QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.38    
    


 
 

STOCK PURCHASE AGREEMENT    
    


        THIS AGREEMENT is made as of December 30, 2002, among each of the stockholders of MXT Holdings, Inc., an Illinois corporation (the "Company"), each
and all of whom are listed on the Stockholders List attached hereto as Exhibit A (collectively "Sellers" and individually a "Seller") and
Magnetek, Inc., a Delaware corporation ("Purchaser"). 


R E C I T A L S


        A.    Sellers
own all of the outstanding shares of Class A Common Stock, $.001 par value, and Class B Common Stock, $.001 par value (collectively, "Shares") of
the Company, which Shares constitute all of the issued and outstanding shares of capital stock of the Company. The Company is a holding company whose wholly owned subsidiary, Maxtec International
Corp., a Delaware corporation (the "Subsidiary") is engaged in the development, production, manufacture, marketing and sale of, and the provision of post-sale services with respect to,
radio-frequency remote controls for cranes, hoist/monorail systems, conveyors, locomotives and other material handling applications (the "Business") under the name "Telemotive Industrial Controls". 


        B.    Purchaser
desires to purchase all the outstanding Shares from Sellers and Sellers desire to sell such Shares to Purchaser, on the terms herein contained. 


A G R E E M E N T S


        Therefore,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 



        1.    Agreement to Purchase and Sell Shares.    On the terms contained in this Agreement, Purchaser shall purchase
from Sellers, and Sellers shall sell to Purchaser, all right, title and interest in and to the outstanding Shares, free and clear of any and all options, proxies, voting trusts, voting agreements,
judgments, pledges, charges, escrows, rights of first refusal or first offer, mortgages, indentures, claims, transfer restrictions, liens, equities, security interests and other encumbrances of every
kind and nature whatsoever, whether arising by agreement, operation of law or otherwise (collectively, "Claims"). 



        2.    Purchase Price.    Subject to Section 3 hereof, the aggregate purchase price of all of the Shares (the
"Purchase Price") shall be equal to: 



        (a)   four
million seven hundred thousand dollars ($4,700,000); plus 


        (b)   the
aggregate consolidated amount of cash on hand and in banks, cash-equivalents and marketable securities of the Company and the Subsidiary as reflected on
the Closing Balance Sheet (as herein defined) (collectively, "Cash Equivalents"); plus 



        (c)   to
the extent realized by the Company and the Subsidiary, the income Tax (as herein defined) savings to the Company and the Subsidiary (the "Tax Savings") resulting from
(v) the exercise of the Options (as herein defined), (w) the Decker Amount (as herein defined), and (x) the Dealy Amount (as herein defined), after deduction of the portion
thereof which is payable to Decker (as herein defined) under clause (y) of section 3 of the Termination Agreement dated December 30, 2002, between T.D. Decker ("Decker") and
Subsidiary (the "Decker Agreement"); minus 


        (d)   the
aggregate consolidated principal amount of, and accrued interest and prepayment penalties or breakage fees with respect to, all indebtedness of the Company and the
Subsidiaries for borrowed money, as reflected on the Closing Balance Sheet ("Indebtedness"); minus 












        (e)   the
aggregate amount (the "Decker Amount") payable by the Subsidiary to Decker (before applicable withholdings) pursuant to the Decker Agreement;  provided, however, that the Decker Amount shall not include salary, bonus or vacation pay which are
accrued as of that date and will be reflected on the Closing Balance Sheet (as herein defined) and taken into account in the determination of Working Capital (as herein defined); minus 


        (f)    the
aggregate amount (the "Dealy Amount") payable by the Subsidiary to John Dealy ("Dealy") (before applicable withholdings) pursuant to that certain Termination
Agreement between the Subsidiary and Dealy, dated December 30, 2002; provided, however, that the
Dealy Amount shall not include salary, bonus or vacation pay which are accrued as of that date and will be reflected on the Closing Balance Sheet (as herein defined) and taken into account in the
determination of Working Capital (as herein defined). 




The
Purchase Price shall be allocated among Sellers as set forth in Exhibit B attached hereto, and shall be payable in the manner provided in
Section 6. The amounts of Indebtedness, the Decker Amount, and the Dealy Amount shall be payable as provided in Section 14(d). 


        3.    Working Capital Adjustment.    The Purchase Price will be (x) increased by an amount equal to the amount
by which the Working Capital of the Company and the Subsidiary and set forth in the Closing Balance Sheet is greater than $2,817,000, or (y) reduced by the amount by which $2,817,000 exceeds
the Working Capital, as the case may be. "Working Capital" shall mean the excess of the consolidated assets of the Company and the Subsidiary which are treated under those generally accepted
accounting principles which were applied by the Company and the Subsidiary in the preparation of the Financial Statements, as herein defined ("GAAP") as current assets (exclusive of Cash Equivalents)
over the consolidated liabilities of the Company and the Subsidiary which are treated under GAAP as current liabilities (exclusive of Indebtedness) determined in the manner set forth below.  Exhibit C hereto reflects the methods which the parties intend will be employed in the computation of Working Capital, based upon the
consolidated balance sheet of the Company and the Subsidiary as of September 30, 2002. The "Working Capital Adjustment" will be the amount by which the Purchase Price is increased or decreased
pursuant to this Section 3. 


        4.    Determination of Cash Equivalents, Indebtedness and Working Capital.    The amounts of Cash Equivalents,
Indebtedness, Working Capital, and the Working Capital Adjustment, shall each be determined from a consolidated balance sheet of the Company and the Subsidiary as of 11:59 p.m. on the Business
Day, as herein defined, immediately preceding the Closing Date (the "Closing Balance Sheet"). As used herein, "Business Day" shall mean any day other than a Saturday, Sunday or other day on which
banks in Chicago Illinois or Los Angeles, California are required or authorized by law to close. The Closing Balance Sheet and the corresponding determination of Working Capital shall each be prepared
by the Stockholders' Committee (as herein defined). The Closing Balance Sheet shall be prepared in accordance with the provisions of this Section 4, and otherwise in accordance with GAAP.
Notwithstanding, or without limitation, as the case may be, of the foregoing: (i) reserves and accruals shall be determined as if the date of the Closing Balance Sheet was the last day of the
Company's fiscal year; (ii) inventories shall be valued, using the first in, first out method of accounting, at the lower of cost or net realizable value;  provided, however, that the Wenglor laser heads ("Wenglor Heads") shall be valued at cost;
(iii) proceeds from the exercise of Options (as herein defined), to the extent not paid in cash by the holders of Options to the Company as of the date of the Closing Balance Sheet, shall be
reflected on the Closing Balance Sheet as a Cash Equivalent; (iv) the accrual for Taxes shall exclude the effect of the Tax Savings; (v) Tax refund receivables in existence on the
Closing Date (which shall not include the Tax Savings) shall be treated as current assets; (vi) the current portion of, and accrued interest in respect of Indebtedness shall be excluded;
(vii) there shall be no accruals in respect of (v) the Options, (w) the Dealy Amount, or (x) the Decker Amount; (viii) capitalized software development costs shall
be accounted for consistent with the Financial Statements; and (ix) the Working Capital calculation shall include (w) as a current liability, any amount payable on or after the Closing
Date in respect of goods or services supplied to the 










Company
before the Closing Date (even if no invoice for such amount has been received by the Company or the Subsidiary before the Closing Date), (x) as a current asset, any inventory in transit
to the Company or the Subsidiary, and any inventory in their possession on the Closing Date for which the Company or the Subsidiary has not received an invoice as of the Closing Date, and
(y) as an account receivable, any sale of inventory which has been shipped by the Company or the Subsidiary before the Closing Date but not invoiced until on or after the Closing Date. Subject
to Purchaser's compliance with the following sentence, the Stockholders' Committee shall cause the Closing Balance Sheet to be delivered to Purchaser not more than sixty (60) days following the
Closing Date (the date on which the Closing Balance Sheet has been delivered, the "Delivery Date"). Purchaser shall make available to the Stockholders' Committee, during normal business hours, the
books, records and personnel of the Company and the Subsidiary which the Stockholders' Committee reasonably requires in order to prepare and deliver the Closing Balance Sheet. 



        5.    Disputes Regarding Closing Balance Sheet.    Disputes with respect to the Closing Balance Sheet shall be
resolved as follows: 



        (a)   Purchaser
shall have thirty (30) days after the Delivery Date (the "Dispute Period") to dispute (i) any of the elements of or amounts reflected on the
Closing Balance Sheet and affecting the calculation of the Purchase Price and/or (ii) the calculation of the Purchase Price (a "Dispute"). If Purchaser does not give written notice of a Dispute
within the Dispute Period to Seller (a "Dispute Notice"), the Closing Balance Sheet shall be deemed to have been accepted and agreed to by Purchaser in the form in which it was delivered to Purchaser,
and shall be final and binding upon the parties hereto. If Purchaser has a
Dispute, Purchaser shall give the Stockholders' Committee a Dispute Notice within the Dispute Period, setting forth in reasonable detail the elements and amounts with which it disagrees. Within thirty
(30) days after delivery of such Dispute Notice, the parties hereto shall attempt to resolve such Dispute and agree in writing upon the final content of the disputed Closing Balance Sheet. 


        (b)   If
Purchaser and the Stockholders' Committee are unable to resolve any Dispute within the thirty (30) day period after the Stockholders' Committee's receipt of a
Dispute Notice, the Stockholders' Committee and Purchaser shall jointly engage as arbitrator (the "Arbitrating Accountant") a public accounting firm of national reputation, other than
Deloitte & Touche LLP. If Purchaser and the Stockholders' Committee are unable to agree on the appointment of the Arbitrating Accountant, the Arbitrating Accountant shall be selected by
agreement of the Stockholders' Committee's and Purchaser's respective accountants. In connection with the resolution of any Dispute, the Arbitrating Accountant shall have access to all documents,
records, work papers, facilities and personnel necessary to perform its function as arbitrator. The Arbitrating Accountant's function shall be to conform the disputed elements or amounts set forth on
the Closing Balance Sheet to the requirements of Sections 3 and 4 (as applicable). 



        (c)   The
Arbitrating Accountant shall allow Purchaser and the Stockholders' Committee to present their respective positions regarding the Dispute and shall thereafter as
promptly as possible provide Purchaser and the Stockholders' Committee with a written determination of the Dispute, which shall be final and binding upon the parties hereto. In this regard, for each
particular Dispute, the Arbitrating Accountant shall select either Purchaser's or the Stockholders' Committee's determination of the amount that is the subject of the Dispute based on its own
assessment of whichever of the two parties' determinations more closely approximates the Arbitrating Accountant's own determination of such amount, and the Arbitrating Accountant may not substitute
its own determination of the amount in dispute as the final determination of such amount. Upon the resolution of all Disputes, the Closing Balance Sheet shall be revised to reflect such resolution.
The Arbitrating Accountant shall promptly, and in any event within sixty (60) calendar days after the date of its appointment, render its decision on the question in writing and finalize the
Closing Balance Sheet. The 












Arbitrating
Accountant may, at its, discretion, conduct a conference concerning the Dispute, at which conference each party shall have the right to present additional documents, materials and other
information and to have present its advisors, counsel and accountants. In connection with such process, there shall be no other hearings or any oral examinations, testimony, depositions, discovery or
other similar proceedings. 


        (d)   The
party whose position in any Dispute is not accepted by the Arbitrating Accountant (in favor of the other party's position) shall bear all of the fees and expenses of
the arbitration proceeding. Where more than one Dispute is considered in such arbitration proceeding and the Arbitrating Accountant finds in favor of each party on separate Disputes, the party which,
in aggregating all of such Disputes, has the largest dollar amount determined against it by the Arbitrating Accountant (in favor of the other party) shall bear all of the fees and expenses of the
arbitration proceeding. The Arbitrating Accountant may, in its discretion, also award to the party obligated to pay the fees and expenses of the arbitration proceeding in accordance with the preceding
sentence the reasonable fees and expenses of the other
party's legal, accounting and other professional advisors incurred in connection with such Dispute if it determines that such party's positions in connection with the Dispute were not taken in good
faith. 




        6.    Manner of Payment of Purchase Price.    The Purchase Price shall be paid or satisfied as follows: 



        (a)   For
purposes of the Closing, the parties have made a good-faith estimate of the Purchase Price, exclusive of the Tax Savings (the "Closing Estimate"), in the
amount of $2,624,555.86, based upon the most recent ascertainable financial information of the Company and the Subsidiary. At the Closing: 



        (i)    Purchaser
shall pay to Bank One Trust Company, N.A., as escrowee (the "Escrowee"), for the account of the Stockholders' Committee, the sum of $1,000,000 (the "Escrow
Deposit"), to be held by the Escrowee pursuant to, and in accordance with the terms of, an Escrow Agreement with Escrowee, in the form attached hereto as  Exhibit D (the "Escrow Agreement"); and




        (ii)   Purchaser
shall pay the balance of the Closing Estimate to or as directed by the Stockholders' Committee, for the benefit of Sellers, by wire transfer of immediately
available funds to the Stockholders' Committee, made to such bank account as the Stockholders' Committee shall specify by written notice to Purchaser delivered before the Closing Date. 




        (b)   Any
increase in the Purchase Price over the Closing Estimate resulting from the finalization of the Closing Balance Sheet and the final determinations of the components
of the Purchase Price (exclusive of the Tax Savings) shall be paid by wire transfer of immediately available funds by Purchaser within two Business Days following the final determination of the
Purchase Price. Any decrease in the Purchase Price below the Closing Estimate resulting from the finalization of the Closing Balance Sheet and the final determinations of the components of the
Purchase Price (exclusive of the Tax Savings) shall be paid by wire transfer of immediately available funds by the Stockholders' Committee within two Business Days following the final determination of
the Purchase Price. 


        (c)   Within
five Business Days following the receipt of a federal income Tax refund which reflects the effects of the Tax Savings as a result of the filing of a federal
income Tax return for the taxable period ending on the Closing Date in accordance with Section 14(e), Purchaser shall pay to the Stockholders' Committee 95% of the aggregate Tax Savings and to
Decker 5% of the aggregate Tax Savings; provided, however, that if for any reason the Company is not
allowed by the Internal Revenue Service ("IRS") to carry back the deductions resulting in the Tax Savings, there shall be no adjustment to the Purchase Price on account of the Tax Savings. 












        (d)   Section 14(d)
hereof deals with the manner of payment of the Decker Amount, the Dealy Amount and Indebtedness. 




        7.    Time and Place of Closing.    The transaction contemplated by this Agreement shall be consummated (the
"Closing") at 10:00 a.m., at the offices of Altheimer & Gray, 10 South Wacker, Suite 4000, Chicago, Illinois 60606 on the date hereof (the "Closing Date"). 


        8.    Representations and Warranties of Purchaser.    Purchaser represents and warrants to Sellers as follows: 



        (a)    Corporate.    Purchaser is a corporation duly organized, existing and in good standing, under the laws of its
state of incorporation. 


        (b)    Power and Authority.    Purchaser has full corporate power and authority to enter into and perform this
Agreement. The execution, delivery and performance of this Agreement by Purchaser and the consummation by Purchaser of the transaction contemplated hereby has been duly and validly approved by the
board of directors of Purchaser; and no other corporate proceedings are necessary on the part of Purchaser to authorize the execution, delivery and performance of this Agreement by Purchaser and the
consummation by Purchaser of the transaction contemplated hereby. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding agreement of Purchaser,
enforceable against Purchaser in accordance with its terms. 


        (c)    Consents.    No consent, authorization, order or approval of, or filing or registration with, any governmental
authority is required for or in connection with the consummation by Purchaser of the transaction contemplated hereby. 


        (d)    Absence of Conflicts.    Neither the execution and delivery of this Agreement by Purchaser, nor the
consummation by Purchaser of the transaction contemplated hereby, will conflict with or result in a breach of any of the terms, conditions or provisions of its Certificate of Incorporation or
by-laws, or of any statute or administrative regulation, or of any order, writ, injunction, judgment or decree of any court or governmental authority or of any arbitration award. Purchaser
is not a party to any unexpired, undischarged or unsatisfied written or oral contract, agreement, indenture, mortgage, debenture, note or other instrument under the terms of which performance by
Purchaser according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Purchaser according to the terms of this
Agreement may be prohibited, prevented or delayed. 


        (e)    Brokers.    Neither Purchaser, nor any of its Affiliates (as herein defined) has dealt with any Person (as
herein defined) who is entitled to a broker's commission, finder's fee, investment banker's fee or similar payment from Sellers, the Company or the Subsidiary for arranging the transaction
contemplated hereby or introducing the parties to each other. As used herein: (i) a "Person" means an individual, any type of business entity (including a corporation, joint-stock company,
partnership or limited liability company), any other type of legal entity (including a trust), or any governmental agency or instrumentality; (ii) an "Affiliate" is any Person which controls
another Person, which another Person controls, or which is under common control with another Person; and (iii) "Control" means the power, direct or indirect, to direct or cause the direction of
the management and policies of a Person through voting securities, contract or otherwise. 




        9.    Joint and Several Representations and Warranties of Sellers.    Sellers jointly and severally represent and
warrant to Purchaser that, except as set forth in the schedule delivered by Sellers to Purchaser concurrently herewith and identified as the "Disclosure Schedule": 



        (a)    Corporate.    The Company is a corporation duly organized, existing and in good standing under the laws of
Illinois. The Company has qualified as a foreign corporation, and is in good standing, under the laws of all jurisdictions where the nature of its business or the 









nature
or location of its assets requires such qualification and where the failure to so qualify would have a Material Adverse Effect (as herein defined). For the purposes of this Agreement, "Material
Adverse Effect" means a change in, or effect on, the operations, affairs, financial condition, results of operations, assets, or liabilities of the Company or the Subsidiary that results or would
reasonably be expected to result in a material adverse effect on or a material adverse change in (i) the Business, or the Company and the Subsidiary (taken as a whole), (ii) the ability
of Purchaser or any Seller to consummate the transactions contemplated in this Agreement, or (iii) Purchaser's ownership of the Shares and conduct of the Business after the Closing. 


        (b)    Power and Authority.    The Company has all necessary corporate power and authority to own or lease all of its
properties and assets and to carry on its business as such business is now being conducted. 



        (c)    Consents.    No consent, authorization, order or approval of, or filing or registration with, any governmental
authority is required for or in connection with the consummation by Sellers of the transaction contemplated hereby. 


        (d)    Absence of Conflicts.    Neither the execution and delivery of this Agreement by Sellers, nor the consummation
by Sellers of the transaction contemplated hereby, will conflict with or result in a breach of any of the terms, conditions or provisions of the Company's or the Subsidiary's Certificate of
Incorporation or by-laws, or of any statute or administrative regulation, or of any order, writ, injunction, judgment or decree of any court or governmental authority or of any arbitration
award to which the Company or the Subsidiary is a party or by which the Company or the Subsidiary is bound. Neither the Company nor the Subsidiary is a party to, or bound by, any unexpired,
undischarged or unsatisfied Material Contract (as herein defined) under the terms of which
performance by Sellers according to the terms of this Agreement will be a default or an event of acceleration, or grounds for termination, or whereby timely performance by Sellers of this Agreement
may be prohibited, prevented or delayed. 


        (e)    The Subsidiary.    The Subsidiary is a corporation duly organized, validly existing and in good standing under
the laws of Delaware, has all necessary corporate power and authority to own or lease all of its properties and assets and to carry on its business as such business is now being conducted, and is
qualified as a foreign corporation and is in good standing in all jurisdictions where the nature of its business or the nature and location of its assets requires such qualification, and where the
failure to so qualify would have a Material Adverse Effect. Other than the Subsidiary, the Company does not hold or beneficially own, and has never held or beneficially owned, any other direct or
indirect interest (whether it be common or preferred stock or any comparable ownership interest in any Person that is not a corporation), or any subscriptions, options, warrants, rights, calls,
convertible securities or other agreements or commitments for any interest, in any Person. 



        (f)    Corporate Records.    True and complete copies of the Certificate of Incorporation and all amendments thereto,
the by-laws as amended and currently in force, all stock records, and corporate minute books and records, of the Company and the Subsidiary, have been made available for inspection by
Purchaser. Said stock records accurately reflect all Share transactions and the current stock ownership of the Company and the Subsidiary. The corporate minute books and records of the Company and the
Subsidiary contain true and complete copies of all resolutions adopted by the stockholders or the board of directors of the Company and the Subsidiary. 



        (g)    Capitalization    



        (i)    The
authorized capital stock of the Company consists of 1,000,000 shares of Class A common stock, $.001 par value, and 1,000,000 shares of Class B Common
Stock, $.001 par value. The outstanding capital stock of the Company consists of 255,208 shares 











of
Class A common stock and 426,715 shares of Class B common stock. There are no shares of capital stock of the Company of any other class authorized, issued or outstanding. All of the
issued and outstanding Shares have been validly issued, are fully paid and nonassessable, and are owned beneficially and of record by Sellers, free and clear of all Claims. The previously outstanding
(x) options to purchase 28,783 shares of Class A common stock outstanding under the Company's 2001 Stock Option Plan and (y) Nonqualified Option to purchase 8,769 Shares of
Class A Common Stock granted to Dealy, have been cancelled and are no longer outstanding. The warrants held by the Mass Mutual Entities (as herein defined) to purchase a total of 135,108 Shares
have all been exercised in full, the former optionees and warrant holders are among the Sellers, and the underlying Shares are included in the Shares being sold to Purchaser pursuant to
Section 1. There are no outstanding subscriptions, options, warrants, rights (including preemptive rights), calls, convertible securities or other agreements or commitments of any character
relating to the issued or unissued capital stock or other securities of the Company obligating the Company to issue any securities of any kind. As used herein, the "Mass Mutual Entities" consist of
Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors and MassMutual Corporate Value Partners Limited. 


        (ii)   The
authorized capital stock of the Subsidary consists of 120,000 shares of Class A Common Stock, $.01 par value, of which 2,084 shares are issued and
outstanding, and 12,999 shares of Class B Common Stock, $.01 par value, none of which are issued or outstanding. There are no shares of capital stock of the Subsidiary of any other class
authorized, issued or outstanding. All of the issued and outstanding shares of capital stock of the Subsidiary have been validly issued, are fully paid and nonassessable, and are owned beneficially
and of record by the Company, free and clear of any Claims. There are no outstanding subscriptions, options, warrants, rights (including preemptive rights), calls, convertible securities or other
agreements or commitments of any character relating to the issued or unissued capital stock or other securities of the Subsidiary obligating the Subsidiary to issue any securities of any kind. 




        (h)    Financial Statements.    Copies of the consolidated balance sheets, consolidated statements of income and
retained earnings, consolidated statements of cash flows and notes to financial statements (together with any supplementary information thereto) of the Company and the Subsidiary as of and for the
years ended June 30, 2002 and June 30, 2001, as audited by Altschuler, Melvoin & Glasser LLP, are contained in the Disclosure Schedule. Such financial statements described in the
preceding sentence are referred to herein as the "Financial Statements". Copies of the consolidated balance sheet and consolidated statements of income and cash flows of the Company and the Subsidiary
as of and for the four month period ended October 31, 2002 are also contained in the Disclosure Schedule. The financial statements described in the preceding sentence are referred to herein as
the "Interim Financial Statements", and October 31, 2002 is referred to herein as the "Interim Financial Statement Date". The Financial Statements and the Interim Financial Statements present
fairly, in all material respects, the consolidated financial position of the Company and the Subsidiary as of the dates thereof and the consolidated results of operations and cash flows of the Company
and the Subsidiary for the periods covered by said statements, in accordance with GAAP consistently applied, except as disclosed therein,
and, in the case of the Interim Financial Statements, except for (x) normal year-end adjustments and (y) the omission of footnote disclosures required by GAAP. 


        (i)    Liabilities.    Neither the Company nor the Subsidiary has any obligation or liability of any nature whatsoever
(direct or indirect, matured or unmatured, absolute, accrued, contingent or otherwise) (collectively, "Liabilities") except for: (i) Liabilities provided for or reserved against in the
Financial Statements or the Interim Financial Statements and not discharged subsequent to the dates of the Financial Statements or the Interim Financial 












Statement
Date, all of which, to the extent not discharged as of the date immediately preceding the Closing Date, shall be provided for or reserved against in the Closing Balance Sheet to the extent
required by GAAP; (ii) Liabilities which have been incurred by the Company and the Subsidiary subsequent to the Interim Financial Statement Date in the ordinary course of the Company's and the
Subsidiary's respective businesses and not discharged since the Interim Financial Statement Date; (iii) Liabilities under the executory portion of any Material Contract by which the Company or
the Subsidiary is bound and which was entered into in the ordinary course of the Company's and the Subsidiary's respective businesses; and (iv) Liabilities under the executory portion of
Permits (as herein defined) and Environmental Permits (as herein defined) issued to, or entered into by, the Company or the Subsidiary in the ordinary course of business. 


        (j)    Title to Assets.    The Company and the Subsidiary have good title to their respective assets, free and clear
of any Claims, except for the following: (i) statutory liens for Taxes not yet due, (ii) statutory liens of landlords, carriers, warehousemen, mechanics and materialmen incurred in the
ordinary course of business for sums not yet due; (iii) liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and
other types of social security or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and
similar obligations; (iv) minor irregularities of title which do not in the aggregate materially detract from the value or use of the Company's or the Subsidiary's respective assets, and
(v) security interests securing the Indebtedness. The foregoing representation and warranty shall not apply to the Intellectual Property (as herein defined), which is dealt with exclusively in
paragraph (w). 


        (k)    Insurance.    



        (i)    The
Disclosure Schedule contains a true and correct list and description (including coverages, deductibles and expiration dates), and Sellers have made available to
Purchaser copies, of all insurance policies which are owned by the Company or the Subsidiary or which name the Company or the Subsidiary as an insured (or loss payee), including without limitation
those which pertain to the Company's and the Subsidiary's respective assets, business, employees and/or operations. All such insurance policies are in full force and effect and all premiums on such
policies have been paid in full as and when due. Since December 31, 2000, neither the Company nor the Subsidiary has received from any insurance company (or other representative thereof) notice
of (A) cancellation of any insurance
policy (other than a cancellation requested by the Company or the Subsidiary), (B) any failure to comply with the terms of any policy, (C) any refusal of coverage (either in effect or
applied for), or (D) a policy's issuer being unwilling or unable to perform its obligations under such policy. There have been no material changes in the Company's or the Subsidiary's insurance
coverage since December 31, 2000. The Company's and the Subsidiary's insurance coverage is sufficient for compliance with all laws applicable to the Company, the Subsidiary, the Business and
any insurance-related requirements under any Material Contract. 


        (ii)   The
Disclosure Schedule contains a description of (A) any self-insurance arrangement by or affecting the Company or the Subsidiary, including any
reserves established thereunder, (B) any contract or arrangement, other than a policy of insurance, for the transfer or sharing of any risk to which the Company or the Subsidiary is a party or
by which the Company or the Subsidiary is bound, or which involves the Business, and (C) each obligation of the Company or the Subsidiary to provide insurance coverage to any other Person,
either directly or as an additional insured or loss payee under a Company or Subsidiary insurance policy, and identifies the policy under which such coverage is provided. 
















        (iii)  For
each insurance policy insuring the Company or the Subsidiary that either is currently in effect or was in effect at any time since December 31, 2000, the
Disclosure Schedule contains, for the current policy year and each of the five (5) preceding policy years, (A) a summary of the loss experience under each such policy, (B) a
statement describing each claim under each such policy for an amount in excess of $10,000, which sets forth the name of the claimant, a description of the policy by insurer, type of insurance and
period of coverage and the amount and a brief description of the claim, and (C) a statement describing the loss experience for all claims that were self-insured, including the
number and aggregate cost of such claims. 


        (iv)  Sellers
have made available to Purchaser copies of any and all reports, correspondence and other documents containing statements by the auditor of the Company's or the
Subsidiary's financial statements or by any consultant or risk management advisor since December 31, 2000 with regard to the adequacy of the Company's and the Subsidiary's insurance coverage
and reserves for claims. 




        (l)    Banking.    The Disclosure Schedule contains a list showing: (i) the name of each bank, safe deposit
company or other financial institution in which the Company or the Subsidiary has an account, lock box or safe deposit box; (ii) the names of all Persons authorized to draw thereon or to have
access thereto and the names of all Persons, if any, holding powers of attorney from the Company or the Subsidiary; and (iii) all instruments or agreements to which the Company or the
Subsidiary is a party as an endorser, surety or guarantor, other than checks endorsed for collection or deposit in the ordinary course of business. 


        (m)    Taxes.    



        (i)    As
used in this Agreement, the following terms shall have the following meanings: (A) "Taxes" means all federal, state, local, foreign and other income, sales,
use, ad valorem, employment, transfer or other taxes, fees, assessments or charges of any kind, together with any interest and any penalties, with respect thereto, and the term "Tax" means any one of
the foregoing Taxes; (B) "Returns" means all returns, declarations, reports, statements and other documents required to be filed in respect of Taxes, and the term "Return" means any one of the
foregoing Returns; (C) "Code" means the Internal Revenue Code of 1986, as amended; and (D) "Taxing Authority" means all federal, state, local, foreign and other governmental authorities
and agencies charged with collecting Taxes or administering Tax laws. 


        (ii)   There
have been filed on a timely basis all Returns required to be filed by the Company and the Subsidiary. No extension of time within which to file any such Return
has been requested or granted. With respect to all amounts in respect of Taxes imposed upon the Company or the Subsidiary, or for which the Company or the Subsidiary is liable to taxing authorities,
with respect to all taxable periods or portions of periods ending on or before the Closing Date, all applicable Tax laws have been complied with, and all amounts required to be paid by the Company or
the Subsidiary (as the case may be) to Taxing Authorities on or before the date hereof have been paid. No issues have been raised (and are currently pending) by any Taxing Authority in connection with
any of the Returns. No waivers of statutes of limitation with respect to the Returns have been given by or requested from the Company or the Subsidiary. All deficiencies asserted or assessments made
as a result of any examinations of Returns previously filed by the Company or the Subsidiary have been fully paid, or are fully reflected as a liability in the Financial Statements and the Interim
Financial Statements, or are being contested and an adequate reserve therefor has been established and is fully reflected as a liability in the Financial Statements and the Interim Financial
Statements. The Disclosure Schedule lists each Return that has been audited or is currently the subject of an audit or reassessment by a Taxing Authority or is currently being contested by any Taxing
Authority. 














        (iii)  Neither
the Company nor the Subsidiary is a party to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement. 


        (iv)  Neither
the Company nor the Subsidiary: (A) has filed a consent pursuant to the collapsible corporation provisions of section 341(f) of the Code (or any
corresponding provision of state, local or foreign income Tax law) or agreed to have section 341(f)(2) of the Code (or any corresponding provision of state, local or foreign income Tax law)
apply to any disposition of any asset owned by it; (B) has agreed to make, nor is either of them required to make, any adjustment under section 481(a) of the Code by reason of a change
in accounting method or otherwise; (C) is a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of section 280G of the Code; (D) has made a deemed dividend election under Regulations Section 1.1502-32(f)(2) or a
consent dividend election under section 565 of the Code; (E) has been a United States real property holding corporation (as defined in section 897(c)(2) of the Code) during the
applicable period specified in section 897(c)(1)(A)(ii) of the Code; (F) has had a permanent establishment in any foreign country, as defined in any applicable Tax treaty or
convention between the United States and such foreign country; or (G) has entered into any agreement that would result in an amount that will not be deductible as a result of
section 162(m) of the Code. 


        (v)   None
of the assets of the Company or the Subsidiary (A) is "tax-exempt use property" within the meaning of Section 168(h) of the Code, or
(B) secures any debt the interest on which is tax-exempt under section 103(a) of the Code. 



        (vi)  None
of Sellers is a Person other than a United States person within the meaning of the Code and the transaction contemplated hereby is not subject to the withholding
provisions of section 3406 or subchapter A of Chapter 3 of the Code. 


        (vii) The
Company and the Subsidiary have each withheld and paid over all Taxes required to have been withheld and paid over in connection with amounts paid or owing to any
director, officer, employee, independent contractor, creditor, stockholder or other Person. 


        (viii) Neither
the Company nor the Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending on or after the Closing Date as a result of any: (A) change in method of accounting for a taxable period ending prior to the Closing Date; (B) "closing
agreement" as described in section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed prior to the Closing Date;
(C) inter-company transaction or any excess loss account described in Treasury Regulations under section 1502 of the Code (or any corresponding or similar provision of state, local or
foreign income Tax law); (D) installment sale or open transaction disposition made prior to the Closing Date; or (E) prepaid amount received prior to the Closing Date. 




        (n)    Conduct of Business.    Since the Interim Financial Statement Date, neither the Company nor the Subsidiary has:
(i) sold or transferred any portion of its assets or property having a value in excess of $10,000 individually or $25,000 in the aggregate, except for sales of its inventory and transfers of
cash in payment of trade payables, all in the usual and ordinary course of business, and except as permitted by this Agreement; (ii) suffered any material loss, or any material interruption in
use, of any material assets or property (whether or not covered by insurance), on account of fire, flood, riot, strike, theft, willful misconduct, accident or other hazard or Act of God;
(iii) suffered any material adverse change to its business, other than changes affecting the Company's and the Subsidiary's industry generally; (iv) waived any material right;
(v) paid or declared any dividends or other distributions on its securities of any class or purchased or redeemed any of its securities of any class; (vi) increased the 









compensation
payable to any officer or employee, other than in the ordinary course of business consistent with past practices; (vii) made any change in accounting principles, methods or
practices or in the manner in which it keeps its books and records, or any change in its practices with regard to sales, receivables, payables or accrued expenses; (viii) without limitation by
the enumeration of any of the foregoing, entered into any material transaction other than in the usual and ordinary course of business (the foregoing representation and warranty shall not be deemed to
be breached by virtue of the entry by Sellers into this Agreement or their consummation of the transaction contemplated hereby); or (ix) entered into any negotiation, commitment or agreement to
do any of the foregoing. 


        (o)    Contracts.    



        (i)    The
Disclosure Schedule lists and describes all Material Contracts to which the Company or the Subsidiary is a party or is bound. All Material Contracts are in full
force and binding upon the Company or the Subsidiary (as the case may be), and, to Sellers' knowledge, the other parties thereto. No material default by the Company or the Subsidiary has occurred
thereunder, and, to Sellers' knowledge, no material default by the other contracting parties has occurred thereunder. To Sellers' knowledge, no event, occurrence or condition exists which, with the
lapse of time, the giving of notice, or both, or the happening of any further event or condition, would become a default by the Company or the Subsidiary thereunder. Complete and accurate copies of
all Material Contracts (including any amendments or supplements thereto) have previously been made available to Purchaser. 


        (ii)   For
purposes of this Agreement, "Material Contracts" shall mean the following oral or written instruments with respect to the Company, the Subsidiary or the Business
which, as of the Closing Date, have not been fully performed or which otherwise contain terms (including, without limitation, warranty (other than normal product warranty) and indemnification terms):
(A) customer and/or vendor purchase orders and purchase contracts in excess of $25,000 each; (B) contracts for capital expenditures in excess of $25,000 each; (C) agreements or
arrangements regarding confidentiality, non-competition (exclusive of confidentiality agreements related to the proposed sale of the Company), (D) loan agreements; notes and
security agreements; (E) employment and employment-related agreements, consulting agreements and nonsolicitation of employees agreements; (F) collective bargaining agreements;
(G) leases and subleases of the Leased Real Property (as herein defined), and any other agreements relating to the Leased Real Property; (H) leases and subleases of personal property and
installment purchase agreements with respect to personal property, where the annual payments thereunder exceed $25,000 or which cannot be canceled by the Company or the Subsidiary without payment or
penalty upon notice of sixty (60) days or less; (I) license agreements; (J) warranties and service plans for major equipment (including all vehicles); (K) performance
bonds, completion bonds, bid bonds, suretyship agreements and similar instruments and agreements; (L) any stockholder agreement between the Company and Sellers (or any of them), whether or not
such agreement terminates at the Closing; and (M) and all other agreements or arrangements (oral or written) to which the Company or the Subsidiary is a party or by which the Company or the
Subsidiary or any of its respective assets is bound and which have a notice for termination period of more than six (6) months or obligate any party thereto to make an annual payment of more
than $25,000 or total payments of more than $100,000 during the term of such agreement or arrangement. 


        (iii)  The
management services letter agreement dated March 10, 2001 between Crowe, Chizek & Co., LLP, (the "Accountants") and the Subsidiary has been
terminated. The Subsidiary has fully performed all of its covenants and obligations thereunder, except for its obligation to pay for current services which will be due and owing and which will be
accrued on the Closing Balance Sheet and taken into account in the Working Capital 














calculation.
There are no disputes pending, or to Sellers' knowledge, threatened with respect to or in connection with such agreement. 




        (p)    Permits.    The Company and the Subsidiary possess all licenses, permits, registrations and government
approvals (the "Permits") (other than Environmental Permits (as defined herein), which are exclusively
provided for in Section 9(u)) which are required in order for the Company and the Subsidiary to conduct their respective business as presently conducted, except for permits of immaterial
significance which can be obtained for nominal filing fees. All Permits issued to the Company or the Subsidiary are described in the Disclosure Schedule, and copies thereof have been made available to
Purchaser. No Permit will be terminated, cancelled or revoked or become terminable, cancelable or revocable or otherwise impaired in any respect as a result of the consummation of the transaction
contemplated hereby. Any notice, other filing or other registration required to be made by the Company, either Subsidiary or Purchaser with any governmental authority in connection with Purchaser's
acquisition of the Shares in order to protect and maintain the effectiveness of any Permit is described in the Disclosure Schedule. 


        (q)    Benefit Plans    



        (i)    Neither
the Company nor any affiliate of the Company as determined under Code section 414(b), (c), (m) or (o) ("ERISA Affiliate") maintains,
administers or contributes to any: (A) employee pension benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) ("Plan");
(B) employee welfare benefit plan (as defined in Section 3(1) of ERISA) ("Welfare Plan"); or (C) bonus, deferred compensation, stock purchase, stock option, severance, salary
continuation, vacation, sick leave, fringe benefit, incentive, insurance, welfare or similar plan or arrangement ("Employee Benefit Plan") other than those Plans, Welfare Plans and Employee Benefit
Plans described in the Disclosure Schedule (collectively, the "Benefit Plans"). Except as required by section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or applicable
state law, neither the Company nor any ERISA Affiliate has promised any former employee or other individual not employed by the Company or any ERISA Affiliate medical or life insurance coverage and
neither the Company nor any ERISA Affiliate maintains or contributes to any plan or arrangement providing medical or life insurance benefits to former employees or their dependents, other than
benefits provided in the event of disability and conversion privileges. None of the Benefit Plans is subject to Title IV of ERISA ("Title IV Plan") and since January 1, 1995 neither the Company
nor the Subsidiary nor any of their respective ERISA Affiliates has ever had any obligation (contingent or otherwise) with respect to any Title IV Plan. 


        (ii)   With
respect to each Benefit Plan: (A) it complies, in form and operation, in all material respects, with all applicable statutes, laws and regulations,
including ERISA and the Code; (B) if it is intended to be a funded Benefit Plan, the funds available thereunder equal or exceed the amounts required to be paid, or which would be required to be
paid, if such Benefit Plan were terminated as of the Closing Date; (C) if it is intended to qualify under section 401(a) of the Code, (i) it meets in all material respects all
requirements for qualification under that section and the regulations thereunder, and (ii) a favorable determination as to its qualification under the Code has been made by the IRS, and Sellers
have made available to Purchaser a copy of the most recent favorable determination letter issued by the IRS concerning its qualification; (D) it has been administered in all material respects
in accordance with its terms and the applicable provisions of ERISA and the Code and the regulations thereunder and, to Sellers' knowledge, no matter exists which would adversely affect its qualified
tax-exempt status and that of any related trust; (E) all material reports and information (i) required to be filed with any governmental entity have been timely filed and are
accurate in all material respects, or (ii) required to be disclosed or provided to participants or their beneficiaries have been timely disclosed or provided; (F) to Sellers' knowledge,
no fiduciary thereof 














has
committed a breach of any responsibility or obligation imposed upon fiduciaries under Title I of ERISA; (G) there has been made available to Purchaser, copies of the following:
(i) the annual report (if required under ERISA) for the last three years (including all schedules and attachments); (ii) the summary plan description, together with each summary of
material modifications, required under ERISA; (iii) such Benefit Plan (including any amendments thereto), and all trust agreements, insurance contracts, accounts or other documents which
establish the funding vehicle for it, (iv) the latest financial statements thereof; (v) any investment management agreements, administrative services contracts, or other agreements and
documents relating to its ongoing administration and investment activities; and (vi) all correspondence with the IRS or the Pension Benefit Guaranty Corporation with respect thereto. 


        (iii)  There
are no actions, suits, proceedings, investigations or hearings pending with respect to any Benefit Plan, or to Sellers' knowledge any claims (other than claims
for benefits arising in the ordinary course of any Benefit Plan) threatened against or with respect to any Benefit Plan or any fiduciary or assets thereof. 


        (iv)  Each
Welfare Plan which is a group health plan (within the meaning of section 5000(b)(1) of the Code) complies in all material respects with and has been
maintained and operated in all material respects in accordance with each of the requirements of section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA. 



        (v)   Neither
any Benefit Plan fiduciary nor any Benefit Plan has engaged in any transaction in violation of Section 406 of ERISA or any "prohibited transaction" (as
defined in section 4975(c)(l) of the Code) and there has been no "reportable event" (as defined in Section 4043 of ERISA), "nondeductible contribution" (as such term is defined in
Section 4972 of the Code) or "accumulated funding deficiency" (as such term is used in section 412 or 4971 of the Code) with respect to any Benefit Plan. Neither the Company nor any
ERISA Affiliate has failed to make any contributions or to pay any amounts (including employee deferrals) due and owing as required by the terms of any Benefit Plan, collective bargaining agreement,
or ERISA or any other applicable law. Full payment has been made of
all amounts which the Company or any ERISA Affiliate is required or committed to pay to the Benefit Plans as of the Interim Financial Statement Date, and all such contributions have been and are
deductible for federal income Tax purposes, and no such contributions or deductions have been challenged or disallowed by the IRS or any other governmental authority. 


        (vi)  Neither
the Company nor the Subsidiary has any announced plan or legally binding commitment to create any additional Benefit Plan or to amend or modify any existing
Benefit Plan. 


        (vii) Neither
the execution, delivery or performance of this Agreement nor the consummation of the transaction contemplated hereby will (either alone or in combination with
another event): (A) result in any payment becoming due, or increase the amount of compensation due, to any current or former employee of the Company or the Subsidiary; (B) increase any
benefits payable under any Benefit Plan, or (iii) result in any acceleration of the time of payment or vesting of any such compensation or benefits, other than acceleration of vesting of the
Options. 


        (viii) Neither
the Company nor the Subsidiary has participated in or contributed to any multiemployer plan (as defined in Section 3(37) of ERISA). 


        (ix)  If
any obligation or liability incurred with respect to any Welfare Plan is fully insured by an insurance policy, (A) there will be no material liability of the
Company, the Subsidiary or the Purchaser in the nature of a retroactive or retrospective rate adjustment, loss sharing arrangement, or other actual or contingent liability as of the Closing Date, nor
would there be any such liability if such insurance policy were 














terminated
on the Closing Date, (B) each such insurance policy may be terminated by the Company or the Subsidiary without penalty upon no more than thirty (30) days' notice and without
causing the Company or the Subsidiary to incur any additional liability, and (C) no insurance company issuing any such policy is in receivership, conservatorship, liquidation, or similar
proceeding and, to the knowledge of Sellers, no such proceedings with respect to any insurer pending or threatened. 




        (r)    Employees.    With respect to employees of the Company or the Subsidiary: 



        (i)    Neither
the Company nor the Subsidiary is a party to a collective bargaining agreement. There has not been, there is not presently pending or existing, and, to Sellers'
knowledge, there is not threatened: (A) any strike, slowdown, picketing, work stoppage or employee grievance process; (B) any material charge, grievance proceeding or other claim against
or affecting the Company or the Subsidiary (or any director, officer or employee thereof) relating to the alleged violation of any law pertaining to labor relations or employment matters, including
any charge or complaint filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission or any comparable governmental authority; (C) any union or other employee association organizational activity or
other labor or employment dispute against or affecting the Company or the Subsidiary; or (D) any application for certification of a collective bargaining agent. 



        (ii)   To
Sellers' knowledge, no event has occurred or circumstances exist that could provide the basis for any work stoppage or other labor dispute with respect to the
Company or the Subsidiary. There is no lockout of any employees of the Company or the Subsidiary currently in effect and no such action is contemplated by the Company or the Subsidiary. 


        (iii)  Sellers
have provided to Purchaser a detailed list of the employees of the Company and the Subsidiary as of a date no less recent than December 20, 2002
containing at least the following details for each such employee: (A) name; (B) part-time or full-time status, (C) title and/or job description,
(D) employment commencement date, (E) salary or wage, (F) available bonus or other contingent compensation; (G) accrued and unused vacation days; (H) accrued and
unused sick days, (I) Benefit Plan participation details, (J) if on leave, the status of such leave (including reason for leave and expected return date), and (K) details of any
disciplinary problems. 


        (iv)  Each
employee's employment can be terminated by the Company or the Subsidiary upon not more than thirty (30) days' notice without severance, penalty or premium,
other than (x) severance provided for in the Company's or the Subsidiary's personnel policies, and (y) accrued salaries, wages and vacation benefits. 



        (v)   All
salaries, wages and other compensation and benefits payable to each employee have been paid by the Company or the Subsidiary when due for all periods through the
date hereof, and, as of the Closing Date, will have been paid by the Company or the Subsidiary when due for all periods through the Closing Date, other than with respect to any stub period existing
between the Closing Date and the last scheduled payday immediately preceding the Closing Date. 




        (s)    Litigation and Claims.    There is no claim, action, litigation or proceeding (whether in mediation,
arbitration or before any court of competent jurisdiction), in law or in equity, underway, pending or, to the knowledge of Sellers, threatened, against or by or with respect to the Company, the
Subsidiary, the Business, any assets of the Company or the Subsidiary or any of the Shares or which seeks to enjoin or rescind any part of the transaction contemplated by this Agreement. There are no
proceedings or governmental investigations before any commission or other administrative authority, pending or, to the Sellers' knowledge, overtly threatened against the Company, the Subsidiary or any
of the Company's or the Subsidiary's 









officers,
directors or Affiliates, with respect to or affecting the Company's or the Subsidiary's assets, operations, business, products sales practices or financial condition, or with respect to the
consummation of the transaction contemplated hereby. Neither the Company nor the Subsidiary is a party to, or bound by, any decree, order, injunction, settlement agreement or arbitration decision or
award (or agreement entered into in any administrative, judicial or arbitration proceeding with any governmental authority) with respect to or affecting the properties, assets, personnel or business
activities of the Company or the Subsidiary. 


        (t)    Compliance with Law.    Except for laws, rules and regulations relating to the environment (which are
exclusively provided for in Section 9(u) hereof), neither the Company nor the Subsidiary is in violation in any material respect of, or delinquent in any material respect in respect to, any
decree, order or arbitration award or law, statute, or regulation of or agreement with, or any Permit from, any Federal, state or local governmental authority to which the property, assets, personnel
or business activities of the Company or the Subsidiary are subject, including, without limitation, federal, state or local laws, statutes and regulations relating to equal employment opportunities,
fair employment practices, occupational health and safety, wages and hours, and discrimination. 


        (u)    Environmental Matters.    



        (i)    The
Company and the Subsidiary are in full compliance with all applicable Environmental Laws (as herein defined) and Environmental Permits (as herein defined). The
Company and the Subsidiary possess all Environmental Permits which are required for the operation of their respective businesses. The Disclosure Schedule contains a complete list of all Environmental
Permits issued to the Company or the Subsidiary. Neither the Company nor the Subsidiary has received any written communication alleging that the Company or the Subsidiary currently is not or was not
since January 1, 1995, in compliance with applicable Environmental Laws or Environmental Permits. There is no Environmental Claim (as herein defined) pending or, to Sellers' knowledge,
threatened, against the Company or the Subsidiary. No Facility (as herein defined) that is or has been owned, leased, occupied or used by the Company or the Subsidiary is currently listed on the
National Priorities List or the Comprehensive Environmental Response, Compensation and Liability Information System, both promulgated under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any comparable state list. Neither the Company nor the Subsidiary has received any written notice from any Person with respect to any
Off-Site Facility (as herein defined), of potential or actual liability or a written request for information from any Person under or relating to CERCLA or any comparable state or local
law. There are no and has not been any Hazardous
Substances used, generated, treated, stored, transported, disposed of, handled or otherwise existing on, under or about any Facility owned, leased, operated or used by the Company or the Subsidiary as
a result of the operations of the Company or the Subsidiary, or otherwise as permitted by or known to the Company or the Subsidiary, in any such case in violation of Environmental Laws. There are no
above-ground storage tanks or, to Sellers' knowledge, underground storage tanks, located on any real property presently owned, leased, operated or used by the Company or the Subsidiary. 


        (ii)   For
the purposes of this Agreement: (A) "Environmental Claim" shall mean any and all civil, administrative, regulatory or judicial or quasi-judicial actions,
suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation (written or oral) by any Person alleging potential liability (including
potential liability for enforcement, investigatory costs, cleanup costs, governmental response costs, removal costs, remedial costs, natural resources damages, property damages, personal injuries or
penalties) arising out of, based on or resulting from: (i) the presence, or release into the environment, of any Hazardous Substance at any location, whether or not owned by the Company or the
Subsidiary; or 














(ii) circumstances
forming the basis of any violation or alleged violation, of any Environmental Law; or (iii) any and all claims by any Person seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from the presence or Release of any Hazardous Substances; (B) "Environmental Laws" shall mean all federal, state or
local statutes, laws, rules, ordinances, codes, rule of common law, regulations, judgments and orders in effect on the Closing Date and relating to protection of human health or the environment
(including ambient air, surface water, ground water, drinking water, wildlife, plants, land surface or subsurface strata), including laws and regulations relating to Releases or threatened Releases of
Hazardous Substances, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances; (C) "Environmental
Permits" shall mean all environmental, health and safety permits, licenses, registrations, and governmental approvals and authorizations; (D) "Facility" means any facility as defined in CERCLA;
(E) "Hazardous Substances" shall mean: (i) any petroleum or petroleum products, radioactive materials, asbestos in any form, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls (PCBs) and radon gas; and (ii) any chemicals, materials or substances which are now or ever have
been defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," or other words of similar import, under any Environmental Law; (E) "Offsite Facility" shall mean any Facility which is not presently, and never has been, owned, leased or
occupied by the Company or the Subsidiary; and (F) "Release" shall mean any release, spill, emission, emptying, leaking, injection, deposit, disposal, discharge, dispersal, leaching, pumping,
pouring, or migration into the atmosphere, soil, surface water, groundwater or property. 


        (iii)  Sellers
have made available to Purchaser all environmental documents, studies and reports relating to (x) the Leased Real Property and any other real property
leased, operated, occupied or used by the Company or either Subsidiary, either presently or in the past, or (y) any liability of the Company or the Subsidiary under any Environmental Laws. 




        (v)    Real Property.    Neither the Company nor the Subsidiary owns or has ever owned any real property, and neither
of them occupies any real property other than the leased real property identified in the Disclosure Schedule (the "Leased Real Property"). The Disclosure Schedule accurately sets forth the street
address and legal description of the Leased Real Property. The Leased Real Property: (i) constitutes all real property and improvements leased or used by the Company or the Subsidiary in the
conduct of the Business; (ii) to Sellers' knowledge, is not in possession of any adverse possessors; (iii) is not subject to any leases or tenancies of any kind (except for the
Subsidiary's lease); and (iv) is, and has been since the date of possession thereof by the Subsidiary, in the peaceful possession of the Subsidiary. There are no challenges or appeals pending
regarding the amount of the real estate Taxes on, or the assessed valuation of, the Leased Real Property brought by the Company or the Subsidiary, and no special arrangements or agreements entered
into by the Company or the Subsidiary exist with any governmental authority with respect thereto (the representations and warranties contained in this sentence shall not be deemed to be breached by
any prospective general increase in real estate Tax rates). There are no condemnation proceedings pending or, to Sellers' knowledge, threatened with respect to any portion of the Leased Real Property.
There is no tax assessment (in addition to the normal, annual general real estate Tax assessment) pending or, to Sellers' knowledge, threatened with respect to any portion of the Leased Real Property.
The Company's and/or the Subsidiary's use of the Leased Real Property for the various purposes for which it is used is permitted as of right under all applicable zoning requirements and is not subject
to permitted nonconforming use or structure classifications. 









        (w)    Personal Property.    The machinery and equipment of the Company and the Subsidiary are, in the aggregate, in
good working order and condition, ordinary wear and tear excepted. 


        (x)    Intellectual Property.    



        (i)    The
Company or the Subsidiary (as indicated in the Disclosure Schedule) is the owner of or has exclusive rights to use all of the Intellectual Property (as herein
defined). The Disclosure Schedule: (A) sets forth a complete and accurate list of all U.S. and foreign copyright registrations, copyright applications, patents and patent applications,
trademark and service mark registrations (including Internet domain name registrations), trademark and service mark applications and material unregistered trademarks and service marks included within
the Intellectual Property (noting jurisdiction of registration or application, and registration or application numbers); (B) lists all Software (as herein defined) which is owned ("Proprietary
Software") or licensed, leased or otherwise used by the Company or the Subsidiary (other than "off-the-shelf" Software), and identifies which Software is owned, licensed,
leased or otherwise used, as the case may be; and (C) sets forth a complete and accurate list of all agreements (other than agreements with respect to "off-the-shelf"
Software) between the Company or the Subsidiary, on the one hand, and any Person, on the other hand, granting any right to use or practice any rights under any of the Intellectual Property owned
either by the Company or the Subsidiary or by any other Person (collectively, "Intellectual Property Licenses"). 



        (ii)   The
Company or the Subsidiary (as the case may be) have a practice of requiring all employees who have access to confidential information, or who may be involved in the
invention or development of Intellectual Property, to execute agreements requiring such employees to agree to preserve the confidentiality of such confidential information and to assign to the Company
or the Subsidiary their rights, if any, in such Intellectual Property. All present and former employees who, in the course of performance of their duties have access to confidential information or who
may be involved in the invention or development of Intellectual Property, and, to Sellers' knowledge, substantially all of the other present and former employees of the Company or the Subsidiary, have
executed such agreements. 


        (iii)  To
Sellers' knowledge: (A) the conduct of the Company's and the Subsidiary's respective businesses and the exercise of their respective rights relating to their
Intellectual Property does not infringe upon or otherwise violate, Intellectual Property rights of any Person; and (B) no Person is infringing upon or otherwise violating any of the
Intellectual Property. Neither the Company nor the Subsidiary has received notice of any threatened claims, and, to Sellers' knowledge, there are no pending claims, of any Persons relating to the
scope, ownership or use of any of the Intellectual Property. 



        (iv)  Neither
the Company nor the Subsidiary has licensed or sublicensed its rights in any of their Intellectual Property or received or granted any such rights, other than
pursuant to Intellectual Property Licenses. 


        (v)   All
Proprietary Software set forth in the Disclosure Schedule was either developed: (A) by employees of the Company or the Subsidiary within the scope of their
employment; or (B) by independent contractors who have assigned their right to the Company or the Subsidiary pursuant to written agreements. 


        (vi)  All
patents, trademarks and copyrights (registered and unregistered) included in the Company's and the Subsidiary's Intellectual Property are currently in material
compliance with formal legal requirements (including, in respect of patents, payment of filing, examination and maintenance fees and proofs of working or use, and, in respect of trademarks, the timely
post-registration filing of affidavits of use and incontestability and renewal applications), and are not subject to any maintenance fees or Taxes or actions 














falling
due within ninety (90) days after the Closing Date. To Sellers' knowledge, all patents, trademarks and copyrights included in the Company's and the Subsidiary's Intellectual Property
are valid and enforceable. No patent included in such Intellectual Property has been or is now involved in, or has been or is the subject of, any interference, reissue, reexamination or opposition
proceeding, and, to Sellers' knowledge, (i) no such proceeding is pending or threatened, and (ii) there is no potentially interfering patent or patent application of any Person. No
trademark included in such Intellectual Property has been or is now involved in, or has been or is the subject of, any opposition, invalidation, or cancellation proceeding and, to Sellers' knowledge,
(i) no such proceeding is pending or threatened, and (ii) there is no potentially interfering trademark or trademark application of any Person. All products made, used or sold under any
patent included in the Intellectual Property of the Company and the Subsidiary have been marked with the proper patent notice. All products made, used or sold that contain a trademark included in the
Company's or the Subsidiary' s Intellectual Property bear the proper federal registration notice with respect to such trademark where permitted by law. All products or other works encompassed by any
copyright included in the Company's or the Subsidiary's Intellectual Property have been marked with the proper copyright notice. 


        (vii) With
respect to each trade secret included in the Intellectual Property, the Company and the Subsidiary have taken reasonable precautions to protect the secrecy,
confidentiality and value of all trade secrets included in the Intellectual Property. No trade secret included in the Intellectual Property is subject to any adverse claim or has been challenged or
threatened in any way. 


        (viii) With
respect to Internet web sites and domain names used by the Company or the Subsidiary, (i) all such sites and domain names have been registered in the name
of the Company or the Subsidiary and are in compliance with all formal legal requirements, (ii) no such site or domain name has been or is now involved in, or has been or is the subject of, any
dispute, opposition, invalidation or cancellation proceeding and, to Sellers' knowledge, no such proceeding is pending or threatened, (iii) to Sellers' knowledge, there is no domain name
application pending of any Person which would or could potentially interfere with or infringe any Company or Subsidiary domain name, and (iv) no Company or Subsidiary web site or domain name
has been challenged, interfered with or threatened in any way or, to Sellers' knowledge, infringes, interferes with or is alleged to interfere with or infringe the trademark, copyright or domain name
of any other Person. 


        (ix)  As
used herein: (A) "Intellectual Property" means all intellectual property rights, including, without limitation, all patents, trademarks, designs, service
marks, copyrights, Internet domain names and web sites, trade or business names, trade dress and slogans (and all registrations of any of the foregoing, and all applications for registration thereof),
discoveries, inventions, ideas, concepts, technology, know-how, trade secrets, processes, formulas, drawings, designs, Proprietary Software,
license rights and all goodwill associated-with such intellectual property rights; and (B) "Software" means any and all (i) computer programs, including any and all software
implementation of algorithms, models and methodologies whether in source code or object code, (ii) databases and computations, including any and all data and collections of data,
(iii) all documentation, including user manuals and training materials, relating to any of the foregoing, and (iv) the content and information contained in any Internet web site. 




        (y)    Inventories.    The inventories of the Company and the Subsidiary consist of items of merchantable quality and
quantity usable or salable in the ordinary course of business, and are salable at prevailing market prices for not less than the book value amounts thereof, and are not obsolete, damaged,
slow-moving or defective, except, in each case to the extent such inventories have been written down to their net realizable value on the Financial Statements or the Interim Financial
Statements. The Company's and the Subsidiary's current inventories have been purchased and maintained in amounts and of types and characters consistent with 









past
practices and the reasonable requirements of the Business and the operations of the Company and the Subsidiary. As of November 30, 2002 the Company and the Subsidiary had a combined
backlog of customer product orders, the aggregate value of which was not less than $871,000. 



        (z)    Accounts Receivable.    All accounts receivable of the Company and the Subsidiary are reflected properly in the
books and records of the Company or the Subsidiary and represent valid and enforceable obligations arising from bona fide transactions in the ordinary course of business. Such accounts receivable are
subject to no defenses, claims or rights of setoff, and are fully collectible in the ordinary course of business without cost in collection efforts therefor, except to the extent of the reserve for
uncollectible accounts reflected in the Financial Statements and the Interim Financial Statements. The Disclosure Schedule contains all details of (i) any account debtor that is delinquent in
its payment by more than sixty (60) days, (ii) any account debtor that has refused or threatened to refuse to pay its obligations for any reason, (iii) any account debtor that is,
to the knowledge of Sellers', insolvent or bankrupt, and (iv) any account receivable that has been factored to any Person. 


        (aa)    Accounts Payable.    The Company and the Subsidiary have satisfied, paid and discharged their accounts payable
and other current liabilities and obligations in a timely manner, except when in bona fide dispute. Any and all such bona fide disputes that are currently unresolved are described in the Disclosure
Schedule. 


        (bb)    Sufficiency of Assets.    The real property, plants, equipment and intangible personal property of the Company
and the Subsidiary constitute all of the assets necessary for the continued conduct of the Business after the Closing in substantially the same manner as presently being conducted. 


        (cc)    Transactions With Related Parties.    No director, officer or employee of the Company or the Subsidiary, nor
any stockholder of the Company (or any family member of any such director, officer, employee or stockholder) (collectively, "Related Parties") now has or at any time since January 1, 1998,
either directly or indirectly, had any ownership or other interest in (i) any Person which furnishes or sells or during such period furnished or sold services or products to the Company or the
Subsidiary, or purchases or during such period purchased from the Company or the Subsidiary any goods or services, or otherwise does or during such period did business with the Company or the
Subsidiary, or (ii) any contract, commitment or agreement to which the Company or the Subsidiary is or during such period was a party or under which it is or during such period was obligated or
bound or to which any of its assets may be or during such period may have been subject. No Related Party owns any asset (including, without limitation, any Intellectual Property), which is used in the
conduct of the Business. 


        (dd)    Product Liability.    



        (i)    There
has not been, and there is not presently, any action, suit, inquiry, proceeding or, to the knowledge of Sellers', investigation by or before any court of competent
jurisdiction or governmental authority pending or, to the knowledge of Sellers, threatened against or involving the Company, the Subsidiary or the Business relating to any product alleged to have been
manufactured, procured, marketed or sold by the Company or the Subsidiary and alleged to have been defective, unsafe or improperly designed or manufactured. 



        (ii)   There
has not been any product recall, or post-sale warning or similar action conducted with respect to any product manufactured, procured, marketed or sold
by the Company or the Subsidiary, or, to the knowledge of Sellers, any investigation or consideration of whether or not to undertake or give any such recall, warning or notice. Neither the Company nor
the Subsidiary has received any written notice of any statement, citation or decision by any governmental authority stating that any product manufactured, procured, marketed or sold by the Company or
the Subsidiary is defective or unsafe or fails to meet any standards promulgated by such governmental authority, or has received written notice of any recall, warning or notice ordered by any such
governmental authority, nor, to Sellers' knowledge, is there any valid basis for notice of any such action. 















        (ee)    Compliance With Foreign Corrupt Practices Act and Export Control and Anti-Boycott Laws.    



        (i)    Neither
the Company nor the Subsidiary has, and no Seller has on the Company's or the Subsidiary's behalf, to obtain, facilitate or retain business, directly or
indirectly, offered, paid or promised to pay, or authorized the payment of, any money or other thing of value (including any fee, gift, sample, travel expense or entertainment with a value in excess
of $100 in the aggregate to any one Person in any year) or any commission payment in excess of ten percent (10%) of any amount payable, to (i) any Person who is an official, officer, agent,
employee or representative of any domestic or foreign governmental authority or of any existing or prospective customer (whether government or non-government owned), (ii) any
political party or official thereof, (iii) any candidate for political or political party office, or (iv) any other Person, while knowing or having reason to believe that all or any
portion of such money or thing of value would be offered, given, or promised, directly or indirectly, to any such official, officer, agent, employee, representative, political party, political party
official, candidate, individual, or any entity affiliated with such customer, political party or official or political office. 


        (ii)   To
Sellers' knowledge, neither the Company nor the Subsidiary, nor any director, officer, employee, consultant, agent or other Person acting on behalf of the Company or
the Subsidiary has accepted or received any unlawful contribution, payment, gift or expenditure in connection with the conduct of the Business or any other affairs of the Company or the Subsidiary. 



        (iii)  The
Company and the Subsidiary have at all times been and acted in compliance with all applicable laws relating to export control and trade embargoes. No product or
service sold or provided by the Company or the Subsidiary since January 1, 1998 has been, directly or indirectly, sold to or performed on behalf of any country identified by the Office of
Foreign Assets Control of the United States Department of the Treasury during such period as being subject to trade sanctions or embargoes, including, without limitation, Cuba, Iraq, Iran, Libya or
North Korea. 


        (iv)  Neither
the Company nor the Subsidiary has violated the anti-boycott prohibitions contained in 50 U.S.C. sect. 2401 et seq. or taken any action that can be
penalized under Section 999 of the Code. Since January 1, 1998, neither the Company nor the Subsidiary has been a party to, or a beneficiary under, any agreement with, or sold or
delivered any product or service to, any customer in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Sudan, Syria, United Arab Emirates or the Republic of Yemen. 




        (ff)    Brokers.    With the exception of BMO Nesbitt Burns, Inc., neither Sellers, nor any of their
Affiliates, nor the Company nor the Subsidiary, have dealt with any Person who is entitled to a broker's commission, finder's fee, investment banker's fee, expense reimbursement or similar payment
from Purchaser, the Company or the Subsidiary for arranging the transaction contemplated hereby or introducing the parties to each other. 


        (gg)    Telemotive Brazil.    The representations and warranties set forth in paragraphs (b) through (ff) and
paragraph (hh) of this Section 9 are true and correct in all respects with regard to Telemotive Industrial Controls do Brasil Llda. ("TIC Brazil"), as if each applicable reference (express or
implied) to the Company and/or the Subsidiary in each such paragraph included an additional reference to TIC Brazil, except to the extent of any particular representation and warranty that provides
information specific only to the Company or the Subsidiary (e.g., the provisions of paragraph (g) regarding the Company's outstanding capital stock). TIC Brazil was officially formed on
December 20, 2002, and has only commenced to engage in business since that date, and none of TIC Brazil, the Subsidiary or the Company has any liability or obligation with respect to any action
or circumstance or on behalf of any other Person arising, accruing or existing before the date of TIC Brazil's formation. 












        (hh)    Accuracy of Representations.    No representation, warranty, statement, schedule or information furnished by
Sellers to Purchaser in this Agreement contains any untrue statement of material fact or omits to state any material fact necessary to make the statements contained herein or therein not misleading. 




        10.    Individual Representations and Warranties of Sellers.    Each of the Sellers, individually, represents and
warrants to Purchaser as follows: 



        (a)    Power and Authority.    Such Seller has full power and authority to execute and perform this Agreement. 



        (b)    Seller Entities.    If such Seller is a corporation, limited partnership, limited liability company, trust or
entity (a "Seller Entity"), such Seller Entity is duly organized, existing and in good standing under the laws of its jurisdiction of incorporation or formation. The execution and delivery of this
Agreement by such Seller Entity and the performance by it of all of its obligations under this Agreement have been duly authorized prior to the date of this Agreement by all requisite action of its
board of directors, general partners, managers, trustees or the like, as the case may be. The approval of such Seller Entity's shareholders, limited partners, members, beneficiaries or the like (as
the case may be), for it to execute this Agreement and consummate the transaction contemplated hereby is either not required or has been duly given. This Agreement has been duly executed and delivered
by it. Neither the execution and delivery of this Agreement by such Seller Entity, nor the consummation by such Seller Entity of the transaction contemplated hereby will conflict with or constitute a
breach of any of the terms, conditions or provisions of its Certificate or Articles of Incorporation, by-laws, Agreement of Limited Partnership, operating agreement, trust agreement or
declaration of trust, or other organizational documents, as the case may be. 


        (c)    Conflicts.    Neither the execution and delivery of this Agreement by such Seller, nor the consummation by him
or it of the transaction contemplated hereby will conflict with or constitute a breach of any of
the terms, conditions or provisions of any statute or administrative regulation, or of any order, writ, injunction, judgment or decree of any court or governmental authority or of any arbitration
award, to which such Seller is a party or by which such Seller is bound. Such Seller is not a party to, or bound by, any unexpired, undischarged or unsatisfied Contract, under the terms of which the
execution, delivery and performance by such Seller of this Agreement and the consummation of the transaction contemplated hereby by such Seller will require a consent, approval, or notice or will
result in a breach, lapse, cancellation, right to terminate, default or acceleration of any right or obligation or result in a lien on the Shares owned by such Seller. 


        (d)    Solvency.    Such Seller is not insolvent, nor has such Seller proposed a compromise or arrangement to his or
its creditors generally, filed a petition in bankruptcy, had any petition in bankruptcy filed against him or it, or filed a petition or undertaken any other action or proceeding to be declared
bankrupt. The transaction contemplated by this Agreement will not cause such Seller to become insolvent or to be unable to satisfy and pay his or its debts and obligations generally as they come due. 



        (e)    Enforceability.    This Agreement has been duly executed and delivered by such Seller and constitutes a legal,
valid and binding agreement of such Seller, enforceable against such Seller in accordance with its terms. 


        (f)    Ownership.    Such Seller owns full legal and beneficial title to the number of Shares listed opposite such
Seller's name on Exhibit A, free and clear of all Claims, other than agreements between the Company and such Seller which will be terminated as
of the Closing. 




        11.    Limitation on Warranties.    Except as expressly set forth in Sections 9 and 10, Sellers make no express or
implied warranty of any kind whatsoever, including, without limitation, any representation as to physical condition or value of any of the assets of the Company or the Subsidiary or the future
profitability or future earnings performance of the Company or the 







Subsidiary.
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED. 



        12.    Definition of Knowledge.    For the purposes of this Agreement, the knowledge of Sellers shall be deemed to be
limited to the knowledge as of the Closing Date which any of Sellers and/or Decker, Mark Ecton, Fernando Bello, Robert Beckmann, Dealy, John Downey, Robert Patterson and Charles M. Allen, actually
have or should reasonably be expected to have after conducting the sort of reasonable investigations and inquires into the financial, operational, business, legal and other affairs of the Company and
the Subsidiary that a reasonable and prudent person would conduct in support of giving the representations and warranties set forth in Section 9 hereof. 



        13.    Closing.    At the Closing: 



        (a)   Sellers
shall deliver, either directly or through the Stockholders' Committee: 



        (i)    to
Purchaser: 



        (A)  certificates
representing all outstanding Shares (including all Shares issued upon exercise of outstanding Options and Warrants), duly endorsed for transfer to Purchaser
or with duly executed stock powers attached; 


        (B)  evidence
that all outstanding and unexercised Options and Warrants, if any, have been validly cancelled; 


        (C)  written
resignations of each director of the Company and the Subsidiary and each officer of the Company and/or the Subsidiary of which Purchaser notifies the
Stockholders' Committee prior to the Closing Date; 


        (D)  payout
statements, current as of the closing date, from all holders of Indebtedness; 


        (E)  with
respect to any Seller for which its Shares represent all or substantially all of the assets of such Seller, (1) a copy, certified by a senior officer (or
equivalent) of such Seller, of the resolution of such Seller's board of directors or similar governing body authorizing the sale of such Shares to Purchaser, and (2) if the approval by the
shareholders, limited partners, members, beneficiaries or the like (as the case may be) of such sale of the Shares is required by applicable law, the Certificate or Articles of Incorporation,
by-laws, Agreement of Limited Partnership, operating agreement, trust agreement or declaration of trust, or other organizational documents, a copy, certified by a senior officer (or
equivalent) of such Seller, of the resolution of the shareholders, limited partners, members, beneficiaries or the like (as the case may be) giving such approval; 


        (F)  the
releases required to be delivered by Decker and Dealy under the Decker Employment Agreement and the Dealy Employment Agreement; 


        (G)  the
Escrow Agreement, duly executed by the Stockholders' Committee on Sellers' behalf and the Escrowee; and 




        (ii)   to
the Escrowee, the Escrow Agreement, duly executed by Sellers. 




        (b)   Purchaser
shall deliver: 



        (i)    to
the Stockholders' Committee, (A) payment of the portion of the Closing Estimate referred to in Section 6(a)(ii), and (B) the Escrow Agreement,
duly executed by Purchaser; and 


        (ii)   to
the Escrowee, (A) the Escrow Deposit, and (B) the Escrow Agreement, duly executed by Purchaser; and 


        (iii)  to
the Company, funds in an amount sufficient to pay the amounts which are payable by the Company on the Closing Date pursuant to Section 14(d). 















        (c)   Sellers,
either directly or through the Stockholders' Committee, on the one hand, and Purchaser, on the other hand, shall deliver such incumbency certificates and other
documents and instruments, and do such other acts and things, as are reasonably necessary to effectuate the consummation of the transaction contemplated hereby. 




        14.    Post-Closing Agreements.    From and after the Closing: 



        (a)    Inspection of Records.    Purchaser shall make the books and records (including work papers in the possession
of their respective accountants, if permitted by such accountants) of the Company and the Subsidiary available for inspection by the Stockholders' Committee, or by its duly accredited representatives,
at reasonable times during normal business hours, for a seven (7) year period after the Closing Date, with respect to all transactions of the Company and the Subsidiary occurring prior to
and/or relating to the Closing, and the historical (i.e., pre-Closing) financial condition, assets, liabilities, operations and cash flows of the Company and the Subsidiary, provided that
the Stockholders' Committee (or its representatives) may only have such access and may only use such books and records for (i) accounting and Tax reporting matters (including responding to
inquiries or audits of any Taxing Authority), or (ii) defending or prosecuting litigation relating to the Company, the Subsidiary or the Business to which one or more Sellers is a party. As
used in this Section 14(a), the right of inspection includes the right to make extracts or copies. 


        (b)    Agreement to Defend and Indemnify.    



        (i)    Purchaser
shall cause the Company and the Subsidiary to indemnify and hold harmless each present and former director, officer, employee and agent of the Company and each
present or former director, officer, employee, agent or trustee of any Benefit Plan (individually, an "Indemnified Employee," and collectively, the "Indemnified Employees") against any losses, claims,
damages, liabilities, costs, expenses (including, without limitation, reasonable attorneys' fees), judgments, fines and amounts paid in settlement in connection with any threatened, pending or
completed claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (any of which, an "Indemnified Employee Liability"), arising out of or pertaining
to any action or omission occurring prior to the Closing Date (including, without limitation, any which arise out of or relate to the transaction contemplated by this Agreement), whether asserted or
commenced prior to or after the Closing Date, to the full extent permitted under the Delaware General Corporation Law (in the case of indemnification by the Subsidiary) and the Illinois Business
Corporation Act of 1983 (in the case of indemnification by the Company), as such rights to indemnification may be expanded subsequent to the Closing Date under said laws, but subject to the terms of,
and limitations set forth in, the Company's and the Subsidiary's respective Certificate or Articles of Incorporation and by-laws as currently in effect on the date hereof. Purchaser
acknowledges and accepts as contract rights (and agrees to cause the Company and the Subsidiary to honor in accordance with their terms) the provisions of the Company's and the Subsidiary's respective
Certificate or Articles of Incorporation and/or by-laws as in effect on the date hereof with respect to indemnification of Indemnified Employees (including provisions relating to
contributions, advancement of expenses and the like) and agrees that such provisions shall not be modified or amended except as required by law, unless such modification or amendment expands the
rights of the Indemnified Employees to indemnification (including with respect to contribution, advancement of expenses and the like). Purchaser shall cause the Company or the Subsidiary to advance
expenses (including attorneys' fees) to each such Indemnified Employee to the full extent permitted by law in effect from time to time, subject to the terms of, and limitations set forth in, the
Company's and the Subsidiary's respective Certificate or Articles of Incorporation and/or by-laws as in effect on the date hereof. 











        (ii)   Notwithstanding
anything set forth in subparagraph (b)(i) above, Purchaser shall not be required to cause the Company or the Subsidiary, and neither the Company
nor the Subsidiary shall be required, to indemnify or hold harmless any Indemnified Employee in respect of any Indemnified Employee Liability where the act or omission of the applicable Indemnified
Employee in respect of which such Indemnified Employee Liability arose would be direct grounds, or could reasonably lead to an event constituting grounds, for indemnification by Sellers pursuant to
any provision of Section 15, notwithstanding the expiration of any applicable time period for the making of a claim for such indemnification. 


        (iii)  Each
Seller, for itself, its Affiliates and its and their respective heirs, executors, personal representatives, successors and assigns (as applicable), hereby waives,
releases, remises and forever discharges the Company, the Subsidiary and each Indemnified Employee (collectively, the "Seller
Releasees") from and against any and all claims, demands, proceedings, causes of action, obligations, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, suspected or
unsuspected, both at law and in equity, which such Seller or any Affiliate thereof or any heir, executor, personal representative, successor or assign thereof now has, has ever had or may hereafter
have against the respective Seller Releasees (or any of them) arising prior to the Closing Date or on account of or arising out of any matter, cause, event or circumstance occurring prior to the
Closing Date; provided, however, that such release shall have no effect with respect to any right of such Seller to indemnification or reimbursement from the Company or the Subsidiary, whether
pursuant to the respective organizational documents of the Company or the Subsidiary, any contract or otherwise and whether or not relating to claims pending on or before, or asserted after, the
Closing Date. 




        (c)    Non-Competition; Non-Solicitation; Confidentiality.    In consideration of the benefits
of this Agreement to Sellers and in order to induce Purchaser to enter into this Agreement, each of the Sellers, other than the Mass Mutual Entities, hereby individually covenants and agrees as
follows: 



        (i)    from
and after the Closing and until the third anniversary of the Closing Date (except that (A) if such time period is determined or declared by a court of
competent jurisdiction to be illegal, unenforceable, invalid, contrary to public policy, void or voidable under any applicable law, and (B) if required by such court of competent jurisdiction
in order for this subparagraph (i) to remain valid and enforceable against such Seller, such time period shall be reduced to expire on the second anniversary of the Closing Date, or if required
by such court of competent jurisdiction in order for this subparagraph (i) to remain valid and enforceable against such Seller, such time period shall be reduced to expire on the first
anniversary of the Closing Date), such Seller shall not, nor shall it cause any Person (including, without limitation, any Affiliate or any director, officer, employee or agent of such Seller or any
such Affiliate) to, directly or indirectly, as a partner, stockholder, proprietor, director, officer, manager, member, consultant, joint venturer, investor or in any other capacity: 



        (A)  engage
in, own, manage, operate or control, provide consulting services to, or participate in the ownership, management, operation or control of or provision of
consulting services to, any business or entity which engages anywhere in North America (except that (1) if such geographic scope is determined or declared by a court of competent jurisdiction
to be illegal, unenforceable, invalid, contrary to public policy, void or voidable under any applicable law, and (2) if required by such court of competent jurisdiction in order for this
subparagraph (A) to remain valid and enforceable against such Seller, such geographic scope shall be reduced to the United States of America, or if required by such court of competent
jurisdiction in order for this subparagraph (A) to remain valid and enforceable against such Seller, such geographic scope shall be reduced to the State of Illinois, or if required by such 













court
of competent jurisdiction or arbitrator in order for this subparagraph (A) to remain valid and enforceable against such Seller, such geographic scope shall be reduced to a range of fifty
(50) miles around the city limits of Glendale Heights, Illinois, in any business which competes with the Business; provided, however, that
nothing herein shall prohibit such Seller and its Affiliates from owning, in the aggregate, not more than five percent (5%) of any class of securities of a publicly traded entity in any of the
foregoing lines of business so long as neither such Seller nor any of its Affiliates participates in any way in the management, operation or control of such entity; and 



        (B)  hire
or solicit to perform services (as an officer, employee, consultant or otherwise) any Persons who are or, within the six (6) month period immediately
preceding such Seller's or such Affiliates action were, employees of the Company or either Subsidiary or take any actions which are intended to persuade any employee of the Company or either
Subsidiary to terminate his or her association with the Company or either Subsidiary; provided, however,
that (x) general solicitations of employment published in a journal, newspaper or other publication of general circulation or listed on any internet job site and not specifically directed
towards such employees shall not be deemed to constitute solicitation for purposes of this subparagraph (B) and (y) this subparagraph shall not apply with respect to the hiring or
solicitation of employment of Decker or Dealy by any such Seller (but, in such event, subject to the noncompetition provisions of paragraph (A) above and the Dealy Agreement (in the case of
Dealy) and the noncompetition provisions of the Decker Agreement (in the case of Decker); or 


        (C)  call
on or solicit for purposes of diverting or taking away from the Company or the Subsidiary any Person that is a customer of or material supplier to the Company or
the Subsidiary, or who was actively solicited as a potential customer of the Company or the Subsidiary during the one year period ending on the Closing Date, for the sale or purchase of products or
services of the type then supplied by the Business, or induce or attempt to induce any customer, supplier, licensor, licensee or other Person to cease conducting business with the Company or the
Subsidiary or in any way intentionally interfere with the relationship between any such customer, supplier, licensor, licensee or other Person and the Company or the Subsidiary; and 




        (ii)   from
and after the Closing, such Seller shall, and shall cause its Affiliates and its and their directors, officers, employees and agents to, keep confidential and not
disclose to any other Person or use for their own benefit or the benefit of any other Person (other than as permitted by paragraph (a)), any information regarding the Company, the Subsidiary or
the Business. The obligation of such Seller
under this subparagraph (ii) shall not apply to information which (i) such Seller can demonstrate is generally known to the public other than as a result of the breach of this Agreement
or any other agreement pursuant to which such Seller or any other Person owes any duty of confidentiality to the Company, the Subsidiary or Purchaser; or (ii) is required to be disclosed by
law, order or regulation of a court or tribunal or government authority; provided, however, that in any such case, such Seller shall notify Purchaser as
early as reasonably practicable prior to disclosure to allow Purchaser to take appropriate measures to preserve the confidentiality of such information. 


        (iii)  Such
Seller hereby acknowledges and agrees that (A) the provisions of subparagraphs (i) and (ii) of this Section 14(c) are reasonable and
necessary to protect the legitimate business interests of Purchaser, (B) Purchaser would not have entered into this Agreement without such Seller providing the covenants contained in
subparagraphs (i) and (ii) of this Section 14(c), (C) the violation of any covenant contained in such subparagraphs would result in irreparable injury to Purchaser (direct
or indirect), the 














exact
amount of which would be difficult to ascertain or estimate, and (D) the remedies at law for any such violation would not be reasonable or adequate compensation to Purchaser for such a
violation. Accordingly, notwithstanding any other provision of this Agreement, such Seller agrees that if it violates any covenant or agreement given or made by it under subparagraph (i) or
(ii) of this Section 14(c), then, in addition to any other remedy which may be available to Purchaser at law or in equity (including, without limitation, indemnification under
Section 15), Purchaser will be entitled to specific performance and injunctive relief in addition to all other legal and equitable rights and remedies, which Purchaser may seek to obtain
through any court of competent jurisdiction. 




        (d)    Payment of Decker Amount, Dealy Amount and Indebtedness.    Purchaser shall cause the Subsidiary to pay the
Decker Amount and the Dealy Amount at the time set forth, and in the manner provided, in the Decker Agreement and the Dealy Agreement, respectively. The Decker Amount and the Dealy Amount shall each
be subject to Tax withholding as required by law. Purchaser shall cause the Subsidiary to pay the Indebtedness in full on the Closing Date. 


        (e)    Income Tax Matters.    This paragraph(e) shall apply for the purposes of United States federal income Tax law.
To the extent permitted by law, the principles of this paragraph (e) shall also apply for the purposes of state, local, foreign and other income Tax laws. The parties shall take all steps, and
do all acts and things, as are or may be necessary or appropriate to implement the provisions and effectuate the purposes and intents of this paragraph (e): Accordingly, the parties agree as
follows: 



        (i)    the
taxable year of the Company and the Subsidiary shall end on the Closing Date at the end thereof. Pursuant to 26 C.F.R. ("Reg.")
§1.1502-76(b)(1)(ii)(B)(4), Reg. §1.1502-76(b)(1)(ii)(B) (the next day rule) shall not be applicable to the payment of the estimated Decker Amount, the
payment of the Dealy Amount and the exercise of the Options, all of which the parties agree are prearranged transactions; rather, the deductions therefor shall be reported, to the extent allowable, in
the taxable year of the Company and the Subsidiary ending on the Closing Date; 


        (ii)   except
as contemplated by this Agreement, there shall be no transactions on the Closing Date after the Closing, except in the ordinary course of business; 



        (iii)  the
items in the taxable year of the Company and/or the Subsidiary ending on the Closing Date shall be determined under a
closing-of-the-books method, and no ratable or other yearly, monthly or other elective allocation method under Reg. §1.1502-76(b)(2) or
otherwise straddling the close of such taxable year shall apply; 


        (iv)  for
all taxable years of the Company and the Subsidiary ending on or before, or including, the Closing Date, the Company and the Subsidiary shall file all Returns
(which have not been filed on or prior to the Closing Date) and pay all income Taxes (which have not been paid on or prior to the Closing Date) as required by and in accordance with law. Purchaser
shall cause the Company and the Subsidiary to vest in the Stockholders' Committee the primary authority to act on behalf of the Company and the Subsidiary with respect to the filing of such Returns,
the payment of such Taxes, and the dealing with taxing authorities with respect thereto and with respect to all matters relating to such taxable years (including Tax refunds) and shall provide to the
Stockholders' Committee such resources, and such use of the services of personnel, as are required or reasonably appropriate with respect to the foregoing and shall so provide the same in a timely
manner and in sufficient amounts; provided, however, that Purchaser's independent public accountants shall be kept fully informed with respect to all
matters relating to the preparing and filing of such Returns and such dealings with Taxing Authorities, and the Stockholders' Committee shall not take any action that, in the reasonable opinion of
Purchaser's accountants, shall be contrary to any Laws or that is reasonably likely to 














adversely
affect the Company and the Subsidiary (taken as a whole) without the prior consent of Purchaser (which shall not unreasonably be withheld). 




        (f)    Edson Partners II, L.P.    For a period of two years following the Closing Date, Edson Partners II, L.P.
("Edson II"), one of the Sellers, individually agrees that (x) it will not dissolve, and (y) that it will retain funds which (when taken together with its share of the Escrow Deposit and
the holdback by the Stockholders' Committee referred to in Section 20(d)) will be sufficient to enable it to satisfy any liability it may have to Purchaser and the other Purchaser Indemnitees
hereunder. 


        (g)    Wenglor Heads.    To the extent the Wenglor Heads shall not have been sold in their entirety, or all or some
shall have been sold for less than the cost thereof, during the period running from the date hereof through the date which is eighteen months following the Closing Date, Sellers shall pay to Purchaser
(x) with respect to Wenglor Heads which have been sold, the aggregate amount (if any) by which the cost of such Wenglor Heads exceeds the sales proceeds thereof; plus (y) the aggregate
cost of all then unsold Wenglor Heads. 


        (h)    Further Assurances.    The parties shall execute such further documents, and perform such further acts, as may
be necessary to transfer and convey the Shares to Purchaser, on the terms herein contained, and to otherwise comply with the terms of this Agreement and consummate the transaction contemplated hereby. 




        15.    Sellers' Indemnification Obligations.    Subject to the provisions of Section 16, Sellers shall
indemnify, save and keep Purchaser, its Affiliates, and its and their officers, directors, managers, employees, agents, successors and assigns (each a "Purchaser Indemnitee" and collectively, the
"Purchaser Indemnitees") harmless against and from all Damages (as herein defined) sustained or incurred by any Purchaser Indemnitee (whether or not involving a Third Party Claim, as herein defined),
as a result of or arising out of or by virtue of: 



        (a)   any
inaccuracy in or breach of any representation and warranty made by Sellers to Purchaser herein or in any closing document delivered to Purchaser in connection
herewith; provided, however, that in the case of an inaccuracy or breach of any of the representations and warranties contained in Section 10,
only the Seller whose representation and warranty was inaccurate or breached shall have an obligation of indemnification under this Section 15(a); 


        (b)   the
breach by any Seller or the Stockholders' Committee of, or failure of any Seller or the Stockholders' Committee to comply with any of the covenants or obligations
under this Agreement to be performed by Sellers or the Stockholders' Committee; provided, however, that in the case of a breach of Section 14(c),
only the Seller in breach of such section shall have an obligation of indemnification under this Section 15(b); 


        (c)   any
liability of Purchaser, the Company or either Subsidiary for the payment of any Tax accrued and unpaid for any period up to and including the date immediately
preceding the Closing Date, regardless of whether or not there has been any inaccuracy in or breach of any representation or warranty made by Sellers in this Agreement (including the Disclosure
Schedule) with respect to such matters; 


        (d)   any
liability with respect to environmental health and safety arising (before, on or after the Closing Date) out of or relating to (i) the ownership or operation
by the Company or the Subsidiary at any time prior to the Closing Date of any property (whether real, personal, or mixed and whether tangible or intangible) or of any business of the Company or the
Subsidiary, or (ii) any Hazardous Substances that were, or allegedly were, at any time before the Closing Date, present on, at or in any such property of the Company or the Subsidiary by reason
of the acts or omissions of the Company or the Subsidiary, or otherwise handled by the Company or the Subsidiary or any other Person for whose conduct the Company or the Subsidiary are or may be held
responsible, regardless of whether or not there has been any inaccuracy in or breach of any representation or warranty made by Sellers in this Agreement (including the Disclosure Schedule) with
respect to such matters; 












        (e)   any
bodily injury (including illness, disability or death, and regardless of when any such bodily injury occurred, was incurred or manifested itself), personal injury,
property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property) or other damage of or to any Person, including any employee or former employee of the
Company or the Subsidiary or any other Person for whose conduct the Company or either Subsidiary are or may be held responsible, in any way arising from or allegedly arising from any Hazardous
Activity (as herein defined) conducted by any Person with respect to the business of the Company or either Subsidiary prior to the Closing Date or from any Hazardous Substance that was
(i) present on or before the Closing Date on, at or in any property (whether real or personal) owned, leased, occupied or used by the Company or either Subsidiary prior to the Closing Date by
reason of the acts or omissions of the Company or the Subsidiary, or (ii) Released or allegedly Released by the Company or the Subsidiary from any such property at any time prior to the Closing
Date, in any such case regardless of whether or not there has been any inaccuracy in or breach of any representation or warranty made by Sellers in this Agreement (including the Disclosure Schedule)
with respect to such matters. As used herein, "Hazardous Activity" shall mean the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release,
storage, transfer, transportation, treatment or use (including any withdrawal or other use of groundwater) of any Hazardous Substance in, on, under, about or from any of the real properties owned,
leased, occupied or used by the Company or the Subsidiary into the environment; 


        (f)    any
indemnification claim either made or pending against the Company or the Subsidiary by any Indemnified Employee on or after the Closing Date in respect of an
Indemnified Employee Liability where the act or omission of such Indemnified Employee in respect of which such Indemnified Employee Liability arose would be direct grounds, or could reasonably lead to
an event constituting grounds, for indemnification by Sellers pursuant to any other provision of this Section 15, notwithstanding the expiration of any applicable time period for the making of
a claim for such indemnification; 


        (g)   any
liability in respect of or in connection with (i) the business, assets, liabilities or operations of the Subsidiary's former B + K Precision
Products division, or (ii) the 1996 sale by the Subsidiary to G.E.M. Illinois, Inc. of the assets and business of such division, including, without limitation, any indemnity given by the
Subsidiary to G.E.M. Illinois, Inc. in connection with such sale; 



        (h)   any
product or component thereof manufactured by or shipped, or any service provided by, the Company or the Subsidiary, in whole or in part, prior to the Closing Date,
including, without limitation the direct costs (i.e., material, labor and freight out) incurred by the Company in honoring any warranty claim with respect thereto that is not covered by the warranty
reserve taken by the Company or the Subsidiary in the Closing Balance Sheet and taken into account in the computation of Working Capital and further including, without limitation, any claim or action
referred to in Section 9(dd) of the Disclosure Schedule where the Damages arising therefrom or related thereto exceed the reserve (if any) taken by the Company or the Subsidiary on the Closing
Balance Sheet and taken into account in the Computation of Working Capital, in any such case, regardless of whether or not there has been any inaccuracy in or breach of any representation or warranty
made by Sellers in this Agreement (including the Disclosure Schedule) with respect to such matters; and/or 


        (i)    any
liability for Company or Subsidiary employee-related claims arising out of the wrongful or unlawful conduct of the Company or the Subsidiary, where such liability
arose or accrued prior to the Closing Date or, in any case where a claim is first made or a liability first accrues on or after the Closing Date, where the factual circumstances giving rise to such
claim or liability occurred prior to the Closing Date, regardless of whether or not there has been any inaccuracy in or breach of any representation or warranty made by Sellers in this Agreement
(including the Disclosure Schedule) with respect to such matters. 













As
used in this Agreement, (x) the term "Damages" shall mean all liabilities, demands, claims, actions or causes of action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties, damages, amounts paid in settlement of Third Party Claims, costs and expenses, including reasonable attorneys', accountants', investigators', and
experts' fees and expenses, sustained or incurred in connection with the defense or investigation of any claim, and (y) "Third-Party Claim" shall mean any claim, complaint, action or
proceeding made or undertaken against the Company, the Subsidiary, any Purchaser Indemnitee or Seller Indemnitee by a Person that is not a Purchaser Indemnitee or Seller Indemnitee. 


        16.    Limitation on Sellers' Indemnification Obligations.    Sellers' obligations pursuant to the provisions of
Section 15 are subject to the following limitations: 



        (a)   the
Purchaser Indemnitees shall not be entitled to recover under Sections 15(a), (c), (d), (e), (g), or (i) until the total amount which the Purchaser Indemnitees
would recover under such Sections, but for this Section 16(a), exceeds $50,000 (the "Deductible"), and then the Purchaser Indemnitees shall be entitled to recover only for the excess over the
Deductible. Notwithstanding the foregoing, for the sole purpose of determining whether the Deductible has been satisfied, all references in Section 9 to materiality or Material Adverse Effect
shall be disregarded; 


        (b)   the
Purchaser Indemnitees shall not be entitled to recover pursuant to Sections 15(a) with respect to a breach of or inaccuracy in any of Sections 9(h), (i), (y), (z),
(aa) or (ee) unless a claim has been asserted by written notice, specifying the details of the alleged misrepresentation or breach of warranty or claim for indemnification under such section,
delivered to the Stockholders' Committee on or prior to the expiration of 18 full calendar months following the Closing Date. The Purchaser Indemnitees shall not be entitled to recover
(x) pursuant to Section 15(a) with respect to the remaining paragraphs of Section 9 (other than with respect to a breach of any of Sections 9(a), (b), (c), (d), (e), (g), (j),
(m) or (u)) or (y) pursuant to Section 15 (g), (h) or (i) unless a claim has been asserted by written notice, specifying the details of the alleged misrepresentation
or breach of warranty or claim for indemnification under such section, delivered to the Stockholders' Committee on or prior to the second anniversary of the Closing Date. The Purchaser Indemnitees
shall not be entitled to recover pursuant to Sections 15(a) with respect to a breach of Section 9(m) or pursuant to Section 15(c) unless a claim has been asserted by written notice,
specifying the details of the alleged misrepresentation or breach of warranty or claim for indemnification under such section, delivered to the Stockholders' Committee on or prior to the expiration of
the applicable statute of limitations with respect to Taxes. The Purchaser Indemnitees shall not be entitled to recover pursuant to Sections 15(a) with respect to a breach of Section 9(u) or
pursuant to Section 15(d) or (e) unless a claim has been asserted by written notice, specifying the details of the alleged misrepresentation or breach of warranty or claim for
indemnification under such sections, is delivered to the Stockholders' Committee on or prior to the expiration of the fourth anniversary of the Closing Date; 


        (c)   the
Purchaser Indemnitees shall not be entitled to recover under Section 15: 



        (i)    with
respect to: (A) consequential damages of any kind, damages consisting of business interruption or lost profits (regardless of the characterization thereof),
damages for diminution in value of the Company and/or the Subsidiary, damages computed or a multiple of earnings or similar basis, and punitive damages; 


        (ii)   to
the extent: (A) the aggregate claims under Section 15(a), (c), (d), (e), (g), (h) and (i) of the Purchaser Indemnitees and paid by
Sellers exceed $1,500,000; or (B) the matter in question, taken together with all similar matters, does not exceed the amount of any reserves or accruals established with respect thereto which
are reflected in the Closing Balance Sheet and taken into account in the calculation of Working Capital; 















        (d)   no
Seller shall be liable to Purchaser for indemnification with respect to any claim of Purchaser which is indemnifiable hereunder in an amount which exceeds such
Seller's pro rata portion of the aggregate amount of such claim (such pro rata portion being computed on the basis of the ratio of the total number of Shares owned by such Seller immediately prior to
the Closing to the total number of Shares then outstanding). Notwithstanding the preceding sentence, (x) in the event a representation and warranty of a Seller pursuant to Section 10
shall be incorrect, or in the event a Seller shall violate
Section 14(c), only that Seller shall have an obligation of indemnification pursuant to Section 15, and (y) Edson II agrees that it will not dissolve except (i) in
accordance with Section 14(f) and (ii) unless, in connection with such dissolution, its partners agree to be jointly and severally liable for any remaining obligations of Edson II under
this Agreement; 


        (e)   Sellers
shall have no obligation of indemnification under Section 15(h) to the extent the Damages which are the substance of such indemnification claim
(x) are covered by insurance presently or heretofore maintained by the Company or the Subsidiary (excluding deductibles), and (y) the insurer under such insurance policy shall have
assumed the defense of such matter. Purchaser's remedy for a breach of an inaccuracy in the representations and warranty contained in Section 9(dd)(i) shall be indemnification pursuant
to Section 15(h). 




        17.    Purchaser's Indemnification Covenants.    Subject to the provisions of Section 18, Purchaser shall
indemnity, save and keep Sellers and their respective officers, directors, managers, employees, agents, successors and assigns ("Seller Indemnitees"), harmless against and from all Damages sustained
or incurred by any Seller Indemnitee, whether or not involving a Third Party Claim against such Seller Indemnitee, as a result of or arising out of or by virtue of: 



        (a)   any
inaccuracy in or breach of any representation and warranty made by Purchaser to Sellers herein or in any closing document delivered to Sellers in connection
herewith; and/or 


        (b)   any
breach by Purchaser of, or failure by Purchaser to comply with, any of the covenants or obligations under this Agreement to be performed by Purchaser. 




        18.    Limitation on Purchaser's Indemnification Obligations.    Purchaser's obligations pursuant to the provisions of
Section 18 are subject to the following limitations: 



        (a)   the
Seller Indemnitees shall not be entitled to recover under Section 17(a) until the total amount which the Seller Indemnitees would recover under such Sections,
but for this Section 18(a), exceeds the Deductible, and then the Seller Indemnitees shall be entitled to recover only for the excess over the Deductible; 



        (b)   no
Seller Indemnitee may make any claim for indirect, special or consequential damages, damages consisting of business interruption or lost profits or punitive damages;
and 


        (c)   Purchaser's
aggregate liability for indemnification claims made under Section 17(a) shall not exceed $1,500,000 (with such aggregate liability being based on
amounts actually paid by Purchaser pursuant to Section 17(a)). 




        19.    Third-Party Claim Procedures.    



        (a)   Promptly
after receipt by a Seller Indemnitee or a Purchaser Indemnitee, as the case may be (an "Indemnitee") of notice of the assertion of a Third-Party Claim against
it, such Indemnitee shall give prompt notice to the Person(s) obligated to indemnify such Indemnitee under Section 15 or 17, as the case may be (each, an "Indemnitor") of the assertion of such
Third-Party Claim, provided that the failure to so notify the Indemnitor will not relieve the Indemnitor of any liability that it may have to such Indemnitee, except to the extent that the Indemnitor
demonstrates that the defense of such Third-Party Claim was prejudiced by the Indemnitee's failure to give such prompt notice. 



        (b)   If
an Indemnitee gives notice to an Indemnitor pursuant to paragraph (a) of the assertion of a Third-Party Claim, the Indemnitor shall be entitled to participate
in the defense 












of
such Third-Party Claim (at its sole cost) and, subject to paragraph (c) below, to assume control of the defense of such Third-Party Claim with counsel reasonably satisfactory to the
Indemnitee. After notice from the Indemnitor to the Indemnitee of its election to assume the defense of such Third-Party Claim, the Indemnitor shall not, so long as it diligently conducts such
defense, be liable to the Indemnitee under Section 15 or 17 (as applicable) for any fees of other counsel or any other expenses with respect to the defense of such Third-Party Claim, in each
case subsequently incurred by the Indemnitee in connection with the defense of such Third-Party Claim, other than reasonable costs of investigation. If the Indemnitor assumes the defense of a
Third-Party Claim, (i) such assumption will conclusively establish for purposes of this Agreement that the claims made in that Third-Party Claim are within the scope of, and subject to,
indemnification as provided herein, and (ii) no compromise or settlement of such Third-Party Claims may be effected by the Indemnitor or shall be binding on the Indemnitee without the
Indemnitee's consent (not to be unreasonably withheld), unless (A) there is no finding or admission of any violation of law or of the rights of any Person, and (B) the sole relief
provided is monetary damages that are paid in full by the Indemnitor. If notice is given to an Indemnitor of the assertion of any Third-Party Claim and the Indemnitor does not, within ten
(10) Business Days after the Indemnitee's notice is given, give notice to the Indemnitee of its election to assume the defense of such Third-Party Claim, the Indemnitee will be entitled, to the
Indemnitor's exclusion and at the Indemnitor's cost, to fully assume the defense of such Third-Party Claim, and the Indemnitor will be bound by any determination made in such Third-Party Claim or any
compromise or settlement effected by the Indemnitee in respect thereof. 


        (c)   Notwithstanding
the foregoing, the Indemnitee may require that the Indemnitor not assume or maintain control of, or actively participate in (in which case, the
Indemnitor shall not assume, maintain control of or actively participate in) the defense, of a Third Party Claim against the Indemnitee if (i) the Indemnitor is also a Person against whom the
Third-Party Claim is made and the Indemnitee determines in good faith that joint representation of the Indemnitor and Indemnitee would be inappropriate, (ii) the Indemnitee requests, and the
Indemnitor fails to provide, reasonable assurance to the Indemnitee of the Indemnitor's financial capacity to defend such Third-Party Claim and to provide indemnification with respect thereto, or
(iii) the Indemnitee determines in good faith that there is a
reasonable probability that the Third-Party Claim may adversely affect it or its Affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this
Agreement. In any of these events, the Indemnitee may, by written notice to the Indemnitor, assume the exclusive right to defend, compromise or settle such Third-Party Claim, but the Indemnitor will
not be bound by any compromise or settlement of such Third-Party Claim for the purposes of this Agreement without its consent (not to be unreasonably withheld) to such compromise or settlement. 


        (d)   Sellers
and Purchaser hereby consent to the nonexclusive jurisdiction of any court in which an action or proceeding in respect of a Third-Party Claim is brought against
any Indemnitee for purposes of any claim that an Indemnitee may have under this Agreement with respect to such action or proceeding or the matters alleged therein, and agree that process may be served
on any Indemnitor with respect to such a claim anywhere in the world. 


        (e)   With
respect to any Third-Party Claim subject to indemnification under Section 15 or 17, (i) the Indemnitee(s) and the Indemnitor(s), as the case may be,
shall keep the other(s) fully informed of the status of such Third-Party Claim and any related actions or proceedings at all stages thereof, and (ii) the parties agree (each at its own expense)
to render to each other such assistance as they may reasonably require of each other and to cooperate in good faith with each other in order to ensure the proper and adequate defense of any
Third-Party Claim. 


        (f)    With
respect to any Third-Party Claim subject to indemnification under Section 15 or 17, the parties agree to cooperate in such a manner as to preserve to the
greatest extent possible the confidentiality of all confidential and proprietary information of the parties and the attorney-client and work-product privileges as between the parties and
their respective legal advisors. In connection therewith, each Party agrees that: (i) it will use all reasonable efforts in respect of any Third-Party Claim in which it assumes or participates
in the defense to avoid production of confidential and proprietary information (consistent with applicable law and rules of procedure), and (ii) all communications between any party hereto and
counsel responsible for or participating in the defense of any Third-Party Claim shall, to the greatest extent possible, be made so as to preserve any applicable attorney-client or
work-product privilege. 













        20.    Set-Off and Recovery from Escrow.    



        (a)   Sellers
may set off the amount of any valid claim for indemnification made by any Seller Indemnified Party under Section 17 against any amounts payable by Sellers
to Purchaser under Section 3 and/or Section 15. 


        (b)   Purchaser
may set off the amount of any valid claim for indemnification made by any Purchaser Indemnified Party under Section 15, against any amount payable by
Purchaser to Sellers under Section 3 and/or Section 17. Purchaser may also set off the amount of any valid claim for indemnification made by any Purchaser Indemnified Party against a
particular Seller under Section 15 (with respect to such Seller's breach of either Section 10 or Section 14(c)) against any amount payable by Purchaser to the same Seller (or its
successors or assigns) under Section 3 or Section 17. 


        (c)   The
indemnification obligations of Sellers pursuant to Section 15 shall first be satisfied from the Escrow Deposit until the Escrow Deposit has been exhausted in
accordance with the terms of the Escrow Agreement. The amount of any such recovery by Purchaser from the Escrow Deposit will correspondingly reduce by the same amount Sellers' liability under
Section 15 for the indemnification claim in respect of which such recovery is made. 


        (d)   Sellers
shall have direct liability for indemnification under Section 15 only to the extent that the amount of any indemnification claim made under
Section 15 exceeds the balance of the Escrow Deposit. To provide a fund for the payment of any such liability, Sellers shall cause the Stockholders' Committee to retain, on behalf of the
Sellers, a fund of not less than $500,000. In the event no claim for indemnification by the Purchaser Indemnitees shall be pending on the second anniversary of the Closing Date, the Stockholders'
Committee may disburse such sum thereafter to Sellers. If a claim for indemnification shall then be pending, and such claim (taken together with the amount of the Escrow Deposit then on deposit with
the Escrowee) is less than the amount being held back by the Stockholders' Committee, the Stockholders' Committee may distribute the surplus to the Sellers. 




        21.    Indemnification Exclusive Remedy.    Except for fraudulent misrepresentations, indemnification pursuant to the
provisions of Section 15 or 17 shall be the exclusive remedy of the parties for any misrepresentation or breach of any warranty or covenant contained herein or in any closing document executed
and delivered pursuant to the provisions hereof. Without limiting the generality of the preceding sentence, except for any claim of fraudulent misrepresentation, no legal action sounding in tort or
strict liability may be maintained by any party. 


        22.    Appointment of Stockholders' Committee.    Each of Sellers hereby irrevocably constitutes and appoints the
Accountants (represented by Charles M. Allen) and David L. Babson & Company Inc. (represented by Michael Klofas) (collectively, the "Stockholders' Committee"), as such Seller's
attorneys-in-fact and agents in connection with the execution and
performance of this Agreement. This power is irrevocable and coupled with an interest, and shall not be affected by the death, incapacity, illness, dissolution or other inability to act of any of
Sellers. The rights, powers and duties of the Stockholders' Committee are as follows: 



        (a)    Authority.    Each of Sellers hereby irrevocably grants the Stockholders' Committee full power and authority
to: (i) execute and deliver, on behalf of such Seller, and to accept delivery of, on behalf of such Seller, such documents as may be deemed by the Stockholders' Committee, in their sole
discretion, to be appropriate to consummate this Agreement; (ii) endorse and to deliver on behalf of such Seller, certificates representing the Shares to be sold by such Seller at the Closing;
(iii) acknowledge receipt at the Closing of the Purchase Price for each Share sold by such Seller at the Closing, as payment in full for such Shares, and to designate the manner of payment of
such Purchase Price; (iv) dispute or refrain from disputing, on behalf of such Seller, any claim made by Purchaser under this Agreement; (v) negotiate and compromise, on behalf of such
Seller, any dispute that may arise under, and to exercise or refrain from exercising any remedies available under, this Agreement; 









(vi) execute,
on behalf of such Seller, any settlement agreement, release or other document with respect to such dispute or remedy; (vii) give or agree to, on behalf of such Seller, any
and all consents, waivers, amendments or modifications, deemed by the Stockholders' Committee, in their sole discretion, to be necessary or appropriate, under this Agreement, and, in each case, to
execute and deliver any documents that may be necessary or appropriate in connection therewith; (viii) enforce, on behalf of such Seller, any claim against Purchaser arising under this
Agreement; (ix) engage attorneys, accountants and agents at the expense of Sellers; (x) retain a portion of the Purchase Price as a fund for the payment of expenses payable by the
Sellers pursuant to the provisions hereof, adjustments to the Purchase Price, and potential claims for indemnification by Purchaser, and to invest such retained portion for the benefit of the Sellers;
(xi) amend this Agreement (other than this Section 22) or any of the instruments to be delivered to Purchaser by such Seller pursuant to this Agreement; and (xii) give such
instructions and to take such action or refrain from taking such action, on behalf of such Seller, as the Stockholders' Committee deems, in their sole discretion, necessary or appropriate to carry out
the provisions of this Agreement. Purchaser shall at all times be entitled to treat the statements and actions (including non-actions) of the Stockholders' Committee (including any
representative thereof), to the extent falling within its authority under this paragraph (a)), as the statements and actions of any and all Sellers, and Purchaser shall have no duty or
obligation to independently verify or confirm with any Seller, any member of the Stockholders' Committee or any other Person the accuracy, truthfulness or validity of any statement or action
(including non-action) of the Stockholders' Committee or the authority of the Stockholders' Committee (or any representative thereof) to make or take such statement or action (or
non-action). 


        (b)    Reliance.    Each Seller hereby agrees that: (i) in all matters in which action by the Stockholders'
Committee is required or permitted, a majority of the members of the Stockholders' Committee is authorized to act on behalf of such Seller, notwithstanding any dispute or disagreement among the
Sellers, among the members of the Stockholders' Committee, or between any Seller and the Stockholders' Committee, and Purchaser shall be entitled to rely on any and all action taken by the
Stockholders' Committee, or a majority of the members thereof, under this Agreement without any liability to, or obligation to inquire of, any of the Sellers or the other members of the Stockholders'
Committee, notwithstanding any knowledge on the part of the Purchaser of any such dispute or disagreement; (ii) notice to any member of the Stockholders' Committee, delivered in the manner
provided in Section 23(c), shall be deemed to be notice to all of the members of the Stockholders' Committee and to all Sellers for the purposes of this Agreement; (iii) the power and
authority of the Stockholders' Committee, as described in this Agreement, shall continue in force until all rights and obligations of Sellers under this Agreement shall have terminated, expired or
been fully performed; (iv) a majority in interest of Sellers shall have the right, exercisable from time to time upon written notice delivered to the Stockholders' Committee and Purchaser:
(A) to remove any member or members of the Stockholders' Committee, with or without cause; (B) to appoint a Seller (or, in the case of a Seller Entity, an officer, employee, partner,
accountant or attorney of such Seller Entity) to fill a vacancy caused by the death, resignation or removal of a member of the Stockholders' Committee; and (C) subject to paragraph (c),
to expand the number of members of the Stockholders' Committee and to appoint Sellers (or officers, employees, partners, accountants or attorneys as aforesaid) to fill the vacancies created thereby; 


        (c)    Replacement.    If any member of the Stockholders' Committee resigns or is removed or otherwise ceases to
function in his capacity as such for any reason whatsoever, and no successor is appointed pursuant to paragraph (b) within thirty (30) days, the Stockholders' Committee shall consist
solely of the remaining member of the Stockholders' Committee. If, as a result of such resignation, removal or cessation, there are no remaining members of the Stockholders' Committee and no successor
is appointed by a majority in interest of the Sellers within thirty (30) days, then Purchaser shall have the right to appoint a Seller or an officer, 












employee,
partner, accountant or attorney as aforesaid, to act as the sole member of the Stockholders' Committee, to serve as described in this Agreement. Notwithstanding anything to the contrary
contained in this Section 22, there shall at no time be more than two members of the Stockholders' Committee. 


        (d)    Actions by Sellers.    Each Seller agrees that, notwithstanding the foregoing, at the request of Purchaser,
such Seller shall take all actions necessary or appropriate to consummate the transaction contemplated hereby (including, without limitation, delivery of such Seller's Shares and acceptance of the
Purchase Price therefor) individually on such Seller's own behalf, and delivery of any other documents required of Sellers pursuant to the terms hereof. 


        (e)    Indemnification of Purchaser Indemnitees.    Sellers, jointly and severally, shall indemnify the Purchaser
Indemnitees against, and agree to hold the Purchaser Indemnitees harmless from, any and all Damages incurred or suffered by any Purchaser Indemnitee arising out of, with respect to or incident to the
operation of, or any breach of any covenant or agreement pursuant to, this Section 22, or the designation, appointment and actions of the Stockholders' Committee pursuant to the provisions
hereof, including without limitation, with respect to (x) actions taken by the Stockholders' Committee or any member thereof, and (y) reliance by any Purchaser Indemnitee on, and actions
taken by any Purchaser Indemnitee in response to or in reliance on, the instructions of, notice given by or any other action taken by the Stockholders' Committee. 


        (f)    Indemnification of Stockholders' Committee.    Each Seller shall severally indemnify each member of the
Stockholders' Committee against any Damages (except such Damages as result from such member's gross negligence or willful misconduct) that such member may suffer or incur in connection with any action
or omission of such member as a member of the Stockholders' Committee. Each Seller shall bear its pro-rata portion of such Damages. No member of the Stockholders' Committee shall be liable
to any Seller with respect to any action or omission taken or omitted to be taken by the Stockholders' Committee pursuant to this Section 22, except for such member's gross negligence or
willful misconduct. 




        23.    Miscellaneous    



        (a)    Fees.    Sellers shall pay all fees and expenses charged by BMO Nesbitt Burns, Inc. 


        (b)    Publicity.    Except as otherwise required by law (including without limitation the Securities Exchange Act of
1934, as amended) or applicable New York Stock Exchange rules, press releases and other publicity concerning this transaction shall be made only with the prior agreement of the Stockholders' Committee
and Purchaser (and in any event, the Stockholders' Committee and Purchaser shall use all reasonable efforts to consult and agree with each other with respect to the content of any such required press
release or other publicity). Except as otherwise required by law or New York Stock Exchange rules, no such press releases or other publicity shall state the amount of the Purchase Price. 


        (c)    Notices.    All notices required or permitted to be given hereunder shall be in writing and delivered by hand,
by facsimile, by nationally recognized private courier, or by United States mail, registered or certified mail, return receipt requested, postage prepaid. Notices delivered by mail shall be deemed
given three (3) Business Days after being deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested. Notices delivered by hand by facsimile,
or by nationally recognized private courier shall be deemed given on the first Business Day following receipt; provided, however, that a notice
delivered by facsimile shall only be effective if such notice is also delivered by hand, or 












deposited
in the United States mail, postage prepaid, registered or certified mail, on or before two (2) Business Days after its delivery by facsimile. All notices shall be addressed as
follows: 


If
to Sellers or the Stockholders' Committee: 



c/o
Crowe, Chizek & Company, LLP

One Mid America Plaza

Suite 700

Oak Brook, Illinois 60101

Attention: Charles M. Allen

Fax: (630) 574-1609 




with
a copy to: 



Altheimer
& Gray

10 South Wacker Drive

Suite 4000

Chicago, Illinois 60606

Attention: David W. Schoenberg

Fax: (312) 715-4800 




If
to Purchaser: 



Magnetek,
Inc.

26 Century Boulevard

Suite 600

Nashville, TN 37214

Attention: John P. Colling, Jr.

Fax: (615) 316-5192 


and
to 


Magnetek,
Inc.

10900 Wilshire Boulevard

Suite 850

Los Angeles, CA 90024

Attention: Tina McKnight

Fax:(310) 208-6133 


with
a copy to: 


Snell
& Wilmer, LLP

One Arizona Center

400 E. Van Buren

Phoenix, AZ 85004

Attention: Matthew P. Feeney

Fax: (602) 382-6070 




and/or
to such other respective addresses and/or addressees as may be designated by notice given in accordance with the provisions of this Section 23(c). 




        (d)    Expenses; Transfer Taxes.    Except as otherwise provided herein, each party hereto shall bear all fees and
expenses incurred by such party in connection with, relating to or arising out of the negotiation, preparation, execution, delivery and performance of this Agreement and the consummation of the
transaction contemplated hereby, including, without limitation, financial advisors', attorneys', accountants' and other professional fees and expenses. Without limiting the generality of the
immediately preceding sentence, any of such fees and expenses incurred by Sellers, whether before or after the date hereof, may not be paid by, or out of the assets of, the Company or the Subsidiary.
Each party hereto will be liable for, and will timely pay, any and all 







Taxes
to which it is subject under applicable federal, state, local and foreign laws in connection with the transaction contemplated hereby. 


        (e)    Entire Agreement.    This Agreement and the instruments to be delivered by the parties pursuant to the
provisions hereof constitute the entire agreement between the parties and shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors
and permitted assigns. Each Exhibit, schedule and the Disclosure Schedule, shall be considered incorporated into and made a part of this Agreement. Any amendments, or alternative or supplementary
provisions, to this Agreement, must be made in writing and duly executed by an authorized representative or agent of each of the parties hereto. Each item of disclosure in the Disclosure Schedule
shall correspond only to the particular paragraph or subparagraph of Section 9 hereof to which such item of disclosure is expressly stated to refer. The inclusion in any part of the Disclosure
Schedule of any item of disclosure in respect of a particular paragraph or subparagraph of Section 9 hereof shall not, nor shall it be deemed to, constitute disclosure for purposes of any other
part of the Disclosure Schedule unless specific reference to such item of disclosure is made in each applicable portion of the Disclosure Schedule. The inclusion of any item in the Disclosure Schedule
is not evidence of the materiality of such item for the purposes of this Agreement. The parties make no representations or warranties to each other, except as contained in this Agreement, and any and
all prior representations and warranties made by any party or its representatives, whether verbally or in writing, are deemed to have been merged into this Agreement, it being intended that no such
prior
representations or warranties shall survive the execution and delivery of this Agreement. Subject to the limitations on indemnification set forth in Sections 16 and 18, the representations,
warranties, covenants and obligations of the parties hereto in this Agreement will survive the Closing and continue in full force and effect, regardless of any investigation conducted by the party to
which such representation, warranty, covenant or obligation was given (including such party's representatives) or any knowledge acquired (or capable of being acquired) by such party (or its
representatives) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of, or compliance with, any such
representation, warranty, covenant or obligation. Purchaser acknowledges that any estimates, forecasts, or projections furnished or made available to it concerning the Company or the Subsidiary
(including, without limitation, the contents of the confidential offering memorandum circulated by BMO Nesbitt Burns, Inc.) on their properties, business or assets have not been prepared in
accordance with GAAP or standards applicable under the Securities Act of 1933, as amended, and such estimates, and the estimates reflected in the Financial Statements and the Interim Financial
Statements, reflect numerous assumptions, and are subject to material risks and uncertainties. 



        (f)    Non-Waiver.    The failure in any one or more instances of a party to insist upon performance of
any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege in this Agreement conferred, or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. 



        (g)    Counterparts.    This Agreement may be executed in multiple counterparts and delivered in original form or by
electronic facsimile, each of which shall be deemed to be an original, and all such counterparts shall constitute but one instrument. This Agreement will become effective when each party hereto, or
its counsel, has received a counterpart hereof signed by each other party hereto. 


        (h)    Severability.    If any provision of this Agreement, or the application of any such provision to any Person or
circumstance, is held to be unenforceable or invalid by any court of competent jurisdiction or arbitrator or under any applicable law, the parties hereto will negotiate an equitable adjustment to the
provisions of this Agreement with the view to effecting, to the greatest extent possible, the original purpose and intent of this Agreement. If any provision of Section 14(c) 










hereof
is found by any court of competent jurisdiction or arbitrator to exceed the temporal, geographic or occupational limits permitted by any applicable law, such provision shall be, and is hereby,
reformed to the maximum temporal, geographic and/or occupational limitations permitted by such applicable law. In any event, the invalidity of any provision of this Agreement or portion of a provision
shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision. 


        (i)    Applicable Law.    The provisions of Section 14(c) shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by the internal laws of the State of Illinois, without reference to choice or conflicts of law rules. All other provisions
of this Agreement and any other agreement, instrument or document delivered at Closing in connection with the transaction contemplated hereby shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects by the internal laws of the State of Delaware, without reference to choice or conflicts of law rules. 


        (j)    Binding Effect; Benefit.    This Agreement shall inure to the benefit of and be binding upon the parties
hereto, and their successors and permitted assigns. Nothing in this Agreement, express or implied, shall confer on any Person other than the parties hereto, and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, including, without limitation, third party beneficiary rights, except that the Indemnified
Employees shall be third party beneficiaries of Section 14(b), the Stockholders' Committee shall be third party beneficiaries of Section 22(f), the Purchaser Indemnitees (other than
Purchaser) shall be third party beneficiaries of Sections 15, and 22(e), and the Seller Indemnitees (other than Sellers) shall be third party beneficiaries of Section 17. 


        (k)    Assignability.    This Agreement shall not be assignable by any Seller without the prior written consent of
Purchaser, or by Purchaser without the prior written consent of the Stockholders' Committee; provided,  however, that Purchaser may assign this Agreement to
a wholly-owned subsidiary without such consent if Purchaser remains liable for its covenants and
obligations hereunder. 


        (l)    Governmental Reporting.    Anything to the contrary in this Agreement notwithstanding, nothing in this
Agreement shall be construed to mean that a party hereto or other Person must make or file, or cooperate in the making or filing of, any return or report to any governmental authority in any manner
that such Person or such party reasonably believes or reasonably is advised is not in accordance with law. 


        (m)    Waiver of Trial by Jury.    Each of the parties hereto waives the right to a jury trial in connection with any
suit, action or proceeding seeking enforcement of such party's rights under this Agreement. 


        (n)    Consent to Jurisdiction.    This Agreement has been executed and delivered in and shall be deemed to have been
made in Chicago, Illinois. Sellers and Purchaser each agree to the nonexclusive jurisdiction of any state or Federal court within the City of Chicago, Illinois or the City of Los Angeles, California,
with respect to any claim or cause of action arising under or relating to this Agreement, and waives personal service of any and all process upon it, and consents that all services of process be made
by registered or certified mail, return receipt requested, directed to it at its address as set forth in Section 23(c), and service so made shall be deemed to be completed when received.
Sellers and Purchaser each waive any objection based on forum non conveniens and waive any objection to venue of any action instituted hereunder.
Nothing in this paragraph shall affect the right of Sellers or Purchaser to serve legal process in any other manner permitted by law. 


        (o)    Amendments.    This Agreement shall not be modified or amended except pursuant to an instrument in writing
executed and delivered on behalf of each of the parties hereto. 







        (p)    Dates and Times.    Dates and times set forth in this Agreement for the performance of the parties' respective
duties and obligations will be strictly construed, time being of the essence of this Agreement. 


        (q)    Headings; Section References; Interpretation.    The headings contained in this Agreement are for convenience
of reference only and, shall not affect the meaning or interpretation of this Agreement. Unless otherwise expressly indicated, any reference in this Agreement (including any Schedule hereto) to a
"Section", "paragraph" or "subparagraph" followed by a number or letter or combination of the two shall be a reference to the particular Section, paragraph or subparagraph of this Agreement bearing
such number, letter or combination thereof. The terms "hereof," "herein," "hereunder" and comparable terms refer, unless otherwise expressly indicated, to this Agreement as a whole and not to any
particular Section, paragraph, subparagraph or other subdivision hereof or any Schedule, Exhibit or other attachment hereto. The terms "include", "includes" and "including" shall be deemed to be
followed by "without limitation" whether or not they are in fact followed by such words or words of like import. Whenever the context so requires, the singular number will include the plural and the
plural will include the singular, and the gender of any pronoun will include the other gender or neuter, as applicable. 


        (r)    Table of Definitions.    The following Capitalized terms are defined in the following sections of this
Agreement: 



	DEFINED TERM
	 	SECTION LOCATION

	Accountants	 	9(o)(iii)
	Affiliate	 	8(e)(ii)
	Arbitrating Accountant	 	5(b)
	Benefit Plans	 	9(q)(i)(c)
	Business	 	Recital A
	Business Day	 	4
	Cash Equivalents	 	2(b)
	CERCLA	 	9(u)(i)
	Claims	 	1
	Closing	 	7
	Closing Balance Sheet	 	4
	Closing Date	 	7
	Closing Estimate	 	6(a)
	Code	 	9(m)(i)(C)
	Company	 	Preamble
	Control	 	8(e)(iii)
	Damages	 	15(x)
	Dealy	 	2(f)
	Dealy Amount	 	2(f)
	Decker Agreement	 	2(c)
	Decker Amount	 	2(e)
	Deductible	 	16(a)
	Delivery Date	 	4
	Disclosure Schedule	 	9
	Dispute	 	5(a)
	Dispute Notice	 	5(a)
	Dispute Period	 	5(a)
	Edson II	 	14(f)
	Employee Benefit Plan	 	9(q)(i)(c)
	Environmental Claim	 	9(u)(ii)
	Environmental Laws	 	9(u)(ii)(B)
	Environmental Permits	 	9(u)(ii)(C)
	ERISA	 	9(q)(i)(A)
	ERISA Affiliate	 	9(q)(i)
	Escrow Agreement	 	6(a)(i)
	 	 	 








	Escrow Deposit	 	6(a)(i)
	Escrowee	 	6(a)(i)
	Facility	 	9(u)(ii)(D)
	Financial Statements	 	9(h)
	GAAP	 	3
	Hazardous Activity	 	15(e)
	Hazardous Substances	 	9(u)(ii)(D)
	Indebtedness	 	2(d)
	Indemnified Employee	 	14(b)(i)
	Indemnified Employee Liability	 	14(b)(i)
	Indemnified Employees	 	14(b)(i)
	Indemnitee	 	19(a)
	Indemnitor	 	19(a)
	Intellectual Property	 	9(x)(ix)(A)
	Intellectual Property Licenses	 	9(x)(i)(C)
	Interim Financial Statement Date	 	9(h)
	Interim Financial Statements	 	9(h)
	IRS	 	6(c)
	Leased Real Property	 	9(v)
	Liabilities	 	9(i)
	Mass Mutual Entities	 	9(g)(i)
	Material Adverse Effect	 	9(a)
	Material Contracts	 	9(o)(ii)
	Offsite Facility	 	9(u)(ii)(E)
	Permits	 	9(p)
	Person	 	8(e)(i)
	Plan	 	9(q)(i)(A)
	Proprietary Software	 	9(x)(i)(B)
	Purchase Price	 	2
	Purchaser	 	Preamble
	Purchaser Indemnitee	 	15
	Purchaser Indemnitees	 	15
	Related Parties	 	9(cc)
	Release	 	9(u)(ii)(F)
	Return	 	9(m)(i)(B)
	Returns	 	9(m)(i)(B)
	Seller	 	Preamble
	Seller Entity	 	10(b)
	Seller Indemnitees	 	17
	Seller Releases	 	14(b)(iii)
	Sellers	 	Preamble
	Shares	 	Recital A
	Software	 	9(x)(ix)(B)
	Stockholders' Committee	 	22
	Subsidiary	 	Recital A
	Tax	 	9(m)(i)(A)
	Tax Savings	 	2(c)
	Taxes	 	9(m)(i)(A)
	Taxing Authority	 	9(m)(i)(D)
	Telemotive Industrial Controls	 	Recital A
	TIC Brazil	 	9(gg)
	Third-Party Claim	 	15(y)
	Title IV Plan	 	9(q)(i)(c)
	Welfare Plan	 	9(q)(i)(B)
	Wenglor Heads	 	4
	Working Capital	 	3
	Working Capital Adjustment	 	3









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



	 	 	SELLERS:
	

 	
 	

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
	 	 	By: David L. Babson & Company, Inc., its investment adviser
	

 	
 	

By:	

/s/  MICHAEL L. KLOFAS      

	 	 	Name:	Michael L. Klofas
	 	 	Title:	Managing Director
	

 	
 	

MASSMUTUAL CORPORATE INVESTORS
	

 	
 	

By:	

/s/  MICHAEL L. KLOFAS      

	 	 	Name:	Michael L. Klofas
	 	 	Title:	Vice President
	

 	
 	

The foregoing is executed on behalf of MassMutual Corporate Investors, organized under a Declaration of Trust, dated September 13, 1985, as amended from time to time. The obligations of such Trust are not personally binding upon, nor shall
resort be had to the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust, but the Trust's property only shall be bound.
	

 	
 	

MASSMUTUAL PARTICIPATION INVESTORS
	

 	
 	

By:	

/s/  MICHAEL L. KLOFAS      

	 	 	Name:	Michael L. Klofas
	 	 	Title:	Vice President
	

 	
 	

The foregoing is executed on behalf of MassMutual Participation Investors, organized under a Declaration of Trust, dated April 7, 1988, as amended from time to time. The obligations of such Trust are not binding upon, nor shall resort be had to
the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust individually, but the Trust's assets and property only shall be bound.
	

 	
 	

MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED
	 	 	By: David L. Babson & Company, Inc., under delegated authority from Massachusetts Mutual Life Insurance Company, its investment Manager
	

 	
 	

By:	

/s/  MICHAEL L. KLOFAS      

	 	 	Name:	Michael L. Klofas
	 	 	Title:	Managing Director
	 	 	 	 







	

 	
 	

EDSON PARTNERS II, L.P.
	

 	
 	

By: EHE, Inc., sole general partner
	

 	
 	

By	

/s/  CHARLES M. ALLEN      
 Charles M. Allen, President





PURCHASER:  


MAGNETEK, INC. 



	By:	 	/s/  JOHN P. COLLING, JR.      
	 	 
	Its:	 	V.P. & TREASURER
	 	 









 
 

EXHIBIT A    
    
    STOCKHOLDERS LIST
  OF MXT HOLDINGS, INC.    
    



	Name of Shareholder
 
	 	Class of

Common

Stock
	 	Cert. #
	 	Number

of

Shares
	 	Date of

Issuance
	 	Disposition
	 	Reason for Issuance

	Edson Partners II, L.P.	 	A	 	A-1	 	255,208	 	06/28/95	 	Outstanding	 	Original Issue
	Massachusetts Mutual Life Insurance Company	 	B	 	B-1	 	49,679.5	 	06/28/95	 	Outstanding	 	Original Issue
	Massachusetts Mutual Life Insurance Company	 	B	 	B-2	 	49,679.5	 	06/28/95	 	Outstanding	 	Original Issue
	MassMutual Corporate Investors	 	B	 	B-3	 	76,923	 	06/28/95	 	Outstanding	 	Original Issue
	MassMutual Participation Investors	 	B	 	B-4	 	38,462	 	06/28/95	 	Outstanding	 	Original Issue
	MassMutual Corporate Value Partners Limited (registered in the name of Webell & Co.)	 	B	 	B-5	 	76,923	 	06/28/95	 	Cancelled—transferred to Certificate B-6	 	Original Issue
	Gerlach & Co.	 	B	 	B-6	 	76,923	 	02/15/96	 	Outstanding	 	Transferred from Certificate B-5
	Massachusetts Mutual Life Insurance Company	 	B	 	B-7	 	23,013	 	12/02	 	Outstanding	 	Exercise of Warrant RW-1
	Massachusetts Mutual Life Insurance Company	 	B	 	B-8	 	23,013	 	12/02	 	Outstanding	 	Exercise of Warrant RW-2
	MassMutual Corporate Investors	 	B	 	B-9	 	35,633	 	12/02	 	Outstanding	 	Exercise of Warrant RW-3
	MassMutual Participation Investors	 	B	 	B-10	 	17,816	 	12/02	 	Outstanding	 	Exercise of Warrant RW-4
	Gerlach & Co.	 	B	 	B-11	 	35,633	 	12/02	 	Outstanding	 	Exercise of Warrant RW-5









 
 

EXHIBIT B    
    
    ALLOCATION OF PURCHASE PRICE    
    



	NAME
 
	 	ALLOCATION

	Edson Partners II, L.P.	 	$	607,746.34
	Massachusetts Mutual Life Insurance Company	 	$	346,680.22
	MassMutual Corporate Investors	 	$	268,051.72
	MassMutual Participation Investors	 	$	134,025.86
	Gerlach & Co.	 	$	268,051.72
	TOTAL	 	$	1,624,555.86









 
 

Exhibit C    
    
    Working Capital Calculation—September 30, 2002
  Dollars in Thousands    
    



	CURRENT ASSETS	 	 	 
	Accounts Receivable, net	 	$	1,711.5
	Inventory, net	 	 	1,866.9
	Prepaid Expenses	 	 	112.7
	 	 	

	 	Total Current Assets	 	$	3,691.2
	
CURRENT LIABILITIES	
 	
 	

 
	Accounts Payable	 	$	437.8
	Current Portion of HP Lease	 	 	9.9
	Accrued Liabilities	 	 	426.1
	 	 	

	 	 	$	873.8
	

Working Capital(1)	
 	
$	

2,817.4






	(1)
	Equal
to non-cash Current Assets less non-debt (except HP Lease) Current Liabilities. 







Exhibit D to the Stock Purchase Agreement

Escrow Agreement  





  
 

    EXHIBIT D    
    
    ESCROW AGREEMENT    
    


        This ESCROW AGREEMENT (this "Agreement") is made this 30th day of December, 2002 by and among
Magnetek, Inc., a Delaware corporation ("Magnetek"), the MXT Holdings, Inc. Stockholders' Committee, represented by Crowe, Chizek &
Co. LLP and David L. Babson & Company Inc. (collectively, the "Stockholders' Committee") and Bank One Trust Company, N.A.
("Bank One") as escrow agent. Magnetek, the Stockholders' Committee and Bank One are sometimes referred to herein collectively as the
"Parties" and individually as a "Party". All initially capitalized words or terms not otherwise defined
in this Agreement have the respective meanings ascribed to them in the Stock Purchase Agreement (as defined below). 


R E C I T A L S 


        Pursuant
to that certain Stock Purchase Agreement made by and among Magnetek and the Sellers dated as of December 30th, 2002 (the "Stock Purchase
Agreement"), Magnetek purchased and acquired from the Sellers all of the issued and outstanding stock of MXT Holdings, Inc., an Illinois corporation. 


        Pursuant
to Section 15 of the Stock Purchase Agreement, the Sellers have agreed to indemnify Magnetek for damages, losses and other liabilities arising from, among other things,
breaches of covenants, agreements, representations and warranties set forth in the Stock Purchase Agreement. 


        This
Agreement is entered into pursuant to Section 6(a)(i) of the Stock Purchase Agreement to establish an escrow of a portion of the Purchase Price, which escrow, pursuant
to Section 20(c) of the Stock Purchase Agreement, may be accessed in respect of a claim for indemnification by Magnetek under Section 15 of the Stock Purchase Agreement against the
Sellers, or any of them. 


        The
Sellers have authorized the Stockholders' Committee to represent them with respect to all matters contemplated in this Agreement, as more fully described in  Section 5.1. 


        NOW,
THEREFORE, in consideration of the premises, and the mutual representations, warranties, covenants and agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows: 


ARTICLE I  


 ESCROW AGENT: ESCROW OF FUNDS  


        1.1    Appointment of Escrow Agent.    The Stockholders' Committee and Magnetek hereby appoint Bank One as escrow
agent hereunder, and Bank One hereby accepts such appointment. For purposes of this Agreement, the term "Escrow Agent" will mean Bank One acting in the
capacity of escrow agent hereunder or any other Person that replaces Bank One as escrow agent following Bank One's resignation or removal as escrow agent pursuant to the provisions hereof. 


        1.2    Delivery of Escrow Amount.    Simultaneously with the execution of this Agreement, pursuant to the provisions
of the Stock Purchase Agreement, Magnetek has delivered to the Escrow Agent, by wire transfer of immediately available funds, One Million Dollars ($1,000,000) (the "Escrow
Amount"), and the Escrow Agent hereby acknowledges receipt of the Escrow Amount and agrees to hold, safeguard and disburse the Escrow Amount only in accordance with the
provisions hereof. 


        1.3    Investment of Funds Held by Escrow Agent: Interest and Income.    Pending distribution in accordance with the
provisions hereof, the Escrow Amount held by the Escrow Agent pursuant to this Agreement will be invested in The One Group U.S. Treasury Money Market Fund or, if directed in writing by the
Stockholders' Committee and Magnetek, in short term, liquid U.S. Government securities. The Parties hereby acknowledge and agree that unless the Escrow Amount and any such written instructions are
delivered to the Escrow Agent by 11:00 a.m. Central Time on a Business Day, the Escrow Amount will remain uninvested until the next Business Day. All interest or other income earned on the
Escrow Amount will be the exclusive property of Sellers and will not form part of the 








Escrow
Amount. Unless otherwise required by applicable law, the Stockholders' Committee and Magnetek agree, for United States federal income tax purposes, to treat all interest and other income earned
on the Escrow Amount as income to the Sellers, and the Stockholders' Committee agrees to cause each Seller to file all tax returns on a basis consistent with such treatment. The Stockholders'
Committee may request at any time, and in which event the Escrow Agent will promptly release from escrow and pay to the Stockholders' Committee on behalf of the Sellers, by wire transfer of
immediately available funds, any and all interest or other income earned on the Escrow Amount. The Escrow Agent shall have no responsibility or liability for any diminution in value of any asset held
hereunder which may result from any investment or reinvestment made in accordance with any provision of this Agreement. 


        1.4    Availability of Funds/Delivery of Property.    The release and payment of the Escrow Amount, or any portion
thereof, as provided herein will be subject to the sale and final settlement of the permitted investments referred to in Section 1.3. Delivery by
Magnetek and/or the Stockholders' Committee to the Escrow Agent of any Payout Direction (as defined in Section 2.1(a)) or other notice or direction for the release and payment of the Escrow
Amount, or any portion thereof, when the Escrow Amount is invested in The One Group U.S. Treasury Money Market Fund, must be made to the Escrow Agent by 11:00 a.m. Central Time if the Escrow
Amount is required under such notice or direction to be delivered by the close of that Business Day. Otherwise, the Escrow Amount will be delivered on the next Business Day. With respect to the sale
of any other permitted investment, if the final settlement of that sale has not occurred by 1:00 p.m. Central Time on the day such notice or direction for release and payment is delivered to
the Escrow Agent, then the portion of the Escrow Amount to be released and paid by the Escrow Agent will be released and paid on the next Business Day following the day on which such Payout Direction
or other notice or direction is delivered to the Escrow Agent. 


ARTICLE II  


 DISTRIBUTION OF ESCROW AMOUNT  


        2.1    Distribution of Escrow Amount.    Subject to the provisions of Sections
2.2 and 2.3, the Escrow Agent will distribute the Escrow Amount only as follows: 



        (a)   If
Magnetek is entitled to any payment for Damages for any valid indemnification claim pursuant to Section 15 of the Stock Purchase Agreement, Magnetek will
execute and deliver to the Escrow Agent, with a copy simultaneously sent to the Stockholders' Committee in accordance with Section 5.2, an
originally executed direction (a "Payout Direction") directing the Escrow Agent to pay to Magnetek that portion of the Escrow Amount which is equal to
the amount of such Damages claim, up to the full amount of the Escrow Amount, less any unpaid portion of Magnetek's share of the Escrow Agent's fees and expenses contemplated in  Section 3.1(g).



        (b)   At
any time after the second (2nd) anniversary of the Closing Date, the Stockholders' Committee may execute and deliver to the Escrow Agent, with a copy simultaneously
sent to Magnetek in accordance with Section 5.2, a Payout Direction directing the Escrow Agent to pay to release from escrow and pay to the
Stockholders' Committee any and all remaining Escrow Amount, less any unpaid portion of the Escrow Agent's fees and expenses contemplated in  Section 3.1(g). 




        2.2    Treatment of Payout Directions and Escrow Release.    The Escrow Agent will act on any Payout Direction that it
receives pursuant to Sections 2.1(a) or (b) as follows: 



        (a)   The
Escrow Agent may not act on a Payout Direction delivered to it by Magnetek pursuant to Section 2.1(a) or by
the Stockholders' Committee pursuant to Section 2.1(b) unless such Payout Direction contains (i) a reference to the specific provisions of
the Stock Purchase Agreement and/or this Agreement pursuant to which such Payout Direction is delivered, (ii) the amount of the Escrow Amount requested for payment, and (iii) a
certification that a copy of such Payout Direction has been sent to the Party (the "Opposing Party") that would be entitled to 







deliver
an Objection Notice (as defined below) with respect thereto in accordance with the provisions of Section 2.1. 


        (b)   The
Escrow Agent will hold any Payout Direction that it receives pursuant to Section 2.1(a) or  (b), without taking any action, for ten (10) Business
Days, during which time the applicable Opposing Party may deliver to the Escrow Agent, with
a copy sent to the Party that delivered the Payout Direction in accordance with Section 5.2, written notice of its good faith objection to such
Payout Direction or the amount sought therein, which notice must contain reasonable details as to the reason for such objection (an "Objection Notice").
For purposes of this Section 2.2(b), Magnetek may only give an Objection Notice on the basis that it has made a claim against the Sellers, or any
of them, for indemnification under Section 15 of the Stock Purchase Agreement, and in connection therewith, Magnetek intends to claim any part of the remaining Escrow Amount in full or partial
satisfaction of such indemnification claim. If the Escrow Agent does not receive an Objection Notice from the Stockholders' Committee in
respect of a Magnetek Payout Direction or from Magnetek in respect of a Stockholders' Committee Payout Direction within the time period specified above, the Party that would have the right to give
such Objection Notice will be irrevocably deemed to have agreed with and consented to the Payout Direction, in which event the Escrow Agent will be, without further notice, authorized and directed to
promptly deliver to the Party that delivered the Payout Direction payment of the amount of the Escrow Amount referred to in such Payout Direction (less any applicable withholdings of the Escrow
Agent's fees and expenses, as contemplated in Section 2.1) by wire transfer of immediately available funds. 



        (c)   If
the Stockholders' Committee or Magnetek delivers an Objection Notice within the ten (10) Business Day period specified in  Section 2.2(b), the Escrow Agent will continue to hold the amount of
the Escrow Amount sought in the Payout Direction that triggered such
Objection Notice pending the resolution between Magnetek and the Stockholders' Committee of the disagreement or dispute forming the basis of the Objection Notice. 


        (d)   Within
ten (10) Business Days following delivery of an Objection Notice, Magnetek and the Stockholders' Committee will commence discussions with a view to
resolving the disagreement or dispute forming the basis of the Objection Notice. If Magnetek and the Stockholders' Committee resolve such disagreement or dispute through such discussions, they will
deliver a joint written notice to the Escrow Agent of such resolution, including the details of any payment to be made out of the Escrow Amount. Following its receipt of such notice, the Escrow Agent
will promptly deliver to the applicable Party payment of the specified amount of the Escrow Amount referred to in such notice (less any applicable withholdings of the Escrow Agent's fees and expenses,
as contemplated in Section 2.1) by wire transfer of immediately available funds. If, within sixty (60) calendar days after the date of
delivery of an Objection Notice, the disagreement or dispute on which such Objection Notice is based is not resolved through discussions, Magnetek or the Stockholders' Committee will be entitled to
undertake formal proceedings to resolve such dispute, subject to the provisions of Sections 5.9 and  5.10. If either Party prevails in such proceedings
so as to entitle such Party to receive some or all of the Escrow Amount, the Escrow Agent will be
authorized to immediately release from escrow and pay such amount to such Party (less any applicable withholdings of the Escrow Agent's fees and expenses, as contemplated in  Section 2.1) upon
receipt from such Party of (i) an executed Payout Direction indicating the amount of such payment to be made, and
(ii) a copy of the court order or finding in favor of such Party stating an amount being awarded in favor of such Party that is equal to or greater than the amount referred to in such Payout
Direction. 




        2.3    Joint Payout Direction.    Notwithstanding any provision of  Section 2.1 or 2.2, Magnetek and the Stockholders' Committee may, at any time, jointly execute
and deliver to the Escrow Agent one or more Payout Directions directing the Escrow Agent to pay to Magnetek and/or the Stockholders' Committee such amounts of the Escrow Amount as may be provided in
such Payout Direction(s), less any unpaid portion of the Escrow Agent's fees and expenses contemplated in Section 3.1(g). 





ARTICLE III  


 ESCROW AGENT  


        3.1    Concerning the Escrow Agent.    



        (a)   The
Parties acknowledge and agree that the Escrow Agent is acting solely and exclusively as a depository hereunder, and will have only those duties as are specifically
provided herein, which will be deemed purely ministerial in nature. The Escrow Agent will under no circumstances be deemed a fiduciary for any of the other Parties. The Escrow Agent will neither be
responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument or document between the other Parties in connection herewith, including, without
limitation, the Stock Purchase Agreement (except that the Escrow Agent has been provided with a copy of the Stock Purchase Agreement for the sole purpose of understanding certain terms used herein
that are defined in the Stock Purchase Agreement, and the Escrow Agent acknowledges that it has reviewed and understands such definitions). The Escrow Agent will have no liability to any Person in
acting upon any written notice, request, waiver, consent, certificate, receipt, authorization, or other paper or document which the Escrow Agent believes in good faith to be genuine and what it
purports to be. 


        (b)   The
Escrow Agent may confer with legal counsel in the event of any dispute or question as to the construction of any of the provisions hereof, or its duties hereunder,
and it will incur no liability and it will be fully protected in acting in accordance with the opinions of such counsel. The Escrow Agent may perform any of its duties hereunder through agents,
attorneys, custodians or nominees; provided, however, that (i) the Escrow Agent will remain solely liable for the performance of its duties and
obligations hereunder (and for any nonperformance by any such delegate), and (ii) if the Escrow Agent seeks to delegate all or substantially all of its duties and obligations hereunder, it will
resign as Escrow Agent in accordance with Section 3.1(f). 


        (c)   In
the event of any conflicting or inconsistent claims or demands being made in connection with the subject matter of this Agreement, or in the event that the Escrow
Agent is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claim, direction or demand made against or on it, or refuse to take any
other action hereunder so long as such disagreement continues or such doubt exists. If the Escrow Agent has any doubt as to the course of action it should take under this Agreement, the Escrow Agent
is hereby authorized to petition any state or federal court of Illinois for instructions or to interplead the Escrow Amount into such court. For purposes of the immediately preceding sentence only,
the Parties agree to the jurisdiction of any of said courts over their persons as well as the Escrow Amount, waive personal service of process, and agree that service of process by certified or
registered mail, return receipt requested, to the address set forth below each Party's signature to this Agreement will constitute adequate service. The Escrow Agent will not be or become liable in
any way or to any Person for its failure or refusal to act hereunder, and the Escrow Agent will be entitled to continue to refrain from acting hereunder until (i) the rights of all
Parties have been fully and finally adjudicated pursuant to the provisions of this Section 3.1(c) or  Section 5.9, as applicable, or (ii) all
differences have been settled and all doubt resolved by agreement among all of the interested
Parties, and the Escrow Agent is notified thereof in writing signed by Magnetek and the Stockholders' Committee. the Stockholders' Committee and Magnetek hereby agree to indemnify and hold the Escrow
Agent harmless from any liability or losses occasioned thereby and to pay any and all of its fees, costs, expenses, and counsel fees and expenses incurred in any such action and agree that, on such
petition or interpleader action, the Escrow Agent, its servants, agents, employees and officers will be relieved of further liability. The Escrow Agent is hereby given a lien upon, and security
interest in, the Escrow Amount to secure the Escrow Agent's rights to payment or reimbursement (or both) under this Agreement. 


        (d)   THE
ESCROW AGENT WILL NOT BE LIABLE TO MAGNETEK, THE STOCKHOLDERS' COMMITTEE, ANY SELLER OR ANY OTHER PERSON FOR ANYTHING WHICH THE ESCROW AGENT MAY DO OR REFRAIN FROM
DOING 











PURSUANT
TO THE EXPRESS PROVISIONS OF THIS AGREEMENT, INCLUDING ANY ACTION OR FAILURE TO ACT WHICH MAY CONSTITUTE THE ESCROW AGENT'S OWN NEGLIGENCE, BUT EXCLUDING THE ESCROW AGENT'S OWN GROSS
NEGLIGENCE, FRAUD OR WILLFUL MALFEASANCE. IN NO EVENT WILL THE ESCROW AGENT BE LIABLE TO MAGNETEK, THE STOCKHOLDERS' COMMITTEE, ANY SELLER OR ANY OTHER PERSON FOR SPECIAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES, OR LOST PROFITS OR LOSS OF BUSINESS, ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. 


        (e)   MAGNETEK
AND THE STOCKHOLDERS COMMITTEE HEREBY AGREE JOINTLY AND SEVERALLY TO PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS THE ESCROW AGENT AGAINST ANY AND ALL COSTS,
LOSSES, DAMAGES, LIABILITIES, CLAIMS AND EXPENSES (INCLUDING REASONABLE LEGAL COUNSEL FEES AND EXPENSES) INCURRED BY IT ARISING OUT OF OR IN CONNECTION WITH ITS ENTERING INTO THIS AGREEMENT AND THE
CARRYING OUT OF ITS DUTIES HEREUNDER, INCLUDING THE COSTS AND EXPENSES OF DEFENDING ITSELF AGAINST ANY CLAIM OF LIABILITY RELATING TO THIS AGREEMENT; PROVIDED,
HOWEVER, THAT SUCH INDEMNITY WILL NOT APPLY TO ANY COSTS, LOSSES, DAMAGES, LIABILITIES, CLAIMS OR EXPENSES ARISING OUT OF OR IN CONNECTION WITH ANY GROSS NEGLIGENCE, FRAUD OR
WILLFUL MALFEASANCE ON THE ESCROW AGENT'S PART. THE ABOVE INDEMNIFICATION SHALL SURVIVE THE RESIGNATION OR REMOVAL OF THE ESCROW AGENT AND/OR THE TERMINATION OF THIS AGREEMENT. 



        (f)    The
Escrow Agent may resign as escrow agent hereunder for any reason upon at least thirty (30) days' prior written notice to the Stockholders' Committee and
Magnetek. Forthwith upon expiration of such notice period, the Escrow Agent will deliver the Escrow Amount, after the payment to itself of all fees and expenses of the Escrow Agent due and payable
hereunder, to any successor escrow agent appointed jointly by the Stockholders' Committee and Magnetek (and of which the Escrow Agent is notified), or if no successor escrow agent has been so
appointed, to any court of competent jurisdiction
referred to in Section 3.1(c). Upon either such delivery, the Escrow Agent will be released from its obligations and liabilities hereunder, other
than any liability for gross negligence, fraud or willful malfeasance of the Escrow Agent occurring before or in connection with such delivery. Release of the Escrow Agent under this  Section 3.1(f)
will in no way discharge the Stockholders' Committee or Magnetek of their obligations under this  Section 3.1 regarding reimbursement of expenses, indemnity and fees. 


        (g)   In
consideration for its services hereunder, the Escrow Agent will be entitled only to the fees set forth in  Schedule A to this Agreement. The Escrow Agent acknowledges and agrees that it will provide
the services described herein in consideration of
such fees and that, subject to the express provisions of this Section 3.1, the Escrow Agent will not be entitled to receive, and no other Party
will be obligated to pay the Escrow Agent, any other fees or expenses for its services hereunder. Simultaneously with the execution and delivery of this Agreement by the Parties, Magnetek will pay to
the Escrow Agent the aggregate Two Thousand Dollar ($2,000) Acceptance Fee and Annual Administrative Fee referred to in Schedule A. All other
fees and expenses owing to the Escrow Agent under Schedule A will be paid by Magnetek as and when due. 


        (h)   It
is strictly understood that the Escrow Agent has no duty to disburse the Escrow Amount (or any portion thereof) to any Person until the Escrow Amount has been
collected by the Escrow Agent and the Escrow Amount is available in accordance with normal banking procedures and/or policies. 


        (i)    No
assignment of the rights and interests herein and hereunder of either Magnetek or the Stockholders' Committee will be binding upon the Escrow Agent unless and until
written evidence of such assignment, in form and substance satisfactory to the Escrow Agent, is delivered to and accepted by the Escrow Agent. 










        (j)    Any
Person into which the Escrow Agent is converted or merged, or with which it is consolidated, or to which it may sell or transfer its corporate trust business and
assets as a whole or in part, or any Person resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, will be and become the successor Escrow Agent hereunder
and will be vested with all of the title to the whole property or trust estate and all the trust, powers, immunities, privileges, protections and all other matters as was its predecessor, without the
execution or filing of any instrument or any further act, deed or conveyance on the part of any of the Parties, anything herein to the contrary notwithstanding. 




        3.2    Removal of the Escrow Agent.    the Stockholders' Committee and Magnetek may terminate, discharge and relieve
the Escrow Agent of its duties hereunder at any time upon delivery of written notice thereof, jointly executed by the Stockholders' Committee and Magnetek. Forthwith, after its receipt of such notice,
the Escrow Agent will make all necessary arrangements to promptly and securely transfer the Escrow Amount into the possession of whichever Person or Persons as the Stockholders'
Committee and Magnetek may specify in such written notice or in any other jointly executed notice to the Escrow Agent. Upon delivery by the Escrow Agent of the Escrow Amount to such specified Person
or persons in the manner provided in such notice, the Escrow Agent will be released from its obligations and liabilities under this Agreement, other than any liability for gross negligence, fraud or
willful malfeasance of the Escrow Agent occurring before or in connection with such delivery. Release of the Escrow Agent under this Section 3.2
will in no way discharge the Stockholders' Committee and Magnetek of their obligations under Section 3.1 regarding reimbursement of expenses,
indemnity and fees. The Escrow Agent will have the right to deduct from the Escrow Amount to be transferred to the Person or Persons referred to in the Stockholders' Committee's and Magnetek's notice
an amount equal to any unpaid fees and expenses due and payable hereunder. 



        3.3    Successor Escrow Agent.    Any successor Escrow Agent appointed by the Stockholders' Committee and Magnetek in
connection with the Escrow Agent's resignation or removal will be required to execute and deliver to each of the Stockholders' Committee and Magnetek an instrument accepting such appointment and all
duties and obligations provided hereunder, in which event such successor Escrow Agent will become vested in all rights, powers, duties and obligations of its predecessor for execution of the mandate
provided herein, with like effect as if originally named as the Escrow Agent hereunder. 


ARTICLE IV  


 TERM OF AGREEMENT  


        4.1    Term of Escrow.    This Agreement will take effect as of the date hereof. Notwithstanding any other provision
hereof, the term of this Agreement, other than the Stockholders' Committee's and Magnetek's joint and several indemnities hereunder, will terminate on the date which is the earlier of: 



        (a)   the
date on which all of the Escrow Amount has been properly disbursed by the Escrow Agent in accordance with the provisions of  Article II; and 


        (b)   the
effective date of termination of this Agreement, as specified in a written notice of termination jointly executed by the Stockholders' Committee, Magnetek and the
Escrow Agent, provided that such termination is not contrary to any order, judgment or decree of a court of competent jurisdiction. 



ARTICLE V  


 MISCELLANEOUS  


        5.1    Authority of Stockholders' Committee.    The Stockholders' Committee hereby represents and warrants to Magnetek
and the Escrow Agent that, pursuant to Section 22 of the Stock Purchase Agreement, the Stockholders' Committee has been appointed by each Seller as such Seller's agent and
attorney-in-fact for all purposes of this Agreement, and in such regard, the Stockholders' Committee has all necessary authority to act for and on behalf of, and to bind, the
Sellers with respect to all 






matters
contemplated herein, and that any action (including any inaction) of the Stockholders' Committee hereunder or in connection herewith will be binding upon the Sellers as if such action (or
inaction) was undertaken directly by each Seller. Each of Magnetek and the Escrow Agent will at all times be entitled to treat the statements and actions (including non-actions) of the
Stockholders' Committee (including any representative thereof) in connection with this Agreement as the statements and actions of any and all of the Sellers, and neither Magnetek nor the Escrow Agent
will have any duty or obligation to independently verify or confirm with any Seller, any member of the Stockholders' Committee or any other Person the accuracy, truthfulness or validity of any such
statement or action (including non-action) of the Stockholders' Committee or the authority of the Stockholders' Committee (or any representative thereof) to make or take such statement or
action (or non-action). 


        5.2    Notices.    All notices required or permitted to be given hereunder shall be in writing and delivered by hand,
by facsimile, by nationally recognized private courier, or by United States registered or certified mail, return receipt requested, postage prepaid. Notices delivered by mail shall be deemed given
three (3) Business Days after being deposited in the United States registered or certified mail, return receipt requested, postage prepaid. Notices delivered by hand by facsimile, or by
nationally recognized private courier shall be deemed given on the first Business Day following receipt; provided, however, that a notice delivered by facsimile shall only be effective if such notice
is also delivered by hand, or deposited in the United States mail, postage prepaid, registered or certified mail, on or before two (2) Business Days after its delivery by facsimile. All notices
shall be addressed as follows: 



        (a)   If
to Magnetek, to 




10900
Wilshire Boulevard, Suite 850

Los Angeles, California

90024-6501

Attention: Tina McKnight

Fax No: 310-208-1322



and
to: 


26
Century Boulevard, Suite 600

Nashville, Tennessee 37214

Attention: John P. Colling, Jr.

Fax No: 615-316-5192 




with
a copy (which will not constitute notice) to: 



Snell
& Wilmer L.L.P.

One Arizona Center

Phoenix, Arizona 85004

Attention: Matthew P. Feeney

Fax No: (602) 382-6070 





        (b)   If
to the Stockholders' Committee, to: 




Crowe,
Chizek & Company, LLP

One Mid America Plaza

Suite 700

Oak Brook, Illinois 60101

Attention: Charles M. Allen

Fax No: (630) 574-1609 










with
a copy (which will not constitute notice) to: 



Altheimer
& Gray

10 South Wacker Drive

Suite 400

Attention: David W. Schoenberg

Fax No: (312) 715-4800 





        (c)   If
to the Escrow Agent, to: 




Bank
One Trust Company, N.A.

416 West Jefferson Street, Third Floor

Louisville, Kentucky 40202

Attention: Deborah Killebrew

Telephone: (502) 566-2069

Fax: (502) 566-1760 






and/or
to such other respective addresses and/or addressees as may be designated by notice given in accordance with the provisions of this Section 5.1. 



        5.3    Amendments; No Waiver.    



        (a)   Any
provision of this Agreement may be amended or waived if, and only if, such, amendment or waiver is in writing and signed, in the case of an amendment, by all
Parties, or in the case of a waiver, by the Party against whom the waiver is to be effective. 


        (b)   No
waiver by a Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, will be deemed to extend to any prior or
subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. No failure or delay by a
Party in exercising any right, power or privilege hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein provided will be cumulative and not exclusive of any rights or remedies provided by law. 




        5.4    Successors and Assigns.    This Agreement will be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Except as expressly set forth herein, no Party may assign its rights or delegate its covenants and obligations hereunder without the prior written
approval of the other Parties; provided, however, that Magnetek may assign this Agreement to a wholly-owned subsidiary without such consent if Magnetek remains liable for its covenants and obligations
hereunder. 


        5.5    Applicable law.    This Agreement will be governed and controlled as to validity, enforcement, interpretation,
construction, effect and in all other respects by the internal laws of the State of Delaware, without reference to choice or conflicts of law rules. 



        5.6    Counterparts.    This Agreement may be executed in multiple counterparts and delivered in original form or by
electronic facsimile, each of which shall be deemed to be an original, and all such counterparts shall constitute but one instrument. This Agreement will become effective when each party hereto has
received a counterpart hereof signed by each other party hereto. 


        5.7    Entire Agreement.    This Agreement and, as between Magnetek and the Stockholders' Committee, the provisions of
the Stock Purchase Agreement applicable to this Agreement, constitutes the entire, final and complete agreement among the Parties with respect to the subject matter hereof and supersede all prior
agreements, promises, understandings, negotiations, representations and commitments, both written and oral, among the Parties with respect to the subject matter hereof. 


        5.8    Third Party Beneficiaries.    Nothing in this Agreement, express or implied, will confer on any Person other
than the Parties and their respective successors and permitted assigns, any right, remedy, obligation or liability under or by reason of this Agreement. 








        5.9    Waiver of Trial by Jury.    Each Party hereby waives the right to a jury trial in connection with any suit,
action or proceeding seeking enforcement of such Party's rights under this Agreement. 


        5.10    Consent to Jurisdiction.    This Agreement has been executed and delivered in, and shall be deemed to have
been made in, Chicago, Illinois. Subject to the provisions of Section 3.1(c) regarding the Escrow Agent's right to take certain actions through
the state or federal courts of Illinois, each Party agrees to the nonexclusive jurisdiction of any state or federal court within the City of Chicago, Illinois or the City of Los Angeles, California,
with respect to any claim or cause of action arising under or relating to this Agreement, and waives personal service of any and all process upon it, and consents that all services of process be made
by registered or certified mail, return receipt requested, directed to it at its address as set forth in Section 5.2 hereof, and service so made
shall be deemed to be completed when received. Each Party hereby waives any objection based on forum non conveniens and waives any objection to
venue of any action instituted hereunder. Nothing in this paragraph shall affect the right of any Party to serve legal process in any other manner permitted by law. 


        5.11    Severability.    If any provision of this Agreement, or the application of any such provision to any Person or
circumstance, is held to be unenforceable or invalid by any court of competent jurisdiction or arbitrator or under any applicable law, the Parties will negotiate an equitable adjustment to the
provisions of this Agreement with the view to effecting, to the greatest extent possible, the original purpose and intent of this Agreement. In any event, the invalidity of any provision of this
Agreement or portion of a provision shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision. 


        5.12    Headings; Section References; Interpretation.    The headings contained in this Agreement are for convenience
of reference only and shall not affect the meaning or interpretation of this Agreement. Unless otherwise expressly indicated, any reference in this Agreement (including any Schedule hereto) to a
"Section", "subsection", "paragraph" or "subparagraph" followed by a number or letter or combination of the two shall be a reference to the particular Section, subsection, paragraph or subparagraph of
this Agreement bearing such number, letter or combination thereof. The terms "hereof," "herein," "hereunder" and comparable terms refer, unless otherwise expressly indicated, to this Agreement as a
whole and not to any particular Section, paragraph, subparagraph or other subdivision hereof or any Schedule or other attachment hereto. The terms "include", "includes" and "including" shall be deemed
to be followed by "without limitation" whether or not they are in fact followed by such words or words of like import. Whenever the context so requires, the singular number will include the plural and
the plural will include the singular, and the gender of any pronoun will include the other gender or neuter, as applicable. 


        5.13    Dates and Times.    Dates and times set forth in this Agreement for the performance of the Parties' respective
obligations will be strictly construed, time being of the essence of this Agreement. All provisions in this Agreement which specify or provide a method to compute a number of days for the performance,
delivery, completion or observance by a Party of any action, covenant, agreement, obligation or notice hereunder will mean and refer to calendar days, unless otherwise expressly provided. If the date
specified or computed under this Agreement for the performance, delivery, completion or observance of a covenant, agreement, obligation or notice by any Party, or for the occurrence of any event
provided for herein, is a day other than a Business Day, then the date for such performance, delivery, completion, observance or occurrence will automatically be extended to the next Business Day
following such date. 


(REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK) 






        IN WITNESS WHEREOF, the Parties have duly executed or caused this Agreement to be duly executed as of the day and year first above
written. 



	MAGNETEK, INC.	 	BANK ONE TRUST COMPANY, N.A.
	

By:	

 	
 	

By:	

 
	 	
	 	 	

	 	John P. Colling, Jr.	 	Name:	 
	 	Vice President & Treasurer	 	 	

	 	 	 	Title:	 
	 	 	 	 	

	
MXT HOLDINGS, INC.

STOCKHOLDERS COMMITTEE,
 by its duly authorized representatives:	
 	

 	

 
	
CROWE, CHIZEK & CO. LLP	
 	

 	

 
	

By:	

 	
 	

 	

 
	 	
	 	 	 
	Name:	 	 	 	 
	 	
	 	 	 
	Title:	 	 	 	 
	 	
	 	 	 
	
DAVID L. BABSON & COMPANY, INC.	
 	

 	

 
	

By:	

 	
 	

 	

 
	 	
	 	 	 
	Name:	 	 	 	 
	 	
	 	 	 
	Title:	 	 	 	 
	 	
	 	 	 









 
 

SCHEDULE A    
    
    ESCROW FEE SCHEDULE    
    



	Acceptance Fee:	 	$1,000
	

Annual Administrative Fee:	
 	

$1,000
	

Transaction Fees:	
 	

$10 per check issued

$25 per outgoing wire
	

Tax Reporting fee:	
 	

$300 per year (if applicable)
	

Extraordinary Fee:	
 	

$250 per hour; minimum increments of one hour.





        The
fees quoted in this schedule apply to services ordinarily rendered in administering an escrow account and are subject to reasonable adjustment when the Escrow Agent is called upon to
undertake unusual duties or as changes in the law, procedures or the cost of doing business demand. The extraordinary fee rate in effect ($250/hour) will apply at the time services are provided. 


        Unless
otherwise agreed upon, the Acceptance Fee and the first year Administration Fee are payable upon the execution of the Escrow Agreement to which this Schedule A is attached
whether or not the escrow account is funded. In the event the escrow is not funded, the Acceptance Fee and all related expenses will not be refunded. Annual Administration fees cover a full year in
advance, or any part thereof, and thus are not pro-rated in the year of termination. 


        Upon
a client's direction, cash balances will be invested in any one of the following: 



        (a)   Cash
balances may be invested on a daily basis in a time deposit account with a BANC ONE affiliate bank in which event Bank One will waive its cash management fee. 



        (b)   Cash
balances may be invested in The One Group Money Market Funds in which event Bank One will charge a 25 basis point (.0025) cash management fee. The One Group will
pay Banc One Investment Advisors Corporation, an affiliate of BANC ONE, an investment advisory fee as described in the prospectuses. 


        (c)   Cash
balances may be invested in an alternative short-term investment fund in which event Bank One will charge a 25 basis point (.0025) cash management fee. 




        In
determining the general schedule of fees, Bank One takes into consideration the various incidental benefits accruing to it from the operation of the accounts. Collected funds must be
on deposit prior to disbursement of payments. In addition, Bank One has the use of funds deposited to pay checks that have not yet been presented for payment. No interest will be paid to the client on
these funds, it being understood that the float on these funds is considered in the calculation of our fees. 





DISCLOSURE SCHEDULE  


 TO  


 STOCK PURCHASE AGREEMENT  


 DATED DECEMBER 30, 2002  


 BY AND AMONG  


 EACH OF THE STOCKHOLDERS

OF MXT HOLDINGS, INC.,  


 AS SELLERS,  


 MAGNETEK, INC.,  


 AS PURCHASER  







        This Disclosure Schedule (the "Disclosure Schedule") is part of, and is incorporated by reference into, Section 9 and is subject to the limitations
contained in Section 23(e), of the Stock Purchase Agreement dated December 30, 2002 by and among the Sellers and the Purchaser (the "Agreement"). 


        The
inclusion of any item in any section of the Disclosure Schedule shall not constitute evidence of the materiality of such item, evidence that such item is required to be disclosed in
the Disclosure Schedule or an admission of any pending or threatened charge, claim or proceeding or any breach of or event of default under any contract. No general disclosure in any section herein
shall be limited by any more specific disclosure in either that section or any other section herein. The fact that any item is disclosed in any section of the Disclosure Schedule shall not give rise
to any implication that the failure to disclose it would result in any breach of any representation or warranty contained in the Agreement. Capitalized terms not otherwise defined herein shall have
the same meanings ascribed to them in the Agreement. The attachments to any section of this Disclosure Schedule form an integral part of the Disclosure Schedule and are incorporated by reference for
all purposes as if set forth fully herein. 



	SELLERS:

MXT Holdings, Inc.
	

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By: David L. Babson & Company, Inc., its investment adviser
	

By:	
 	

/s/  MICHAEL L. KLOFAS      
	
 	

 
	

Its:	
 	

Managing Director
	
 	

 
	

MASSMUTUAL CORPORATE INVESTORS
	

By:	
 	

/s/  MICHAEL L. KLOFAS      
	
 	

 
	

Its:	
 	

Vice President
	
 	

 
	

MASSMUTUAL PARTICIPATION INVESTORS
	

By:	
 	

/s/  MICHAEL L. KLOFAS      
	
 	

 
	

Its:	
 	

Vice President
	
 	

 







	MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED

By: David L. Babson & Company, Inc., under delegated authority from Massachusetts Mutual Life Insurance Company, its Investment Manager
	

By:	
 	

/s/  MICHAEL L. KLOFAS      
	
 	

 
	

Its:	
 	

Managing Director
	
 	

 
	

EDSON PARTNERS II, L.P.

By: EHE, Inc., sole general partner
	

By	
 	

/s/  CHARLES M. ALLEN      
 Charles M. Allen, President	
 	

 
	
PURCHASERS

Magnetek, Inc.	
 	

 
	

By:	
 	

/s/  JOHN P. COLLING JR.      
	
 	

 
	

Its:	
 	

V.P. & TREASURER
	
 	

 











	Schedule
 
	 	Subject
 

	9(a)	 	Corporate
	9(b)	 	Power and Authority
	9(c)	 	Consents
	9(d)	 	Absence of Conflicts
	9(e)	 	The Subsidiary
	9(f)	 	Corporate Records
	9(g)	 	Capitalization
	9(h)	 	Financial Statements
	9(i)	 	Liabilities
	9(j)	 	Title to Assets
	9(k)	 	Insurance
	9(l)	 	Banking
	9(m)	 	Taxes
	9(n)	 	Conduct of Business
	9(o)	 	Contracts
	9(p)	 	Permits
	9(q)	 	Benefit Plans
	9(r)	 	Employees
	9(s)	 	Litigation and Claims
	9(t)	 	Compliance with Law
	9(u)	 	Environmental Matters
	9(v)	 	Real Property
	9(w)	 	Personal Property
	9(x)	 	Intellectual Property
	9(y)	 	Inventories
	9(z)	 	Accounts Receivable
	9(aa)	 	Accounts Payable
	9(bb)	 	Sufficiency of Assets
	9(cc)	 	Transactions with Related Parties
	9(dd)	 	Product Liability
	9(ee)	 	Compliance with Foreign Corrupt Practices Act and Export Control and Anti-Boycott Laws
	9(ff)	 	Brokers
	9(gg)	 	Accuracy of Representations








 
 

SCHEDULE 9(a)    
    
    CORPORATE    
    



        No exceptions. 





 
 

SCHEDULE 9(b)    
    
    POWER AND AUTHORITY    
    


        No exceptions. 





 
 

SCHEDULE 9(c)    
    
    CONSENTS    
    


	1.
	Subsidiary
owns various equipment authorizations from the FCC (see attached list). Per 63 FR 36598, Section 2.929(d) (July 7, 1998), Buyer will be required to send a
written notification to the FCC of the change in control within 60 days after the consummation of the transaction. 





 
 

SCHEDULE 9(d)    
    
    ABSENCE OF CONFLICTS    
    



        No exceptions. 





 
 

SCHEDULE 9(e)    
    
    The Subsidiary    
    


        See Schedule 9(n) 





 
 

SCHEDULE 9(f)    
    
    CORPORATE RECORDS    
    


        No exceptions. 





 
 

SCHEDULE 9(g)    
    
    CAPITALIZATION    
    


	1.
	Options
to purchase 37,552 shares of Class A common stock were previously outstanding under the Company's 2001 Stock Option Plan and a Non-Qualified Plan, and
warrants to purchase 135,108 shares of Class A common stock or Class B common stock were previously outstanding under the Company's Securities Purchase Agreement, dated June 28,
1995: 






	 
	 	1995 Warrants
	 	2001 Options
	 	 

	Robert Beckmann	 	 	 	6,059	*	 
	John Downey	 	 	 	5,681	*	 
	Robert Patterson	 	 	 	5,681	*	 
	Fernando Bello	 	 	 	5,681	*	 
	John Dealy	 	 	 	8,769	*	 
	Massachusetts Mutual Life Insurance Company	 	23,013	**	 	 	 
	Massachusetts Mutual Life Insurance Company	 	23,013	**	 	 	 
	MassMutual Corporate Investors	 	35,633	**	 	 	 
	MassMutual Participation Investors	 	17,816	**	 	 	 
	Gerlach & Co.	 	35,633	**	 	 	 
	
Totals	
 	

135,108	
 	

331,871	
 	

172,660
	 	 	 	 	 	 	








	*
	See
paragraph 2.



	**
	All
warrants have been exercised in full.



	2.
	All
the options described in paragraph 1 were cancelled in exchange for the following payments to the optionee (see list bellow) and warrants stated above have been exercised
and the underlying shares are included in the shares to be sold. 






	•	 	John Dealy	 	$20,332	 	 
	

•	
 	

Robert Beckmann	
 	

$7,500	
 	

 
	

•	
 	

Fernando Bello	
 	

$7,500	
 	

 
	

•	
 	

John Dwney	
 	

$5,000	
 	

 
	

•	
 	

Robert Patterson	
 	

$5,000	
 	

 








 
 

SCHEDULE 9(h)    
    
    FINANCIAL STATEMENTS    
    


	1.
	See
Attached Financial Statements.



	2.
	See
Schedule 9(y)



	3.
	Capitalized
software costs are recorded in the "salesmen's demos" ledger account; however, such costs have been capitalized in accordance with GAAP. 





 
 

SCHEDULE 9(i)    
    
    LIABILITIES    
    


        See Schedule 9(dd) 









 
 

SCHEDULE 9(j)    
    
    TITLE TO ASSETS    
    



	1.	 	MXT Holdings, Inc.
	

 	
 	

a.	
 	

Filing:	
 	

UCC-1 Financing Statement #3418423
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/28/95
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Blanket Lien
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

b.	
 	

Filing:	
 	

UCC-3 Financing Statement #4215298
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

05/18/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

[Amended Debtor's address on UCC-1 Financing Statement #3418423]
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

c.	
 	

Filing:	
 	

UCC-3 Financing Statement #4215299
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

05/18/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Collateral:	
 	

[Continuation of UCC-1 Financing Statement #3418423]
	

 	
 	

 	
 	

 	
 	

v)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

d.	
 	

Filing:	
 	

UCC-1 Financing Statement #3732771
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

08/27/97
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

LaSalle National Bank
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Blanket Lien
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

e.	
 	

Filing:	
 	

UCC-1 Financing Statement #00U1181 and #00U1183
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/27/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Fixtures
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

DuPage County, IL
	 	 	 	 	 	 	 	 	 	 	 








	

2.	
 	

Telemotive Industrial Controls, Inc. ("Maxtec International Corp.")
	

 	
 	

a.	
 	

Filing:	
 	

UCC-1 Financing Statement #3418422
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/28/95
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Blanket Lien
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

b.	
 	

Filing:	
 	

UCC-3 Financing Statement #3617802
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

11/27/96
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Partial Release to UCC-1 Financing Statement 3418422
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

c.	
 	

Filing:	
 	

UCC-3 Financing Statement #4220329
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

05/31/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Amendment to UCC-1 Financing Statement #3418422 with additional Debtors' names
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

d.	
 	

Filing:	
 	

UCC-3 Financing Statement #4232817
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/22/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Continuation of Blanket Lien UCC 3418422
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

e.	
 	

Filing:	
 	

UCC-1 Financing Statement #3732772
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

08/72/97
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

LaSalle National Bank
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Blanket Lien
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

f.	
 	

Filing:	
 	

UCC-1 Financing Statement #4092658
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

09/13/99
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Orix Credit Alliance, Inc.
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Specific Equipment
	 	 	 	 	 	 	 	 	 	 	 







	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

g.	
 	

Filing:	
 	

UCC-1 Financing Statement #3829001
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

04/06/98
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

IBM Credit Corporation
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Specific Computer Equipment
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

IL Secretary of State
	

 	
 	

h.	
 	

Filing:	
 	

UCC-1 Financing Statement #00U1180
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/27/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Fixtures
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

DuPage County, IL
	

 	
 	

i.	
 	

Filing:	
 	

UCC-1 Financing Statement #00U1182
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/27/00
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

Fixtures
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

DuPage County, IL
	

 	
 	

j.	
 	

Filing:	
 	

Trademark Lien
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/28/95
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

"GATEMATE"
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

US Patent and Trademark Office
	

 	
 	

k.	
 	

Filing:	
 	

Trademark Lien
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

06/28/95
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value Partners Limited
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

"TELEMOTIVE"
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

US Patent and Trademark Office
	

 	
 	

l.	
 	

Filing:	
 	

Trademark Lien
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

"10-K"
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

Canada
	 	 	 	 	 	 	 	 	 	 	 







	

 	
 	

m.	
 	

Filing:	
 	

Trademark Lien
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

"TELEMOTIVE"
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

Canada
	

 	
 	

n.	
 	

Filing:	
 	

Trademark Lien
	

 	
 	

 	
 	

 	
 	

i)	
 	

Date:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

ii)	
 	

Creditors:	
 	

(NO INFORMATION)
	

 	
 	

 	
 	

 	
 	

iii)	
 	

Collateral:	
 	

"TELTEC"
	

 	
 	

 	
 	

 	
 	

iv)	
 	

Jurisdiction:	
 	

Canada







 
 

SCHEDULE 9 (k)    
    
    INSURANCE    
    



	(i)	 	 	 	 	 	 
	

1.	
 	

General Liability
	 	 	a.	 	Insurer:	 	Westchester Surplus Lines
	 	 	b.	 	Policy No.:	 	OGL065525
	 	 	c.	 	Date:	 	03/01/02 - 03/01/03
	 	 	d.	 	Deductible:	 	$25,000 per claim
	 	 	e.	 	Limits:	 	 





	 	 	 	 	i)	 	Each Occurrence:	 	$1,000,000	 	 
	 	 	 	 	ii)	 	Fire Damage:	 	$50,000	 	 
	 	 	 	 	iii)	 	Personal & Adv Injury:	 	$1,000,000	 	 
	 	 	 	 	iv)	 	General Aggregate:	 	$2,000,000	 	 
	 	 	 	 	v)	 	Products—Comp/Op Agg:	 	$1,000,000	 	 





	

2.	
 	

Automobile Liability (Property, Business Auto & Transportation)
	 	 	a.	 	Insurer:	 	Cincinnati Insurance Co.
	 	 	b.	 	Policy No.:	 	CAP5060882AWR
	 	 	c.	 	Date:	 	10/01/02 - 10/01/03
	 	 	d.	 	Limits:	 	 





	 	 	 	 	i)	 	Combined Single Limit:	 	$1,000,000	 	 





	

3.	
 	

Excess Liability (Umbrella)
	 	 	a.	 	Insurer:	 	First Specialty Ins. Corp.
	 	 	b.	 	Policy No.:	 	UMF1041601
	 	 	c.	 	Date:	 	03/01/02 - 03/01/03
	 	 	d.	 	Limits:	 	 





	 	 	 	 	i)	 	Each Occurrence:	 	$10,000,000	 	 
	 	 	 	 	ii)	 	Aggregate:	 	$10,000,000	 	 





	

4.	
 	

Workers' compensation insurance is provided through Synergy, Inc. See Schedule 9(o)(E)(10). Synergy, Inc. may adjust the rate if the average wage for the Subsidiary increases or decreases by 10%.
	

5.	
 	

Wrap (Directors and Officers, Fiduciary Liability, IPLI and Crime)
	 	 	a.	 	Insurer:	 	Travelers Casualty & Surety Co.
	 	 	b.	 	Policy No.:	 	08LB103357204BCM
	 	 	c.	 	Date:	 	10/01/02 - 10/01/03
	 	 	d.	 	Coverage:	 	 





	 	 	 	 	i)	 	Liability Coverage Parts:
	 	 	 	 	 	 	a)	 	Directors and Officers Liability: aggregate limit of liability
	 	 	 	 	 	 	b)	 	Employment Practices Liability aggregate limit of liability
	 	 	 	 	 	 	c)	 	Fiduciary Liability: aggregate limit of liability
	 	 	 	 	ii)	 	Crime Coverage Parts
	 	 	 	 	 	 	a)	 	Fidelity
	 	 	 	 	 	 	b)	 	Kidnap and Ransom/Extortion: single loss limit of liability
	 	 	e.	 	Limits:	 	 
	 	 	 	 	i)	 	Aggregate Limit of Liability for all purchased Liability Coverage Parts combined: $2,000,000
	 	 	 	 	ii)	 	Aggregate Limit of Liability for all purchased Crime Coverage Parts combined: N/A
	

(ii)	
 	

No exceptions.
	

(iii)	
 	

See attached Loss Summary list.







 
 

SCHEDULE 9(l)    
    
    BANKING    
    



	Financial Institution:	 	LaSalle Bank
	

Persons authorized to draw upon the accounts:	
 	

T.D. Decker, Mark Ecton, John Downey and Robert Patterson







 
 

SCHEDULE 9(m)    
    
    TAXES    
    



No
exceptions. 





 
 

SCHEDULE 9(n)    
    
    CONDUCT OF BUSINESS    
    



	(i)
	No
exceptions.



	(ii)
	No
exceptions.



	(iii)
	No
exceptions.



	(iv)
	No
exceptions.



	(v)
	No
exceptions.



	(vi)
	No
exceptions.



	(vii)
	No
exceptions.



	(viii)
	The
Subsidiary and Jose Alfredo Machado de Assis ("Machdo") have executed and filed an Articles of Incorporation for the formation of a Brazilian limited liability
company named "Telemotive Industrial Controls do Brasil Ltda." (Telemotive Brasil"). The Subsidiary is to own 90% of the equity of Telemotive Brasil and Machado is toown the balance. The
Company and Machado have also entered into a Partnership and Service Agreement, dated October 15, 2002. In connection with the formation of Telemotive Brasil, the Company has executed a power
of attorney in favor of its Brazilian counsel. Copies of these documents have been made available to Purchaser.



	(ix)
	No
exceptions. 












 
 

SCHEDULE 9(o)    
    
    CONTRACTS    
    


	A.
	Customer
and/or Vendor Purchase Orders



	1.
	Customer
Purchase Order 









	a.	 	Western Iowa Coop	 	$	33,690	 	 
	b.	 	Misissippi Line Co.	 	$	35,018	 	 
	c.	 	Champion & Associates	 	$	50,954	 	 
	d.	 	DOT Rail Service	 	$	28,044	 	 
	e.	 	General Conveyor	 	$	25,400	 	 
	f.	 	Double Eagle Steel	 	$	48,498	 	 
	g.	 	International Steel Group	 	$	24,712	 	 
	h.	 	Craneveyor	 	$	21,960	 	 






	2.
	Vendor
Purchase Orders 







	a.	 	Suncoast Digital	 	$	26,256	 	PO# 10161
	b.	 	Tadiran Batteries	 	$	68,180	 	PO# 8892
	c.	 	Tadairan Batteries	 	$	228,000	 	PO# 9287





	B.
	Capital
Expenditures: No exceptions.



	C.
	Confidentiality,
Non-Competition Agreements



	1.
	Confidentiality
and Non-Disclosure Agreement between Telemotive Industrial Controls, Inc. and Tension Robotics, LLC dated June 10, 2002.



	2.
	Confidentiality
and Non-Disclosure Agreement between Telemotive Industrial Controls, Inc. and Canac, Inc. dated October 10, 2002.



	2.
	Following
employees have signed a confidentiality agreement: 









	a.	 	Frank Adrovel	 	09/30/02
	b.	 	Timothy Baker	 	09/30/02
	c.	 	Victor Bartholowmew	 	09/30/02
	d.	 	Alecia Bauler	 	09/30/02
	e.	 	Gigi Benitez	 	09/30/02
	f.	 	Mark Berger	 	09/30/02
	g.	 	Martha Campos	 	09/30/02
	h.	 	Ramon Carrasco	 	09/30/02
	i.	 	Eugene Dahlbacka	 	09/30/02
	j.	 	Rudy Deguzman	 	09/30/02
	k.	 	Ruperto Delgado	 	09/30/02
	l.	 	Abraham Fanco	 	09/30/02
	m.	 	Lupe Gomez	 	09/30/02
	n.	 	Duc Khong	 	09/30/02
	o.	 	Dan Koziel	 	09/30/02
	p.	 	Angie Mora	 	09/30/02
	q.	 	Sandy Morgan	 	10/01/02






	3.
	The
following have signed an Employee Agreement, which includes confidentiality, non-competition and assignment of invention provisions: 







	a.	 	Abdul Ahmad	 	10/31/02
	b.	 	Robert Beckmann	 	12/05/01
	 	 	 	 	 








	c.	 	Fernando Bello	 	09/27/02
	d.	 	James Bringer	 	10/01/02
	e.	 	Mervin Berthrong	 	10/01/02
	f.	 	Nancy Burrell	 	09/30/02
	g.	 	Richard Choy	 	09/30/02
	h.	 	Chris Cline	 	09/30/02
	i.	 	John Dealy*	 	10/04/02
	j.	 	John Downey	 	09/24/02
	k.	 	Mark Ecton	 	10/04/02
	l.	 	Mitch Gordon	 	09/30/02
	m.	 	Jerry Grimm	 	10/01/02
	n.	 	Cynthia Hilton	 	10/08/02
	o.	 	Christine Kearns	 	09/30/02
	p.	 	Michael Lee	 	09/30/02
	q.	 	Ken Loar	 	09/24/02
	r.	 	Jerry McCarver	 	10/04/02
	s.	 	Jim McGuire	 	09/30/02
	t.	 	Sandy Morgan	 	10/01/02
	u.	 	Chan Patel	 	10/01/02
	v.	 	Robert Patterson	 	10/02/02
	w.	 	Marco Salas	 	09/24/02
	x.	 	Ken Shults	 	10/02/02
	y.	 	Matt Smith	 	09/24/02
	z.	 	Len Stella	 	09/24/02
	aa.	 	Ben Stoller	 	09/27/02
	bb.	 	Talmage Wesley	 	05/12/99
	cc.	 	Jay Whitaker	 	09/30/02
	dd.	 	T.D. Decker*	 	(See E.1 of this section)





	D.
	Loan
Agreements, Note, and Security Agreements



	1.
	Stock
Purchase Agreement dated June 28, 1995, as amended by the First Amendment to Stock Purchase Agreement dated October 20, 1999, the Second Amendment to Stock Purchase
Agreement dated May 15, 2001, the Third Amendment to Stock Purchase Agreement dated September 15, 2001 and the Fourth Amendment to Stock Purchase Agreement dated October 4, 2002
between MXT Holdings, Inc., Maxtec International Corp., and MassMutual Life Insurance Company, MassMutual Corporate Investors, MassMutual Participation Investors, and MassMutual Corporate Value
Partners, expiring on April 15, 2003.



	2.
	See
9(j) Title to Assets section.






	E.
	Employment
Agreements



	1.
	Employment
Agreement dated May 11, 2000 between T.D. Decker and Maxtec International Corp. for the position of President and Chief Executive Officer. Contract expiration date is
June 30, 2005, with automatic year to year extension unless notice of termination provided. Said Employment Agreement amended three times subsequently: First Amendment executed on
February 23, 2001; Second Amendment executed on July 2001; Third Amendment executed on June 7, 2002.



	2.
	Employment
Agreement dated July 17, 2000 between John Dealy and Maxtec International Corp. for the position of Vice President of Marketing and Business Development. Contract
expiration date is June 30, 2005, with automatic year to year extension unless notice of termination provided. 











	3.
	Employment
Agreement dated September 1, 2002 between Mark Ecton and Maxtec International Corp. for the position of Vice President of Finance. No fixed employment term is
included in the contract.



	4.
	MXT
Holdings, Inc. 2001 Stock Option Plan:



	a.
	Stock
Option Grant to Robert Beckmann dated October 17, 2001, for 6,059 shares of Class A common stock at $5.49 per share, expiring on October 16, 2011. Robert
Beckmann will waive his right to exercise options granted to him by executing a Waiver of Stock Options in exchange for a lump sum. (See Schedule 9(g))



	b.
	Stock
Option Grant to John Downey dated October 17, 2001, for 5,681 shares of Class A common stock at $5.49 per share, expiring on October 16, 2011. John Downey
will waive his right to exercise options granted to him by executing a Waiver of Stock Options in exchange for a lump sum. (See Schedule 9(g))



	c.
	Stock
Option Grant to Fernando Bello dated October 17, 2001, for 5,681 shares of Class A common stock at $5.49 per share, expiring on October 16, 2011. Fernando
Bello will waive his right to exercise options granted to him by executing a Waiver of Stock Options in exchange for a lump sum. (See Schedule 9(g))



	d.
	Stock
Option Grant to Robert Patterson dated October 17, 2001, for 5,681 shares of Class A common stock at $5.49 per share, expiring on October 16, 2011. Robert
Patterson will waive his right to exercise options granted to him by executing a Waiver of Stock Options in exchange for a lump sum. (See Schedule 9(g))






	5.
	Nonqualified
Stock Option Agreement between MXT Holdings, Inc. and John Dealy dated July 17, 2000, for 8,769 shares of Common Stock at $1.00 per share, expiring on
July 17, 2010. The agreement will be waived before closing date by John Dealy's execution of a Letter of Agreement and Release in which in exchange for a lump sum, Dealy waives his right to
exercise options entitled to him under said agreement. (See Schedule 9(g))



	6.
	Also
see C.2 of this section.



	7.
	Consultation
Agreement dated August 18, 1988, between Maxtec International Corp. and Apton Corporation, as independent contractor. Apton Corporation agrees to solicit business,
hire, direct and pay assistants, maintain an office, own such equipment and materials as are necessary to conduct its business, hold a business or trade license, and advertise its services in
newspapers, trade journals, magazines, etc. Agreement does not have a definitive term and each party may terminate by sending written notice. Same agreement also contains a confidentiality clause.



	8.
	Consultation
Agreement dated September 27, 2002, between Subsidiary, the Corporation, and Solutions, Inc. Webcom is an independent contractor. Agreement does not have a
definitive term and each party may terminate by sending written notice. Same agreement contains a confidentiality clause. $42,636 is due at the completion and final acceptance of the website. (Total
Project cost is $51,996)



	9.
	Services
Agreement between MXT Holdings, Inc., Maxtec International Corp., and Crowe, Chizek and Company, LLP dated March 10, 2001, for the specific services of Charles
M. Allen to serve as Interim Chairman of the Board of MXT Holdings, Inc. Agreement may be terminated upon a thirty day written notice by either party without cause.



	10.
	Client
Service Agreement between Telemotive Industrial Controls, Inc. and Synergy, Inc. whereby Telemotive remains the worksite employer and Synergy is the
administrative employer of record. As such, Synergy pays all employee wages and provides employee benefits (except for the 401(k) plan) including the following: health and dental insurance, life and
AD&D insurance, long term disability, Section 125 and 129 pre-tax Benefit Plans, Secton 132(f) Qualified Transportation Fringe Plan, Workers' Compensation, Employee Assistance
Program, 








and
Synergy Partners Credit Union. Contract became effective on September 1, 2002, and continues for a one year period, with automatic annual renewal periods unless terminated according to the
contract term. 



	11.
	Exclusive
Listing Agreement between Telemotive Industrial Controls, Inc. and Cushman & Wakefield of Illinois, Inc. ("C&W"). From October 11, 2002, to
October 10, 2003, C&W has the exclusive right to sublease the premises located at 175 S. Wall Street, Glendale Heights.






	F.
	Collective
Bargaining Agreements: No exceptions.



	G.
	Leases
and Subleases of Real Property



	1.
	Assignment
of Lease and Consent dated August 11, 1997 between California Microwave, Inc. (Assignor) and Maxtec International Corp. (Assignee). Effective from
November 1, 1997 to April 30, 2006.






	H.
	Leases
and Subleases of Personal Property (>$25,000)



	1.
	Office
printer lease with Imagetec, L.P. dated June 27, 2001. Terms are $668 per month for 48 months.



	2.
	Equipment
Lease (C4923953) for ESG Series RF Signal Generator, billing by GE Capital.



	3.
	Equipment
Lease (C49218548) for Spectrum Analyzer and RF Signal Generator by GE Capital (formerly Orix Credit Alliance, Inc.)






	I.
	License
Agreements



	1.
	Amended
and Restated License Agreement dated September 1, 1999, between Maxtec International Corp. ("Maxtec") and Berlet Electronics Limited ("Berlet"). Berlet has an exclusive
right and license to manufacture, use, sell, lease and repair in Canada certain products from patents owned by Maxtec. Agreement continues from year to year, and either party may terminate by
providing written notice three months before desired termination date.. Agreement contains both confidentiality and non-compete provisions binding on Berlet.






	J.
	Warranties
and Service Plans for Major Equipment



	2.
	Lease
for office equipment with Imagetec, LP, (Toshiba E-Studio 45 and Toshiba 6560) beginning on June 27, 2001, for a 48-month lease period (with a
purchase option at the end of term for fair market value), including a service plan. Includes an additional agreement for maintenance of printers and fax machines that has less than a year remaining
and will not be renewed. Maintenance is $1,440 annually for each printer, and has been paid through July 10, 2003.



	3.
	Production
equipment: GE Capital lease (formerly Orix Credit Alliance lease) on a) HP Spectrum Analyzer Synthesized Tuning includes a 3-year
return-to-HP repair service option and b) HP ESG Series RF Signal Generator with a 5-year return-to-HP repair service option. Said
lease will be paid off at closing in the amount of $20,470.89.



	4.
	Lease
agreement with Minolta for a CRS Pro 5000 copier and a Minolta Fax 2600, dated July 9, 1999 for a term of 60 months. Monthly payment is $585,000. Includes
maintenance of the copier for term of the lease.



	5.
	Agreement
to provide scheduled inspections on equipment with Edwards Engineering, Inc. Agreement renewed on an annual basis from November 20 to
November 19th of the following year, unless terminated by either party in writing at least 30 days prior to the anniversary date. Annual cost is $7,620.






	K.
	Bonds,
Suretyship Agreements, Etc.: No exceptions.



	L.
	Stockholders
Agreement



	1.
	Stockholders
Agreement dated June 28, 1995 among Edson Partners II, LP, Massachusetts Mutual Life Insurance Company, MassMutual Corporate Investors, MassMututal Participation
Investors and MassMutual Corporate Value Partners Limited, Bob M. Tyler, and MXT Holdings, Inc.






	M.
	[Termination
Period > 6 Months or Annual Payment Obligation > $25,000 or Total Payments > $100,000]



	1.
	Consignment
Agreement dated August 7, 2002, between Maxtec International Corp. (Supplier) and Galaxy Circuits (Consignee). Agreement expires on August 7, 2003, or until
all components have been sold, which ever occurs first.






	N.
	See
Schedule 9(n)(viii) 





 
 

SCHEDULE 9(p)    
    
    PERMITS    
    


	1.
	See
Schedule 9(c)



	2.
	Retail
License from the Illinois Department of Revenue for Maxtec International Corp. Current license expired September 2002, renewed license forthcoming by mail. 







 
 

SCHEDULE 9(q)    
    
    BENEFIT PLANS    
    


	(i)
	List of Benefit Plans



	1.
	Maxtec
International Corp. Retirement Savings Plan (401(k)) through Minnesota Life. (No formal written policies concerning contributions. Past practice is for Subsidiary to contribute
$0.33 for every $1.00 employee contributes up to 6% of employee's salary.)



	2.
	Synergy, Inc.
Commuter's Expense Reimbursement Plan including pre-tax salary reduction commuter spending account and parking spending account.



	3.
	Synergy, Inc.
Flexible Benefits Plan including pre-tax salary reduction dependent care reimbursement flexible spending account, health care reimbursement flexible
spending account, and insurance premium payment features.



	4.
	Synergy, Inc.
Group Life and Accidental Death and Dismemberment Plan providing insured long term disability benefits and life insurance through AIG Life Insurance Company.



	5.
	Synergy, Inc.
Group Health Plan providing insured medical benefits through American Medical Security. Synergy, Inc. may adjust the rate charged for health insurance if
the average wage for the Subsidiary increases or decreases by 10%.



	6.
	Synergy, Inc.
Group Dental Plan providing insured dental benefits through American Medical Security.



	7.
	See
Schedule 9(o), E.1-5.



	8.
	Discretionary
Bonus Program: Such plan is based on achieving overall Company Performance Objectives and on individuals achieving Individual Objectives, subject to the approval of the
Board of Directors on an annual basis. (Unwritten, but understood to exist.)



	9.
	Overtime
Policy: See "Telemotive Industrial Controls, Inc., Teammate Handbook" date July 1, 2001, page 18.



	10.
	Workers
Compensation Policy: See Telemotive Industrial Controls, Inc. Teammate Handbook" date July 1, 2001, page 31.



	11.
	Time-Off
Benefits (including holidays, vacation, sick/personal absences, jury duty, military leave, bereavement pay, school visitation, and leaves of absence): See
Telemotive Industrial Controls Teammate Handbook, dated July 1, 2001, pages 21-25.



	12.
	Tuition
Assistance Program: See Telemotive Industrial Controls, Inc. Teammate Handbook" date July 1, 2001, page 31. 



        Some
of the policies have been listed above in the interest of full disclosure and may not actually constitute a Benefit Plan or may merely relate to another listed Benefit Plan. No
conclusions regarding the meaning of the term Benefit Plan should be made from the items listed above. 


	(ii)
	No
exceptions. Copies previously made available to the Purchaser.



	(iii)
	No
exceptions.



	(iv)
	No
exceptions.



	(v)
	No
exceptions.



	(vi)
	No
exceptions.



	(vii)
	Obligations triggered by this Agreement



	1.
	See
Schedule 9(o), E.1-5



	2.
	Letter
dated April 30, 2002, from T.D. Decker to John Downey, outlining payments and benefits in the event of a sale of the Subsidiary.



	3.
	Letter
dated April 30, 2002, from T.D. Decker to Bob Patterson, outlining payments and benefits in the event of a sale of the Subsidiary.



	4.
	Letter
dated April 30, 2002, from T.D. Decker to Bob Beckmann, outlining payments and benefits in the event of a sale of the Subsidiary.



	5.
	Letter
dated April 30, 2002, from T.D. Decker to Fernando Bello, outlining payments and benefits in the event of a sale of the Subsidiary.



	(viii)
	No
exceptions. 





 
 

SCHEDULE 9(r)    
    
    EMPLOYEES    
    


	(i)
	No
exceptions.



	(ii)
	No
exceptions.



	(iii)
	Employee
list, as of December 2002, made available to Buyer.



	(iv)
	See
Schedule 9(o), E.1 and 2 and Schedule 9(q) (vii)



	(v)
	No
exceptions. 



See
Schedule 9(o)(E)(10) 





 
 

SCHEDULE 9(s)    
    
    LITIGATION AND CLAIMS    
    



See
Schedule 9(dd) 





 
 

SCHEDULE 9(t)    
    
    COMPLIANCE WITH LAW    
    


No
exceptions. 






 
 

SCHEDULE 9(u)    
    
    ENVIRONMENTAL MATTERS    
    


See
matters disclosed in Buyer's Environmental Discovery Audit performed by Brown and Caldwell. 





 
 

SCHEDULE 9(v)    
    
    REAL PROPERTY    
    


	1.
	175
West Wall Street, Glendale Heights, IL 60139 (commercial property) 



        Legal
Description: 




Lot
9 in Highgrove Center of DuPage—West Campus resubdivision number 1, being a resubdivision of all of Lots 3 and 4 in Highgrove Center of DuPage West Campus Unit 1, in the Southeast
quarter of Section 21, Township 40 North, Range 10 East of the third principal meridian, in the village of Glendale Heights, DuPage County, Illinois. 





        Subject
to Covenants, Conditions, Restrictions, and Easements of Record. 





 
 

SCHEDULE 9(w)    
    
    PERSONAL PROPERTY    
    


No
exceptions. 







 
 

SCHEDULE 9(x)    
    
    INTELLECTUAL PROPERTY    
    



	(i)
	





	1.
	The
Company and its Subsidiary have the following United States and foreign registered trademarks: 






	MARK
	 	APPLICATION NO./FILING

DATE
	 	REGISTRATION NO./DATE
	 	STATUS
	 	COUNTRY

	10-K	 	817762728

03/21/94	 	817762728

04/16/96	 	REGISTERED	 	Brazil
	10-K	 	663786

08/08/90	 	TMA424878

03/11/94	 	REGISTERED	 	Canada
	10-K	 	190045

02/04/94	 	465747

07/06/94	 	REGISTERED	 	Mexico
	10-K	 	74/074749

07/02/90	 	1795622

09/28/93	 	REGISTERED	 	US
	BOOMMATE	 	74/142680

02/27/91	 	1704173

07/28/92	 	EXPIRED	 	US
	CONTROLMATE	 	75/003434

10/10/95	 	 	 	ABANDONED	 	US
	GATEMATE	 	789260

08/03 95	 	TMA466455

11/27/96	 	REGISTERED	 	Canada
	GATEMATE	 	74/658899

04/10/95	 	2042358

03/04/97	 	REGISTERED	 	US
	INSTACON	 	74/688835

06/15/95	 	 	 	ABANDONED	 	US
	LASER GUARD	 	75/077998

03/25/96	 	2092195

08/26/97	 	REGISTERED	 	US
	MAXTEC	 	2105555

03/27/95	 	2105555

05/16/97	 	REGISTERED	 	UK
	MAXTED	 	2056277

02/09/96	 	2056277

02/21/97	 	REGISTERED	 	UK
	MAXTEC	 	73/754245	 	1605327

07/10/90	 	EXPIRED	 	US
	MAXTEC 10-K	 	09/26/88	 	 	 	ABANDONED	 	UK
	MODULAR SOLUTIONS	 	2016358

04/03/95	 	 	 	ABANDONED	 	US
	TELEC	 	729246

01/25/85	 	1297064

01/25/85	 	REGISTERED	 	France
	TELEDRIVE	 	75/259386

03/18/97	 	2281955

09/28/99	 	REGISTERED	 	US
	TELEMOTIVE	 	2065790

08/24/76	 	1765964

02/13/87	 	REGISTERED	 	Argentina
	TELEMOTIVE	 	01/24/75	 	A284672

06/23/76	 	EXPIRED	 	Australia
	TELEMOTIVE	 	01/23/75	 	330395

03/05/75	 	REGISTERED	 	Benelux
	TELEMOTIVE	 	 	 	6312594

05/10/76	 	REGISTERED	 	Brazil
	TELEMOTIVE	 	408330

03/15/77	 	TMA230731

10/20/78	 	REGISTERED	 	Canada
	TELEMOTIVE	 	70616

05/31/76	 	462061

06/14/76	 	REGISTERED	 	Chile
	 	 	 	 	 	 	 	 	 







	TELEMOTIVE	 	 	 	1297065

01/25/75	 	REGISTERED	 	France
	TELEMOTIVE	 	01/22/75	 	940296

01/22/75	 	REGISTERED	 	Germany
	TELEMOTIVE	 	7516905

01/28/75	 	684924

04/03/79	 	REGISTERED	 	Italy
	TELEMOTIVE	 	59140

03/17/89	 	368167

10/09/92	 	REGISTERED	 	Mexico
	TELEMOTIVE	 	05/21/79	 	89/2351

10/16/91	 	REGISTERED	 	South Africa
	TELEMOTIVE	 	1315186

06/30/87	 	778035

05/21/79	 	EXPIRED	 	Spain
	TELEMOTIVE	 	72/393761

06/02/71	 	1315186

07/27/90	 	REGISTERED	 	UK
	TELEMOTIVE	 	73/041813	 	939664

08/01/72	 	REGISTERED	 	US
	TELEMOTIVE	 	01/15/75	 	1023673

10/28/1975	 	REGISTERED	 	US
	TELEMOTIVE	 	 	 	83589

12/03/76	 	REGISTERED	 	Venezuela
	TELEMOTIVE SERIES 10-K	 	1561484

02/07/94	 	 	 	ABANDONED	 	UK
	TELTEC	 	 	 	330394

01/23/75	 	REGISTERED	 	Benelux
	TELTEC	 	408331

03/15/77	 	228235

06/02/78	 	REGISTERED	 	Canada
	TELTEC	 	7516906

01/28/75	 	684918

04/03/79	 	CANCELLED	 	Italy




	2.
	The
Company and the Subsidiary have the following United States and foreign patents: 






	TITLE
	 	PATENT/APPLN.

#

ISSUE/FILING

DATE
	 	COUNTRY
	 	STATUS
	 	OWNER

	Improved Optical Switch	 	6201905

03/13/01	 	US	 	GRANTED	 	Subsidiary
	Optical Switch	 	6157026

12/05/00	 	US	 	GRANTED	 	Subsidiary
	Laser Optical Path

Degradation Detecting Device	 	5852410

12/22/98	 	US	 	GRANTED	 	Subsidiary
	Fail Safe Vehicle Proximity Sensing and Control System	 	1080334

06/24/80	 	Canada	 	EXPIRED	 	Subsidiary
	Hand Held Remote Control	 	64764

11/14/89	 	Canada	 	LAPSED	 	Subsidiary Unit




	3.
	The
Subsidiary uses the following software packages under license: JD Edwards, miscellaneous Microsoft Products (shrink-wrap licenses), and miscellaneous engineering tools.



	a.
	JD
Edwards: "Silver Service Package" with concurrent support (Maintenance Agreement dated February 25, 1998, and runs concurrently with the period of use of the program, renewed
annually unless 30 day notice of termination.) which started from March 1, 2002, and ends on February 28, 2003. (Agreement made available to Buyer.)



	•
	$10,500
annually for 30 Licensed Users 











	•
	Customer
Number: 5856941



	•
	Batch:
75633



	•
	Vendor:
140056



	•
	G/L
No.: 100.1630 






        b
Miscellaneous Engineering Tools: Subsidiary owns 5 licenses (seats) for AutoCAD (various versions such as 12, 13, 2000), and EE and ME development tools such as Electronic Workbench
and Micrographx. No engineering software tools are valued in excess of $1,000. 


	4.
	The
Company and Subsidiary are parties to the following agreements regarding grants of right to use or practice any rights under any of the Intellectual Property: 



        See
Schedule 9(o), I 



	(ii)
	See
Schedule 9(o), C.3



	(iii)
	No
exceptions



	(iv)
	See
Schedule 9(o), C.3



	(v)
	No
exceptions.



	(vi)
	No
exceptions.



	(vii)
	No
exceptions.



	(viii)
	No
exceptions. 










 
 

SCHEDULE 9 (y)    
    
    INVENTORIES    
    


        The inventory of Wenglor laser heads is slow-moving. 






 
 

SCHEDULE 9(z)    
    
    ACCOUNTS RECEIVABLE    
    



	(i)
	See
attached Accounts Receivable Aging List. (Previously made available to the Purchaser.)



	(ii)
	No
exceptions.



	(iii)
	No
exceptions.



	(iv)
	No
exceptions. 










 
 

SCHEDULE 9(aa)    
    
    ACCOUNTS PAYABLE    
    


        No exceptions. 





 
 

SCHEDULE 9(bb)    
    
    SUFFICIENCY OF ASSETS    
    



        No exceptions. 







 
 

SCHEDULE 9(cc)    
    
    TRANSACTIONS WITH RELATED PARTIES    
    


        See Schedule 9(o), E.9 


        Transaction
with Genrich Corp., where Fernando Bello's brother is an employee, for brochure printings. (Mr. Bello is the Subsidiary's Vice President of World Sales) No formal
agreement exists between the parties and transactions occur on an ad hoc basis. 



        Transaction
with Tom Decker and Associates, owned by father of T. D. Decker, President and CEO of Subsidiary, for clothing supplies. No formal agreement exists between the parties and
transactions occur on an ad hoc basis. 





 
 

SCHEDULE 9(dd)    
    
    PRODUCT LIABILITY    
    


        Pending Claims: (information as of 09/17/02) 



	1.
	Stonewall Lay v. Telemotive Industrial, Inc.: Accident claim filed on March 1, 2002. No further information since date.
(COURT: Cook County, IL)



	2.
	John A. Desieno v. Crane Manufacturing and Service Corp. and Telemotive Industrial Controls, Inc.: Plaintiff is part of a "crane
pool" at General Electric and claims to suffer pain in his lower and upper arms due to the use of crane controls over the years. Liability and exposure is questionable as the case is still in
discovery stages. Relationship must be formed between the time of employment and length of time using the remote. The Plaintiff has not yet roved the remote was manufactured by the Subsidiary. (COURT:
Supreme Court, Schenectady County, NY) 







	Pending Reserve:	 	$	25,000
	Expense Reserve:	 	$	25,000
	Exposure:	 	 	50% to 75%






	3.
	Robert Redmand Sr. v. CPH Company, Telemotive Industrial Controls, et al.: Motion for summary judgment has been filed and has yet to be
ruled upon.. Plaintiff has presented no evidence indicating that the remote malfunctioned therefore, no liability upon Telemotive can be had. (COURT: Circuit Court, Cook County, IL)






	ii.
	


	1.
	Safety
memo on 10K9, 10K12 and Telemotion 3.2 Transmitters equipped with tactile, two-speed membrane switch. No personal injuries or property damages associated with these
products have been reported. (See attached Safety Memo dated September 20, 2000.)



	2.
	NBB,
a German switch manufacturer, supplied defective switches for use in the JLTX transmitter. The Subsidiary has replace substantially all of the defective switch. (Internal memo
made available to the Buyer.) 












 
 

SCHEDULE 9(ee)    
    
    COMPLIANCE WITH FOREIGN CORRUPT PRACTICES ACT AND EXPORT CONTROL AND ANTI-BOYCOTT LAWS    
    


        No exceptions. 





 
 

SCHEDULE 9(ff)    
    
    BROKERS    
    


        No exceptions. 





 
 

SCHEDULE 9(gg)    
    
    ACCURACY OF REPRESENTATIONS    
    



        No exceptions. 











QuickLinks



Exhibit 10.38


STOCK PURCHASE AGREEMENT


EXHIBIT A STOCKHOLDERS LIST OF MXT HOLDINGS, INC.



EXHIBIT B ALLOCATION OF PURCHASE PRICE



Exhibit C Working Capital Calculation—September 30, 2002 Dollars in Thousands


EXHIBIT D ESCROW AGREEMENT


SCHEDULE A ESCROW FEE SCHEDULE


SCHEDULE 9(a) CORPORATE

SCHEDULE 9(b) POWER AND AUTHORITY

SCHEDULE 9(c) CONSENTS

SCHEDULE 9(d) ABSENCE OF CONFLICTS

SCHEDULE 9(e) The Subsidiary

SCHEDULE 9(f) CORPORATE RECORDS

SCHEDULE 9(g) CAPITALIZATION

SCHEDULE 9(h) FINANCIAL STATEMENTS

SCHEDULE 9(i) LIABILITIES


SCHEDULE 9(j) TITLE TO ASSETS

SCHEDULE 9 (k) INSURANCE

SCHEDULE 9(l) BANKING

SCHEDULE 9(m) TAXES

SCHEDULE 9(n) CONDUCT OF BUSINESS


SCHEDULE 9(o) CONTRACTS

SCHEDULE 9(p) PERMITS



SCHEDULE 9(q) BENEFIT PLANS

SCHEDULE 9(r) EMPLOYEES

SCHEDULE 9(s) LITIGATION AND CLAIMS

SCHEDULE 9(t) COMPLIANCE WITH LAW

SCHEDULE 9(u) ENVIRONMENTAL MATTERS

SCHEDULE 9(v) REAL PROPERTY

SCHEDULE 9(w) PERSONAL PROPERTY


SCHEDULE 9(x) INTELLECTUAL PROPERTY

SCHEDULE 9 (y) INVENTORIES

SCHEDULE 9(z) ACCOUNTS RECEIVABLE

SCHEDULE 9(aa) ACCOUNTS PAYABLE

SCHEDULE 9(bb) SUFFICIENCY OF ASSETS


SCHEDULE 9(cc) TRANSACTIONS WITH RELATED PARTIES

SCHEDULE 9(dd) PRODUCT LIABILITY

SCHEDULE 9(ee) COMPLIANCE WITH FOREIGN CORRUPT PRACTICES ACT AND EXPORT CONTROL AND ANTI-BOYCOTT LAWS

SCHEDULE 9(ff) BROKERS

SCHEDULE 9(gg) ACCURACY OF REPRESENTATIONS