ASSET PURCHASE AGREEMENT


         This Asset  Purchase  Agreement (the  "Agreement")  is made and entered
into  this  14th  day of  June,  1996 and is by and  between  Pulau  Electronics
Corporation  ("Pulau"),  a  Florida  corporation,  and  ST  Microwave  (Arizona)
Corporation  ("STMA"),  a Delaware  corporation and  wholly-owned  subsidiary of
Signal Technology Corporation ("Parent"), a Delaware corporation.

                                   Recitals

         A. STMA is engaged in the manufacture, repair and sale of magnetic core
memory products, and related services (the "Business").

         B. Pulau  desires to purchase  from STMA,  and STMA  desires to sell to
Pulau,  the  operating  and  intangible  assets  utilized  in the conduct of the
Business,  on  and  subject  to the  terms  and  conditions  contained  in  this
Agreement.

                              Terms and Conditions

         NOW, THEREFORE,  in consideration of the premises and of other good and
valuable consideration, and intending to be legally bound hereby, Pulau and STMA
hereby agree as follows:

                                    ARTICLE I
                               General Provisions

         1.1 Certain Definitions and Meanings;  Interpretation:  For purposes of
this  Agreement,  the term "parties"  means (except where the context  otherwise
requires) Pulau and STMA; the term "person"  includes any natural person,  firm,
association,  partnership,  corporation, or other entity other than the parties;
and the words  "hereof",  "herein",  "hereby" and other words of similar  import
refer to this Agreement as a whole,  including all Annexes and Schedules hereto.
Other terms used herein and identified  with initial  capital letters shall have
the  meanings  set forth  herein.  The table of contents and the headings of the
Articles  and  sections  of  this  Agreement  have  been  included   herein  for
convenience  of reference  only and shall not be deemed to affect the meaning of
the  operative  provisions of this  Agreement.  All dollar  amounts  referred to
herein are in United States Dollars.

<PAGE>

                                   ARTICLE II
                                Purchase and Sale

         2.1  Transactions:  On and subject to the terms and  conditions of this
Agreement,  (a) Pulau will purchase from STMA,  and STMA will sell to Pulau,  or
cause to be sold to Pulau, all of the Acquired Assets (as hereinafter defined in
Section 2.2), free and clear of any and all liens, security interests,  charges,
title  restrictions and encumbrances of every kind and nature  ("Encumbrances");
(b) Pulau will  assume  and  become  directly  and  solely  responsible  for the
payment,  performance  or  discharge,  as the case may be, of all of the Assumed
Liabilities (as hereinafter  defined in Section 2.3); (c) Pulau will pay to STMA
the Purchase Price (as hereinafter  defined in Section 2.5) with such payment to
be made as herein provided;  (d) Pulau will place a purchase order with STMA for
STMA's supply to Pulau,  on a sub-contract  basis,  of not less than 65 units of
Q65 core  memories at such unit prices and  delivery  schedules  as  hereinafter
provided;  and (e) Pulau will pay to STMA,  upon the  completion and delivery by
STMA  to  Pulau  of  the  inventory,   fixtures,  machinery  and  equipment  and
intellectual   property,   such   additional   amounts   as   provided   herein.
Notwithstanding  the consummation of such transactions,  STMA will remain solely
responsible  for the payment,  performance or discharge,  as the case may be, of
the Excluded Liabilities (as hereinafter defined in Section 2.4).

         2.2 Acquired Assets: For purposes hereof,  "Acquired  Assets" means all
right, title and interest of STMA in and to the following:

                  (a)  good  and  marketable   title,  free  and  clear  of  all
Encumbrances,  to all  inventories  of STMA on the Closing Date (as  hereinafter
defined  in Section  4.2) of raw  materials,  loose  core,  work-in-process  and
finished goods relating to the Business,  all as listed or described on Schedule
2.2(a) hereto or otherwise located at or in transit to STMA's Chandler,  Arizona
facility,  but excluding such of the inventories  which are required by STMA for
the  manufacture  and completion of STMA's backlog as such exists on the Closing
Date and for which STMA is contractually responsible, all of which are listed in
Schedule  2.2(a)(1) hereto ("STMA Backlog"),  and to complete the purchase order
issued  by  Pulau to STMA in  connection  with the  subcontract  referred  to in
Sections 2.1(d) and 2.7 hereof;

                  (b)  good  and  marketable   title,  free  and  clear  of  all
Encumbrances,  in and to fixtures,  tooling and machinery and equipment, used in
the Business, all of which is listed on Schedule 2.2(b) hereto;

                  (c) those bids and quotations,  and similar  arrangements,  if
any, relating to the sale of core memory goods or services,  which have not been
accepted by  customers or STMA as of the Closing Date all of which are listed on
Schedule 2.2(c) hereto;

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<PAGE>

                  (d) as of the Closing  Date,  as it relates to the Business as
of the date of this Agreement, the following:

                           (i) good and marketable  title, free and clear of all
Encumbrances, in and to the domestic and foreign patents and patent applications
related to the  Business all of which are listed on Schedule  2.2(d)(i)  hereto,
including the goodwill associated therewith;

                           (ii) good and marketable title, free and clear of all
Encumbrances,  in  and to  the  domestic  and  foreign  tradenames,  trademarks,
copyrights,  service marks and all applications and registrations,  all of which
are listed on Schedule  2.2(d)(ii)  hereto,  including  the goodwill  associated
therewith;

                           (iii) all of STMA's documentation directly related to
the  Business  which  documentation   evidences  currently  utilized  (or  under
development)  product  formulations  and  associated  manufacturing  and process
know-how, trade secrets, production methods and procedures,  product testing and
quality  control,  engineering  and other  drawings,  product  applications  and
specifications  and  associated  know-how,   unpatented   inventions,   research
developments and know-how, technology, product literature and related materials,
current  customer and supplier  lists and files,  and similar  marketing data in
writing,  including,  without limitation,  those listed or described on Schedule
2.2(d)(iii) hereto; and

                           (iv) STMA's  books and  records (or copies  thereof),
which books and records are directly related to the Business, provided that STMA
may utilize such of the foregoing as necessary to complete outstanding orders as
of the Closing Date and the Pulau purchase order and subcontract  referred to in
Sections 2.1(e) and 2.7 hereof.

                  (e) to the extent assignable and relating to the Business, all
permits,  approvals,  qualifications,  licenses  and  the  like  issued  by  any
government or governmental unit, agency,  board, body,  instrumentality or other
subdivision,  whether federal,  state or local, and all pending applications for
any of same, all of which are listed on Schedule 2.2(e) hereto; and

                  (f) subject to the provisions of Section 5.3 hereof, all books
and other  records,  whether  written or in  machine-readable  form  (including,
without  limitation,  computerized  records maintained on tapes, disks and other
electronic or optical storage media),  generated in connection with or otherwise
related to the conduct of the Business and the Acquired Assets,  and not related
to any other business of STMA.

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<PAGE>

         2.3 Assumed Liabilities: For the purposes hereof, "Assumed Liabilities"
means only the following  liabilities  and  obligations as the same exist at the
Closing Date and which arise from or relate to the conduct of the Business at or
prior to, or after (as hereinafter defined) the Closing Date:

                  (a) all  liabilities  and  obligations  with respect to claims
asserted by third  parties  after the Closing Date which seek relief in the form
of return, replacement or repair of magnetic core memory products made, repaired
or assembled by or on behalf of STMA in connection with the Business,  which are
under  warranty as of the Closing  Date or are  delivered  from STMA backlog (as
defined herein)  subsequent to the Closing Date, and which are asserted by third
parties on or after the Closing Date pursuant to express  written  magnetic core
memory  product and/or repair  warranties  extended by STMA and all of which are
set  forth  on  Schedule  2.3(a).  The  foregoing  notwithstanding,  in no event
whatsoever will Pulau be responsible for consequential  damages,  including loss
of profits, with respect to such claims.

         2.4  Excluded   Liabilities:   For  the  purposes   hereof,   "Excluded
Liabilities"  means,  except for those  matters  referred  to in Section  2.3(a)
hereof,  all other debts,  liabilities and obligations of STMA of every kind and
nature, including the following:

                  (a) all liabilities and obligations of STMA of whatever nature
and whether  known,  or unknown,  absolute,  fixed or  contingent  or otherwise,
arising out  of,  resulting  from or  relating  to the  conduct of the  Business
including all indebtedness, trade accounts payable and accrued expenses;

                  (b)  all  liabilities  and  obligations  incurred  by  STMA in
connection with the conduct of the Business which have been fully  discharged or
satisfied  at or prior  to the  Closing;

                  (c) all liabilities and obligations  arising out of, resulting
from or relating to any violation by STMA of any statute, ordinance,  regulation
or other  governmental  requirement in connection  with the use and ownership of
the Acquired Assets or conduct of the Business, including environmental matters;

                  (d) except for product warranty matters which shall be handled
in  accordance  with Section  2.3(a)  hereof,  all other  pending or  threatened
claims,  actions or  litigation  of the  Business  as of the  Closing  including
injuries to  persons,  damages to  property  and  similar  matters to the extent
arising out of or relating to the Business;

                  (e) all federal,  state and local  income,  sales,  franchise,
property, sales and other taxes of STMA and the Business;

                  (f)  all  liabilities  and  obligations  arising  out  of,  or
resulting from, or relating to claims,  whether founded upon negligence,  breach
of warranty,  strict  liability in tort, or other similar legal theory,  seeking
compensation  or  recovery  for or  relating  to  injury  to person or damage to
property  which  occurs  prior to or after the Closing Date and arises out of or
relates to

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<PAGE>

core memory  products  made,  repaired or  assembled by or on behalf of STMA and
sold by or on  behalf  of STMA or a  representative,  agent  or  distributor  or
services  rendered by STMA before the Closing,  excluding  inventories  included
within the Acquired Assets which shall be  the  responsibility  and liability of
Pulau and excluding any work done by Pulau on behalf of STMA; and

                  (g) all liabilities and obligations  with respect to employees
of STMA and employee  benefit and welfare plans of STMA.

         2.5 Purchase  Price:  For purposes  hereof,  the term "Purchase  Price"
means the aggregate sum of Three Hundred Thousand Dollars ($300,000).

         2.6 Payment of Purchase  Price.  Pulau will pay the  Purchase  Price as
follows:

                  (a) Cash on the Closing Date. On the Closing Date,  Pulau will
pay STMA the sum of One Hundred Thousand Dollars ($100,000) by means of either a
cashier's  check  drawn on  immediately  available  funds or a wire  transfer of
immediately available funds to an account designated by STMA.

                  (b)  Additional  Cash  Payments.   Pulau  will   pay  to  STMA
additional cash payments in the aggregate amount of Two Hundred Thousand Dollars
($200,000) for all  inventory,  fixtures,  tooling,  machinery and equipment and
intellectual  property  which are  included in the  Acquired  Assets and are not
delivered on the Closing Date. Of such aggregate amount, One Hundred and Seventy
Thousand Dollars  ($170,000) shall be paid at the time of completion of delivery
(as specified in Section 2.6(c)) to Pulau of the  inventories  and  intellectual
property  included in the Acquired  Assets by means of either a cashier's  check
drawn on immediately available funds or a wire transfer of immediately available
funds to an account which STMA has  designated.  The remaining  Thirty  Thousand
Dollars  ($30,000)  of such  aggregate  amount  shall  be  paid  at the  time of
completion  of  delivery  (as  specified  in Section  2.6(c))  of the  fixtures,
tooling,  machinery and equipment  included in the Acquired Assets and described
on  Schedule  2.2(b)  hereto,  by  means  of either a  cashier's  check drawn on
immediately available funds or a wire transfer of immediately available funds to
an account which STMA has designated.

                  (c)  Delivery.  Delivery (as defined  below) of inventory  and
intellectual property included in the Acquired Assets will be complete not later
than thirty (30) days after the Closing Date. Delivery of fixtures, tooling, and
machinery and equipment  included in the Acquired  Assets shall commence as soon
as possible from and after the Closing Date and continue to the extent  possible
without  adverse  effect (at STMA's  sole  reasonable  determination)  to STMA's
contractual  obligations  with respect to the STMA backlog set forth in Schedule
2.2(a)(1)  and the  subcontract  referred to in Sections  2.1(d) and 2.7 hereof.
Delivery of all  Acquired  Assets  shall be complete  not later than thirty (30)
days after delivery of the last Q65 core memory unit

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<PAGE>

pursuant to the subcontract referred to in Sections 2.1(d) and 2.7 hereof. Pulau
shall  pay  all  reasonable  copying,  reproduction,   duplication,   packaging,
labeling, insurance, and freight costs associated with delivery.

               Delivery of inventory,  fixtures,  machinery and  equipment,  and
intellectual  property which are included in the Acquired Assets shall be deemed
to have taken  place when such items  have been  placed in the  staging  area of
STMA's Chandler,  Arizona  facility,  packaged as specified below, and when STMA
has delivered to Pulau  assignments of all patents listed on Schedule  2.2(d)(i)
hereto and trademarks listed on Schedule  2.2(d)(ii)  hereto  conveying to Pulau
STMA's right, title and interest thereto.

               Packaging  of  inventory  items  shall  be  in  commercial  grade
cardboard  boxes.  Documentation  shall be  packaged  in the  same (or  similar)
storage  containers as it currently occupies in the ordinary course of business.
Equipment  shall  not be  packaged,  but  loose  cables,  accessories  and other
appendages  shall  be  secured,  and  the  equipment  shall  be  in a  condition
acceptable for shipment by padded van.

         2.7  Subcontract.  On or before the Closing Date,  Pulau will issue its
purchase order to STMA,  substantially  in the form of Annex 1 hereto,  whereby,
among other things,  Pulau will  subcontract the manufacture by STMA of not less
than 65 units of Q65 core  memories  and pay STMA a  per-unit  price of  Sixteen
Thousand Five Hundred Dollars ($16,500). Additionally, STMA will, as provided in
Section 2.1(d)  hereof,  subcontract to Pulau elements of work in the production
of the units of Q65 core memories on such additional terms and conditions as may
be mutually  agreed between STMA and Pulau,  provided,  however,  that Pulau has
been qualified as a supplier at no cost to STMA for the anticipated  elements of
work,  and provided  that Pulau must perform to STMA's  requirements  within the
cost, schedule and quality  requirements  outlined by STMA. STMA will retain the
right  to  terminate  Pulau  for  non-performance  to  contract  under  the U.S.
Government Federal Acquisition Regulations.

                                  ARTICLE III
                         Representations and Warranties

         3.1 Representations and Warranties: STMA hereby represents and warrants
to Pulau as follows:

                  (a)  Organization  and Existence:  STMA is a corporation  duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.

                  (b) Power and  Authority:  STMA has full  corporate  power and
authority  to  execute,  deliver,  and  perform  this  Agreement  and all  other
agreements,  certificates  or documents to be delivered in connection  herewith,
including, without limitation, the other agreements,

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<PAGE>

certificates   and   documents    contemplated   hereby   (collectively   "Other
Agreements").  STMA has full  corporate  power and  authority to own,  lease and
operate the Acquired  Assets and to conduct the Business,  as same are currently
being conducted.

                  (c) Authorization:  The execution, delivery and performance of
this Agreement and all Other  Agreements,  by STMA have been duly  authorized by
all requisite shareholder and corporate action.

                  (d) Binding Effect:  Upon execution and delivery by STMA, this
Agreement and the Other Agreements will be and constitute the valid, binding and
legal obligations of STMA, enforceable against STMA in accordance with the terms
hereof  and  thereof,  except as the  enforceability  hereof or  thereof  may be
subject  to  the   effect  of  (i)  any   applicable   bankruptcy,   insolvency,
reorganization,  moratorium or similar laws relating to or affecting  creditors'
rights generally,  and (ii) general  principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

                  (e) No Default:  Neither the  execution  and  delivery of this
Agreement  or  the  Other  Agreements  nor  full  performance  by  STMA  of  its
obligations  hereunder  or  thereunder  will  violate  or breach,  or  otherwise
constitute  or give rise to a default  under,  the  terms or  provisions  of the
Certificate of Incorporation or By-Laws of STMA or, subject to obtaining any and
all  necessary  consents,  of  any  contract,  commitment  or  other  obligation
included in Acquired  Assets or  necessary  for the  operation  of the  Business
following the Closing Date or any other material contract,  commitment, or other
obligation to which STMA is a party,  or create or result in the creation of any
encumbrance on any of the Acquired Assets.

                  (f) No  Consents:  STMA  has,  after  reasonable  inquiry,  no
knowledge  that any  consent,  approval or  authorization  of, or  registration,
declaration or filing with any third party,  including,  but not limited to, any
governmental  department,  agency,  commission  or  other  instrumentality,   is
required  prior to  Closing,  except for  consents,  approvals  or waivers to be
obtained pursuant to Section 4.3(a)(2) hereof.

                  (g)  Finders:  STMA has not  engaged  and is not  directly  or
indirectly  obligated  to anyone  acting as a  broker,  finder,  or in any other
similar capacity in connection with STMA's sale of the Acquired Assets.

                  (h) No Knowledge of Pulau Default:  STMA has no knowledge that
any of the Pulau's representations and warranties contained in this Agreement or
the Other  Agreements  are untrue,  inaccurate or incomplete or that Pulau is in
default under any term or provision of this Agreement or the Other Agreements.

                  (i) Inventories:  STMA has good and marketable title, free and
clear of all liens,  charges and encumbrances,  to all inventories of every type
and description included in the Acquired Assets.

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                  (j) Personal Property: STMA  has  good and marketable title to
all of the machinery and equipment listed on Schedule 2.2(b) hereto. All of such
machinery and equipment is and on the Closing Date,  will be, in generally  good
and operable condition.

                  (k) Liabilities:  STMA is not in default under any nonmonetary
provision,  note, bond,  debenture,  mortgage,  indenture,  security  agreement,
guaranty,  or other instrument of  indebtedness,  and no condition exists which,
with the giving of notice or the passage of time, or both, would constitute such
a  default,  in  either  case,  which  default  is or would be  likely to have a
material adverse effect on the Business or Acquired Assets.

                  (1)  Litigation:  Except as  otherwise  disclosed  on Schedule
3.1(1) hereto, (1) there presently exists no litigation,  proceedings,  actions,
claims or investigations  pending in law or in equity, nor, to STMA's knowledge,
are there any of the foregoing  which are  threatened,  relating to the Acquired
Assets  or the  Business;  and (2)  STMA is not  subject  to any  notice,  writ,
injunction,  order,  or  decree  of any  court,  agency,  or other  governmental
authority in connection with the Acquired  Assets or the Business.  Schedule 3.1
(1) hereto  sets  forth all  pending  litigation,  proceedings,  injunctions  or
decrees  of any  court,  agency or  governmental  authority  pending  against or
otherwise involving or relating to the Business, the Assumed Liabilities, or the
Acquired Assets.

                  (m) Permits and  Approvals:  Except as otherwise  disclosed on
Schedule 3.1(m) hereto, insofar as the Business is concerned, (1) STMA is not in
default under any permit, approval or qualification included within the Acquired
Assets,  nor to STMA's knowledge is there any existing condition which, with the
giving  of notice or the  passage  of time,  or both,  would  constitute  such a
default;  in either  case which  default  is likely to have a  material  adverse
effect  on the  acquired  assets  or  business,  (2)  to  STMA's  knowledge,  no
additional  permit,  approval or qualification of any government or governmental
unit,  agency, board, body or  instrumentality, whether federal, state or local,
is  necessary  for the  conduct  of the  Business  as same has been and is being
conducted;  and (3) there is no  lawsuit  or  proceeding  pending  or, to STMA's
knowledge, threatened with respect to any of the foregoing.

                  (n)  Compliance  with  Laws:  Except  as  otherwise  expressly
indicated on Schedule 3.1(n) hereto,  (1) STMA is in material  compliance,  with
all  laws,  ordinances,   codes,  restrictions,   regulations  and  other  legal
requirements  applicable to the conduct of the Business,  the noncompliance with
which would be likely to have a material adverse effect on the Business; and (2)
there are no lawsuits or proceedings pending or, to STMA's knowledge, threatened
with respect to the foregoing.

                  (o)  Payment of Taxes;  Tax  Liens:  All tax  returns  and all
documents  whether  federal,  state or local,  required to be filed by STMA with
respect  to the  Business  have been or will be filed on or  before  the date on
which such tax returns or other documents are required to

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<PAGE>

be filed and all taxes due and payable  for all  periods  ended on the dates for
which such tax returns and other documents cover have been or will be paid on or
before the date on which such taxes are required to be paid. The Acquired Assets
and Business are not and will not be  encumbered  by any liens arising out of or
relating to unpaid taxes.

                  (p) Ordinary  Course:  The Business has been conducted by STMA
in the ordinary and usual course  since  December 31, 1995.  Further,  except as
disclosed on Schedule 3.1(p) hereto, STMA knows of, after reasonable inquiry, no
dispute with any customer or vendor of STMA relating to the  Business,  which is
or would be likely to have a material adverse effect on the Business or Acquired
Assets.

                  (q) Intellectual Property: Other than those patents and patent
applications  listed in Schedule 2.2(d)(i) hereto and those trademarks and other
items listed in Schedule 2.2(d)(ii) hereto,  there are no patents and trademarks
or  applications  therefor  which are  owned by STMA and used by STMA  solely in
connection  with  the  Business  as of the  date of this  Agreement.  Except  as
otherwise  disclosed in Schedules  2.2(d)(i) and 2.2(d)(ii) hereto, no rights or
licenses to any of such  intellectual  property  have been  granted to any other
parties. At the Closing Date, STMA will deliver assignments of such intellectual
property conveying to Pulau STMA's right, title and interest thereto.  After the
Closing  Date,  Pulau  will grant STMA,  Parent or other legal agency  acting on
STMA or Parent's  behalf,  access to all intellectual  property  included in the
Acquired  Assets to the extent  required to defend  threatened  or pending legal
action  against  STMA or Parent.

                  Nothing  herein shall be construed to grant or imply the grant
of any right or license  in Pulau to the use of the  trademark  "ST";  nor shall
anything herein be construed to grant or imply the grant of any right or license
in  Pulau  to any  patent  now or  hereafter  owned  by STMA  other  than  those
specifically set forth in Schedule  2.2(d)(i)  hereto.

                  (r)  Products  Liability:  Except as  otherwise  disclosed  in
Schedule  3.1(r)  hereto,   there  have  been  no  product  liability   lawsuits
instituted, or to STMA's knowledge threatened,  from January 1, 1990 through the
Closing   Date  with   respect  to  the   Business.

         3.2   Accuracy   of   STMA's   Representations   and   Warranties:   No
representation,  warranty or other statement made by STMA in this Agreement, the
Other  Agreements or the schedules  hereto or thereto provided to Pulau contains
any untrue  statement of a material  fact,  or omits to state any material  fact
necessary  to  make  such  representation,   warranty  or  other  statement  not
misleading, in light of the circumstances in which same was made.

         3.3 Pulau's Representations and Warranties: Pulau hereby represents and
warrants to STMA as follows:

                  (a)  Organization  and Existence:  Pulau is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida.

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<PAGE>

                  (b) Power and Authority:  Pulau has full  corporate  power and
authority  to  execute,  deliver  and  perform  this  Agreement  and  the  Other
Agreements.

                  (c) Authorization: The  execution, delivery and performance of
this  Agreement and the Other  Agreements by Pulau have been duly  authorized by
all requisite corporate action.

                  (d) Binding Effect: Upon execution and delivery by Pulau, this
Agreement and the Other Agreements will be and constitute the valid, binding and
legal  obligations  of Pulau  enforceable  against Pulau in accordance  with the
terms hereof and thereof, except as the enforceability hereof and thereof may be
subject  to  the   effect  of  (i)  any   applicable   bankruptcy,   insolvency,
reorganization,  moratorium or similar laws relating to or affecting  creditors'
rights generally,  and (ii) general  principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

                  (e) No Default:  Neither the  execution  and  delivery of this
Agreement  or  the  Other  Agreements  nor  full  performance  by  Pulau  of its
obligations  hereunder  or  thereunder  will  violate  or breach,  or  otherwise
constitute or give rise to a default  under,  the terms or provisions of Pulau's
Certificate of Incorporation or By-Laws or of any material contract, commitment,
or other  obligation  to which  Pulau is a party.

                  (f)  Finders:  Pulau has not  engaged,  and is not directly or
indirectly  obligated  to,  anyone  acting as a  broker,  finder or in any other
similar capacity in connection with Pulau's purchase of the Acquired Assets.

                  (g) No  Knowledge  of STMA's  Default:  Pulau has no knowledge
that any of STMA's representations and warranties contained in this Agreement or
the Other  Agreements  are untrue,  inaccurate  or incomplete or that STMA is in
default under any term or provision of this Agreement or the Other Agreements.

                  (h) Pulau's  Representations and Warranties True and Complete:
All  representations  and  warranties  of Pulau in this  Agreement and the Other
Agreements  are true,  accurate and complete in all material  respects as of the
Closing.

         3.4  Survival:  The  parties'   respective   covenants  to  the  extent
unperformed  at  Closing,  representations  and  warranties  contained  in  this
Agreement  and the Other  Agreements  will survive the execution and delivery of
this Agreement and the Other Agreements at the Closing.

                                   ARTICLE IV
                                    Closing

         4.1 The Closing:  For  purposes  hereof,  "Closing"  means the time and
place at which the  transactions  contemplated by this Agreement are consummated
and the documents and instruments referred to in Section 4.3 hereof are executed
and delivered by the parties.

                                       10
<PAGE>

         4.2 Time.  Date and Place of Closing:  The Closing will occur as of the
close of business at 11:59  p.m.  (Eastern  Daylight Time) on the first business
day following  satisfaction of all of the conditions  referred to in Article VII
hereof but in no event whatsoever later than June 14, 1996 (the "Closing Date").
The Closing will take place at the offices of STMA in Chandler, Arizona.

         4.3 Deliveries at Closing: At the Closing:

                  (a) STMA shall deliver to Pulau a  certificate  executed by an
officer of STMA with knowledge of the facts set forth to the effect that:

                           (1) all  corporate and other  proceedings  or actions
required to be taken by STMA in connection with the transactions contemplated by
this Agreement have been taken;

                           (2) those consents or approvals, or effective waivers
thereof,  to or of  assignment,  of those persons  listed in Schedule  4.3(a)(2)
hereto have been obtained;

                           (3)  all   requisite   governmental   approvals   and
authorizations   necessary  for   consummation  by  STMA  of  the   transactions
contemplated hereby have been duly issued or granted; and

                           (4) there has not been issued, and there shall not be
in effect,  any  injunction or similar legal order  prohibiting  or  restraining
consummation  by STMA of any of the  transactions  herein  contemplated,  and no
legal or governmental action, proceeding or investigation which might reasonably
be expected to result in any such injunction or order is pending.

                  (b) STMA shall deliver to Pulau:

                           (1) an executed Bill of Sale in the form set forth as
Annex 2 hereto  conveying the owned personal  property  included in the Acquired
Assets;  and

                           (2) copies of  customer  warranties  as  provided  in
Section 2.3(a) hereof.

                  (c) All documents  reflecting any actions  taken,  received or
delivered  by STMA  pursuant  to  Sections  4.3(a)  and 4.3(b)  hereof  shall be
reasonably  satisfactory in form and substance to Pulau.

                  (d) Pulau shall deliver to STMA a  certificate  executed by an
executive  officer of Pulau with  knowledge of the facts set forth to the effect
that:

                           (1) all corporate and other  proceedings  required to
be taken  by Pulau in  connection  with the  transactions  contemplated  by this
Agreement have been taken;

                           (2)  all   requisite   governmental   approvals   and
authorizations   necessary  for   consummation  by  Pulau  of  the  transactions
contemplated hereby have been duly issued or granted; and

                           (3)  there has not been  issued,  and there is not in
effect,  any  injunction  or similar  legal  order  prohibiting  or  restraining
consummation by Pulau of any of the transactions

                                       11
<PAGE>

herein  contemplated,  and  no  legal  or  governmental  action,  proceeding  or
investigation  which  might  reasonably  be  expected  to  result  in  any  such
injunction or order is pending.

                  (e) Pulau shall deliver to STMA:

                           (1) the  cash  portion  of the  Purchase  Price to be
delivered on the Closing Date; and

                           (2) the  purchase  order  referred  to in Section 2.7
hereof.

                  (f) All documents  reflecting any actions  taken,  received or
delivered  by Pulau  pursuant  to  Sections  4.3(d) and 4.3(e)  hereof  shall be
reasonably satisfactory in form and substance to STMA.

         4.4  STMA's  Indemnity  Obligation:  STMA  shall,  at its sole cost and
expense,  indemnify  and defend and hold  harmless  Pulau from and  against  the
Excluded  Liabilities  provided that: (i) STMA is notified as soon as reasonably
practicable  in writing of any such claim;  (ii) STMA shall have  control of the
defense  and  settlement  negotiations;  (iii)  Pulau  shall not be in  default,
subject to cure periods, in the payment of any amounts due under this Agreement;
and (iv) Pulau provides STMA  information  available to Pulau and assistance for
such defense  provided STMA  reimburses  Pulau for all travel and  out-of-pocket
expenses.

                                   ARTICLE V
                             Actions After Closing

         5.1 Further Conveyances and Assurances:  After the Closing,  STMA will,
without further cost or expense to, or  consideration  of any nature from Pulau,
execute and  deliver,  or cause to be executed  and  delivered,  to Pulau,  such
additional  documentation  and instruments of transfer and conveyance,  and will
take such other and further  actions,  as Pulau may  reasonably  request as more
completely to sell,  transfer and assign to and fully vest in Pulau ownership to
the Acquired Assets.

         5.2 Further  Consents to Assignment:  With respect to those consents or
approvals  (or  effective  waivers  thereof) to or of  assignment  which are not
obtained on or prior to Closing:

                  (a) the  parties  will make all  reasonable  efforts to obtain
such  consents or  approvals  (or an  effective  waiver  thereof) at the written
request therefor by Pulau after Closing; and

                  (b) if the  parties  are  unable to obtain  such  consents  or
approvals,  or an effective waiver thereof,  then, with respect to the contract,
lease,  license,  permit,  approval or other item to or of which such consent or
approval or effective  waiver thereof is requested by Pulau in writing after the
Closing,  (1)  this  Agreement  shall  not  constitute  or  be  deemed  to be an
assignment  or an  agreement  to  assign  such item if an  attempted  assignment
without such consent or approval, or

                                       12
<PAGE>

an effective waiver thereof,  would constitute a breach of or default under such
item or create in any party  thereto  the right or power to cancel or  terminate
such item,  and (2) STMA will cooperate with Pulau in entering into or effecting
any reasonable  arrangement designed to provide Pulau with the benefit of STMA's
rights under or pursuant to such item, including enforcement (at Pulau's expense
which shall include without  limitation  out-of-pocket  expenses of STMA but not
any expenses for the time and effort of STMA personnel) of any and all rights of
STMA against any other party as Pulau may reasonably request.

         5.3 Access to Former Business  Records:  For a period of five (5) years
following the Closing,  Pulau will retain all business records constituting part
of the Acquired Assets and Assumed  Liabilities.  During such period, Pulau will
afford  authorized  representatives  of STMA free and full access to all of such
records at reasonable  times and during normal  business  hours at the principal
business  office of Pulau,  or at such other location or locations at which such
business  records may be stored or maintained from time to time, and will permit
such  representatives to make abstracts from, or copies of, any of such records,
or to obtain temporary  possession of any thereof as may be reasonably  required
by STMA at STMA's sole cost and  expense.  During such  period,  Pulau will,  at
STMA's  expense,  cooperate  with  STMA  in  furnishing  information,  evidence,
testimony,  and other  reasonable  assistance  in  connection  with any  action,
proceeding, or investigation relating to STMA's conduct of the Business prior to
the Closing.

         5.4 Customer  Inquiries:  STMA will,  from and after the Closing  Date,
refer to Pulau all customer inquiries,  requests for bids and quotations and the
like as may relate to the Business.

         5.5  Transitional  Assistance:  In the event that Pulau should  request
assistance  of  STMA  personnel  with  respect  to the  shipment  of  inventory,
machinery and equipment and process  technology  transfer or to support  Pulau's
proposal and/or production activity which may be required prior to completion of
shipment of all machinery and equipment to Pulau,  then in such event STMA would
provide all such  assistance to the extent  available and Pulau would  reimburse
STMA, on a monthly basis, amounts set forth in Schedule 5.5 hereto.

                                   ARTICLE VI
                            Covenant Not to Compete

         As a material inducement to Pulau's becoming a party to this Agreement,
STMA  agrees  that,  except for the  subcontracting  to be  provided  by STMA in
accordance  with the provisions of Section 2.7, from and after the Closing Date,
STMA will not at any time,  during the fifteen (15) years after the date hereof,
and will not cause or permit at any time during the fifteen (15) years after the
date  hereof,  any  of  its  affiliates,   including  Parent,  to,  directly  or
indirectly, alone or in

                                       13
<PAGE>
association  with  any  other  person,  firm,   corporation  or  other  business
organization, manufacture or repair or offer for sale, or solicit sales for, any
magnetic core memory products including those currently  manufactured or sold by
STMA or any magnetic  core memory  products  which STMA  currently  has plans to
manufacture or sell or any other magnetic core memory  products  similar thereto
which  compete  with such  magnetic  core  memory  products,  or carry on, or be
engaged or  concerned  in, take part in, own, or share in the  earnings  of, any
person, firm,  corporation or other business organization engaged in, a business
which  manufactures  or markets such magnetic  core memory  products (a "Similar
Business");

         As a separate  and  independent  covenant,  STMA and Parent agree that,
except for the  subcontracting  to be  provided by STMA in  accordance  with the
provisions of Section 2.7, from and after the Closing Date, STMA and Parent will
not at any time,  during the fifteen (15) years after the date hereof,  and STMA
and Parent will not at any time,  during the  fifteen  (15) years after the date
hereof,  cause or permit any of their  affiliates  to, in any way,  directly  or
indirectly,  for the purpose of conducting or engaging in any Similar  Business,
to take away or  interfere  or attempt to interfere  with any  customer,  trade,
business  or  patronage  of Pulau  relating  to the  Acquired  Assets  or of any
affiliate of Pulau relating to a Similar Business,  or interfere with or attempt
to interfere  with any officers or employees of Pulau  relating to the Purchased
Assets or of any affiliate of Pulau relating to a Similar Business, or induce or
attempt to induce  any of them to leave the employ of Pulau or of any  affiliate
of Pulau or violate the terms of their  contract with any of them (provided that
STMA has knowledge of such contract.

                                   ARTICLE VII
                                   Conditions

         7.1  Conditions  to Pulau's  Obligations:  The  obligation  of Pulau to
consummate  the  transactions  contemplated  by this Agreement is subject to the
satisfaction of the following conditions at or before the Closing;

                  (a)  Northrop   Grumman:   The  award  by  Northrop   Grumman,
Electronic  Space and Systems  Division  ("Northrop") to Pulau of a contract for
the  production  and  delivery  by Pulau  of not less  than 95 units of Q65 core
memories to  Northrop on terms and  conditions  acceptable  to Pulau;  provided,
however, that Pulau shall not accept an award by Northrop to Pulau of a contract
for the  production  and delivery by Pulau for the 95 units of Q65 core memories
on or before the Closing Date without prior written consent of STMA and issuance
of  the  subcontract   referred  to  in  Section  2.7  to  STMA.

                  (b)   Truth   of   Representations    and   Warranties:    The
representations  and  warranties of STMA  contained in this Agreement and STMA's
Schedules as updated from time to time from

                                       14
<PAGE>

the date hereof through the Closing shall be true, accurate, and complete in all
material  respects  as of the  Closing,  except  with  respect  to the effect of
transactions contemplated or permitted by this Agreement and except with respect
to the effect of the passage of time upon dated  material in the  Schedules  and
Pulau shall have been given an officer's certificate to such effect.

                  (c)  Performance  of Covenants:  STMA shall have performed and
complied with all  agreements  and  conditions  required by this Agreement to be
performed  or  satisfied  by STMA,  and STMA shall have  delivered  to Pulau all
documents,  certificates, and instruments required to be delivered by STMA under
the  terms of this  Agreement  and Pulau  shall  have  been  given an  officer's
certificate to such effect.

                  (d) Corporate Proceedings: All corporate and other proceedings
or actions to be taken by STMA in connection with the transactions  contemplated
by this Agreement,  and all documents  incidental  thereto,  shall be reasonably
satisfactory in form and substance to Pulau.

                  (e) Consents: All third party consents and approvals listed in
Schedule 4.3(a)(2) hereto shall have been obtained.

                  (f) No  Restraints:  There  shall not have been  issued and in
effect  any  injunction  or  similar  legal  order  prohibiting  or  restraining
consummation of any of the transactions  herein contemplated and no legal action
or governmental  investigation  which might  reasonably be expected to result in
any such injunction or order shall be pending.

                  (g)   Governmental   Approvals:  All  requisite   governmental
approvals and  authorizations  necessary for  consummation  of the  transactions
contemplated hereby shall have been duly issued and granted.

                  (h) No  Adverse  Change:  There  shall  have been no  material
damage, destruction or loss (whether or not covered by insurance) materially and
adversely affecting the Business after March 31, 1996.

                  (i) Customer Notification: STMA shall have notified in writing
each of its customers with which it has at the Closing Date executory agreements
involving the Business  that,  from and after the Closing Date,  (i) it will not
accept core memory products for repair or any orders for any such products, (ii)
Pulau is the owner of the  Business  and,  (iii) with respect to the repairs and
other matters relating to the Business,  such customers should  communicate with
Pulau.

         7.2  Conditions  to  STMA's  Obligations:  The  obligation  of  STMA to
consummate  the  transactions  contemplated  by this Agreement is subject to the
satisfaction of the following conditions at or before the Closing:

                  (a)   Truth   of   Representations    and   Warranties:    The
representations  and warranties of Pulau contained in this Agreement and Pulau's
Schedules as updated from time to time from the date hereof  through the Closing
shall be true, accurate, and complete in all material

                                       15
<PAGE>

respects as of the Closing,  except with respect to the effect of the passage of
time upon  dated  material  in the  Schedules  and STMA shall have been given an
officer's certificate to such effect.

                  (b)  Performance of Covenants:  Pulau shall have performed and
complied with all  agreements  and  conditions  required by this Agreement to be
performed or satisfied by Pulau,  and Pulau shall have  delivered all documents,
certificates,  and instruments required to be delivered by Pulau under the terms
of this  Agreement  and STMA shall have been given an officer's  certificate  to
such effect.

                  (c) Corporate Proceedings: All corporate and other proceedings
to be taken by Pulau in connection  with the  transactions  contemplated by this
Agreement,   and  all  documents   incidental   thereto,   shall  be  reasonably
satisfactory in form and substance to STMA.

                  (d) No  Restraints:  There  shall not have been  issued and in
effect  any  injunction  or  similar  legal  order  prohibiting  or  restraining
consummation of any of the transactions  herein contemplated and no legal action
or governmental  investigation  which might  reasonably be expected to result in
any such injunction or order shall be pending.

                  (e) No  Adverse  Change:  There  shall  have been no  material
adverse changes (whether or not in the ordinary and usual course of business) in
the financial condition, net worth, assets, liabilities,  personnel, business or
results of operations of Pulau after March 31, 1996.

                  (f)  Governmental   Approvals:   All  requisite   governmental
approvals and  authorizations  necessary for  consummation  of the  transactions
contemplated hereby shall have been duly issued and granted.

         7.3 Termination: This Agreement may be terminated, without liability on
the part of either party to the other, by either STMA or Pulau if:

                  (a) Completion Date.  The  conditions precedent referred to in
Article  VII hereof  have not for  whatever  reason,  or no reason at all,  been
completed by June 14, 1996; or

                  (b)  Non-Fulfillment  of  Conditions.  Any of  the  conditions
precedent to the respective obligations of the parties under this Agreement have
not been satisfied or waived on or prior to the Closing Date, provided, however,
the  parties  hereto will from time to time after the date  hereof,  advise each
other as to the satisfaction of such conditions as and when they are completed.

         7.4 Risk of Loss: Risk of loss shall pass at delivery.  In the event of
any damage or destruction of any of the Acquired  Assets prior to their delivery
to Pulau, STMA agrees to make an equitable  adjustment to the Purchase Price but
in  no  event  less  than  the  actual  insurance   proceeds  received  by  STMA
attributable to the damaged or destroyed Acquired Assets. STMA agrees to keep in
force such insurance  with respect to the Acquired  Assets as was in place prior
to December 31, 1995 until all remaining  items of the Acquired Assets have been
delivered to

                                       16
<PAGE>

Pulau.  In the event of any loss or damage to any of the Acquired  Assets listed
in Schedule  2.2(b) as to which STMA  receives  no  insurance  proceeds,  STMA's
liability shall be limited to the actual cost of repair or replacement  thereof,
including labor and parts, but in no event shall such liability in the aggregate
with  respect to all such  Acquired  Assets  exceed  the sum of Thirty  Thousand
Dollars ($30,000).

                                  ARTICLE VIII
                                Indemnification

         8.1  Indemnification  of STMA: Pulau will indemnify,  defend,  and hold
STMA and its affiliates and their respective officers,  directors and employees,
harmless from and against,  any and all liabilities,  damages,  losses,  claims,
costs and  expenses  (including  reasonable  attorneys'  fees and  court  costs)
arising out of or resulting from any of the following:

                  (a) the inaccuracy or falsehood of any representation,  or the
breach  of any  warranty  by Pulau  contained  in this  Agreement  or the  Other
Agreements;

                  (b) the  breach  by Pulau of any  covenant  contained  in this
Agreement or the Other Agreements; and

                  (c) any  failure by Pulau on or after the date of the  Closing
(i) to pay or satisfy,  or to cause to be paid or satisfied,  any of the Assumed
Liabilities  when due and/or payable,  or (ii) to perform any other  obligations
required  to be  performed  by Pulau  pursuant  to this  Agreement  or the Other
Agreements.

         8.2  Indemnification  of Pulau:  STMA will  indemnify,  defend and hold
Pulau and its affiliates and their respective officers, directors and employees,
harmless  from and against any and all  liabilities,  damages,  losses,  claims,
costs and  expenses  (including  reasonable  attorneys'  fees and  court  costs)
arising out of or resulting  from any of the  following:

                  (a) the inaccuracy or falsehood of any representation,  or the
breach of any warranty by STMA contained in this Agreement, the Other Agreements
or the Schedules hereto;

                  (b)  the  breach  by STMA of any  covenant  contained  in this
Agreement or the Other Agreements; and

                  (c) any failure by STMA (i) to pay or satisfy,  or to cause to
be paid or satisfied, any of the Excluded Liabilities,  or any other liabilities
which are not Assumed  Liabilities  hereunder,  when due and payable, or (ii) to
perform any other obligations  required to be performed by STMA pursuant to this
Agreement and the Other Agreements.

         8.3 Procedure for Claims: If either STMA or Pulau (including, in either
case, parent corporations, subsidiaries and affiliates) (the "Claimant") desires
to make a claim  against any party  obligated to provide  indemnification  under
Sections 8.1 or 8.2 hereof, respectively (the

                                       17
<PAGE>

"Indemnitor"),  with  respect  to any  matter  covered  by such  indemnification
obligation, the procedures for making such claim shall be as follows:

                  (a) Third Party  Claims:  If the claim is for  indemnification
with respect to any action, suit, proceeding or demand at any time instituted or
asserted  against,  or made upon,  the  Claimant  by or on the behalf of a third
party (a "Third Party  Claim"),  the Claimant will give prompt written notice to
the Indemnitor of the institution, assertion or making of the Third Party Claim,
and the nature thereof.  Upon delivery of such notice the claim specified herein
shall be deemed to have been made for purposes of this Agreement. The Indemnitor
shall, within ten (10) days after receipt of such notice, give written notice to
the Claimant as to whether or not the Indemnitor  accepts the  responsibility to
defend and  indemnify  Claimant  with respect to the Third Party  Claim.  If the
Indemnitor  accepts the responsibility to defend and indemnify the Claimant with
respect to the Third Party Claim, the Claimant will then grant to the Indemnitor
authority,  and the Indemnitor will defend and proceed,  at its sole expense, to
cure,  defend,  compromise  or settle the Third Party Claim,  in the name of the
Claimant or  otherwise;  provided,  however,  that any such defense of the Third
Party  Claim  shall be  conducted  by  counsel  reasonably  satisfactory  to the
Claimant,  and that the Indemnitor  shall not enter into any final compromise or
settlement  of the Third  Party  Claim  without  the prior  written  consent  to
Claimant.  If the Indemnitor  denies the  responsibility to defend and indemnify
the Claimant with respect to the Third Party Claim,  or if the Indemnitor  fails
to respond in a timely manner to  Claimant's  notice of the Third Party Claim or
fails to proceed in a diligent and timely manner to cure, defend,  compromise or
settle a Third Party Claim for which it has accepted  responsibility pursuant to
the  foregoing  provisions,  the  Claimant  may then,  proceed to cure,  defend,
compromise  or settle such Third Party Claim as it shall in its sole  discretion
deem to be advisable, without prejudice to any right to indemnification Claimant
may have against the Indemnitor with respect  thereto,  whether pursuant to this
Agreement  or  otherwise.

                  (b)   Non-Third   Party   Claims:   If   the   claim   is  for
indemnification  with respect to a matter  other than a Third Party  Claim,  the
Claimant  will give  timely  written  notice to the  Indemnitor  of such  claim,
setting forth with reasonable  particularity the basis, nature and dollar amount
thereof.  Upon  delivery of such  notice the claim  specified  therein  shall be
deemed to have been made for purposes of this Agreement.  The Indemnitor  shall,
within thirty (30) days after receipt of such notice, give written notice to the
Claimant  as to whether or not the  Indemnitor  accepts  the  responsibility  to
indemnify  Claimant with respect to such claim.  If the  Indemnitor  accepts the
responsibility  to  indemnify  the  Claimant  with  respect to such  claim,  the
Indemnitor  shall  immediately  pay to the  Claimant the amount set forth in the
notice thereof, with such payment to be made in immediately available funds, and
upon actual  receipt of such payment by the Claimant  such claim shall be deemed
to have been satisfied. If the Indemnitor denies the

                                       18
<PAGE>

responsibility  to indemnify the Claimant with respect to such claim,  or if the
Indemnitor  fails to respond  in a timely  manner to notice of such  claim,  the
liability of the Indemnitor to the Claimant for indemnification  with respect to
such claim shall be  determined  by a judgment  entered by a court of  competent
jurisdiction, or by written consent of the Indemnitor.

                  (c) Limitation: Claims pursuant to the foregoing provisions of
this  Article  VII must be made by claimant  within two  years after the Closing
Date,  and in no event shall  impose  liability  upon the  Indemnitor  an amount
greater than the  Purchase  Price.  The  foregoing  limitation  shall not in any
manner  apply with  respect to either the Assumed  Liabilities  or the  Excluded
Liabilities.

                                   ARTICLE IX
                                 Miscellaneous

         9.1 Cooperation:  The provision of Section 5.2  notwithstanding,  Pulau
and STMA will each cooperate with the other, at the other's request and expense,
in furnishing  information,  testimony,  and other assistance in connection with
any  actions,  proceedings,   arrangements,   disputes  with  other  persons  or
governmental inquiries or investigations  involving STMA's or Pulau's conduct of
the Business or the transactions contemplated hereby.

         9.2  Severability:  If any provision of this Agreement shall be finally
determined to be unlawful or unenforceable,  then such provision shall be deemed
to be null and void and to be  severed  from this  Agreement,  and  every  other
provision  of this  Agreement  shall  remain in full force and effect  provided,
however,  that if this paragraph becomes applicable and if the effect thereof is
to  substantially  impair  the  value of this  Agreement  to either  party,  the
affected party may terminate this Agreement by written notice to the other.

         9.3  Expenses:  Except as otherwise  provided in Section 9.4 or Section
9.5 hereof,  each party will bear its own expenses  incurred in connection  with
this Agreement and the  transactions  contemplated  hereby,  whether or not such
transactions  shall be consummated.

         9.4  Transfer and  Property  Taxes:  STMA and Pulau will share in equal
amounts any and all transfer  taxes,  if any, which may result from the transfer
of the Acquired Assets from STMA to Pulau.  Notwithstanding the foregoing, Pulau
agrees to provide STMA with a tax exemption certificate acceptable to the taxing
authorities  stating  that the  inventory  is being  purchased  for resale.  All
federal,  state and local income  taxes  relating to the conduct of the Business
until  the  Closing  Date  shall be the sole  responsibility  of STMA.  STMA has
currently  paid  property  tax  on  the  personal   property  involved  in  this
transaction  through the last tax year ended  prior to the  Closing  Date of the
applicable taxing authority, and will be liable for, and agrees to pay, personal
property taxes on this property through the Closing Date.

                                       19
<PAGE>

         9.5 Bulk Sales  Compliance:  Pulau waives  compliance  by STMA with the
applicable  provisions of the Uniform  Commercial  Code regarding bulk sales, or
any other similar bulk sales law, as presently in effect, and STMA covenants and
agrees to pay and  discharge  when due all claims of  creditors  which  could be
asserted against Pulau by reason of such non-compliance.

         9.6 Notices: All notices,  requests and other communications  hereunder
shall be in  writing  and shall be  effective  upon  receipt.  Notices  shall be
addressed:

         If to Pulau:           Pulau Electronics Corporation
                                12423 Research Parkway
                                Orlando, Florida 32826
                                Attn: Chief Financial Officer
                                Telefax: 407-381-9476

         If to STMA:            ST Microwave (Arizona) Corporation
                                340 N. Roosevelt Avenue
                                Chandler, Arizona 85226
                                Attn: President
                                Telefax: 602-961-6209

        with a copy to:         Signal Technology Corporation
                                955/975 Benicia Avenue
                                Sunnyvale, California 94086
                                Attn: President
                                Telefax: 408-730-6333

provided,  however,  that if either  party  shall have  designated  a  different
address by notice to the other  given as  provided  above,  then any  subsequent
notice shall be addressed to such party at the last address so designated.

         9.7 Assignment:  This  Agreement shall be binding upon and inure to the
benefit  of the  successors  of each of the  parties  hereto,  but  shall not be
assignable by either party without the prior written consent of the other party.

         9.8 No Third Parties: This Agreement is not intended to, and shall not,
create  any  rights in or confer  any  benefit  upon any  person  other than the
parties hereto.  The assumption of any liability or obligation by Pulau pursuant
to this  Agreement and the  exclusion of any  liability or obligation  hereunder
shall have  effect  and shall  create  enforceable  rights  only as between  the
parties to this  Agreement,  and is not intended to and shall not be enforceable
by,  create any rights of  whatever  nature in, or confer any  benefit  upon any
person other than the parties to this Agreement.

         9.9  Incorporation  by  Reference:  The  Schedules  to  this  Agreement
constitute  integral  parts of this Agreement and are hereby  incorporated  into
this Agreement by this reference.

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<PAGE>

         9.10 Governing Law: This Agreement  shall be interpreted  and construed
and legal  relations  created shall be determined in accordance with the laws of
Arizona as though this Agreement were entered into by residents of Arizona to be
wholly performed in Arizona.

         9.11  Counterparts:  More than one counterpart of this Agreement may be
executed by the parties  hereto,  and each fully executed  counterpart  shall be
deemed an original without production of the others.

         9.12  No Agency:  Nothing in this Agreement shall make either party the
agent of the other for any  purpose  whatsoever.  Neither  party  shall  bind or
attempt to bind the other to any agreement or the performance of any obligation,
nor represent  that it has any right to enter into any  undertaking on behalf of
the other.

         9.13 Force  Majeure:  Neither  party shall be liable for any failure to
perform its  obligations  hereunder if such failure  arises out of causes beyond
its control,  including,  but not limited to acts of God,  governmental  action,
nationalization,   embargo,  expropriation,   labor  disputes,  strikes,  riots,
insurrection or inability to secure materials,  labor or transportation.  In the
event of such  delay,  the time for such  performance  shall be  extended  for a
period equal to the duration of such delay so caused.  Each party shall give the
other party notice of any event of force  majeure  immediately  after it becomes
known to such party.

         9.14  Complete   Agreement:   This  Agreement  sets  forth  the  entire
understanding  of the parties  hereto with respect to the subject  matter hereof
and supersedes all prior letters of intent, agreements, covenants, arrangements,
communications,  representations, or warranties, whether oral or written, by any
officer, employee, or representative of either party relating thereto. It cannot
be modified or amended except by a writing signed by authorized  representatives
of the parties.  There are no warranties,  representations  or conditions except
those expressly stated in this Agreement and the Schedules hereto.

         IN WITNESS  WHEREOF,  Pulau and STMA have each caused this Agreement to
be executed by their respective duly authorized  officers,  as of the date first
above written.

ATTEST:                                PULAU ELECTRONICS CORPORATION

By:  Robert Esposito                   By:   Gary Y. Nakata
    ---------------------                  -------------------------
Title: Controller                      Title: Secretary
       ------------------                     ----------------------

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<PAGE>



ATTEST:                                ST MICROWAVE (ARIZONA) CORPORATION


By:  Robert Esposito                   By:  Gene L. Joles
    ---------------------                  -------------------------
Title: Controller                      Title: President
       ------------------                     ----------------------


ATTEST:                                SIGNAL TECHNOLOGY CORPORATION
                                       (As to Article VI Only)

By:  Robert Esposito                   By:  Russ D. Kinsch
    ---------------------                  -------------------------
Title: Controller                      Title:  Assistant Secretary
       ------------------                     ----------------------


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