The Seller's corporate minute books, corporate seal, charter documents, and stock records;

(d) Furniture used in the offices of ▇▇▇▇▇▇▇▇ Group Inc. personnel located in the Bloomfield, Connecticut facility;

(e) All leasehold and ownership interests in trucks, cars, trailers and other vehicles of any kind, including the Dodge Ram Truck;

(f) Contracts to acquire precious metals and contracts with sales agents, representatives and distributors;

(g) Any refinery or factory lot precious metal inventory owned by Seller in the custody of third parties;

(h) Artwork, including, but not limited to, those items listed on Schedule 1.2(h);

(i) Any recoveries from or related to or in connection with the misappropriation of monies by Les ▇▇▇▇ ▇▇▇▇▇▇▇▇, including but not limited to recoveries of monies from Les ▇▇▇▇ ▇▇▇▇▇▇▇▇, any insurance company, the Ohio Supreme Court Client Recovery Fund, any bank from which the misappropriated monies were initially deposited or recoveries from any other source;

(j) Any rights to receive or subscribe for any shares of capital stock as the result of being the owner and/or the holder of any insurance policy or annuity contract and any rights to subscribe for shares of stock of mutually owned savings banks, thrift institutions, insurance companies or any comparable or analogous financial institutions that is involved in the conversion from a mutual form of ownership to a stock form of ownership and all deposits at, or the cash surrender values of, any monies held by such financial institutions for or on behalf of Seller;

(k) Any deposits, prepayments and prepaid expenses not specifically identified on Schedule 1.2 (k);

(l) The annuity contract relating to ▇▇▇▇▇ ▇▇▇▇▇▇ and the life insurance policies insuring the lives of ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇;

(m) Any rights under any insurance contracts maintained by the Seller to the extent related to the Excluded Assets or the Excluded Liabilities (as defined in Section 1.4);

(n) Any real property, and any buildings and improvements thereon, of the Seller, and any related rights and authorizations associated with fee ownership thereof, including Seller's rights as lessor under the lease attached hereto as Exhibit C;

(o) Any refund of any taxes which have been paid by the Seller and net operating or capital loss carryforwards;

(p) Any business records and files to the extent related to only the foregoing Excluded Assets or the Excluded Liabilities;

(q) All accounts and accounts receivable, promissory notes of other parties and other rights to receive payments from any person or entity, including the Stockholder and its affiliates, including without limitation rights to payments arising from the sale or lease of goods and services (whether current or non-current) with respect to goods or services sold by Seller prior to the Closing Date and including related security interests; and

(r) Any and all insurance policies, annuity contracts, trust funds and other assets relating to Employee Plans as defined in Section 3.19; and

(s) Any unearned or prepaid issuance premiums or any dividends on insurance policies in effect as of the Closing.

(a) Liabilities and obligations of the Seller for unpaid accrued vacation benefits recorded in the books and records of the Seller as of the Closing Date plus current year vacation benefits effective March 1, 2001, to the extent accrued in accordance with the Seller's personnel policies, regardless of whether recorded on the books and records of the Seller as of the Closing Date, in each case for employees of Seller hired by Buyer. Schedule 1.3(a) is a complete schedule of employees at signing of this Agreement. Buyer shall deliver to Seller, no later than 20 business days after the delivery of such schedule, a schedule of names of employees of Seller to be hired by Buyer. After receipt by Seller of the schedule of names of employees of Seller to be hired by Buyer, Seller shall provide to Buyer, no later than five (5) business days prior to the expected Closing Date, the value of the accrued vacation benefits determined in accordance with Section 2.8 as of the Closing Date for such employees;

(b) Liabilities and obligations of the Seller from and after the Closing Date under the contracts and agreements listed on Schedule 1.3(b) which are other than warranty arrangements (but not any liability or obligation resulting from any breach or violation thereof on or prior to the Closing);

(c) Liabilities and obligations for payment of the remaining amounts due under the capitalized leases set forth on the Closing Statement and listed on Schedule 1.3(c); and

(d) Liabilities and obligations of the Seller for "customer pool balances." For the purpose of this Section 1.3(d) "customer pool balances" means precious metal inventories that are owned by customers of Seller at or prior to the time of Closing, held by the Seller or a third party and listed on Schedule 1.3(d).

(a) Arising out of or relating to this Agreement or the transactions contemplated hereby, including without limitation the preparation, negotiation or execution of this Agreement and any attorneys', accountants' or other fees or expenses incurred in connection therewith, except for 50% of the expenses incurred in performing the appraisal performed by The ▇▇▇▇▇ Group (the "Appraisal");

(b) Constituting indebtedness, including without limitation obligations or liabilities on account of borrowed money, the deferred purchase price of any property, letters of credit or guarantees;

(c) For federal, state, local or foreign taxes arising out of or relating to the operation of the Business by the Seller or any activity or event occurring or condition or state of facts existing at or prior to the Closing Date or arising out of, resulting from or incident to the consummation of the transactions contemplated by this Agreement;

(d) Arising out of or relating to any actual or alleged breach or failure to perform by the Seller, or any other person or entity for which the Seller may be liable, under any contract, commitment, arrangement or understanding;

(e) Resulting from any violation by the Seller, or any other person or entity for which the Seller may be liable, of any legal duty or any applicable federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order or decree, including without limitation any Environmental Laws (as defined in Section 3.15(a));

(f) Relating to any condition, event, action or situation occurring or existing prior to the Closing for which liability under any Environmental Law may arise;

(g) To any present or former stockholder, option holder, officer or director of the Seller;

(h) To any present or former employee of the Seller (or their dependents or beneficiaries), including without limitation, (i) liabilities and obligations relating to Employee Plans, (ii) vacation benefits accrued through the Closing Date for employees other than employees hired by Buyer or as provided in the last sentence of this Section 1.4 below, (iii) all medical and other benefit obligations to retirees from employment with the Seller, and their dependents and beneficiaries, (iv) medical and other benefit obligations to employees of the Seller and their dependents and beneficiaries that relate to events or activities occurring, or conditions or states of fact existing, at or prior to the Closing Date, (v) severance benefits or payments payable to employees upon the termination of their employment with the Seller under any severance or similar contract, agreement, plan, program, policy arrangement or understanding maintained by the Seller, or to which the Seller is a party, except as provided in the last sentence of this Section 1.4, (vi) obligations for wages, bonuses, fringe benefits or worker's compensation, or (vii) other obligations under any federal, state, local or foreign law, statute, ordinance, rule or regulation, relating to employment;

(i) Relating to any accounts payable, note payable or other payable to any affiliate of the Seller or the Stockholder or any affiliate of the Stockholder;

(j) Relating to any litigation pending or threatened against the Seller;

(k) Resulting from any product liability claims, warranty claims or other claims with respect to products sold or leased or services rendered by the Seller or any of its predecessors;

(l) Relating to any activities or businesses of the Seller or any of its predecessors other than the Business; or

(m) Relating to any Excluded Asset.

The Seller agrees to pay and discharge all Excluded Liabilities in accordance with the terms thereof. In the event that Buyer deviates from the headcount reduction set forth on Schedule 1.4, Buyer shall assume the liability with respect to any incremental severance costs in excess of $5,000, as calculated in accordance with the severance policy described on Schedule 3.19 and assuming in each department that those employees terminated shall be those resulting in the highest severance cost.

(a) A ▇▇▇▇ of Sale and General Assignment in the form attached hereto as Exhibit A, duly executed by the Seller (the "▇▇▇▇ of Sale") and transferring the Purchased Assets to the Buyer, free and clear of all liens, security interest, charges, claims and other encumbrances of any kind;

(b) An Escrow Agreement in the form attached hereto as Exhibit B, duly executed by the Seller and the Escrow Agent (the "Escrow Agreement");

(c) A certificate executed by the Seller setting forth the computation of the Purchase Price, together with the Closing Statement described in Section 2.6;

(d) Any other instruments of transfer and assignment of the Purchased Assets that the Buyer may reasonably request to vest the Purchased Assets in the Buyer, free and clear of all liens, security interests, charges, claims and other encumbrances of any kind, in accordance with the terms of this Agreement;

(e) A copy of a written consent executed by the Stockholder approving this Agreement and the transactions contemplated hereby;

(f) Documents evidencing the change in the Seller's corporate name and the release of any assumed name of the Seller in favor of the Buyer in form and substance satisfactory to the Buyer;

(g) Evidence satisfactory to Buyer that all liabilities for accrued vacation benefits for employees of Seller not hired by Buyer have been satisfied by payment in cash; and

(h) A lease with respect to the premises commonly known as ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and occupied by the Seller in connection with the Business prior to the Closing Date, duly executed by ▇▇▇▇▇▇▇▇ Group, Inc. and in the form attached hereto as Exhibit C (the "Lease").

(a) The cash consideration referred to in Section 2.7(a), payable by wire transfer to the account or accounts specified in writing by the Seller, together with the amount to be deposited with the Escrow Agent referred to in Section 2.7(b);

(b) The Escrow Agreement, duly executed by the Buyer and the Escrow Agent;

(c) An Assumption Agreement in the form attached hereto as Exhibit D, duly executed by the Buyer (the "Assumption Agreement"); and

(d) The Lease, duly executed by the Buyer and in form and substance acceptable to the Seller.

(a) The Purchase Price, less $600,000, shall be paid to the Seller at the Closing; and

(b) Six hundred thousand dollars ($600,000) shall be deposited with a bank or trust company, as escrow agent (the "Escrow Agent") under the Escrow Agreement, which amount shall be distributed in accordance with the provisions of the Escrow Agreement.

"Hired Employee Vacation Accrual" shall mean the value of accrued vacation as reflected on the books and records of the Company as of February 28, 2001, plus (i) a portion of the accrual effective March 1, 2001, regardless of whether recorded on the books and records of the Company, equal to such March accrual times a fraction, the numerator of which is actual number of days elapsed since March 1 to the Closing Date, and the denominator of which is 365, less (ii) any days of vacation taken.

"Precious Metal Adjustment" means, with respect to any Inventory (other than Inventory subject to any fixed price contract), the positive or negative difference between the value of precious metal content thereof set forth in the books of account of the Seller based on Seller's frozen standard less the value of precious metal content determined at the second London Fix as of the Closing Date and with respect to any order for which the price has been fixed and is not subject to change based on changes in fluctuation in precious metal prices ("Fixed Price Contract") as listed on Schedule 1.3(b), the positive or negative difference between the value of precious metal content determined at the second London Fix as of the Closing Date of any such item of Inventory, less the value of precious metal content thereof set forth in such contracts. In the event a Fixed Price Contract does not contain a specific amount of goods to be delivered, the amount of precious metal content will be a good faith estimate jointly agreed to Buyer and Seller based on past purchases by the customer. For the purposes of this definition, the second London Fix means the London Fix price set in the afternoon, London, U.K. time, for the relevant precious metal as stated in United States dollars and found on the Internet site ▇▇▇.▇▇▇▇▇.▇▇▇ under the headings "Historical London Fixings" "PM" for the day preceding the Closing Date.

"Purchased Inventory" means the value of Inventory as determined pursuant to clause (iv) of Section 3.4(b), plus (i) any LIFO reserves and obsolescence reserves, less (ii) the value of any refinery or factory lot precious metal inventory (net of any reserves) in the custody of third parties, less (iii) the Precious Metal Adjustment, in each case as adjusted by the physical inventory taken pursuant to Section 7.9 hereof and set forth on the Closing Statement.

"Purchased Prepaid Expenses" means prepaid expenses as set forth on the books and records of the Seller in accordance with generally accepted accounting principles as of the Closing Date, but only if listed on Schedule 1.2(k).

Each of the Seller and the Stockholder jointly and severally represents and warrants to the Buyer as follows:

(a) The Seller has delivered to the Buyer copies of the financial statements set forth on Schedule 3.4 (collectively, the "Financial Statements"). The Financial Statements fairly present the financial condition of the Seller at the dates indicated and the results of operations and cash flows of the Seller for the periods indicated in accordance with generally accepted accounting principles consistently applied.

(b) All inventory of the Business (whether or not allocated to contracts in process), including raw materials, work in process and finished products, displays, advertising materials, packaging, items purchased for distribution or resale and items of the foregoing types which have been ordered or purchased by Seller for the Business, including inventory shown on the Financial Statements, or acquired thereafter, but excluding refinery and factory lot precious metal inventory in the custody of third parties ("Inventory"), (i) was acquired or manufactured in the ordinary course of business, (ii) is not damaged, defective, or Soft Inventory (as defined in Section 10.8 hereof), (iii) meets the current specifications and standards of Seller as well as all government and industry specifications and standards for the particular product, (iv) is valued on the books of account and Financial Statements at standard (on a last-in, first-out (LIFO) basis)) in which the standard cost less reserves is no greater than individual market value (sales price less direct selling and direct distribution costs), in accordance with generally accepted accounting principles consistently applied throughout the periods reported upon, and (v) all adjustments described in the definition of Purchased Inventory were made correctly.

(a) Schedule 3.8 lists, in reasonable detail all personal property owned by the Seller with an individual book value or market value in excess of $500, all leased property and all leases in respect of personal property. Except as set forth on Schedule 3.8, (i) all of the tangible personal property (other than inventory) owned by the Seller or leased by the Seller pursuant to any lease has been well maintained and is in good working order and condition, ordinary wear and tear excepted, and, in addition, in the case of leased property is in the condition required by the applicable lease; and (ii) all leases are in full force and effect and constitute legal, valid and binding agreements of the parties (and their successors) thereto in accordance with their respective terms.

(b) All inventory of the Seller is saleable or useable in the ordinary course of business consistent with past practice and all damaged, obsolete or slow moving inventory or inventory in excess of the amount reasonably required for the operation of its business has been written off or down to its net realizable value on the Financial Statements and the books and records of the Seller.

(a) The Seller has complied with and is in compliance in all material respects with all applicable federal, state and local laws, statutes, ordinances, regulations, rules, judgments, orders, writs, injunctions and decrees relating to environmental protection (collectively "Environmental Laws"), including without limitation Environmental Laws relating to substances or materials that are deemed under Environmental Laws to be hazardous or toxic, including without limitation asbestos, lead-based paints and petroleum and petroleum products (including crude oil or any fraction thereof) (collectively, "Hazardous Materials").

(b) The Seller has obtained and Schedule 3.15 sets forth, all licenses, franchises, permits and other governmental authorizations and approvals (collectively, the "Authorizations") required by Environmental Laws for the conduct of the Business as currently conducted, and Seller is in compliance with all such Authorizations.

(c) To the knowledge of the Seller, there have been no events, situations or conditions, including releases or threats of releases of Hazardous Materials, at, from, in or on any property owned or operated by the Seller which (i) were, or which were required to be, reported under any Environmental Law, or (ii) were given or could give rise to liabilities under Environmental Laws.

(d) Except as set forth on Schedule 3.15, neither the Seller nor anyone acting on behalf of the Seller has transported Hazardous Materials, disposed of Hazardous Materials, or arranged for the transportation of Hazardous Materials to a site which is the subject of any federal, state or local enforcement action or any other investigation, which, may lead to a claim for any clean-up cost, fines, remedial work, recovery for damage to natural resources, property damage or personal injury, including, but not limited to, any claim under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or any state counterpart thereof.

(e) The transactions contemplated by this Agreement do not require disclosure or other compliance activities under any Environmental Law which are triggered by transfers or transactions of the type contemplated herein.

(f) Seller has provided to Buyer copies of all environmental audits, assessments, studies or analytical data prepared for or within the possession or control of the Seller or the Stockholder with respect to any property or facility owned, operated or leased by the Seller.

(g) The indemnity provisions of Section 11 shall be the sole remedy for breaches of this representation.

(a) For purposes of this Agreement, the term Employee Plan includes each employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan as defined in Section 3(37) of ERISA) including terminated plans, and each other bonus, deferred compensation, pension, retirement, profit sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, change in control, retention, restricted stock, stock option, phantom stock, employment, termination, severance, compensation, medical, health or other plan, agreement, policy, practice or arrangement that covers employees or former employees of the Seller and their dependents and beneficiaries. Schedule 3.19 lists each Employee Plan which currently, or since January 1, 1999, is or has been maintained by the Seller for its employees and their beneficiaries or dependants, or to which the Seller made or was required to make contributions.

(b) Except for the Employee Plans described on Schedule 3.19, (1) the Seller does not sponsor, maintain or contribute to any plan, program, fund or arrangement that constitutes an Employee Plan, nor does the Seller have any obligation to contribute to or accrue or pay any benefits under any such Employee Plan, and (2) the Seller is not required to contribute to any Employee Plan pursuant to the provisions of any collective bargaining agreement establishing the terms and conditions of employment of any of the Seller's employees.

(c) The Seller is not now, nor can as a result of its past activities become, liable to the Pension Benefit Guaranty Corporation ("PBGC") or to any multiemployer employee pension benefit plan under the provisions of Title IV of ERISA. All Employee Plans listed on Schedule 3.19 and the administration thereof are in compliance in all material respects with their terms and all applicable provisions of ERISA, the Code and the regulations issued thereunder, as well as with all other applicable federal, state and local statutes, ordinances and regulations. All accrued contribution obligations of the Seller with respect to any Plan listed on Schedule 3.19 have either been fulfilled in their entirety or are fully reflected on the most recent balance sheet of the Seller included in the Financial Statements.

(a) there have been no terminations, partial terminations or discontinuance of contributions to any such Qualified Plan intended to qualify under Section 401(a) of the Code without notice to and approval by the Internal Revenue Service;

(b) no Plan listed in Schedule 3.19 subject to the provisions of Title IV of ERISA has been terminated;

(c) there have been no "reportable events" (as that phrase is defined in Section 4043 of ERISA and the regulations issued thereunder) with respect to any Plan listed in Schedule 3.19;

(d) the Seller has not incurred any liability under Section 4062 of ERISA;

(e) As to each Employee Plan subject to Title IV of ERISA, the value of the assets thereof, as of the date hereof, as determined by such Employee Plan's independent actuaries, exceeds the present value, as of the date hereof, as determined by such actuaries on a termination basis and on an ongoing basis, of all benefits accrued under such Plan;

(f) No waiver from the minimum funding standard requirements of Section 302 of ERISA or Section 412 of the Code has been obtained, applied for or is contemplated with respect to any Employee Plan subject to Title IV of ERISA;

(g) All current and material documents relating to each Multiemployer Plan, to which Seller has, or had since January 1, 1999, any obligation to contribute, have been furnished to the Buyer, including but not limited to collective bargaining agreements, plan and trust documents, plan rules relating to estimates of withdrawal liability and statements of unfunded vested benefits and contribution history. The Seller has made all contributions required in connection with any Multiemployer Plan as of the date hereof. The Seller has not terminated participation in, or withdrawn from, in a complete withdrawal as defined in Section 4203 of ERISA, or a partial withdrawal as defined in Section 4205 of ERISA, any Multiemployer Plan, and is not aware of any withdrawal liability as defined in Section 4201 of ERISA assessed against the Seller, with respect to any Multiemployer Plan;

(h) No matter is pending or relating to any Employee Plan before any court or governmental agency; and

(i) Except as set forth in Schedule 3.19 there are no plans, arrangements or agreements to which the Seller is a party, or by which it is bound, and under which as a result of any particular transaction or transactions (including but not limited to the transactions contemplated by this Agreement), any director, officer, employee or other agent of the Seller or any other party claiming through such a person shall or may acquire rights with respect to any Employee Plan (including the creation, increase or extension of new or existing rights), shall become entitled to a distribution or payment with respect to any Employee Plan at a date earlier than if such transaction had not occurred, or shall otherwise receive or become vested in rights and benefits with respect to any Employee Plan. Except as set forth in Schedule 3.19, the Seller is not a party to any agreement with any director, officer, employee or agent of the Seller pursuant to which any such person will be entitled to any payment by the Seller upon termination of employment with the Seller following a change in control of the Seller.

(j) The indemnity provisions of Section 11 shall be the sole remedy for breaches of this representation.

The Stockholder represents and warrants to the Buyer as follows:

4.4. Shareholder Reports. The consolidated financial statements of Stockholder and Seller contained in reports filed by the Stockholder with the Securities and Exchange Commission (the "SEC") (collectively, including any amendments of any such reports, the "Stockholder Reports") pursuant to the Securities Exchange Act of 1934, as amended, fairly present the financial condition of Stockholder at the dates indicated, and the results of operation and cash flows of Stockholder for the periods indicated in accordance with generally accepted accounting principles consistently applied. The consolidated financial statements of the Stockholder and the Seller included in such Stockholder Reports comply as to form in all material respects with the applicable rules and regulations of the SEC with respect thereto.

The Buyer represents and warrants to the Seller and the Stockholder as follows:

(a) each of the parties will use its reasonable efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement;

(b) Seller will give any notices to third parties, and shall obtain any third party consents that are required or that the Buyer may reasonably request in connection with the matters referred to in this Agreement; and

(c) each of the parties will give any notices to, make any filings with, and use its best efforts to obtain any authorizations, consents, and approvals of, governments and governmental agencies required in connection with the transactions contemplated by the Agreement.

7.3. Conduct of Business Pending Closing. Between the date of this Agreement and the Closing, the Seller will:

(a) carry on its business in substantially the same manner as it has heretofore and not introduce any material new method of management, operation or accounting;

(b) maintain its properties and facilities, including those held under leases, in as good working order and condition as at present, ordinary wear and tear excepted;

(c) perform in all material respects all of its obligations under agreements relating to or affecting its assets, properties or rights;

(d) keep in full force and effect present insurance policies or other comparable insurance coverage;

(e) use its reasonable efforts to maintain and preserve its business organization intact, retain its present salaried employees (except to extent identified on Schedule 1.4) and maintain its relationships with suppliers, customers and others having business relations with the Seller;

(f) comply in all material respects with all permits, laws, statutes, ordinances, regulations and rules, and judgments, orders and decrees of any court or other governmental department, commission, board, bureau, agency or instrumentality having jurisdiction over it; and

(g) maintain and comply in all material respects with the terms of its present debt and lease instruments and not enter into any amendments thereto or any new debt or lease instruments, without the prior written consent of Buyer.

7.4. Prohibited Activities. Between the date hereof and the Closing, the Seller will not, without prior written consent of the Parent:

(a) make any change in the Seller charter or bylaws (except for the change in the name of the Seller contemplated herein);

(b) issue any securities, subscriptions, options, warrants, calls, conversion rights or commitments relating to its securities of any kind;

(c) declare or pay any dividend, or make any distribution in respect of its capital stock or directly or indirectly purchase, redeem or otherwise acquire or retire for value any shares of its capital stock;

(d) enter into any contract or commitment or incur or agree to incur any liability or make any capital expenditures, except if it is in the normal course of business and consistent with past practice and involves an amount not in excess of $10,000;

(e) create, assume or permit to exist any mortgage, pledge or other lien or encumbrance upon any of its assets or properties whether now owned or hereafter acquired, except (i) with respect to purchase money liens incurred in connection with the acquisition of newly acquired equipment with an aggregate cost not in excess of $25,000 necessary or desirable for the conduct of the businesses of the Seller or (ii) liens for taxes either not yet due or being contested in good faith and by appropriate proceedings (and for which contested taxes adequate reserves have been established and are being maintained), or materialmen's, mechanics', workers', repairmen's or other like liens arising by operation of law and securing amounts not yet due or being contested in good faith by appropriate proceedings (and for which contested amounts adequate reserves have been established and are being maintained) in the ordinary course of business;

(f) sell, assign, lease or otherwise transfer or dispose of any property or equipment except in the normal course of business (except as contemplated by this Agreement);

(g) negotiate or enter into any agreement for the acquisition of any business or the start-up of any new business;

(h) merge or consolidate or agree to merge or consolidate with or into any other corporation or other entity;

(i) waive any material rights or claims of the Seller, provided that the Seller may negotiate and adjust bills in the course of good faith disputes with customers in a manner consistent with past practice;

(j) Increase present salaries, bonuses, incentive compensation and commission levels for any officer, director, employee or agent, except for ordinary and customary salary increases for employees (but not officers, directors or agents) in accordance with past practice, amend any existing Employee Plan so as to provide increased benefits thereunder for any employee of the Seller who participates in such Plan, or his beneficiaries or dependents, or establish any new Employee Plan with respect to employees of the Seller or their beneficiaries or dependents;

(k) make any new hires;

(l) commit a material breach or amend or terminate any material agreement or instrument, license or other right of the Seller;

(m) enter into any agreement with the Stockholder or any Affiliate of the Stockholder; or

(n) enter into any other transaction outside the ordinary course of its business or prohibited hereunder.

7.5. No Shop. None of the Stockholder, the Seller, or any agent, employee, officer, director, trustee or any representative of any of the foregoing will, during the period commencing on the date of this Agreement and ending with the earlier to occur of the Closing or the termination of this Agreement in accordance with its terms, directly or indirectly, solicit or initiate the submission of proposals or offers from any person or entity for, participate in any discussions pertaining to, or furnish any information to any person or entity other than the Buyer, Parent or their authorized agents relating to, any acquisition or purchase of any or all of the assets of, or any equity interest in, the Seller or substantially all the assets of Stockholder or any merger, consolidation or business combination of or involving the Seller or Stockholder (each a "Takeover Proposal"); provided, however, that if, at any time the Board of Directors of Stockholder determines in good faith, after consultation with outside counsel, that it is necessary to do so in order to act in a manner consistent with its fiduciary duties to Stockholder's stockholders under applicable law, Stockholder may, in response to a Superior Proposal (as defined in Section 7.6(b)) which was not solicited by it or which did not otherwise result from a breach of this Section 7.5 and subject to compliance with Section 7.6(c), following delivery of the required notice (x) furnish information with respect to Stockholder or Seller to any person making a Superior Proposal pursuant to a customary confidentiality agreement (as determined by Seller after consultation with its outside counsel) and (y) participate in discussions or negotiations regarding such Superior Proposal.

7.6. Stockholder Stockholders Meeting; Other Proposals.

(a) Stockholder will take, in accordance with applicable law and its certificate of incorporation and by-laws, all action necessary to call, give notice of, convene and hold a meeting of holders of shares of voting stock of Stockholder, including any adjournment thereof, as promptly as practicable after execution of this Agreement to consider and vote upon the approval of this Agreement and such other matters as may be appropriate. The Board of Directors of Stockholder shall recommend such approval and shall take all lawful action reasonably necessary to solicit such approval.

(b) Except as expressly permitted by this Section 7.6, neither the Board of Directors of Stockholder nor any committee thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to the Company, the approval or recommendation by such Board of Directors of this Agreement, (ii) approve or recommend, or propose publicly to approve or recommend, any Takeover Proposal or (iii) cause Stockholder or Seller to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement (each, an "Acquisition Agreement") related to any Takeover Proposal. Notwithstanding the foregoing, in the event that the Board of Directors of Stockholder determines in good faith, after consultation with outside counsel, that in light of a Superior Proposal it is necessary to do so in order to act in a manner consistent with its fiduciary duties to Stockholder's stockholders under applicable law, the Board of Directors of Stockholder may (subject to this and the following sentences) terminate this Agreement in order to concurrently enter into such Acquisition Agreement with respect to a Superior Proposal; provided, however, that Stockholder may not terminate this Agreement pursuant to this Section 7.6 unless and until (i) three business days have elapsed following the delivery to the Buyer of a written notice of such determination by the Board of Directors of Stockholder and (x) Stockholder has delivered to the Buyer the written notice required by Section 7.6(c) below, and (y) during such three business day period, Stockholder otherwise cooperates with the Buyer with respect to the Superior Proposal with the intent of enabling the Buyer to engage in good faith negotiations so that the transactions contemplated hereby may be effected and (ii) at the end of such three business day period the Board of Directors of Stockholder continues reasonably to believe that the Takeover Proposal constitutes a Superior Proposal. For purposes of this Agreement, a "Superior Proposal" means any proposal made by a third party, on or prior to the date of the meeting of the holders of shares of voting stock of the Stockholder, to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction, for consideration consisting of cash and/or securities, more than 50% of the combined voting power of the shares of Stockholder common stock then outstanding or all or substantially all the assets of Seller or Stockholder and otherwise on terms which the Board of Directors of Stockholder determines in its good faith judgment (based on the advice of a financial advisor of recognized reputation) to be more favorable to Stockholder's stockholders than this Agreement and for which financing, to the extent required, is then committed or which, in the good faith judgment of the Board of Directors of Stockholder, is reasonably capable of being obtained by such third party.

(c) In addition to the obligations of Stockholder set forth in Sections 7.5 and 7.6(a) and (b), Stockholder shall immediately advise Buyer orally and in writing of any request for information or of any proposal, the material terms and conditions of such request or proposal and the identity of the person making such request or proposal. Stockholder will keep Buyer reasonably informed of the status and details (including amendments and proposed amendments) of any such request or proposal.

7.7. Agreements to be Terminated. The Stockholders and the Seller shall terminate, on or prior to the Closing Date, any and all agreements listed on Schedule 7.7. The Seller and the Stockholders shall provide Seller proof of the terminations required pursuant to this Section 7.7. Terminations of options and warrants may provide for a deferred purchase price as long as such termination terminates any right to acquire equity securities of Seller.

7.8. Notification of Certain Matters. From and after the date of this Agreement until the Closing, each party hereto shall promptly notify the other parties hereto of (a) any representation or warranty made by it in connection with this Agreement was untrue or inaccurate when made, (b) the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any condition to the obligations of any party to effect the purchase of the Purchased Assets or the other transactions contemplated by this Agreement not to be satisfied, or (c) the failure of the Seller or the Stockholder, on the one hand, or the Buyer or Parent, on the other hand, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement which would be likely to result in any condition to the obligations of any party to effect the purchase of the Purchased Assets or the other transactions contemplated by this Agreement not to be satisfied; provided, however, that the delivery of any notice pursuant to this Section shall not modify any representations or warranties contained in this Agreement, cure any breach of any representation or warranty requiring disclosure of such matter or otherwise limit or affect the rights and remedies available hereunder to the party receiving such notice. The Stockholders and the Seller shall deliver to the Buyer updated versions of Schedules 1.2(k), 1.3(c) (to reflect payments made only), 1.3(d), 3.8, 3.10, 3.11 and 10.6 as of the Closing Date, solely to reflect events occurring between the date of this Agreement and the Closing Date which are not as a result of any failure of the Stockholders or the Seller to comply with the covenants and agreements under this Agreement, or shall have notified the Buyer in writing that no changes to such Schedules are required.

7.9. Inventory. The Seller shall provide to the Buyer no later than three business days prior to the anticipated Closing Date a schedule listing all Inventory and setting forth its value as determined pursuant to the definition of Purchased Inventory. Such schedule shall be adjusted pursuant to a physical inventory taken by the Buyer with the assistance of Seller immediately prior to the Closing for purposes of the Closing Statement.

7.10. Further Assurances. The parties hereto agree to execute and deliver, or cause to be executed and delivered, such further instruments or documents or take such other action as may be reasonably necessary or convenient to carry out the transactions contemplated hereby.

7.11. Noncompetition By Seller and Stockholder.

(a) For a period of five years after the Closing (the "Restricted Period") neither the Seller, Stockholder nor any affiliate thereof shall engage, directly or indirectly, in any business anywhere in the United States that develops, designs, manufactures, sells or markets products or services of the kind developed, designed, manufactured, sold and marketed by the Business or the Seller as of the Closing Date or, without the prior written consent of the Buyer, directly or indirectly, own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, consultant or otherwise, any person that competes with the Buyer, Parent, the Business or the Seller in developing, designing, manufacturing, selling or marketing products or services of the kind developed, designed, manufactured, sold or marketed by the Business or the Seller as of the Closing; provided, however, that, for the purposes of this section ownership of securities having no more than five percent (5%) of the outstanding voting power of any competitor which are listed on any national securities exchange or traded actively in the national over-the-counter market shall not be deemed to be in violation of this section so long as the person owning such securities has no other connection or relationship with such competitor.

(b) As a separate and independent covenant, the Seller agrees with the Buyer that, for a period of five years following the Closing, neither the Seller, Stockholder nor any affiliate thereof shall, in any way, directly or indirectly, for the purpose of conducting or engaging in any business that develops, designs, manufactures, sells or markets products or services of the kind developed, designed, manufactured, sold or marketed by the Business or the Seller as of the Closing, call upon, solicit, advise or otherwise do, or attempt to do, business with any customers of the Business or the Seller in order to take away or interfere or attempt to interfere with any custom, trade, business or patronage of the Business or the Seller, or interfere with or attempt to interfere with any officers, employees, representatives or agents of the Business or the Seller, or induce or attempt to induce any of them to leave the employ of the Seller or violate the terms of their contracts, or any employment arrangements, with the Business.

(c) The Restricted Period shall be extended by the length of any period during which the Seller is in breach of the terms of this Section 7.11.

The obligations of the Stockholder and the Seller with respect to actions to be taken at the Closing are subject to the satisfaction or waiver on or prior to the Closing of all of the following conditions. The consummation of the Closing shall constitute a waiver of any conditions not so satisfied. However, no such waiver shall be deemed to affect the survival of the representations and warranties of the Buyer contained in Section 5.

The obligations of the Buyer with respect to actions to be taken at the Closing are subject to the satisfaction or waiver on or prior to the Closing of all of the following conditions. The consummation of the Closing shall constitute a waiver of any conditions not so satisfied. However, no such waiver shall be deemed to affect the survival of the representations and warranties of the Seller or the Stockholder contained in this Agreement.

(a) The parties agree that it is to the advantage of the Buyer and the Seller as to the goods and services provided by the Seller, to settle claims made by customers with respect to goods and services warranted by the Seller and goods returned to Buyer by customers. As a result the Buyer, shall perform such warranty obligations and provide customer returns only as are expressly described on Schedule 10.2(a).

(b) For a period of 60 days following the Closing Date, the Buyer shall make such efforts to collect accounts receivable of the Seller identified on Schedule 3.10 as have been normal and customary for the Seller, but in no event shall the Buyer be required to institute litigation or refer a receivable to a third party for collection. If any obligor on a receivable incurs further indebtedness to the Buyer after the Closing Date, all payments received from such obligor after the Closing Date shall be credited to the earliest indebtedness still outstanding, unless the obligor denies or disputes its obligation with respect to such indebtedness or otherwise directs allocation of the payment to later indebtedness. For a period of 30 days following the Closing Date, Seller shall retain control of its lockbox account and shall remit any amounts collected with respect to indebtedness incurred after the Closing Date on the first business day of the week following the week of collection. Thereafter, Buyer will have sole control and possession of the lockbox account and Buyer shall remit the collected amounts for the accounts receivable of the Seller to Seller on the first business day of the week following the week of collection. Buyer shall provide Seller with periodic reports of accounts receivable collected. Buyer shall not grant credits to any outstanding accounts receivable with prior written consent of Seller, which consent shall not be unreasonably withheld. Seller hereby agrees that Buyer is not guaranteeing the collection of the accounts receivable or acting as a guarantor of collection of accounts receivable or guaranteeing in any way any accounts receivable.

10.8. Soft Inventory. Within five business days of the end of the second full calendar month after the Closing Date, Buyer will calculate the amount by which $300,000 exceeds 50% of the value of nonprecious material, labor and overhead content of all Soft Inventory and promptly deliver a certificate to Seller setting forth such amount. Thereafter, within five business days of the end of every other calendar month, up to and including such month end most nearly preceding the 18 month anniversary of the Closing, Buyer will determine which Soft Inventory has been shipped or placed into production on a shop order. Buyer will then calculate the amount equal to 50% of nonprecious material, labor and overhead content of the Soft Inventory so shipped or placed in production and promptly deliver a certificate to Seller setting forth such amount (any such amount contained in a certificate provided for in this paragraph, a "Soft Inventory Release Amount".)

"Soft Inventory" is defined as those inventory items for which the balance on hand at Closing exceeds two and one half times the usage during the twelve month period prior to Closing. "Usage" shall mean either shipment to customers or placement into production on a shop order.

10.9. Ney Name. At no time after the Closing will Seller use any name incorporating or similar to the name "Ney", except in connection with transacting checks and other payments on accounts constituting Excluded Assets.

(a) The Seller and the Stockholder will, jointly and severally, indemnify, defend and hold harmless the Buyer from and against all liabilities, losses, claims, demands and damages, including reasonable attorneys' fees (collectively, "Claims") to the extent arising out of or related to (i) any Excluded Liabilities, (ii) any breach of any representation, warranty or agreement made by the Seller or the Stockholder in or pursuant to this Agreement or any of the other Transaction Documents, or (iii) any failure of the parties to have complied with any applicable bulk sales law. Notwithstanding the foregoing provisions of this Section 11.2 (a), with respect to any breaches of the representations and warranties contained in Section 3.4(b), Buyer's sole remedy with respect to breaches of Section 3.4(b) with respect to Soft Inventory shall be pursuant to the procedures set forth in Section 10.8 of this Agreement and Section 6(c) of the Escrow Agreement. On the Claim Date (as defined in the Escrow Agreement) a maximum of 50% of the nonprecious material, labor and overhead content of any remaining Soft Inventory will be permitted to be disbursed to the Buyer pursuant to the Escrow Agreement but only to the extent of the account balance remaining in the Inventory Indemnification Escrow Fund. Notwithstanding the limitation contained in the immediately preceding sentence, any other amounts in the Inventory Indemnification Escrow Fund shall be available to satisfy Claims with respect to breaches of the other representations and warranties contained in Section 3.4(b).

(b) The Buyer will indemnify, defend and hold harmless the Seller and the Stockholder from and against all Claims to the extent arising out of or related to (i) any Assumed Liabilities or (ii) any breach of any representation, warranty or agreement made by the Buyer in or pursuant to this Agreement or any of the other Transaction Documents.

(a) Promptly after any party hereto (the "Indemnified Party") receives notice of or has knowledge of any claim by a person or entity not a party to this Agreement ("Third Person"), or the commencement of any action or proceeding by a Third Person, for which the Indemnified Party intends to make a claim against any party obligated to provide indemnification pursuant to Section 11.2(a) (the "Indemnifying Party"), the Indemnified Party shall give the Indemnifying Party written notice of such claim or the commencement of such action or proceeding, provided that the failure to give such prompt notice shall not affect the Indemnifying Party's obligation to indemnify absent a showing of actual prejudice to the Indemnifying Party. Such notice shall state the nature and the basis of such claim.

(b) The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel, any such matter so long as the Indemnifying Party pursues the same in good faith and diligently, provided that the Indemnifying Party shall not settle any criminal matter, without the written consent of the Indemnified Party, or any other matter, without the written consent of the Indemnified Party which in the case of matters which are not criminal matters will not be unreasonably withheld or delayed. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in the defense thereof and, subject to the preceding sentence, in any settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records or information reasonably requested by the Indemnifying Party that are in the Indemnified Party's possession or control. In the event that counsel to the Indemnifying Party shall have a conflict of interest that prevents counsel for the Indemnifying Party from representing the Indemnified Party, or in the event that the Indemnified Party is not reasonably satisfied with the counsel selected by the Indemnifying Party, the Indemnified Party shall have the right to participate in such matter through counsel of its own choosing and the Indemnifying Party will reimburse the Indemnified Party for the reasonable expenses of its counsel. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability, except (i) as set forth in the preceding sentence, and (ii) to the extent such participation is requested by the Indemnifying Party, in which event the Indemnified Party shall be reimbursed by the Indemnifying Party for reasonable additional legal expenses and out-of-pocket expenses. If the Indemnifying Party notifies the Indemnified Party of its intention to undertake to defend any claim by a Third Person, the Indemnifying Party shall be conclusively presumed to have agreed to indemnify and hold the Indemnified Party harmless with respect thereto and the Indemnified Party shall be entitled to be indemnified for all losses, damages, liabilities, actions, suits, proceedings, demands, assessments, adjustments, costs and expenses (including without limitation reasonable attorneys fees and expenses of investigation) with respect to such claim.

(c) If the Indemnifying Party does not undertake to defend such matter to which the Indemnified Party is entitled to indemnification hereunder, or fails diligently to pursue such defense, the Indemnified Party may undertake such defense through counsel of its choice, at the cost and expense of the Indemnifying Party, and the Indemnified Party may settle such matter, and the Indemnifying Party shall reimburse the Indemnified Party for the amount paid in such settlement and any other liabilities or expenses incurred by the Indemnified Party in connection therewith; provided, however, that under no circumstances shall the Indemnified Party settle any such matter without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

(a) by mutual consent of the Buyer, the Stockholder and the Seller;

(b) by the Stockholder or the Seller, on the one hand, or by the Buyer on the other hand, if the transactions contemplated by this Agreement to take place at the Closing shall not have been consummated by February 28, 2002; provided, however, that (i) neither the Stockholder nor the Seller shall be entitled to terminate this Agreement pursuant to this Section 12.1(b) if the failure of such transactions to be consummated is due to the willful failure of the Seller or Stockholder to perform any of their respective obligations under this Agreement required to be performed by any of them prior to or at Closing and (ii) the Buyer shall not be entitled to terminate this Agreement pursuant to this Section 12.1(b) if the failure of such transactions to be consummated is due to the willful failure of the Buyer to perform its obligations under this Agreement required to be performed by it prior to or at Closing;

(c) by the Stockholders or the Seller, on the one hand, or by the Buyer on the other hand, if a material breach or default shall be made by the other parties in the observance or in the due and timely performance of any of the covenants or agreements contained herein, and the curing of such breach or default shall not have been made within ten business days after receipt of notice specifying the breach and requesting that such breach be cured;

(d) by the Buyer in the event that the outcome of the vote of the stockholders of the Stockholder does not result in approval of this Agreement, in which event Seller shall, within two (2) calendar days following such termination, pay to Buyer $75,000, unless such vote follows the withdrawal or modification of the recommendation of the Board made in accordance with Section 7.6, in which case the payment shall be $300,000;

(e) by the Seller in the event the Seller accepts a Superior Proposal in accordance with Section 7.6, in which event Seller shall, within two (2) calendar days following such termination, pay to Buyer $300,000; or

(f) by Buyer within 20 business days of the date of this Agreement, if Buyer or Parent is not provided with access and cooperation under Section 7.1 (including access to Seller's customers) or if Buyer or Parent is not satisfied in its sole discretion with its review of customer relationship or the terms of any fixed price contracts.

If to the Buyer or Parent, addressed as follows:

▇▇▇▇▇▇▇▇ Mfg. Company

▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attn: ▇▇▇▇ ▇▇▇▇▇▇▇

President

with a copy to:

▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇

Suite 6600

Sears Tower

▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attn: ▇▇▇▇ ▇▇▇▇▇▇

If to the Seller or the Stockholder, to:

▇▇▇▇▇▇▇▇ Group, Inc.

▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.

or to such other address or number as any party hereto shall specify for itself by notice given pursuant to this Section 13.3 from time to time; provided, however, that notices of any change in an address or number shall not be effective until receipt.

(a) Parent is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has all requisite corporate power and authority to own, lease and operate its properties and assets and to conduct its business as currently conducted or proposed to be conducted.

(b) Parent has all requisite power and authority to execute and deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement have been duly authorized by all requisite corporate action on the part of Parent. This Agreement constitutes the legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except to the extent enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditors rights generally, and general principles of equity.

(c) The execution, delivery and performance of this Agreement by Parent and the consummation of the transactions contemplated hereby (a) do not require Parent to file any notice with or obtain any consent, approval, authorization or exemption from any person or entity, including without limitation any government or governmental agency or instrumentality, (b) will not violate any writ, injunction, decree, order, judgment, law, statute, ordinance, rule or regulation and (c) will not constitute a default or breach under any agreement or commitment to which the Parent is a party or by which it or any of its properties may be bound.

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

▇▇▇▇▇▇▇▇ ACQUISITION CORP. THE ▇.▇. ▇▇▇ COMPANY

By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇

Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇

Title: President Title: Chief Financial Officer, Treasurer and Secretary

▇▇▇▇▇▇▇▇ MFG., COMPANY ▇▇▇▇▇▇▇▇ GROUP, INC., as the

(as to Section 13.13) Stockholder

By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.

Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.

Title: Chairman and Chief Executive Officer Title: President and Chief Executive Officer

Schedule 1.2(h) Artwork

Schedule 1.2(k) Deposits, Prepayments and Prepaid Expenses

Schedule 1.3(a) Employees

Schedule 1.3(b) Assumed Contracts

Schedule 1.3(c) Capitalized Lease Obligations

Schedule 1.3(d) Customer Pool Balances

Schedule 1.4 Headcount Reduction

Schedule 2.6 Form of Closing Statement

Schedule 3.1 Business Conducted by Agents, Subsidiaries or Affiliates

Schedule 3.3 Consents

Schedule 3.4 Financial Statements

Schedule 3.8 Personal Property

Schedule 3.9 Real Property

Schedule 3.10 Accounts and Notes Receivable

Schedule 3.11 Contracts and Leases

Schedule 3.12 Customer List

Schedule 3.13 Permits, Licenses and Authorizations

Schedule 3.15 Environmental Matters

Schedule 3.19 Employee Plans

Schedule 3.20 Compliance with ERISA

Schedule 3.21 Capitalization and Subsidiaries

Schedule 3.22 Predecessor Status; Etc.

Schedule 3.23 Intellectual Property

Schedule 3.24 Warranty and Sales Return Claims

Schedule 7.7 Agreements to be Terminated

Schedule 10.2(a) Warranty Claims, Inventory Returns

Exhibit A - Form of ▇▇▇▇ of Sale and General Assignment

Exhibit B - Form of Escrow Agreement

Exhibit C - Form of Lease

Exhibit D - Form of Assumption Agreement