PURCHASE AND SALE AGREEMENT



1. Communications & Power Industries,  Inc. ("Seller") agrees to SELL and Signal
Technology  Corporation  ("Buyer") agrees to BUY, upon the terms hereinafter set
forth,  the  premises  at  26-28  Tozer  Road,  Beverly,   Massachusetts,   more
particularly described in Exhibit A attached hereto.

        Together with the buildings,  structures,  and improvements now thereon,
and the fixtures belonging to Seller and used in connection therewith including,
if any,  all window  blinds and shades,  screens,  screen and storm  windows and
doors, awnings,  furnaces,  heaters,  heating equipment, oil and gas burners and
fixtures appurtenant thereto, hot water heaters, plumbing and bathroom fixtures,
electric and other lighting fixtures,  fences, gates, trees, shrubs, plants, air
conditioning  equipment,  ventilators,  (the aforesaid premises and property are
herein   collectively   called  "the  Premises").   None  of  such  fixtures  or
improvements have been leased or purchased on an installment basis by Seller.

2. The  Premises  are to be conveyed  by a good and  sufficient  quitclaim  deed
running to Buyer or to such  grantee as Buyer may  designate by notice to Seller
at least seven days before the deed is to be delivered as herein  provided,  and
said deed shall convey a good and clear  record and  marketable  title  thereto,
sufficient to entitle Buyer to a Certificate  of Title to the Premises free from
encumbrances, except:


                                      -1-
<PAGE>

        (a) Applicable  laws and  regulations of any  governmental  authority in
effect on the date of the delivery of the deed;

        (b)  Such  taxes  for the then  current  tax  period  as are not due and
payable on the date of the delivery of such deed,  which taxes Buyer assumes and
agrees to pay, subject to the adjustment referred to in Paragraph 12 hereof;

        (c) Any liens for municipal betterments assessed after the date hereof;

        (d) Easements, agreements and restrictions of record as shown on Exhibit
B;

        (e) Leases and tenancies referred to in Paragraph 6 hereof;

        (f) Site  Access,  Property  Use and  Indemnity  Agreement  with  Varian
Associates, Inc. attached as Exhibit C; and

        (g) Covenant Not to Sue by the Commonwealth of Massachusetts.

For title, see Certificate of Title No. 53820 in Essex  South Registry  District
of the Land Court.

3. If said deed refers to a plan necessary to be recorded therewith Seller shall
deliver such plan with the deed in form adequate for recording or registration.

4. The agreed purchase price for the Premises is Two Million Three Hundred Fifty
Thousand ($2,350,000) Dollars of which:



                                      -2-
<PAGE>

$  200,000      shall be paid to  Hunneman & Co.  ("Escrow  Agent") as a deposit
                upon execution of this Agreement, and

$  200,000      are to be paid to Escrow  Agent on or  before  August  29,  1997
                provided this Agreement has not been terminated, and

$1,950,000      are to be paid at the time of  delivery  of the deed by  federal
                wire transfer to be received before 2 p.m. on such date pursuant
                to instructions  provided to Buyer at least five days before the
                closing
-----------
$2,350,000      TOTAL

        Buyer  and  Seller  hereby  agree  to  execute  a  separate  Designation
Agreement in the form attached as Exhibit I,  designating  the reporting  person
pursuant to Section 6045 of the Internal Revenue Code.  Seller agrees to provide
the reporting person with  information  substantially in the form of Exhibit I-A
attached to the Designation  Agreement,  or if the  transaction  contemplated by
this agreement is exempt from the reporting requirements of Section 6045, with a
certification  to that effect,  specifying the grounds for the exemption,  which
certification shall meet the requirements of Treasury Regulation  1.6045-3T.  If
more than one person is the Seller hereunder,  each such person hereby agrees to
provide the reporting  person with a separate Exhibit I-A and a statement of the
allocation of the gross proceeds among the parties who constitute the Seller.

5. Such deed is to be delivered at 10 o'clock A.M. on the 30th day of September,
1997, at the offices of Buyer's  attorneys,  Gadsby & Hannah,  LLP, 225 Franklin
Street,  Boston,  Massachusetts  02110,  or,  upon five days notice to Seller by
Buyer,  at the offices of Buyer's  lender or its  counsel,  or unless  otherwise
agreed upon in writing,


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<PAGE>

(such time,  as the same may be extended  pursuant to Paragraph 8 hereof,  being
hereinafter referred to as "the Time of Closing").  It is agreed that time is of
the essence of this agreement.

6. Full  possession  of the Premises  free of all tenants and  occupants  except
Buyer  (formerly  known as ST Olektron  Corp., a subsidiary of Buyer),  is to be
delivered at the Time of Closing,  the Premises to be then (i)  substantially in
the same condition as they now are,  reasonable  use and wear thereof  excepted,
and  (ii)  not in  violation  of any  applicable  zoning  or  building  laws  or
regulations  or of any  encumbrance  referred to in  Paragraph  2 above.  If the
Premises shall have been damaged by fire or casualty insured  against,  then the
Time of Closing  shall be extended  until the sooner of (a) December 30, 1997 or
(b) 15 days  after  notification  by Seller to Buyer  that the  damage  has been
restored,  and Seller shall proceed to restore the Premises in  accordance  with
the  provisions  of the current lease of the Premises  between  Seller and Buyer
(f/k/a ST Olektron  Corp.) If on December 15, 1997 the  Premises  shall not have
been restored or Seller shall not have  provided  such notice,  then, at Buyer's
option exercised on or before December 22, 1997, Buyer may either (a) proceed to
a closing on December 30, 1997 and Seller shall assign and pay over to Buyer all
amounts recovered or recoverable on account of such insurance,  less any amounts
reasonably  expended  by  Seller  in  the  collection  thereof  or  for  partial
restoration,  plus any applicable  deductible amount not yet expended by Seller,
or (b) terminate  this  Agreement  whereupon  Seller shall  promptly  return the
deposit and any  interest  earned  thereon and neither  party shall have further
recourse hereunder.


                                      -4-

<PAGE>

     The rights and obligations of Seller and ST Olektron Corp in the event this
Agreement is terminated shall be governed by the terms of their lease. Otherwise
Seller's obligations under that lease shall terminate at the Time of Closing.

7.      Buyer shall have until 5 P.M. August 22, 1997 to:

               (a) obtain reports and review existing documentation to determine
        in Buyer's sole discretion (1) whether the type and amount of any oil or
        hazardous  substances  as defined in any  applicable  federal,  state or
        local law,  ordinance  or  regulation,  in, on,  affecting  or likely to
        affect the  Premises,  the  potential  risks thereof to the Buyer and/or
        potential  limitations  therefrom on the Premises are  acceptable to the
        Buyer,  (ii) if the Site Access Property Use and Indemnity  Agreement is
        acceptable  to the Buyer,  and (iii) if the  Covenant Not to Sue entered
        into by and between the  Department of  Environmental  Protection of the
        Commonwealth of Massachusetts  and the Seller shall inure to the benefit
        of the Buyer and its successors and assigns;

               (b) determine  whether the Premises and building  thereon  comply
        with the  requirements  of all applicable  municipal laws and ordinances
        and to determine that the Premises and proposed use thereof by the Buyer
        are in conformance with all applicable  zoning and other bylaws and code
        requirements; and

               (c) determine  whether the title to the Premises is acceptable to
        the Buyer.



                                      -4a-
<PAGE>

        If the  inspections  and  review to be  conducted  by the  Buyer  reveal
results which are not acceptable to the Buyer, in Buyer's sole discretion, or if
the Buyer is not able to make a determination regarding the Premises within such
time period,  the Buyer may terminate this Agreement by written notice delivered
to the Seller no later than 5 p.m.  August 22, 1997,  whereupon  this  Agreement
shall terminate and shall be of no further force or effect and all deposits made
thereunder shall be forthwith returned to the Buyer.

8. Provided that the Agreement has not been terminated  pursuant to paragraph 7,
Buyer shall give Seller notice, on or before 5 p.m. August 22, 1997, designating
all  objections to the matters set forth in Paragraph 2 and all defects in title
and violations of applicable  zoning and building laws and regulations  referred
to in  Paragraph  6 above  existing  at the  time of such  notice,  and all such
defects and violations not so designated shall be deemed to have been waived. If
Seller  shall be  unable  to give  title or to make  conveyance,  or to  deliver
possession  of the  Premises,  all as  herein  stipulated,  or if at the Time of
Closing the  Premises do not conform  with the  provisions  hereof,  then Seller
shall use  reasonable  efforts  to remove any  defects  in title,  or to deliver
possession as provided herein, or to make the Premises conform to the provisions
hereof, as the case may be, in which event the Time of Closing shall be extended
for a period of 30 days.

        If at the expiration of the extended time Seller shall have failed so to
remove any defects in title,  deliver possession,  or make the Premises conform,
as the case may be, all as herein agreed, any payments made under this agreement
shall be


                                      -5-
<PAGE>

forthwith  refunded and all other  obligations of all parties hereto shall cease
and this  agreement  shall be void and without  recourse to the parties  hereto;
provided that Buyer shall have the election,  at either the original or extended
Time of Closing,  to accept such title as  Seller can deliver to the Premises in
their then condition and to pay therefor the purchase  price without  deduction,
in which case Seller shall  convey such title,  except that in the event of such
conveyance in accordance  with the provisions of this clause,  if any portion of
the Premises  shall have been taken by exercise of the power of eminent  domain,
Seller  shall pay over or assign to Buyer on  delivery  of the deed,  all awards
recovered or recoverable on account of such taking,  less any amounts reasonably
expended by Seller in obtaining such award.

        Should this Agreement be terminated pursuant to the preceding paragraph,
Seller  agrees  to extend  the  lease of the  current  tenant,  Buyer  (f/k/a ST
Olektron  Corp.),  for an additional  period of six months from the date of such
termination on the current terms.

9. The acceptance of a deed by Buyer or the grantee  designated by Buyer, as the
case may be,  shall be deemed to be a full  performance  and  discharge of every
agreement and obligation herein contained or expressed, except the provisions of
Paragraph 12, 13 and 15 hereof.

10. To enable Seller to make conveyance as herein  provided,  Seller may, at the
Time of Closing use the purchase money or any portion thereof to clear the title
of any or all  encumbrances  or interests,  provided that  provision  reasonably
satisfactory



                                      -6-
<PAGE>

to Buyer's  attorney is made at the Time of Closing for prompt  recording of all
instruments so procured.

11. Until the Time of Closing,  Seller shall maintain  insurance on the Premises
against fire and hazards  covered by extended  endorsement in an amount at least
equal to 80% of the replacement value of the Premises.

12. Collected or uncollected  rents,  and, to the extent not paid by the tenant,
water and sewer use charges,  and taxes for the then current tax period shall be
apportioned, as of the Time of Closing and the net amount thereof shall be added
to or be deducted  from, as the case may be, the purchase price payable by Buyer
at the Time of Closing.

        If the  amount of said taxes is not known at the Time of  Closing,  they
shall be apportioned on the basis of the taxes assessed for the preceding  year,
with a  reapportionment  as  soon  as the  new tax  rate  and  valuation  can be
ascertained;  and, if the taxes which are to be apportioned  shall thereafter be
reduced by abatement, the amount of such abatement,  less the reasonable cost of
obtaining same, shall be apportioned between the parties,  provided that neither
party shall be obligated to institute or prosecute  proceedings for an abatement
unless otherwise agreed. If such proceedings are commenced, the party commencing
the same  shall  give the other  party  notice  thereof,  thereafter  diligently
prosecute such proceedings and not discontinue the same without first giving the
other party notice of its intention so to do and  reasonable  opportunity  to be
substituted in such proceedings; and the other



                                      -7-
<PAGE>

party agrees to cooperate in such  proceedings  without being obligated to incur
any expense in connection therewith.

13. This Agreement  constitutes the entire agreement  between the parties hereto
and no verbal  statements made by anyone with regard to the transaction which is
the subject of this  Agreement  shall be construed  as a part hereof  unless the
same be incorporated  herein by writing.  Buyer acknowledges that neither Seller
nor anyone acting in Seller's behalf has made any warranties or  representations
upon  which  Buyer has  relied  (other  than as  specifically  set forth in this
Agreement)  with respect to the  condition of the  Premises,  or any other fact,
matter or  condition  respecting  or  concerning  the  transaction  which is the
subject hereof.

        Without  limiting  the  foregoing,  Seller makes no  representations  or
warranty regarding the presence or absence of lead paint,  asbestos or hazardous
substances on or under the Premises. Buyer acknowledges that it is accepting the
Building in its "as is" condition and is aware of the age and general  condition
of the building roof and air  conditioners  and that such condition is reflected
in the purchase price.  Buyer also acknowledges that the Premises is affected by
subsurface  contamination from the adjacent property at 150 Sohier Road and that
responsibility  for  such  contamination  is the  subject  of the  Site  Access,
Property Use and Indemnity Agreement between Seller and Varian ("the Site Access
Agreement"), a copy of which has been provided to Buyer. Accordingly the deed to
Buyer will preclude Buyer and its  successors and assigns from recourse  against
Seller or Varian Associates, Inc. for loss in property value due to the presence
of the contamination on the Premises or migrating from


                                     -8-
<PAGE>


150  Sohier  Road  as  disclosed  in  reports  filed  with  the   Department  of
Environmental  Protection  or provided by Seller to Buyer.  However,  nothing in
this  paragraph  would  preclude  any lawful claim by Buyer  against  Seller for
contamination to the Premises caused by Seller.

14.  The  Premises  is  currently  served by an  underground  copper  line which
provides  gaseous nitrogen from 150 Sohier Road to the building on the Premises.
Seller agrees to continue such supply  provided  Buyer pays promptly for the gas
supplied  and  maintains  the  line and  meter.  Furthermore,  Seller  expressly
reserves the right to discontinue such supply at any time in its sole discretion
upon 90 days'  notice to Buyer or without  notice in the event of  emergency  or
malfunction.  Seller shall not be liable for interruption in service, quality of
the gas supplied or any damage or liability  resulting from the supply of gas or
its use by Buyer. Buyer hereby holds harmless,  indemnifies and agrees to defend
Seller from and against any loss,  damage,  liability,  cost or injury resulting
from or in connection with supplying Buyer with gas.

        Seller  shall remove the current  gate which  separates  the 26-28 Tozer
Road parking lot from the access  driveway to 150 Sohier Road and relocate it in
the existing fence between the two properties adjacent to Route 128.

15. Buyer and Seller mutually represent and warrant that no person or firm other
than  Hunneman & Co. would be entitled to be paid a commission  by reason of the
procurement  of this  Agreement or the  transaction  which is the subject matter
hereof. Buyer and Seller mutually agree to indemnify and hold harmless the other
party


                                       -9-
<PAGE>

from and against any loss, cost,  damage or expense arising out of any claim for
a commission  by any person or firm with whom it has dealt other than Hunneman &
Co.

16. All deposits made  hereunder  shall be held by Escrow Agent as agent for the
Seller,  as earnest money for the proper  performance  of this  agreement on the
part of Buyer subject to the terms of this agreement and shall be duly accounted
for at the Time of Closing. Such deposits shall be held in an uninsured interest
bearing  account,  with all interest thereon being payable to Buyer unless Buyer
defaults hereunder and Seller is entitled to retain the deposit.

17. If Buyer shall fail to fulfill Buyer's obligations  hereunder,  the $400,000
deposit and any  interest  thereon  shall be  retained  by Seller as  liquidated
damages,  the parties hereby acknowledging that it is not possible to accurately
predict the actual amount of damages and that the deposit is their best estimate
of such damages and not a penalty.  The  retention of the $400,000  deposit plus
interest thereon shall constitute  Seller's sole remedy at law or at equity.  If
Buyer  has not yet paid the  full  $400,000  deposit  and  fails to do so,  this
provision shall be void.

18. If Buyer records this agreement,  it shall, at the option of Seller,  become
ipso facto null and void, and all payments made  hereunder  shall be retained by
Seller as liquidated damages.

19. All notices  required or permitted to be given hereunder shall be in writing
and  delivered by hand or mailed  postage  prepaid,  by  registered or certified
mail,  addressed  in the case of Seller to  Communications  & Power  Industries,
Inc.,


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<PAGE>

150  Sohier  Road,  Beverly,   Massachusetts  01915-5595,   Attention:  Division
Controller,  with a copy to Robert  Tuchmann,  Esq., Hale and Dorr LLP, 60 State
Street,  Boston,  Massachusetts  02109  and in  the  case  of  Buyer  to  Signal
Technology   Corporation,   26-28  Tozer  Road,  Beverly,   Massachusetts  01915
Attention:  John  Croke and Sam  Smookler,  with a copy to Harry  Hauser,  Esq.,
Gadsby & Hannah, LLP, 225 Franklin Street, Boston, Massachusetts 02110 or in the
case of either  party to such other  address as shall be  designated  by written
notice given to the other  party.  Any such notice shall be deemed given when so
delivered by hand or if so mailed, when deposited with the U.S. Postal Service.

20. If Seller executes this agreement in a representative or fiduciary capacity,
only the principal or the estate  represented  shall be bound and neither Seller
so executing nor any shareholder or beneficiary of any trust shall be personally
liable for the performance or observance of any obligation  expressed or implied
hereunder.  If two or more  persons are named  herein as Seller or Buyer,  their
respective obligations hereunder shall be joint and several.

21. The  submission of a draft of this  agreement or a summary of some or all of
its provisions  does not constitute an offer to buy or to sell the Premises,  it
being  understood  and agreed  that  neither  Buyer nor Seller  shall be legally
obligated with respect to the purchase or sale of the Premises  unless and until
this  agreement has been executed by both Buyer and Seller and a fully  executed
copy has been delivered.



                                      -11-
<PAGE>


22. Buyer may, upon written notice to Seller,  assign its interest  hereunder to
an entity controlled by Buyer.

        This  instrument,  executed  this  25th  day  of  July,  1997,  is to be
construed as a Massachusetts contract, is to take effect as a sealed instrument,
sets  forth the  entire  contract  between  the  parties  and may be  cancelled,
modified  or amended  only by a written  instrument  executed by both Seller and
Buyer.


                                     Communications & Power Industries, Inc.


                                     By: /s/ Dennis Gleason
                                        ----------------------------
                                             Dennis Gleason, Vice President


                                     Signal Technology Corporation


                                     By: /s/ Sam Smookler
                                        ----------------------------
                                             Sam Smookler, President


                                      -12-
<PAGE>


                                      DEED



        Communications & Power Industries,  Inc., a Delaware  corporation with a
principal  place of business at 150 Sohier  Road,  Beverly,  Massachusetts,  for
consideration  paid of Two  Million  Three  Hundred and Fifty  Thousand  Dollars
($2,350,000)  hereby  grants  to  Signal  Technology  Corporation,   a  Delaware
corporation  with a  principal  place of  business  at 28 Tozer  Road,  Beverly,
Massachusetts,  with QUITCLAIM  COVENANTS,  the land at 28 Tozer Road,  Beverly,
Massachusetts  shown as Lot 24 on Land Court Plan No. 33283H,  more particularly
bounded and described as shown as Exhibit A attached hereto.

        Executed as a sealed instrument this 25th day of September, 1997.



                                         COMMUNICATIONS & POWER
                                               INDUSTRIES, INC.


                                         By: /s/ Dennis Gleason
                                            ----------------------------
                                                 Dennis Gleason, Vice President




                         COMMONWEALTH OF MASSACHUSETTS

Essex, ss.                                                    September 29, 1997

        Then personally appeared the above-named Dennis Gleason,  Vice President
of Communications & Power Industries, Inc., who acknowledged the foregoing to be
his free act and deed and the free act and deed of said corporation, before me,



                                                --------------------------
                                                Notary Public
                                                My commission expires:


                                             My Commission expires Dec. 13, 2002
<PAGE>

                                   EXHIBIT A


PARCEL ONE:

SOUTHWESTERLY               by the northeasterly line of Tozer Road six hundred
                            thirteen and 08/100 (613.08) feet;


NORTHERLY                   by the southerly line of State  Highway, no access,
                            ninety nine and 33/100 (99.33) feet;


NORTHEASTERLY               by lot 25, as shown on plan hereinafter  mentioned,
                            five hundred sixty seven and  12/100 (567.12) feet;
                            and

SOUTHEASTERLY               by lot 23, as shown on said plan, one hundred ninety
                            two and 92/100 (192.92) feet.



All of said  boundaries  are determined by the Court to be located as shown upon
plan numbered 33283H drawn by Hancock Survey Associates,  Inc., Surveyors, dated
December  23, 1981,  as modified  and  approved by the Court,  filed in the Land
Registration  Office,  a copy of a portion of which is filed with Certificate of
Title 51578 in the Southern Registry District of Essex County, and Parcel One is
shown thereon as lot 24.

For grantor's  title to Parcel One, see Certificate of Title No. 53820 issued by
said Registry.

Together with those matters contained in an Agreement made by and between Howard
A. Fafard and Varian Associates,  Inc. dated January 14, 1983 and filed with the
Essex South Registry District of the Land Court as Document Number 186734.




                                      -1-
<PAGE>

                                   EXHIBIT B


1.  Real estate taxes and municipal  charges which  constitute  liens, but which
    are not yet due and payable.

2.  Easement granted to Massachusetts  Electric Company dated September 28, 1982
    and filed  with the  Essex  South  Registry  District  of the Land  Court as
    Document Number 184785.

3.  Easements  granted to Massachusetts  Electric Company dated January 31, 1983
    and filed with said Land Court as Document Numbers 186651 and 186652.

4.  Order of Conditions by the Beverly  Conservation  Commission  dated November
    23, 1981 and filed with said Land Court as Document Number 188554.

5.  Terms and  provisions  of a Lease and Option to Purchase made by and between
    Varian Associates,  Inc. (Lessor) and RF Components, Inc. (Lessee) notice of
    which is dated  December 28, 1990 and filed with said Land Court as Document
    Number  262863.  ST Olektron has succeeded to the interest of the Lessee and
    the Option to Purchase has been terminated.

6.  Right  of way  granted  to  Bomac  Laboratories,  Inc.  as set  forth  in an
    Instrument  dated March 31, 1953 and recorded with the Essex South  Registry
    of Deeds at Book 3968, Page 522.

7.  Order of Conditions by the Beverly  Conservation  Commission  dated November
    23,  1981 and filed  with said Land  Court as  Document  Number  182736.  As
    affected by Extension Permit dated November 5, 1982 and filed with said Land
    Court as Document  Number 185358.  As further  affected by Extension  Permit
    dated May 25, 1984 and filed with said Land Court as Document Number 194882.

8.  Easement  from the Bomac  Laboratories,  Inc.  to Beverly  Gas and  Electric
    Company dated  September 25, 1950 and recorded with said Deeds at Book 3782,
    Page 309.

9.  Easements  as shown on plan of land  entitled  "Subdivision  Plan of Land in
    Beverly" prepared by Hancock Survey Associates,  Inc.,  Surveyors filed with
    said Land Court as Plan Number 33283H.

10. Site Access,  Property Use and Indemnity  Agreement with Varian  Associates,
    Inc. and Seller attached as Exhibit C to be executed by the parties.



                                      -1-
<PAGE>

11.  Covenant  Not  to Sue  by  and  between  Seller  and  the  Commonwealth  of
Massachusetts.



----------------------------
Initial for identification



                                      -2-