<PAGE>

              This ASSET PURCHASE AGREEMENT dated as of December 9, 1999, is by
and between Tanisys Operations, LP, a Texas limited partnership ("BUYER"), and
Tanisys Technology, Inc. a Wyoming corporation ("SELLER").

                                      RECITALS:

              WHEREAS, Seller wishes to sell, and Buyer wishes to purchase,
certain of the tangible and intangible properties and assets that constitute
Seller's worldwide memory module distribution and manufacturing business
(collectively, the "BUSINESS") currently conducted by Seller at or through the
manufacturing, converting, distribution, research and development,
administrative and other facilities set forth on SCHEDULE A (the "FACILITIES"),
all upon the terms and subject to the conditions hereinafter set forth; and

              WHEREAS, capitalized terms used but not defined herein have the
meanings specified in APPENDIX A.

              NOW, THEREFORE, in consideration of the mutual premises and the
covenants and other agreements set forth herein, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, each intending to be
contractually bound, hereby agree as follows:

1.     SALE OF ASSETS

       1.1    ASSETS TO BE SOLD.  Except as otherwise provided in SECTION 1.2,
upon the terms and subject to the conditions herein set forth, at the Closing,
Seller will sell, assign, transfer, convey and deliver to Buyer all right, title
and interest of Seller related to the Business in and to:

              (i)    certain  fixed assets and Equipment with respect to the
       Business, as set forth on SCHEDULE 1.1(i) attached hereto, specifically
       excepting the fixed assets and Equipment encumbered by lease obligations
       included on SCHEDULE 1.2;

              (ii)   all Inventory;

              (iii)  all Records;

              (iv)   all site plans, surveys, soil and substratus studies,
              architectural plans, as-built drawings, appraisals and electrical
              and mechanical plans and studies relating to the Facilities
              located on the Real Property;

              (v)    all Intellectual Property except as set forth on SCHEDULE
       5.23(d);

              (vi)   all sales, promotion, marketing and advertising rights and
       materials, customer lists, supplier lists, mailing lists and other data
       with respect to the Business;

              (vii)  all Permits, to the extent such Permits are transferable,
       and all non-governmental licenses, franchises, authorizations and
       approvals, in each case relating to the Business;

<PAGE>

              (viii) all products sold or leased by Seller in connection with
       the Business (including products hereafter returned or repossessed and
       unpaid sellers' rights of rescission, replevin, reclamation and rights to
       stoppage in transit);

              (ix)   all guaranties, representations, warranties, indemnities
       and similar rights in favor of Seller in connection with the Business;

              (x)    any and all goodwill and going concern value of the
       Business;

              (xi)   the product lines set forth on SCHEDULE 1.1(xiv);

              (xii)  all Accounts Receivable;

              (xiii) insurance policies;

              (xiv)  prepaid expenses;

              (xv)   employee advances;

              (xvi)  all deposits and retentions held by third parties, if any,
       under all contracts assumed or entered into by Buyer; AND

              (xvii) to the extent not otherwise included in the assets
       described in this SECTION 1.1, all other assets of every kind and
       description owned or held by Seller with respect to the Business as the
       same shall exist on the Closing Date, other than the Retained Assets.

All the foregoing rights, properties and assets to be sold, assigned,
transferred, conveyed and delivered to Buyer hereunder are hereinafter
collectively referred to as the "ASSETS."  At the Closing, Buyer will purchase
the Assets for the consideration set forth in SECTION 3.1 upon the terms and
subject to the conditions set forth in this Agreement.

       1.2    RETAINED ASSETS.  Anything in SECTION 1.1 to the contrary
notwithstanding, the following rights, properties and assets, as the same shall
exist on the Closing Date, will be excluded from the Assets to be sold,
assigned, transferred, conveyed and delivered to Buyer hereunder and will not be
included within the meaning of the term "Assets" (all of such excluded assets
being hereinafter collectively referred to as the "RETAINED ASSETS"):

              (i)    all of the tangible and intangible properties and assets
       that constitute Seller's worldwide Dark Horse test systems and Tanisys
       Touch businesses;

              (ii)   the consideration delivered to Seller pursuant to this
       Agreement for the Assets;

              (iii)  all accounts owing between and among Seller and its
       Affiliates;


                                       2

<PAGE>

              (iv)   all assets and rights of Seller under any benefit plans or
       benefit arrangements, including the Benefit Plans and the Benefit
       Arrangements; and

              (v)    all cash, negotiable securities, certificates of deposit
       and other cash equivalents;

              (vi)   all contracts, licenses, leases (including Real Property
       Leases), sales orders, purchase orders and other agreements with respect
       to the Business; and

              (vii)  Equipment encumbered by leases listed on SCHEDULE 1.2.

       1.3    TRANSFER OF ASSETS IN SCOTLAND.  Notwithstanding anything herein
to the contrary, if Buyer cannot reach an agreement in principal by December 31,
1999 with the Scottish Government regarding the transfer of the Assets located
in Scotland to Buyer that is acceptable to Buyer in its sole discretion, the
transfer of Seller's Assets relating to its Business in Scotland shall be deemed
null and void and such assets shall be deemed to be Retained Assets for purposes
of this Agreement.

       1.4    NONASSIGNABLE PERMITS. To the extent any Permit is not assignable,
either by its terms or as a matter of Law, Buyer will prepare and submit, and
Seller will cooperate with and assist Buyer in preparing and submitting, any
information, applications or filings required in connection with the reissuance
to Buyer of such Permit.

2.     ASSUMPTION OF LIABILITIES

       2.1    LIABILITIES ASSUMED BY BUYER  Except as otherwise limited in this
Agreement, Buyer will assume, upon the terms and subject to the conditions set
forth herein, at the Closing, and will perform or satisfy (or cause to be
performed or satisfied) thereafter, but only to the extent related to the
Business, only the following liabilities and obligations:

              (i)    all Current Liabilities;

              (ii)   except as otherwise provided in this Agreement, all
       obligations, claims, demands and causes of action arising from and
       accruing with respect to the functioning, use and operation of the Assets
       by Buyer on and after the Closing Date; and

              (iii)  all liabilities or obligations with respect to Taxes for
       which Buyer is liable pursuant to SECTION 7.19.

All of the foregoing liabilities and obligations of Seller to be assumed by
Buyer hereunder are hereinafter collectively referred to as the "ASSUMED
LIABILITIES."

       2.2    RETAINED LIABILITIES.  Anything in SECTION 2.1 to the contrary
notwithstanding, Buyer will not assume or in any way be liable or responsible
for:  (x) any liabilities or obligations of Seller relating to the Assets or the
Business or any claims in respect thereof, other


                                       3

<PAGE>

than Assumed Liabilities, or (y) any liabilities, obligations or claims,
other than Assumed Liabilities, which may be asserted against or imposed upon
Buyer by reason of its being a successor to or transferee of Seller or an
acquiror of the Assets or the Business, or otherwise, including, but not
limited to, the following:

              (i)    all liabilities associated with Seller's worldwide Dark
       Horse test systems and Tanisys Touch businesses;

              (ii)   any liabilities not included in the Creditor's Plan;

              (iii)  any liability or obligation with respect to Taxes for which
       Seller is liable pursuant to SECTION 7.19;

              (iv)   any liability or obligation of Seller based upon or arising
       under this Agreement;

              (v)    any liability or obligation with respect to any present,
       former or prospective employees of the Business arising out of or in
       connection with their employment or possible employment with Seller at
       any time, or any liability or obligation with respect to any present,
       former or prospective contract employee, independent sales representative
       or other independent contractor of the Business arising out of or in
       connection with their relationship or possible relationship with Seller
       at any time, including any liability arising out of:

                     (A)    any benefit plans or benefit arrangements, including
              but not limited to the Benefit Plans and Benefit Arrangements;

                     (B)    any collective bargaining agreements;

                     (C)    any shut-down agreements;

                     (D)    any charges, complaints and/or grievances concerning
              Seller's termination of its employees, contract employees,
              independent sales representatives or other independent
              contractors;

                     (E)    any violations or alleged violations of any federal,
              state, provincial, local or foreign labor and employment laws by
              Seller;

                     (F)    any tort or contract claims, or claims relating to
              affirmative action compliance, compensation, health and welfare
              benefits, vacation pay, unemployment insurance benefits, deferred
              compensation, pension and retirement benefits, severance benefits,
              disability benefits, other fringe benefits, rights arising under a
              collective bargaining agreement, or rights or benefits under the
              Consolidated Omnibus Budget Reconciliation Act, as amended, Title
              VII of the Civil Rights Act of 1964, as amended, the Age
              Discrimination in Employment


                                       4

<PAGE>

              Act, as amended, the Americans with Disabilities Act, the
              Occupational Safety Hazard Act, the Worker Adjustment Retraining
              and Notification Act, ERISA, or any other federal, state,
              provincial, local or foreign employment Law;

                     (G)    any claims asserted by Seller's present or former
              employees or independent contractors for workers' compensation,
              unemployment compensation or comparable benefits; or

                     (H)    the termination or refusal to employ by Seller of
              any of its present, former or prospective employees, or the
              termination or refusal to utilize by Seller of any of its present,
              former or prospective contract employees, independent sales
              representatives or other independent contractors;

              (vi)  any environmental conditions or liabilities, actual,
       contingent or otherwise, including but not limited to On-Site
       Environmental Liabilities and Off-Site Environmental Liabilities;

              (vii)  any liability arising out of the violation by Seller of any
       Law;

              (viii)  any liability or obligation of Seller relating to the
       Retained Assets;

              (ix)  any liability or obligation of Seller arising out of any
       indebtedness with respect to any period ending on or prior to the Closing
       Date;

              (x)  any liability or obligation of Seller with respect to any
       claim, action, suit, proceeding or arbitration by any Person, or arising
       out of any inspection, investigation or audit or any other action by any
       Governmental Entity;

              (xi)   any product liability with respect to any and all products
       (including Inventory) sold or manufactured by Seller;

              (iiii) any audit, legal, financial adviser, broker or finder fees
       and commissions payable by Seller; and

              (xii)  all liabilities and obligations of Seller under its
       contracts, licenses, leases (including Real Property Leases), sales
       orders, purchase orders and other agreements with respect to the
       Business.

All of the foregoing liabilities, obligations or claims will be the
responsibility of Seller are not being assumed by Buyer hereunder or otherwise,
and are hereinafter collectively referred to as the "RETAINED LIABILITIES."

       2.3    BANK OF AMERICA DEBT.  Seller is currently party to that certain
_____________________ dated ______________ with Bank of America (the "BA Note").
There is currently an outstanding balance of $________ under the BA Note.  Of
that amount,


                                       5

<PAGE>

$______ constitutes an Assumed Liability.  The remaining $_________ of debt
(the "Remainder" shall be purchased by Purchaser from Bank of America on the
date hereof, resulting in Purchaser becoming a secured creditor of Seller for
the Remainder.

3.     PURCHASE PRICE AND ALLOCATION

       3.1    PURCHASE PRICE.  Buyer will pay to Seller, as consideration for
the Assets, the sum of $350,000 (the "PURCHASE PRICE"), payable as set forth in
SECTION 3.2.  The Purchase Price will be increased or decreased, as the case may
be, after the Closing pursuant to SECTION 3.3.

       3.2    PAYMENT OF PURCHASE PRICE.  (a) At the Closing, Buyer will deliver
to Seller the amount of $350,000, which shall consist of $250,000 for the Assets
and $100,000 for Seller agreeing to be bound by the provisions of SECTION 7.15.
Contemporaneously with the execution of this Agreement, Purchaser is loaning
Seller the sum of $85,000 to be used by Seller to pay Bank of America's
pre-payment fees in connection with the transactions described in SECTION
2.3. Seller agrees that Purchaser shall retain $85,000 of the Purchase Price
as collateral for the loan described in the preceding sentence..

        (b)  Buyer shall pay Seller six monthly "EARN OUT PAYMENTS" following
the Closing Date. The Earn Out Payment shall be an amount equal to 50% of the
gross profit generated (net sales less cost of goods sold on a fully-burdened
basis in accordance with GAAP) from sales to customers listed on the customer
list constituting part of the Assets, such customer list being set forth on
SCHEDULE 3.1(b).  One-half of each  Earn Out Payment shall be payable on or
before the twentieth day following the month as to which the Earn Out Payment is
being calculated.  The remaining 50% of the Earn Out Payments for the six-month
period shall be paid on or before the twentieth day following the sixth month
following the Closing Date.

       (c)  As of the date hereof, Buyer and Seller have agreed upon the amount
which Buyer is willing to pay to retire Seller's unsecured indebtedness relating
to the Business (the "SETTLEMENT AMOUNT").  If the amount of the Creditor's Plan
is less than the Settlement Amount, at the Closing, Buyer will pay to Seller an
amount equal to the Settlement Amount less the Creditor's Plan.  If the
Creditor's Plan exceeds the Settlement Amount, Buyer shall reduce the Earn Out
Payments by such amount.

       (d)  For a period of up to six months following the Closing Date, Buyer
shall have the right to require that Seller assist in the transition of the
Business.  As consideration for such services, Seller shall be paid a monthly
fee of $15,000 (based upon 160 hours of service, such amount to be prorated for
the amount of the service actually provided by Seller) (the "Consulting
Payments").  Any Consulting Payments due hereunder shall be payable on the last
Business Day of each month in which the services are provided hereunder.  Buyer
shall have no obligation to request that Seller provide services hereunder.

       3.3    ADJUSTMENT OF PURCHASE PRICE.  (a) INTENTIONALLY LEFT BLANK


                                       6

<PAGE>

       (b)  If any claims or liabilities are asserted against Buyer or its
Affiliates after the Closing Date, and if such claims or liabilities are
determined in good faith by Buyer to be valid and if Buyer pays such claims or
liabilities after consultation with the Seller, Buyer shall have the right to
offset the amount of such payments against the Earn Out Payment and/or the
Consulting Payment (at the sole option of Buyer).

       (c)  If it is determined that any of Seller's Accounts Receivable or
Inventory acquired by Buyer are not collectible or useable within 90 days of the
Closing Date, Buyer shall have the right to assign back to Seller the
uncollectible Accounts Receivable and unusable Inventory and offset (at Seller's
book value) the amount assigned back against the Earn Out Payment and/or the
Consulting Payment (in Buyer's sole discretion).  For purposes of this SECTION
3.3(c), the term "book value" shall mean the normal and customary method of
valuing Inventory and Accounts Receivable used by Seller so long as such method
is in accordance with GAAP.  Should such methods deviate from GAAP, Buyer will
be entitled to use GAAP accounting principles to determine the book value of the
uncollectible Accounts Receivable or unusable Inventory, as applicable.

       (d)  With respect to SECTIONS 3.3(b) AND (c), no offset shall be taken
unless the aggregate offset amount exceeds a minimum threshold of $25,000.  If
such minimum threshold is exceeded, the offset shall be determined on a dollar
for dollar basis from the first dollar of offset.

        (e)   The Purchase Price, as adjusted after the Closing pursuant to this
SECTION 3.3, is hereinafter referred to as the "ADJUSTED PURCHASE PRICE."

4.     CLOSING.  The closing of the sale and purchase of the Assets and the
transactions contemplated hereby (the "CLOSING") will take place immediately
following the execution of this Agreement at the offices of Locke Liddell & Sapp
LLP, 2200 Ross Avenue, Suite 2200, Dallas, Texas 75201. The "CLOSING DATE" will
be deemed to be 12:01 a.m. on the date upon which the Closing occurs.

5.     REPRESENTATIONS AND WARRANTIES OF SELLER.  Seller represents and warrants
to Buyer as follows:

       5.1    DUE ORGANIZATION AND AUTHORITY.  Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Wyoming and has full power and authority to own, lease and operate its assets,
properties and business and to carry on its business as currently conducted.

       5.2    QUALIFICATION.  Seller is duly qualified, licensed or otherwise
authorized as a foreign corporation to transact business and is in good standing
in each jurisdiction where the character of the properties owned or leased or
the nature of the business conducted by it makes such qualification, licensing
or authorization necessary.


                                       7

<PAGE>

       5.3    AUTHORITY TO EXECUTE AND PERFORM AGREEMENT.  Seller has all
requisite power and authority to enter into, execute and deliver this Agreement
and each of the Seller Documents, and to perform fully its obligations hereunder
and thereunder, and no other act or proceeding on the part of Seller is
necessary to authorize the same.  This Agreement has been, and each of the
Seller Documents will be, duly authorized, executed and delivered by Seller,
and, assuming the due authorization, execution and delivery of this Agreement
and each of the Buyer Documents by Buyer and the validity and binding effect
hereof and thereof on Buyer, each is, or upon execution will be, a valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors' rights and remedies generally or
general principles of equity (regardless of whether considered and applied in a
proceeding at law or in equity).

       5.4    NO MATERIAL ADVERSE CHANGE.  Except as set forth on SCHEDULE 5.4,
since the close of business on October 31, 1999, there has been no material
adverse change in the Condition of the Business, and Seller has no Knowledge
after due inquiry of any such change which is threatened or reasonably likely;
and there has not been any material damage, destruction or loss to any of the
properties or assets of the Business since such date.

       5.5    COMPLIANCE WITH LAWS; PERMITS.  (a)  Except as set forth on
SCHEDULE 5.5, the Business is currently being conducted, and has at all times
since May 21, 1996 been conducted, in compliance with all applicable Laws, and
there is no pending or, to Seller's Knowledge after due inquiry, any threatened
investigation by any Governmental Entity with respect to actual or alleged
violations of any applicable Laws, including Environmental Laws and Laws
relating to the safe conduct of business, employment and employment practices,
handicapped accessibility, antitrust, Taxes, consumer protection, product
safety, currency exchange, customs, tariffs, equal opportunity, health,
sanitation, fire, zoning, building, pension, securities and Intellectual
Property.

       (b)    Seller has all licenses, permits, registrations, orders and
approvals required by all applicable Laws or Governmental Entities (including
those relating to Environmental Laws) in order for Seller to carry on the
Business as currently conducted, and to own and operate the properties and
assets of the Business, and such licenses, permits, registrations, orders and
approvals (collectively, "PERMITS") are listed on SCHEDULE 5.5.  Except as set
forth on SCHEDULE 5.5, (i) all such Permits are in full force and effect, and
are assignable without the consent of any Person; (ii) Seller is in compliance
with all, and has not violated in any respect, such Permits; and (iii) there are
no proceedings pending or, to Seller's Knowledge after due inquiry, threatened
that could reasonably be expected to result in the revocation, cancellation or
suspension thereof.

       5.6    NO BREACH.  The execution, delivery and performance of this
Agreement and each of the Seller Documents, and the consummation of the
transactions contemplated hereby and thereby, will not (i) violate or result in
the breach of any provision of the articles of incorporation, by-laws, or other
constituent documents of Seller; (ii) assuming the receipt of the


                                       8

<PAGE>

Required Consents, violate, result in the breach of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, any material contract to which Seller is a party or by which
Seller or any of the Assets may be bound; (iii) result in the creation or
imposition of any Lien upon the Business or the Assets; (iv) violate any
order, writ, judgment, injunction, consent, award or decree of any
Governmental Entity against Seller or affecting the Business or the Assets;
or (v) violate any Law applicable to any of Seller, the Business or the
Assets.

       5.7    ACTIONS AND PROCEEDINGS.  Except as set forth on SCHEDULE 5.7,
there are no outstanding orders, writs, judgments, injunctions, consents, awards
or decrees of any Governmental Entity against Seller relating to or affecting
the Business or the Assets, and there is no action, litigation, claim, suit or
other legal, administrative, investigative or arbitral proceeding of any type
whatsoever pending or, to Seller's Knowledge after due inquiry, threatened
against Seller or its officers, directors, employees or agents relating to or
affecting the Business or the Assets.

       5.8    CONSENTS, APPROVALS AND FILINGS.  Except for the "REQUIRED
CONSENTS," the execution and delivery by Seller of this Agreement and the Seller
Documents, and the performance by Seller of its obligations hereunder and
thereunder, do not require Seller to obtain any consent, approval or other
action of, or make any filing with or give any notice to, any Governmental
Entity or any other Person.  All Required Consents are described on SCHEDULE
5.8.

       5.9    REAL PROPERTY  (a)  SCHEDULE 5.9(a) sets forth a true and complete
list of all leases, subleases, licenses, easements, rights of way and other
similar agreements under which Seller with respect to the Business, uses or
occupies or has the right to use or occupy, now or in the future, any real
property, and all amendments and modifications thereto (collectively, the "REAL
PROPERTY LEASES;" and the land, buildings, structures and other improvements
covered by the Real Property Leases are hereinafter collectively referred to as
the "LEASED REAL PROPERTY").  Except as set forth on SCHEDULE 5.9(a), (i) Seller
has good and valid title to the leasehold estate created under each Real
Property Lease free and clear of all Liens, and Seller has the right to quiet
enjoyment of all Leased Real Property for the full term of each such Real
Property Lease, (ii) Seller is not in default under any Real Property Lease and
no written claim of any default thereunder has been received by Seller which has
not been cured; and (iii) all rent and other sums and charges currently due or
payable by Seller under each of the Real Property Leases have been paid in full
when due and were not, and will not be, subject to any withholding or similar
Taxes; and (iv) each Real Property Lease is assignable without the consent of
any Person (including the lessor thereunder).  Except as set forth in SCHEDULE
5.9(a), each of the Real Property Leases has not been amended and is in full
force and effect. Complete and correct copies of all documents relating to
Leased Real Property have been delivered to Buyer.

       (b)    Except as set forth on SCHEDULE 5.9(b), (i) all the land,
buildings, structures and other improvements used by Seller in connection with
the Business is included in the Owned Real Property or the Leased Real Property
(such Owned Real Property and Leased Real Property


                                       9

<PAGE>

are hereinafter collectively referred to as the "REAL PROPERTY"); and
(ii) Seller does not own or hold, and is not obligated under or a party to,
any option, right of first refusal or other contractual right to purchase,
acquire, sell or dispose of any real property with respect to the Business.

       (c)    Except as set forth on SCHEDULE 5.9(c), there are no Liens or
other agreements granting to any Person any right to the possession, use,
occupancy or enjoyment of the Real Property, or any part thereof, and there are
currently no tenants or other Persons (other than Seller) in possession of the
Real Property.

       (d)    There is neither any condemnation proceeding nor any sale or other
disposition in lieu of condemnation pending and, to Seller's Knowledge after due
inquiry, threatened or contemplated, with respect to the Real Property, or any
part thereof.

       (e)    All public utilities, including, water, sewer, gas, electric,
telephone and drainage facilities, provide adequate service to the Real Property
to support current and proposed uses and operations, and the Real Property has
direct access to and from publicly-dedicated streets or the right to use private
roadways to obtain access to such publicly-dedicated streets.

       5.10   TITLE TO TANGIBLE ASSETS.  (a)  Except as set forth on SCHEDULE
5.10, Seller has good, valid and marketable title to all tangible assets and
property of the Business reflected in the Interim Balance Sheet or thereafter
acquired by Seller except for (i) inventory sold; and (ii) accounts receivable
collected, in each case in the ordinary course of business consistent with past
practice.  Such Assets are free and clear of any Lien, except for Permitted
Liens.

       (b)    At the Closing, Seller will deliver to Buyer good, valid and
marketable title to all the tangible Assets, free and clear of all Liens, other
than Permitted Liens.

       5.11   EMPLOYEE BENEFIT PLANS.  (a)  SCHEDULE 5.11 sets forth a true and
complete list of all Benefit Plans and Benefit Arrangements relating to the
Business and maintained by Seller for the benefit of the Employees.

       (b)    No Benefit Plan is a "multi-employer plan," as defined in Section
4001(a)(3) of ERISA, or a plan subject to Title IV of ERISA, and neither Seller
nor the Controlled Group has made any contributions to or participated in any
"multi-employer plan" or plan subject to Title IV of ERISA.

       (c)    Each Benefit Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS,
and no event has occurred which would cause any such plan to cease being so
qualified.  Except as set forth on SCHEDULE 5.11, each Benefit Plan complies in
all material respects with the requirements of ERISA and the Code.  Seller has
complied in all material respects with the health care continuation requirements
of Section 601, ET SEQ., of ERISA with respect to all employees of the Business
and their spouses, former spouses and dependents.


                                       10

<PAGE>


       (d)    Seller has made available to Buyer, with respect to each
Benefit Plan and Benefit Arrangement, correct and complete copies of (i) all
plan documents and amendments, trust agreements, letter agreements and
insurance contracts; (ii) the most recent IRS determination letter; (iii) the
most recent Annual Report (Form 5500 Series) and accompanying schedules as
filed; (iv) the current and, to the extent available, prior summary plan
descriptions, summaries of material modifications, plan booklets or
brochures, employee manuals and personnel policy manuals; (v) the most recent
financial statements; and (vi) the most recent actuarial report.

       (e)    None of the Benefit Plans subject to Title IV of ERISA has
terminated, no proceeding has been initiated to terminate any such plan, and
there has been no "reportable event" (within the meaning of Section 4043(c)
of ERISA) with respect to any such plan.  None of the Benefit Plans which is
a defined benefit plan subject to section 412 of the Code has incurred any
"accumulated funding deficiency" (within the meaning of Section 412 of the
Code), whether or not waived.  Assuming that each Benefit Plan subject to
Title IV of ERISA was terminated as of the Closing Date, Seller would have no
liability under Title IV of ERISA as a result of such termination.  Except as
set forth on SCHEDULE 5.11, Seller has no obligations under any Benefit Plan
or otherwise to provide health benefits to former employees of the Business,
except as specifically required by Law.

       (f)    Neither Seller nor to Seller's Knowledge after due inquiry, any
other "disqualified person" (within the meaning of Section 4975 of the Code)
or any "party in interest" (within the meaning of Section 3(14) of ERISA) has
engaged in any "prohibited transaction" (within the meaning of Section 4975
of the Code or Section 406 of ERISA) with respect to any Benefit Plan which
could subject any such plan (or its related trust), Seller, the Controlled
Group, or any officer, director or employee of Seller or the Controlled Group
to the penalty or tax under Section 502(i) or Section 502(l) of ERISA or
Section 4975 of the Code.

       (g)    There is no pending or, to Seller's Knowledge after due
inquiry, threatened claim which alleges any violation of ERISA or any other
Law (i) by or on behalf of any Benefit Plan or Benefit Arrangement, or (ii)
by any employee of Seller or any Business Affiliate or any plan participant,
beneficiary, administrator, contract employee, independent sales
representative or other independent contractor with respect to any such
Benefit Plan or Benefit Arrangement.

       5.12   LABOR MATTERS.  Except as set forth on SCHEDULE 5.12, (i) there
is no organizing effort, strike, picketing, charge of unfair labor practices,
petition, demand for recognition, boycott activity, grievance, collective
bargaining negotiation, OSHA citation, slowdown or work stoppage pending or,
to Seller's Knowledge after due inquiry, threatened against it with respect
to the Business; (ii) since January 1, 1994 Seller has not experienced any
work stoppages or been a party to any arbitration proceeding arising out of
or under any collective bargaining agreements; (iii) none of the employees of
Seller with respect to the Business are, or have since January 1, 1994, been
represented by any labor union, and there are no collective bargaining
agreements otherwise in effect with respect to such employees; (iv) there are
no discrimination or unfair employment charges or complaints pending with any
Governmental Entity against Seller in


                                      11
<PAGE>

connection with the Business; and (v) there are no actual or pending consent
decrees, conciliation agreements, settlement agreements, agreements with
Governmental Entities or court orders which may impose employment or labor
related obligations on Seller in connection with the Business.

       5.13   INSURANCE.  SCHEDULE 5.13 sets forth a complete and accurate
list of all insurance policies currently maintained with respect to (or, in
the case of any comprehensive general liability insurance policies, would
have applicability to) the Business and the Assets including policies
relating to fire, theft, business interruption, employee fidelity, general
liability, fiduciary liability, workers' compensation, products liability and
vehicular insurance.  All such policies are in full force and effect and no
notice of cancellation, termination or non-renewal has been received with
respect to any such policy.  All premiums that have become due with respect
to such policies for any period ending on or prior to the Closing Date have
been or will be paid when due by Seller prior to the Closing.  Such policies
provide Seller with adequate insurance coverage against the risks covered by
such policies in accordance with the highest applicable industry standards
and, in the reasonable opinion of Seller, such coverage is customary and
reasonable with respect to the Business and the Assets.

       5.14   TAXES.  (a)  Except as set forth in SCHEDULE 5.14, (i) Seller
has timely and properly filed, or will file when due, all federal, state,
provincial, local, foreign and other Tax Returns (including relating to their
respective properties, franchises, payroll, excise, stamp, occupation,
customs, duties, AD VALOREM, transfer, sales and use) required to be filed in
respect of the Business, the Assets and the Assumed Liabilities, and all
Taxes, interest, penalties, additions to Tax, and other charges due and
payable as shown on such Tax Returns, or claimed to be due with respect to
taxable periods covered by such Tax Returns, have been paid; (ii) such Tax
Returns were when filed (or when filed will be) true, correct and complete,
and disclosed (or will disclose) all Taxes required to be paid in respect of
the Business, the Assets and the Assumed Liabilities for the periods covered
thereby; (iii) all Taxes (whether or not shown on any Tax Return) owed by
Seller in respect of the Business, the Assets and the Assumed Liabilities
have been timely paid; (iv) all such Tax Returns have been examined by the
relevant taxing authorities or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired; (v)
there is no examination, action, suit, investigation, audit, claim or
assessment or proceeding pending, proposed or threatened by any Governmental
Entity relating to the determination, assessment or collection of, or any
delinquencies in filing relating to, any Taxes owing by Seller with respect
to the Assets, the Business or the Assumed Liabilities, and to Seller's
Knowledge after due inquiry, no basis exists therefor; (vi) Seller has not
waived or been requested to waive any statute of limitations in respect of
Taxes associated with the Business, the Assets or the Assumed Liabilities
which waiver is currently in effect; (vii) all monies required to be withheld
by Seller (including from employees of the Business for income Taxes, social
security Taxes and other payroll Taxes) have been collected or withheld, and
paid to the respective taxing authorities; (viii) none of the Assets is
properly treated as owned by any Person


                                      12
<PAGE>

other than Seller for income Tax purposes; and (ix) none of the Assets is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.

       (b)    No payment or other benefit, and no acceleration of the vesting
of any options, payments or other benefits, will be, as a direct or indirect
result of the transactions contemplated by this Agreement, an "excess
parachute payment" to a "disqualified individual" as those terms are defined
in Section 280G of the Code and Treasury Regulations.  Except as set forth on
SCHEDULE 5.14, no payment or other benefit, and no acceleration of the
vesting of any options, payments or other benefits, will be, as a direct or
indirect result of the transactions contemplated by this Agreement (or under
Section 280G of the Code and the Treasury Regulations thereunder) be presumed
to be a "parachute payment" to a "disqualified individual" as those terms are
defined in Section 280G of the Code and the Treasury Regulations thereunder,
without regard to whether such payment or acceleration is reasonable
compensation for personal services performed or to be performed in the future.

       (c)    No transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code and, except as set forth on
SCHEDULE 5.14, no sales, use, real estate transfer, registration, inventory,
stamp or other similar federal, state, provincial, local or foreign Taxes
will be imposed on the sale and transfer of the Assets or the assumption of
the Assumed Liabilities pursuant to this Agreement.

       5.15   CERTAIN ENVIRONMENTAL CONDITIONS  (a)  Except as set forth on
SCHEDULE 5.15(a), there is no pending, or, to Seller's Knowledge after due
inquiry, threatened litigation, suit, complaint, investigation or
administrative action or claim of any type whatsoever alleging that (i) the
Real Property, or Seller in connection with its operations of the Business,
is in violation of any Environmental Laws; or (ii) the Real Property, or
Seller in connection with the operation of the Business, is responsible for
remediation of a Contaminant with respect to the Real Property or with
respect to any off-site facility or location, including, any waste disposal
site whether or not located on the Real Property.

       (b)    All reports, studies, audits, notices and correspondence,
whether generated by Seller, any Governmental Entity or any other Person, and
all tests, analyses and other documents, in the possession or control of
Seller and which relate to compliance by the Business or the Real Property
with Environmental Laws have been made available to Buyer.

       (c)    Except as set forth on SCHEDULE 5.15(c), Seller has complied,
and is currently complying, with all Environmental Laws applicable to Seller
with respect to the Business and the Real Property, and all Permits required
thereunder.

       (d)    Except as set forth on SCHEDULE 5.15(d), no Contaminant is or
has been present or released on, in, under, about or above the Real Property
in an amount or condition that could give rise to an Environmental Claim.
All releases of Contaminants that have occurred on the Real


                                      13
<PAGE>

Property, if any, have been reported to the appropriate Governmental Entity
pursuant to applicable Environmental Laws.

       (e)    Except as set forth on SCHEDULE 5.15(e), no Notice with respect
to the Business' compliance with Environmental Laws or the environmental
condition of any of the Real Property is outstanding, nor has any such Notice
been issued by any Governmental Entity or other Person which has not been
responded to fully and in a timely fashion.

       (f)    Except as set forth on SCHEDULE 5.15(f), no underground storage
tank used by Seller or any other Person in connection with the Business is,
and, to Seller's Knowledge after due inquiry, no underground storage tank has
at any time been, located on any of the Real Property that has not been
removed in compliance with applicable Environmental Laws.  The locations on
the Real Property of all current or previous underground storage tanks that
are or were used Seller or, to Seller's knowledge after due inquiry, any
other Person, are described on SCHEDULE 5.15(f).

       (g)    Except as set forth on SCHEDULE 5.15(g), neither Seller nor any
other Person has leased, operated or owned any facilities or property in
connection with the Business or the Real Property with respect to which
Seller is subject to any pending or, to Seller's Knowledge after due inquiry,
potential proceeding under any Environmental Law.

       (h)    Except as set forth on SCHEDULE 5.15(h), neither Seller nor any
other Person (i) has, in connection with the Business or the Real Property,
sent, or arranged for the shipment of, Contaminants to any facility or site
for reuse, recycling, reclamation, treatment, storage or disposal; or (ii) is
subject to any pending or, to Seller's Knowledge after due inquiry, potential
proceeding under any Environmental Law with respect to any such facilities or
sites.

       (i)    There are no Contaminants in any inactive, closed or abandoned
storage or disposal areas or facilities on property which has been leased,
operated or owned by Seller in connection with the Business or the Real
Property.  Except as set forth on SCHEDULE 5.15(i), such areas and facilities
are not subject to actual or, to Seller's Knowledge after due inquiry,
potential proceedings, investigations or Notices by officials of any
Governmental Entity or by any private litigant as a result of any previous
on-site management, treatment, storage or disposal of Contaminants.

       5.16   FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES  (a)  Attached as
SCHEDULE 5.16(a) are the audited (unaudited to fiscal 1999) balance sheets of
Seller as of September 30, 1996, September 30, 1997, September 30, 1998 and
September 30, 1999, and the related audited (unaudited as to fiscal 1999)
statements of income, shareholder's equity and cash flow of Seller for the
fiscal years then ended, together with the notes to such financial statements
(collectively, the "ANNUAL FINANCIAL STATEMENTS").  The Annual Financial
Statements (i) were prepared in accordance with the books and records of
Seller and with GAAP; (ii) fairly present the combined financial position of
Seller as of the dates set forth therein and the results of operations and
cash


                                      14
<PAGE>

flows for the periods set forth therein; and (iii) reflect accurately in
all material respects the costs and expenses of Seller for the periods set
forth therein.

       (b)    Attached as SCHEDULE 5.16(b) are the unaudited balance sheet of
the Seller as of October 31, 1999 (the "INTERIM BALANCE SHEET"), and the
related unaudited statement of income of the Seller for the one-month period
then ended (the "INTERIM FINANCIAL STATEMENTS").  The Interim Financial
Statements (i) were prepared in accordance with the books and records of
Seller and with GAAP (and on a basis consistent with the principles used in
preparation of the Annual Financial Statements), except as otherwise noted
therein; (ii) fairly present (subject to normal year-end adjustments) the
financial position of the Seller as of October 31, 1999 and the results of
operations of the Seller for the one-month period then ended; and (iii)
reflect accurately in all material respects the costs and expenses of the
Seller for the one-month period then ended.

       (c)    There are no liabilities, debts, claims or obligations with
respect to the Seller (whether accrued, absolute, contingent, unasserted or
otherwise and whether or not of a nature required by GAAP to be reflected,
disclosed or otherwise provided for in a balance sheet of the Seller or in
the notes thereto) which, individually or in the aggregate, could have a
material adverse effect on the Condition of the Business, except (i) those
reflected or otherwise provided for in the Interim Balance Sheet (or
described in the notes thereto); (ii) for liabilities and obligations
occurred in the ordinary course of business consistent with past practice
since the date of the Interim Balance Sheet; (iii) those specifically
described on SCHEDULE 5.16(b); and (iv) Retained Liabilities.

       5.17   CONDITION OF ASSETS.  The Equipment constituting Assets is to
be conveyed in its present condition, with no express or implied warranty by
the Seller.

       5.18   OPERATIONS.  Except as disclosed on SCHEDULE 5.18, since
October 31, 1999, Seller has operated the Business only in the ordinary
course of business consistent with past practice, and, without limiting the
generality of the foregoing, Seller or any Business Affiliate has not:

              (i)    changed in any material respect the character, operation or
       Condition of the Business;

              (ii)   (A) sold, abandoned or made any other disposition of any
       properties or assets of the Business except in the ordinary course of
       business consistent with past practice; (B) granted or suffered any Lien
       on any of the properties or assets of the Business; or (C) amended any
       contract or entered into or amended any other contract material to the
       operations of the Business which is in force and effect as of the date
       hereof;

              (iii)  except in the ordinary course of business consistent with
       past practice, incurred or assumed any debt, obligation or liability
       (whether absolute, contingent or otherwise, and whether or not currently
       due and payable);
                                      15
<PAGE>

              (iv)   suffered any material destruction, damage or loss (other
       than ordinary wear and tear), whether or not covered by insurance,
       relating to any of the properties or assets of the Business, including
       the Assets;

              (v)    waived, canceled, sold or otherwise disposed of for less
       than the fair value thereof any claim or right which Seller had against
       any other Person, except for routine settlements or resolutions of
       disputed customer or supplier accounts in the ordinary course of business
       consistent with past practice;

              (vi)   entered into, adopted, amended, paid, agreed to pay or
       incurred any obligation for any payment or contribution to, or with
       respect to, any benefit plan, or any collective bargaining or severance
       agreement, or paid or promised to pay any bonus to, or granted an
       increase in compensation or benefits to, any Employee, except for normal
       accruals under benefit plans and normal compensation adjustments in
       accordance with past practice;

              (vii)  received any notice that any supplier, distributor,
       independent sales or manufacturer representative, customer or contractor
       of the Business has terminated or is terminating its relationship with,
       or is threatening any legal or similar action against, Seller;

              (viii) made any forward purchase commitments, except for purchase
       commitments in the ordinary course of business consistent with past
       practice;

              (ix)   entered into any material transaction, whether or not in
       the ordinary course of business consistent with past practice; or

              (x)    prepared or filed any Tax Return inconsistent with past
       practice or, on any such Tax Return, taken any position, made any
       election, or adopted any method that is inconsistent with positions
       taken, elections made or methods used in preparing or filing similar Tax
       Returns in prior periods (including positions, elections or methods which
       would have the effect of deferring income to periods for which Buyer is
       liable pursuant to SECTION 7.19 or accelerating deductions to periods for
       which Seller is liable pursuant to SECTION 7.19).

       5.19   CONTRACTS. Except as set forth on SCHEDULE 5.19, there is no
arrangement, understanding, agreement or contract to which Seller is a party
with respect to the Business:  (i) with any current or former Employee,
independent contractor or temporary employment agency; (ii) with any labor union
or collective bargaining association representing any Employee; (iii) for the
sale, transfer or lease of any asset or group of related assets of the Business
having a fair market value in excess of $25,000; (iv) for the purchase of any
asset or group of related assets for a purchase price in excess of $25,000; (v)
that involves an obligation to pay or render, or an entitlement to receive,
monies or services with a fair market value in excess of $5,000; or (vi) that is
otherwise material to the Business.  Except as set forth on SCHEDULE 5.19, (x)
each Real


                                      16
<PAGE>


Property Lease and contract relating to the Business is in full force and
effect and is enforceable by Seller against the other party or parties
thereto in accordance with its terms, and there have been no terminations or
cancellations thereunder; (y) Seller has delivered to Buyer a true, correct
and complete copy of the Real Property Leases and the contracts relating to
the Business, together with all amendments, modifications and supplements
thereto and (z) none of the Real Property Leases and any contracts relating
to the Business will be in breach or default, terminate or be terminable by
virtue of the transactions contemplated hereby. Neither Seller nor, to
Seller's Knowledge after due inquiry, any other person has breached its
obligations or defaulted under any Real Property Lease or any contract
relating to the Business, and there has occurred no event or condition which,
with the giving of notice or passage of time or both, would constitute such a
breach or default on the part of Seller or, to Seller's Knowledge after due
inquiry, any other person.

       5.20   INVENTORY; ACCOUNTS RECEIVABLE.  Except as set forth on SCHEDULE
5.20, (a)  the Inventory of the Business as the same shall exist on the Closing
Date shall consist of substantially the same types of Inventory as that
reflected on the Interim Balance Sheet and the amount of such Inventory shall be
sufficient to carry on the Business and shall vary from that reflected on the
Interim Balance Sheet only by variances typical in the ordinary course of
business.  The Inventory of the Business as reflected on the Interim Balance
Sheet, and the Inventory as the same shall exist on the Closing Date, consisted,
and will consist, of items substantially all of which were and will be of the
usual quality and quantity necessary for the normal conduct of the Business and
expected to be usable or saleable within a reasonable period of time in the
ordinary course of business.  With respect to Inventory to be purchased by Buyer
and in the hands of suppliers for which Seller is committed as of the date
hereof or the Closing Date, such Inventory is expected to be usable or saleable
in the ordinary course of business as presently being conducted.

       (b)  Except as set forth on SCHEDULE 5.20, the Accounts Receivable of the
Business, whether reflected on the Interim Balance Sheet or accrued since the
date thereof, represent sales actually made in the ordinary course of business,
are not subject to any defense or offset, and are current and collectible net of
any reserves shown on the Interim Balance Sheet (which reserves are adequate and
were calculated in accordance with GAAP and consistent with past practice).

       5.21   ASSETS SUFFICIENT FOR BUSINESS.  Immediately prior to the Closing,
Seller will own or have legal rights to use as currently used in the Business,
and Seller will convey to Buyer, pursuant to this Agreement, those assets, both
tangible and intangible, which are necessary and sufficient to conduct the
Business as currently conducted or, to Seller's Knowledge, proposed to be
conducted by the Buyer, except for the fixed assets included on SCHEDULE 1.2.

       5.22   PRODUCT RECALLS; WARRANTIES.  (a)  Except as set forth on SCHEDULE
5.22(a), Seller has no Knowledge of any facts, events or conditions (i) which
could furnish a basis for the recall, withdrawal or suspension by any
Governmental Entity of, or an injunction from or an award of damages with
respect to, any product manufactured, distributed or sold by the Business; or
(ii)


                                      17
<PAGE>

which would otherwise reasonably be expected to cause the Business to
withdraw, recall or suspend or have enjoined any product from any market or
to terminate or suspend testing of any such product.  SCHEDULE 5.22(a)
contains an accurate and complete list of (x) all products manufactured or
distributed by the Business that have been recalled at any time since January
1, 1994, and (y) all proceedings (whether completed or pending) at any time
since May 21, 1996 seeking the recall, withdrawal, suspension or seizure of
any such product.

       (b)    Except as set forth in SCHEDULE 5.22(b), there is no claim
against or liability of Seller with respect to any products manufactured,
distributed or sold by the Business which are alleged to be defective or
unsafe, and, to Seller's Knowledge after due inquiry, there is no basis for
any such claim.

       5.23   INTELLECTUAL PROPERTY.  (a)  Seller owns all right, title and
interest in, or possess adequate licenses or other valid rights to use
(without the making of any payment to others or the obligation to grant
rights to others in exchange), free and clear of all Liens, all Intellectual
Property used in connection with the operation of the Business as currently
conducted or, to the knowledge of Seller, proposed to be conducted.  Each
item of Intellectual Property owned or used by Seller immediately prior to
the Closing will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing hereunder.  Seller
has taken all necessary and desirable action to maintain and protect each
item of Intellectual Property that Seller owns or uses.

       (b)    Seller has not interfered with, infringed upon, misappropriated
or otherwise come into conflict with any Intellectual Property rights of any
other Person, and none of the directors and officers (and employees with
responsibility for Intellectual Property matters) of Seller has ever received
any charge, complaint, claim, demand or notice from any Governmental Entity
or other Person alleging any such interference, infringement,
misappropriation or conflict (including any claim that Seller must license or
refrain from using any Intellectual Property rights of any other Person).  To
Seller's Knowledge after due inquiry, no Person has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of Seller.

       (c)    SCHEDULE 5.23(c) identifies (i) each patent or patent
registration which has been issued to Seller in the United States and all
jurisdictions worldwide with respect to any item of Intellectual Property
used in connection with the Business; and (ii) each pending patent
application or application for patent registration which Seller has filed
with respect to any item of Intellectual Property anywhere in the world
(together with any exceptions) which relates to the Business.  Seller has
delivered to Buyer correct and complete copies of all such patents,
registrations and applications (as amended to date) and has made available to
Buyer correct and complete copies of all other written documentation
evidencing ownership and prosecution (if applicable) of each such item of
Intellectual Property.

       (d)    SCHEDULE 5.23(d) identifies (i) each trademark or trademark
registration which has been issued to Seller in the United States and all
jurisdictions worldwide with respect to any item


                                      18
<PAGE>

of Intellectual Property used in connection with the Business; and (ii) each
pending trademark application or application for trademark registration which
Seller has filed with respect to any item of Intellectual Property anywhere
in the world (together with any exceptions).  Seller has delivered to Buyer
correct and complete copies of all such trademarks, registrations and
applications (as amended to date), and has made available to Buyer correct
and complete copies of all other written documentation evidencing ownership
and prosecution (if applicable) of each such item of Intellectual Property.
SCHEDULE 5.23(d) also identifies each trade name or unregistered trademark
used by Seller in connection with the Business.

       (e)    SCHEDULE 5.23(e) identifies (i) each copyright or copyright
registration which has been issued to Seller in the United States and all
jurisdictions worldwide with respect to any item of Intellectual Property
used in connection with the Business; and (ii) each pending copyright
application or application for copyright registration which Seller has filed
with respect to any item of Intellectual Property (together with any
exceptions) used in connection with the Business.  Seller has delivered to
Buyer correct and complete copies of all such copyrights, registrations and
applications (as amended to date), and has made available to Buyer correct
and complete copies of all other written documentation evidencing ownership
and prosecution (if applicable) of each such item of Intellectual Property.

       (f)    SCHEDULE 5.23(f) identifies each license, agreement or other
permission which Seller has granted to any other Person with respect to any
item of Intellectual Property used in connection with the Business in the
United States and any jurisdictions worldwide.  Seller has delivered to Buyer
correct and complete copies of all such licenses, agreements and other
permissions (as amended to date) and has made available to Buyer correct and
complete copies of all written documentation evidencing the legality,
validity and enforceability of each such license, agreement and other
permission (if applicable).  With respect to each item of Intellectual
Property required to be identified on SCHEDULE 5.23(f):

              (i)  Seller owns all right, title and interest in and to such
       item, free and clear of any Lien;

              (ii)  such item is not subject to any outstanding injunction,
       judgment, order, decree, ruling or charge;

              (iii)  no action, suit, proceeding, hearing, investigation,
       charge, complaint, claim, or demand is pending or, to Seller's Knowledge
       after due inquiry, threatened which challenges the legality, validity,
       enforceability, use or ownership of such item;

              (iv)  Seller has not agreed to indemnify any Person for or against
       any interference, infringement, misappropriation or other conflict with
       respect to such item;

              (v)  all licenses, agreements and other permissions pertaining to
       such item and all other rights to which Seller is entitled with respect
       thereto are in compliance in all


                                      19
<PAGE>

       respects with all applicable Laws in all jurisdictions worldwide,
       including those pertaining to remittance of foreign exchange and
       Taxes; and

              (vi)  Seller has not made a previous assignment, sale, transfer or
       agreement constituting a present or future assignment, sale or transfer
       of, or granted any Lien on, such item other than licenses granted in the
       ordinary course of business consistent with past practice (and each such
       license has been identified on SCHEDULE 5.23(f)); nor has Seller granted
       any release, covenant not to sue or other non-assertion assurance to any
       Person with respect to such item which could reasonably be expected to
       have an adverse effect on the aggregate value of the Intellectual
       Property.

       (g)    SCHEDULE 5.23(g) identifies each item of Intellectual Property
used in connection with the Business  that any Person (other than Seller) owns
and that Seller uses pursuant to any license, sublicense, agreement or
permission.  Seller has delivered to Buyer correct and complete copies of all
such licenses, sublicenses, agreements and other permissions (as amended to
date).  With respect to each item of Intellectual Property required to be
identified on SCHEDULE 5.23(g):

              (i)  the license, sublicense, agreement or other permission
       covering such item is legal, valid, binding, enforceable and in full
       force and effect;

              (ii)  such license, sublicense, agreement or other permission will
       continue to be legal, valid, binding, enforceable and in full force and
       effect on identical terms following the consummation of the transactions
       contemplated hereby;

              (iii)  no party to such license, sublicense, agreement or other
       permission is in breach or default thereof, and no event has occurred
       which with the giving of notice or the lapse of time or both would
       constitute such a breach or default thereof or permit termination,
       modification or acceleration thereunder;

              (iv)  no party to such license, sublicense, agreement or other
       permission has repudiated any provision thereof;

              (v)  with respect to each such sublicense, the representations and
       warranties set forth in clauses (i) through (iv) above are true and
       correct with respect to the underlying license;

              (vi)  the underlying item of Intellectual Property is not subject
       to any outstanding injunction, judgment, order, decree, ruling or charge;

              (vii)  no action, suit, proceeding, hearing, investigation,
       charge, complaint, claim or demand is pending or, to Seller's Knowledge
       after due inquiry, threatened which challenges the legality, validity or
       enforceability of the underlying item of Intellectual Property; and


                                      20


<PAGE>

              (viii)  Seller has not granted any sublicense or similar right
       with respect to the underlying license, sublicense, agreement or other
       permission.

       (h)    To Seller's Knowledge after due inquiry, the continued
operation of the Business as currently conducted, and as proposed to be
conducted, does not and will not interfere with, infringe upon,
misappropriate or otherwise come into conflict with, any Intellectual
Property rights of any Person.

       (i)    Seller has no Knowledge after due inquiry of any new products,
inventions, procedures, or methods of manufacturing or processing that any
competitors or other Persons have developed which reasonably could be
expected to supersede or make obsolete any product or process of Seller with
respect to the Business.

       5.24   NO BUSINESS AFFILIATES.  No Affiliate of Seller is engaged,
either directly or indirectly, in the manufacturing, distribution or sale of
products or owns, leases or operates any assets in connection with the
Business.

       5.25   FACILITIES.  No manufacturing, converting, distribution,
research and development, administrative or other facility of Seller or any
of its Affiliates (other than the Facilities) is owned, leased or operated by
Seller or any such Affiliate in connection with the Business.

       5.26   BOOKS AND RECORDS.  Seller maintains its books, records and
accounts (including, but not limited to, those kept for financial reporting
and Tax purposes) in accordance with good business practice and in sufficient
detail to reflect accurately and fairly the transactions and the Condition of
the Business.

       5.27   SUPPLIERS AND CUSTOMERS. Set forth on SCHEDULE 5.27 is a list
of the names, addresses and current relationship status of the 10 largest
customers and the 10 largest suppliers (measured, in each case, by dollar
volume) of the Business and the percentage of the Business which each such
customer or supplier represented since November 1, 1998 (since January 1,
1999 as to suppliers).

       5.28   YEAR 2000 COMPLIANCE.  Seller is, as of the date hereof, and
will, on the Closing Date, continue to be, Year 2000 Compliant with respect
to its Information Technology.  To the best of Seller's knowledge, after due
inquiry, all customers of and suppliers to the Business, and all other third
parties who exchange computerized information with Seller's Information
Technology, are, as of the date hereof, and will, on the Closing Date,
continue to be, Year 2000 Compliant with respect to their respective
Information Technology.

       5.29   REPRESENTATIONS NOT WAIVED.  The representations and warranties
of Seller contained herein will not be affected or deemed waived by reason of
any investigation made by or on behalf of Buyer and/or its representatives or
agents or by reason of the fact that Buyer


                                       21
<PAGE>

and/or its representatives or agents knew or should have known that any such
representation or warranty is or might be inaccurate in any respect.

       5.30   DISCLOSURE.  None of (i) the representations or warranties of
Seller contained herein; (ii) the information contained in the Schedules
referred to in this ARTICLE V; and (iii) the other information or documents
furnished to Buyer or any of its representatives or agents by Seller or its
representatives or agents pursuant to the terms of this Agreement is or will
be false or misleading in any material respect or omits or will omit to state
a fact herein or therein required to be stated or necessary to make the
statements herein or therein not misleading in any material respect.  There
is no fact which adversely affects or in the future is likely to adversely
affect the Assets or the Business in any material respect which has not been
disclosed in this Agreement or the Schedules hereto.

       5.31   CREDITOR PLAN.  Seller has negotiated a pay-out plan with
substantially all of its unsecured creditors of the Business (which creditors
are listed on SCHEDULE 2.1) (the "Creditor's Plan"), except for certain
unsecured creditors whose claims aggregate $40,000 or less and those
creditors listed on SCHEDULE 5.31.  Each of the unsecured creditors that has
agreed to the Creditor's Plan has executed a settlement agreement and release
in the form supplied to the Seller by Buyer.  Seller has delivered copies of
each such agreement to Buyer.

6.     REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer represents and
warrants to Seller as follows:

       6.1    DUE ORGANIZATION AND AUTHORITY.  Buyer is a limited partnership
duly organized, validly existing and in good standing under the Laws the
State of Texas, and has, or will have on the Closing Date, all requisite
power and authority to own, lease and operate its assets, properties and
business and to carry on its business as currently conducted.

       6.2    AUTHORITY TO EXECUTE AND PERFORM AGREEMENT.  Buyer has all
requisite power and authority to enter into, execute and deliver this
Agreement and each of the Buyer Documents, and to perform fully its
obligations hereunder and thereunder, and no other act or proceeding on the
part of the Buyer is, or will be on the Closing Date, necessary to authorize
same.  This Agreement has been, and each of the Buyer Documents to be
delivered by Buyer at the Closing will be, duly authorized, executed and
delivered by Buyer and, assuming the due authorization, execution and
delivery of this Agreement and each of the Seller Documents by Seller, and
the validity and binding effect hereof and thereof on Seller, each is, or
upon execution will be, a valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights and remedies generally or general principles of equity
(regardless of whether considered and applied in a proceeding at law or in
equity).

       6.3    NO BREACH.  The execution, delivery and performance by Buyer of
this Agreement and each of the Buyer Documents to which it is party, and the
consummation of the transactions


                                       22
<PAGE>

contemplated hereby and thereby, will not (i) violate or result in the breach
of any provision of the restated certificate of incorporation, by-laws or
other constituent documents of Buyer; (ii) violate, result in the breach of,
or constitute a default (or an event which, with the giving of notice or the
lapse of time or both, would constitute a default) under, any material
contract to which Buyer is party or by which Buyer or any of its assets may
be bound; (iii) violate any order, writ, judgment, injunction, award or
decree of any arbitrator or Governmental Entity against Buyer or affecting
any of its assets or properties; or (iv) violate any applicable Law, which
violation, individually or in the aggregate, would reasonably be expected to
have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.

       6.4    ACTIONS AND PROCEEDINGS.  There are no outstanding orders,
writs, judgments, injunctions, awards or decrees of any Governmental Entity
against Buyer, and there are no actions, litigations or suits or other legal,
administrative, investigative or arbitral proceedings of any type whatsoever
pending, or to Buyer's Knowledge, threatened, against or involving Buyer
which, individually or in the aggregate, would reasonably be expected to have
a material adverse effect on the ability of the Buyer to consummate the
transactions contemplated hereby.

       6.5    CONSENTS AND APPROVALS.  Except for any required approvals from
appropriate Governmental Entities for the issuance or transfer of the
Permits, the execution and delivery by Buyer of this Agreement and the Buyer
Documents, and the performance by Buyer of its obligations hereunder and
thereunder, do not require Buyer to obtain any consent, approval, or other
action of, or make any filing with or give any notice to, any Governmental
Entity or other Person.

7.     COVENANTS AND AGREEMENTS.  The parties hereto covenant and agree as
follows:

       7.1    DUE DILIGENCE.  Prior to the Meeting Date, Seller will provide
Buyer, and Buyer's counsel, accountants and other representatives, during
normal business hours, full access to all of the properties, personnel,
books, contracts, records, Tax Returns and files of or relating to the
Business and the Assets.  Seller will also furnish to Buyer and such
representatives all such additional documents and financial, operational,
environmental, legal and other information concerning the Business and the
Assets as Buyer may from time to time reasonably request.  Seller will
instruct its employees, agents and representatives to cooperate in all
reasonable respects with Buyer in its investigation of the Business and the
Assets.

       7.2    INTENTIONALLY LEFT BLANK

       7.3    CONSENTS, APPROVALS AND FILINGS.  As soon as practicable after
the execution of this Agreement, Seller and Buyer will cooperate with each
other with respect to, and will make or cause to be made, all requests,
filings and submissions to any Governmental Entity or other Person that are
required to be made in connection with the transactions contemplated hereby,
including: (i) the obtaining of all necessary actions or non-actions,
waivers, consents and approvals from all Governmental Entities, including the
making of all necessary registrations and


                                       23
<PAGE>

filings with, and the taking of all other reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid any action or
proceeding by, any such Governmental Entities (including any in connection
with the transfer or reissuance of the Permits); (ii) the obtaining of all
necessary consents, approvals or waivers from Persons other than Governmental
Entities; and (iii) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including any attempt
to have any stay or temporary restraining order entered by any arbitrator or
Governmental Entity vacated or reversed.  Notwithstanding the foregoing,
neither Buyer nor any of its Affiliates will be required to divest or hold
separate or otherwise take or commit to take any action that limits its
freedom of action with respect to, or its ability to retain, the Business,
the Assets or any other property or assets, or any material portions thereof.
 Seller will furnish to Buyer, and Buyer will, furnish to Seller such
information and assistance as may reasonably be requested in connection with
the preparation of any requests, filings, submissions or other
communications.  Each party hereto agrees to provide to the other party
copies of any notifications that it or its representatives or Affiliates
receive from any Governmental Entity in connection with the foregoing
matters.

       7.4    EXPENSES.  Each party to this Agreement will bear its own
expenses incurred in connection with the preparation, execution and
performance of this Agreement, including all fees and expenses of agents,
representatives, counsel and accountants. Seller also will bear (i) the costs
associated with any sales, use, registration, inventory, stamp, transfer, or
similar Taxes (including, real property transfer or documentary stamp taxes);
(ii) any recording or registration costs payable by either party as a result
of the transactions contemplated hereby; and (iii) all costs in connection
with any filings made with any Governmental Entity.

       7.5    INDEMNIFICATION FOR BROKERAGE COMMISSIONS.  Except for the fee
due and owing to Harris Webb & Garrison, Inc., Seller represents and warrants
to Buyer that (i) no broker, finder, agent or similar intermediary has acted
on behalf of Seller in connection with this Agreement; and (ii) there are no
brokerage commissions, finders' fees or similar fees or commissions payable
in connection herewith on account of Seller's actions.  Seller agrees to
indemnify and keep Buyer harmless from any claim or demand for commission or
other compensation by any broker, finder, agent or similar intermediary
claiming to have been employed or retained by or on behalf of Seller, and to
bear the cost of any legal expenses incurred by Buyer in defending against
any such claim. Buyer represents and warrants to Seller that (x) no broker,
finder, agent or similar intermediary has acted on behalf of Buyer in
connection with this Agreement, and (y) there are no brokerage commissions,
finders' fees or similar fees or commissions payable in connection herewith
on account of Buyer's actions.  Buyer agrees to indemnify and keep Seller
harmless from any claim or demand for commission or other compensation by any
broker, finder, agent or similar intermediary claiming to have been employed
or retained by or on behalf of Buyer, and to bear the cost of any legal
expenses incurred by Seller in defending against any such claim.

       7.6    INSURANCE. After the Closing, Seller will maintain or cause to
be maintained in force (including necessary renewals thereof) products
liability insurance policies against risks


                                       24
<PAGE>

and liabilities to the extent and in the manner heretofore maintained by
Seller with respect to the Business and the Assets.

       7.7    LITIGATION.  After the Closing, Seller will promptly notify
Buyer of any lawsuits, investigations or other proceedings that are
threatened or commenced against Seller (or any current or former director,
officer or employee thereof) which may relate to, or affect, the Business,
the Assets, the Assumed Liabilities, this Agreement or the transactions
contemplated hereby.

       7.8    ACCESS; RECORDS; OPERATIONS MANUALS.  (a)  After the Closing,
Buyer and Seller will afford to each other and their respective
representatives the opportunity, upon reasonable request, to examine and make
copies of their respective books and records relating to the Business and the
Assets, and to consult with their respective officers, employees, accountants
and other representatives in connection with any reasonable business purpose,
including the preparation of Tax Returns and financial reports and the
conducting of any audits with respect thereto, the administration of Buyer's
benefit plans and benefit arrangements, the review of any materials, books,
records or circumstances relating to either party's ongoing obligations under
this Agreement or any Operative Document or for any other reasonable business
purpose.

       (b)    On the Closing Date, Seller will make available for delivery to
Buyer the following:

              (i)  all Records, subject to the following:

                     (A)    Buyer recognizes that certain Records may not relate
              to the Business or may relate primarily to Retained Assets or
              Retained Liabilities, in which case Seller may retain such Records
              but will provide copies of the portions thereof relating to the
              Business to Buyer;

                     (B)    Seller may retain any Tax Returns and any files and
              records relating thereto (including payroll records and paid
              invoices); PROVIDED, that Buyer will be provided with copies of
              such Tax Returns, files and records to the extent that they relate
              to the Business, the Assets or Buyer's obligations under this
              Agreement; PROVIDED, FURTHER, that Seller will not dispose of or
              destroy such records without first offering to turn over
              possession thereof (to the extent relating to the Business, the
              Assets or Buyer's obligations under this Agreement) to Buyer (at
              Buyer's expense) by written notice to Buyer at least 30 days prior
              to the proposed date of such disposition or destruction;

                     (C)    Seller may retain its corporate record books and
              stock records containing its articles of incorporation, bylaws,
              minutes of meetings of the boards of directors, stockholders,
              managers and management committees, and similar governance
              documents; and


                                       25
<PAGE>

                     (D)    Seller may retain all records exclusively relating
              to, or that constitute Retained Assets; PROVIDED, that Seller will
              not, dispose of or destroy such records without first offering to
              turn over possession thereof (to the extent relating to Buyer's
              obligations under this Agreement) to Buyer (at Buyer's expense) by
              written notice to Buyer at least 30 days prior to the proposed
              date of such disposition or destruction;

              (ii)  operations and maintenance manuals setting forth in
       reasonable detail all procedures necessary to operate the Assets in a
       safe and reliable manner, which procedures will (A) incorporate
       manufacturers' recommended guidelines and sound industry practices; (B)
       include specific preventative maintenance procedures, including an annual
       maintenance schedule; (C) include adequate safety measures and procedures
       for the safe operation and maintenance of the Equipment, including
       measures and procedures for fire prevention; (D) include adequate
       security measures and procedures; and (E) integrate vendor and
       manufacturer recommendations to the extent Seller, in consultation with
       Buyer, deems such recommendations necessary or desirable in connection
       with the efficient operation and maintenance of the Assets or the
       protection of warranties.

       7.9    FIRPTA AFFIDAVIT. Upon request of Buyer, Seller will furnish to
Buyer an affidavit, in form and substance reasonably satisfactory to Buyer,
stating under penalty of perjury Seller's United States taxpayer
identification number and that Seller is not a foreign Person pursuant to
Section 1445(b)(2) of the Code.

       7.10   BULK SALES.  Seller agrees to indemnify and save Buyer harmless
from any losses actually suffered by Buyer as a result of any noncompliance
by Seller with the provisions of any bulk sales law or any similar statute of
any jurisdiction as they may be applicable to the transactions contemplated
by this Agreement.

       7.11   FURTHER ASSURANCES.  Each party hereto will, and will cause its
respective Affiliates to, execute such agreements, documents, instruments and
other papers and take such further actions, at any time and from time to
time, after the Closing Date, as may be reasonably requested by the other
party to carry out the provisions hereof and the transactions contemplated
hereby.

       7.12   MAIL OR OTHER COMMUNICATIONS RECEIVED AFTER CLOSING.  On and
after the Closing Date, Buyer may receive and open all mail or other
communications addressed to Seller and deal with the contents thereof in its
discretion to the extent that such mail or other communications and the
contents thereof relate to the Business, the Assets or any of the Assumed
Liabilities.  Buyer agrees to keep and cause to be kept confidential the
contents of, and to deliver or cause to be delivered promptly to Seller, all
other mail or communications (including any mail or communications that
relate to the Retained Assets or the Retained Liabilities) received by Buyer
which are addressed to Seller.  In the event that Seller receives mail or
other communications which relate to the Business, the Assets or any of the
Assumed Liabilities on or after the Closing Date, Seller will deliver or
cause to be delivered immediately to Buyer such mail or other


                                       26
<PAGE>

communications.  Seller agrees to keep and cause to be kept confidential the
contents of such mail or other communications.

       7.13   ANCILLARY AGREEMENTS.  INTENTIONALLY LEFT BLANK.

       7.14   CONDUCT OF BUSINESS.  Except as set forth on SCHEDULE 7.14 or
as otherwise expressly permitted by the terms of this Agreement, from the
date hereof to the Meeting Date, Seller will use its best efforts to: (a)
conduct its business in the ordinary course in substantially the same manner
as currently conducted; (b) use its best efforts to preserve and maintain the
condition of the business, including relationships with customers, suppliers,
distributors and others with whom Seller deals in connection with the
business, and all associated goodwill; (c) comply with all applicable Laws
with respect to its business; and (d) pay, perform and discharge, when due,
in the ordinary course of business consistent with past practice, all
obligations of Seller.  In addition, except as set forth on SCHEDULE 7.14 or
as otherwise expressly permitted by the terms of this Agreement, Seller will
not do any of the following without the prior written consent of Buyer:

              (i)  institute any changes in the business other than in the
       ordinary course of business consistent with past practice;

              (ii)  engage in any trade or distributor loading of finished goods
       of the business;

              (iii)  sell, lease, dispose of or encumber, or agree to sell,
       lease, dispose of or encumber, any properties or assets of the business,
       except sales of inventory in the ordinary course of business consistent
       with past practice;

              (iv)  enter into any contract, lease, commitment, arrangement or
       transaction relating to its business or any properties or assets of the
       Business other than in the ordinary course of business consistent with
       past practice;

              (v)  enter into any new employment agreement or increase or
       modify, in any material respect, the terms of any Benefit Plan or Benefit
       Arrangement (including but not limited to any commitment to pay
       retirement or other benefits or any modification of benefits or personnel
       policies and practices);

              (vi)  increase or modify the salary, commissions or other wages
       payable to, or which will become payable to, any Employee, except in the
       ordinary course of business consistent with past practice;

              (vii)  perform any act or omit to perform any act which, if taken
       or omitted prior to the date hereof, would constitute, result in or cause
       a breach of or default under any contracts relating to its business;


                                        27
<PAGE>

              (viii)  enter into any purchase orders for amounts in excess of
       $5,000, except for purchase orders for (A) raw materials ordered in the
       ordinary course of business consistent with past practice and
       (B) services under existing contracts;

              (ix)  prepare or file any Tax Return inconsistent with past
       practice or, on any such Tax Return, take any position, make any election
       or adopt any method that is inconsistent with positions taken, elections
       made or methods used in preparing or filing similar Tax Returns in prior
       periods (including positions, elections or methods which would have the
       effect of deferring income to periods for which Buyer is liable pursuant
       to SECTION 7.19 or accelerating deductions to periods for which Seller is
       liable pursuant to SECTION 7.19);

              (x) institute any suit or other proceeding which involves the
       Business or the Assets; or

              (xi)  agree, whether in writing or otherwise, to do any of the
       foregoing.

Seller will not take any action or agree to take any action that results in
any of the representations and warranties of Seller set forth in this
Agreement becoming untrue or misleading.

       7.15   COVENANT NOT TO COMPETE.  (a)  As a material inducement to
Buyer to enter into this Agreement and to consummate the transactions
contemplated hereby, Seller agrees to the covenants and agreements set forth
in this SECTION 7.15 for the benefit of Buyer and its Affiliates.

       (b)    Neither Seller nor any of its Affiliates will, at any time from
and after the Closing Date and through the tenth anniversary thereof, without
the prior written consent of Buyer, (i) directly or indirectly engage in, or
(ii) acquire control of or more than a two percent (2%) interest in, or
assist or render services (whether or not for compensation, or as an agent,
advisor, consultant or lender) to or for, any business more than ten percent
(10%) of the consolidated revenues of which are derived from the development,
manufacture, sale or provision of memory modules and board design in North
America, South America, Europe and Asia.

       (c)    The covenant set forth in SECTION 7.15(b) will be construed as
a separate and independent covenant for each of the separate countries listed
in SECTION 7.15(b).  To the extent that such covenant is declared to be
invalid or unenforceable in any country, state, province, territory or
possession, or in any other jurisdiction, or with respect to any Person, such
covenant will be deemed to be deleted herefrom with respect to, and only with
respect to, the operation of such covenant in the particular jurisdiction or
with respect to such Person in which or against whom such declaration was
made, and such declaration will not affect the enforceability of such
covenant with respect to any other country, state, province, territory or
possession, or any other jurisdiction or Person; PROVIDED, that to the extent
such covenant may be valid and enforceable in such jurisdiction or against
such Person by limitations on the scope of the activities, geographical area,
time period covered or otherwise, Seller and Buyer agree that such covenant
instead will be deemed to be limited to the extent, and only to the extent,
necessary to make such covenant


                                       28
<PAGE>

enforceable to the fullest extent permissible under the laws and public
policies applied in such jurisdiction.

       (d)    Seller agrees that it will not (and will not permit any of its
Affiliates to), at any time from and after the Closing Date and through the
tenth anniversary thereof, directly or indirectly through the actions of any
other Person, whether for its own benefit or for that of another Person:  (i)
solicit, divert or take away, or attempt to solicit, divert or take away, any
individual who is, as of the Closing Date or at any time thereafter, an
officer, director or managerial, marketing, research and development or other
key employee of Buyer or any of its Affiliates with respect to the Business,
or induce or attempt to induce any such individual to terminate his or her
employment with Buyer or any of its Affiliates; or (ii) take any action, or
advise or assist any Person in taking any action, that would impair the
goodwill of the Business, including but not limited to, actions that could
interfere with or damage the relationships between the Business and its
employees, customers, distributors, manufacturer representatives and
suppliers.

       7.16   NOTICE OF CERTAIN EVENTS.  Each party hereto will promptly
notify the other party of any event, occurrence, condition or circumstance of
which it becomes aware from the date hereof that would constitute a violation
or breach of any representation, warranty, covenant or agreement made by it
in this Agreement.

       7.17   REASONABLE BEST EFFORTS.  INTENTIONALLY LEFT BLANK

       7.18   NEGOTIATIONS.  From and after the date hereof, Seller agrees
that Seller and its Affiliates will deal exclusively and in good faith with
Buyer and its Affiliates with respect to any transaction involving the sale,
transfer or other disposition of the Assets or the Business, and none of
Seller, its Affiliates nor their respective officers, directors, employees,
lenders, investment banking firms, advisors or other agents, nor any Person
acting on their behalf, will solicit any inquiries or proposals by, or engage
in any discussions or negotiations with, or furnish any non-public
information to, or enter into any agreement with, any Person other than Buyer
and its Affiliates concerning the sale or other disposition of the Assets or
the Business or a merger, consolidation, sale of securities or other
transaction involving Seller or its Affiliates, if such merger,
consolidation, sale or other transaction would be inconsistent, in any
respect, with the transactions contemplated by this Agreement, and will
promptly notify Buyer of the substance of any inquiry or proposal concerning
any such transaction that may be received by Seller or its Affiliates.

       7.19   TAXES.  (a)  Seller will be liable for and will pay, and will
indemnify, defend and hold harmless Buyer and its Affiliates (and directors,
officers, employees, stockholders, successors, assigns, representatives and
agents) from and against, all Taxes (whether assessed or unassessed), and
will be responsible for the preparation and filing of all Tax Returns,
applicable to the Business, the Assets and the Assumed Liabilities, in each
case attributable to taxable years or periods ending on or prior to the close
of the day on which the Closing occurs and, with


                                       29
<PAGE>

respect to any Straddle Period, the portion of such Straddle Period ending on
and including the close of the day on which the Closing occurs.

       (b)    Buyer will be liable for and will pay, and will indemnify,
defend and hold harmless Seller and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representatives and agents) from and against, all Taxes (whether assessed or
unassessed), and will be responsible for the preparation and filing of all
Tax Returns, applicable to the Business, the Assets and the Assumed
Liabilities that are attributable to taxable years or periods beginning on
the day immediately following the day on which the Closing occurs and, with
respect to any Straddle Period, the portion of such Straddle Period beginning
on the day immediately following the day on which the Closing occurs;
PROVIDED, that Buyer will not be liable for or pay, and will not indemnify,
defend or hold harmless, Seller and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representatives and agents) from and against, any Taxes for which Seller is
liable under this Agreement, including, pursuant to the preceding sentence or
SECTION 5.14 (which Taxes will be the liability of Seller).

       (c)    Seller, on the one hand, or Buyer, on the other hand, as the
case may be, will provide reimbursement for any Tax paid by one party or its
Affiliates, all or a portion of which is the responsibility of the other
party in accordance with the terms of this SECTION 7.19.  Not later than 14
days prior to the payment of any such Tax, the party paying such Tax will
give notice to the other party of the Tax payable and the portion which is
the liability of the other party, although failure to do so will not relieve
the other party from its liability hereunder.

       (d)    After the Closing Date, Seller and Buyer will, and will cause
their respective Affiliates to: (i) assist in all reasonable respects the
other party in preparing any Tax Returns which such other party is
responsible for preparing and filing; (ii) cooperate in all reasonable
respects in preparing for any audits of, or disputes with taxing authorities
regarding, any Tax Returns concerning the Business, the Assets or the Assumed
Liabilities; (iii) make available to the other party and to any taxing
authority as reasonably requested by the other party all information,
records, and documents relating to Taxes concerning the Business, the Assets
or the Assumed Liabilities; (iv) provide timely notice to the other party in
writing of any pending or threatened Tax audits or assessments relating to
Taxes concerning the Business, the Assets or the Assumed Liabilities for
taxable periods for which the other party may have a liability under this
SECTION 7.19; and (v) furnish the other party with copies of all
correspondence received from any taxing authority in connection with any Tax
audit or information request with respect to any such taxable period.

       (e)    Notwithstanding anything to the contrary in this Agreement, the
obligations of the parties set forth in this SECTION 7.19 will be
unconditional and absolute and will remain in effect without limitation as to
time or amount.

       7.20   SHAREHOLDER CONSENT.  Immediately following the Closing, Seller
shall promptly have prepared and distributed to its shareholders, a proxy
statement and proxy requesting that the


                                       30
<PAGE>

shareholders ratify the sale of the Assets to Buyer.  The meeting of
shareholders to vote on the ratification shall be held on or before February
16, 2000.

       7.21   NEGOTIATIONS.  In negotiating with the Scottish Government,
Buyer will request that Seller be released from its obligations to the
Scottish Government.

       77.22  SALE OF TESTERS.  If Buyer sells any of the sigma three test
systems that constitute Assets within six months from the Closing Date,
Seller shall extend the Seller's warranty on such products for six months
from the sale of such products by Buyer.

8.     EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS

       8.1    EMPLOYEES.  As of the Closing Date, Seller will terminate the
employment of all Employees employed by Seller in connection with the
Business (other than those Employees to whom Buyer decides, in its sole
discretion, not to offer employment and whom Seller desires to retain).
Seller will retain and assume all liabilities, and carry out all obligations
accrued on or before the Closing Date, with respect to each such terminated
Employee's compensation, benefits and other entitlements resulting from such
termination.  Buyer will, immediately following the Closing Date, offer to
employ Seller's employees who work in the Business, on terms and conditions
to be established by Buyer. Seller will make available to Buyer the personnel
records for each Employee. Seller will not make any representations or
assurances to the Employees that all or any of them will be hired by Buyer or
what their wages, hours, or terms and conditions of employment would be were
they employed by Buyer.  Buyer will not solicit or hire Employees without the
consent of Seller.

       8.2    BENEFIT PLANS.  Without limiting the generality of SECTION 2.2
hereof, and except as otherwise provided in this ARTICLE 8, Seller will
retain and be solely responsible for (i) all liabilities and obligations
under all Benefit Plans and Benefit Arrangements, including all liabilities
and obligations arising under the continuation coverage requirements of
Section 4980B of the Code and Part 6 of Title I of ERISA; (ii) any long-term
disability benefits provided under any Benefit Plan, including any claims
resulting from disabilities incurred but not reported as of the Closing Date;
(iii) any benefits provided to Persons who do not become Continuing
Employees; (iv) any expenses incurred under Seller's Benefit Plans and
Benefit Arrangements; and (v) any award of stock appreciation rights, stock
options, restricted stock, performance shares or units, or other incentive
compensation by Seller.

       8.3    NO RIGHT TO BENEFITS.  No provision contained in this Agreement
will create any third party beneficiary or other rights in any employee or
former employee of Seller (or any beneficiary or dependent thereof) in
respect of continued employment or resumed employment with any Buyer or the
Business, and no provision of this Agreement will create any such rights in
any such Person in respect of any benefits that may be provided under any
employee benefit plan or arrangement that may be established by any Buyer.


                                       31
<PAGE>

       8.4    EMPLOYEE AGREEMENTS.  Seller hereby (i) assigns to Buyer all of
Seller's rights under all confidentiality and non-competition agreements that
exist with any Employees (other than those Employees, if any, retained by
Seller), and (ii) pursuant to SECTION 7.8(b), provides copies of all such
agreements to Buyer.

       8.5    RIGHT TO CHANGE BENEFITS.  Buyer will have the right, in the
good faith exercise of its managerial discretion, to make changes or cause
changes in the compensation, benefits (including retiree medical, pension,
thrift plan or other benefits), and other terms of employment for, and to
terminate the employment of, any Continuing Employee.

9.     INTENTIONALLY LEFT BLANK

10.    INTENTIONALLY LEFT BLANK

11.    SURVIVAL

       All covenants and agreements contained herein survive, without
limitation as to time (except as may be otherwise provided in such covenants
and agreements), the execution and delivery of this Agreement and the Closing
hereunder.  All representations and warranties contained herein will
terminate and expire on the second anniversary of the Closing Date, except
with respect to (i) SECTIONS 5.3, 5.9 AND 5.10, for which the representations
and warranties contained therein will continue to survive indefinitely; (ii)
SECTION 5.15, for which the representations and warranties contained therein
will terminate and expire on the tenth anniversary of the Closing Date; and
(iii) SECTION 5.14, for which the representations and warranties contained
therein will terminate and expire 60 days after the expiration of the
applicable statute of limitations or any extensions thereof.

12.    INDEMNIFICATION

       12.1   OBLIGATION OF SELLER TO INDEMNIFY.  Seller agrees to indemnify,
defend and hold harmless Buyer and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representatives, counsel and agents) (collectively, the "BUYER INDEMNITIES")
from and against all claims, losses, liabilities, damages, deficiencies,
costs or expenses, including interest, penalties and attorneys' fees and
disbursements (collectively, "LOSSES"), actually incurred, suffered or paid,
directly or indirectly, by the Buyer Indemnities based upon, arising out of
or otherwise in respect of: (i) any breach or alleged breach of any
representation or warranty of Seller contained in this Agreement, the
Schedules hereto, or the Seller Documents; (ii) any breach or alleged breach
of any covenant or agreement of Seller contained in this Agreement or any
Seller Document; (iii) any Retained Liability; (iv) the failure by Buyer to
submit this Agreement and the transactions contemplated hereby to the
shareholders of the Buyer for their consideration and approval; (v) the
operation of the Assets or the Business prior to the Closing Date; (vi) the
sale and transfer of the Assets to Buyer; (vii) (A) any Environmental Claim
asserted against Buyer or for which Buyer otherwise becomes liable or must
investigate, or any actual or threatened violation of or non-compliance with,
or remediation


                                       32
<PAGE>

obligation arising under, any Environmental Laws arising from any event,
condition, circumstance, activity, practice, incident, action or plan
relating in any way to the Assets; (B) the presence of any Materials of
Environmental Concern arising out of actions or events relating to or
involving Seller, the Business or the Assets prior to the Closing Date on,
in, under or affecting all or any portion of the Assets and/or any property
on which Seller has conducted business, and any release or threatened release
with respect to Materials of Environmental Concern; and (C) the storage,
disposal or treatment, or the transportation for storage, disposal or
treatment, of Materials of Environmental Concern (regardless of location)
arising out of actions or events involving or relating to Seller, the
Business or the Assets prior to the Closing Date; (viii) relating to product
liability claims which have arisen or may arise against Seller or Buyer or
the Assets for actions or events involving or relating to the Seller, the
Business or the Assets prior to the Closing Date; (ix) any employee related
claims arising out of events that occurred prior to the Closing Date; or (x)
the operation of Tanisys Europe Ltd. (including, but not limited to, relating
to the Section 7 Industrial Development Act of 1982 Grant from the Scottish
Government).

       12.2   OBLIGATION OF BUYER TO INDEMNIFY.  Buyer agrees to indemnify,
defend and hold harmless Seller and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representative and agents) (collectively the "SELLER INDEMNITIES") from and
against any Losses actually incurred, suffered or paid, directly or
indirectly, by the Seller Indemnities based upon, arising out of or otherwise
in respect of: (i) any breach or alleged breach of any representation or
warranty of Buyer contained in this Agreement, or the Buyer Documents; (ii)
any breach or alleged breach of any covenant or agreement of Buyer contained
in this Agreement or any Buyer Document; or (iii) any Assumed Liability.

       12.3   NOTICE AND OPPORTUNITY TO DEFEND.  (a)  NOTICE OF ASSERTED
LIABILITY.  Promptly after receipt by any Person entitled to indemnification
under this ARTICLE 12 (the "INDEMNITEE") of notice of any demand, assertion
or other circumstance which could give rise to a claim or the commencement
(or threatened commencement) of any action, proceeding or investigation
(each, an "ASSERTED LIABILITY") that may result in a Loss, the Indemnitee
will give notice thereof (the "CLAIMS NOTICE") to the party obligated to
provide indemnification or payment pursuant to SECTION 12.1 or 12.2 (the
"INDEMNIFYING PARTY"), as the case may be, subject to the procedures
contained in this SECTION 12.3.  The Claims Notice will describe the Asserted
Liability in reasonable detail and will, if possible, indicate the amount of
the Loss that has been or may be suffered by the Indemnitee.  In no event
will the Indemnitee's failure to give a Claims Notice to the Indemnifying
Party relieve the Indemnifying Party of any liability under this ARTICLE 12,
except to the extent that such failure materially prejudices the Indemnifying
Party's ability to adequately defend such claim.

       (b)    OPPORTUNITY TO DEFEND.  If the Indemnifying Party confirms in
writing that it is obligated hereunder to indemnify the Indemnitee with
respect to any Asserted Liability, the Indemnifying Party may elect to
compromise or defend, at its own expense and with counsel reasonably
satisfactory to the Indemnitee, such Asserted Liability; and if the
Indemnifying Party so elects to compromise or defend, the Indemnifying Party
will have the right to control the defense of such Asserted Liability.  If
the Indemnifying Party elects to compromise or defend


                                       33
<PAGE>

such Asserted Liability, it will within 15 days (or sooner, if the nature of
the Asserted Liability so requires) notify the Indemnitee of its intent to do
so, and the Indemnitee will cooperate with the Indemnifying Party in the
compromise of, or defense against, such Asserted Liability.  If the
Indemnifying Party elects not to compromise or defend such Asserted
Liability, fails to notify the Indemnitee of its election as herein provided
or contests its obligation to indemnify under this Agreement, the Indemnitee
may pay, compromise or defend such Asserted Liability, and the Indemnitee
will have the right to control the compromise or defense of such Asserted
Liability; and in such case, the Indemnitee will retain the right to pursue
its rights to indemnification hereunder against the Indemnifying Party.
Notwithstanding the foregoing provisions of this SECTION 12.3(b), the
Indemnifying Party may settle or compromise any Asserted Liability; PROVIDED,
that (i) such settlement or compromise does not result in any liability to,
restriction on or admission by the Indemnitee; and (ii) such settlement or
compromise constitutes or includes a full release of the Indemnitee.  In any
event, the Indemnitee may participate, at its own expense, in the defense of
any Asserted Liability.  If the Indemnifying Party chooses to defend any
Asserted Liability, the Indemnitee will make available to the Indemnifying
Party any books, records or other documents within its control that are
necessary or appropriate for such defense.

       12.4   INDEMNIFICATION PAYMENTS ON AFTER-TAX BASIS.  Any
indemnification payment hereunder with respect to any Loss will be in an
amount which is sufficient to compensate the Indemnitee for the amount of
such Loss, after taking into account all increases in federal, state,
provincial, local, foreign or other Taxes payable by the Indemnitee because
of the receipt of such payment (by reason of such payment being included in
income, resulting in a reduction of tax basis or otherwise increasing such
Taxes payable by the Indemnitee at any time).

       12.5   PAYMENT OF DAMAGES.  Any Loss for which Indemnitee is entitled
to indemnification under this ARTICLE 12 shall be paid by the Indemnifying
Party to the Indemnitee as such Losses are incurred.

       12.6   RIGHT OF OFFSET.  Upon the determination by Buyer that it is
entitled to indemnification for Losses hereunder from Seller, Buyer may
offset any indemnification amounts or expense advances to which Buyer
believes it is entitled against the Earn Out Payment and/or any Consulting
Payment.

13.    RESCISSION.  If Seller does not obtain on or before February 16, 2000,
the requisite shareholder vote to ratify the transactions consummated under
this Agreement, Buyer shall have the right to rescind the transactions that
occurred hereunder by giving written notice to Seller.


                                       34
<PAGE>

14.    MISCELLANEOUS

       14.1   PUBLICITY.  Neither Seller nor Buyer will make any publicity
release or announcement concerning this Agreement or the transactions
contemplated hereby without the prior written approval thereof by Buyer or
Seller, as the case may be, except as required by applicable Law, in which
case the party issuing the release will so advise the other party in writing
and submit a copy of such release in advance of such issuance.

       14.2   NOTICES.  Any notice or other communication required or
permitted hereunder will be in writing and will be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice will be deemed given when delivered
personally, or sent by facsimile transmission (after receiving confirmation
of receipt) or, if mailed, five days after the date of deposit in the United
States mail or, if express mailed, one Business Day after delivery to a
reputable overnight express mail courier, as follows:

       (i)  If to Buyer, to:

                            TanisysOperations, LP
                            13717 Beta Road
                            Farmers Branch, Texas 75244
                            Attention:  President of General Partner
                            Telecopy:  (972) 851-1997

       (ii)  If to Seller, to:

                            Tanisys Technology, Inc.
                            12201 Technology Boulevard
                            Austin, TX 78727-6101
                            Attention:  Charles T. Comiso
                            Telecopy:  (512) 257-5350

              with a copy to:

                            W. Audie Long
                            7411 John Smith Drive, Suite 200
                            San Antonio,  TX 78229-4898
                            Telecopy: (210) 949-7024

Either party may by notice given in accordance with this SECTION 14.2
designate another address or Person for receipt of notices hereunder.

       14.3   ENTIRE AGREEMENT.  This Agreement (including the Schedules
hereto), the Buyer Documents and the Seller Documents contain the entire
understanding among the parties with respect to the purchase and sale of the
Assets and the Business and supersede all prior


                                       35
<PAGE>

agreements, written or oral, with respect thereto, including, but not limited
to, the Letter Agreement.

       14.4   AMENDMENTS AND WAIVERS; PRESERVATION OF REMEDIES.  This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, in each case only by a written instrument signed
by Buyer and Seller or, in the case of a waiver, by the party waiving
compliance.  No delay on the part of either party in exercising any right,
power or privilege hereunder will operate as a waiver thereof; nor will any
waiver on the part of either party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such
right, power or privilege.

       14.5   GOVERNING LAW, JURISDICTION, FORUM SELECTION AND WAIVER OF JURY
TRIAL.  This Agreement, and the rights and obligations of Buyer and Seller
hereunder, will be governed by, and construed and enforced in accordance
with, the laws of the State of Texas applicable to agreements made and to be
performed entirely within such State, without regard to principles of
conflict of laws. Buyer and Seller each agrees that any action or proceeding
based upon or relating to this Agreement will, to the fullest extent
permitted by applicable law, be brought and maintained exclusively in the
courts of the State of Texas or in the United States District Court for the
Northern District of Texas. Buyer and Seller each hereby irrevocably submits
to the jurisdiction of the courts of the State of Texas and of the United
States District Court for the Northern District of Texas for purposes of any
such action or proceeding, and irrevocably agrees to be bound by any judgment
rendered by any such court in connection with such action or proceeding.
Buyer and Seller each hereby irrevocably waives, to the fullest extent
permitted by law, any objection that it may have to the laying of venue of
any such action or proceeding brought in any such court and any claim that
any such action or proceeding has been brought in an inconvenient forum.
Buyer and Seller each hereby irrevocably waives any right it may have to a
trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.

       14.6   BINDING EFFECT; NO ASSIGNMENT.  This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  This Agreement may not be assigned by
either party hereto without the prior written consent of the other party;
PROVIDED, that Buyer may assign any or all of its rights hereunder to one or
more Affiliates of Buyer, but no such assignment will release Buyer from any
of its obligations hereunder.

       14.7   VARIATIONS IN PRONOUNS.  All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as
the context may require.

       14.8   COUNTERPARTS.  This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, and all such counterparts will together constitute one
and the same instrument.


                                       36
<PAGE>

       14.9   SCHEDULES.  The Schedules are an integral part of this
Agreement as if fully set forth herein.  All references herein to Articles,
Sections and Schedules will be deemed references to such parts of this
Agreement, unless the context otherwise requires.

       14.10  HEADINGS.  The headings in this Agreement, in any Appendix,
Exhibit or Schedule hereto and in the table of contents are for reference
only and will not affect the meaning or interpretation of this Agreement.

       14.11  SEVERABILITY OF PROVISIONS.  Subject to the reformation
provision in SECTION 7.15, if any provision of this Agreement is held to be
illegal, invalid or unenforceable under any current or future law, and if the
rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part
thereof, the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance therefrom.   In lieu of such
illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement, a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible, and the parties hereto request the court or any
arbitrator to whom disputes relating to this Agreement are submitted to
reform the otherwise illegal, invalid or unenforceable provision in
accordance with this SECTION 14.11.

       14.12  NO THIRD-PARTY BENEFICIARIES.  Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any
Person, other than the parties hereto and their respective successors and
permitted assigns, any rights or remedies under or by reason of this
Agreement; provided, however, All Components, Inc. be, and it hereby is,
deemed to be a third party beneficiary of this Agreement.

       14.13  EQUITABLE RELIEF.  Seller acknowledges and agrees that in view
of the uniqueness of the Business, damages at law would be an insufficient
remedy for a breach of any of its covenants in this Agreement.  Accordingly,
Seller agrees that in the event of a breach or threatened breach by Seller of
any such provisions, Buyer will be entitled to, and Seller acknowledges and
covenants that it will not, and will cause its Affiliates not to, contest the
appropriateness and availability of, equitable relief in the form of an
injunction to prevent irreparable injury.  Nothing herein will be construed
as prohibiting Buyer from pursuing any other remedies, including damages, for
a breach or threatened breach of this Agreement;

       14.14  DENOMINATIONS.  All dollar references in this Agreement will be
understood to refer to United States dollars.

       14.15  OBLIGATIONS OF SELLER WITH RESPECT TO AFFILIATES.  Each
obligation, covenant and undertaking of Seller set forth in each of this
Agreement and the Seller Documents will be deemed, as and to the extent
required by the context, to also include a corresponding obligation,


                                       37
<PAGE>

covenant or undertaking of Seller to cause its Affiliates to perform or
satisfy such obligation, covenant or undertaking.

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

TANISYSOPERATIONS, LP                     TANISYS TECHNOLOGY, INC

By:    Tanisys Acquisition GP, Inc.
       Its General Partner

/s/ Robert Cooper                         By: /s/ Charles T. Comiso
-----------------------------------          ---------------------------------
Robert Cooper, President                  Name:  Charles T. Comioso
                                               -------------------------------
                                          Title: Pres. & CEO
                                                ------------------------------


                                       38
<PAGE>

                                                                      APPENDIX A

                            DEFINITIONS AND RULES OF USAGE

                                    RULES OF USAGE

       The terms defined below shall have the respective meanings set forth
below for all purposes, and such meanings shall be equally applicable to both
the singular and plural forms of the terms defined.  "Include," "includes" and
"including" shall be deemed to be followed by "without limitation."  "Writing,"
"written" and comparable terms refer to printing, typing, lithography and other
means of reproducing words in a visible form.  Any instrument or Law defined or
referred to below or in any instrument that recites it is to be construed in
accordance with this Appendix means such instrument or Law as from time to time
amended, modified or supplemented, including (in the case of instruments) by
waiver or consent and (in the case of Laws) by succession of comparable
successor Laws and includes (in the case of instruments) references to all
attachments thereto and instruments incorporated therein.  References to any
Person are, unless the context otherwise requires, also to its successors and
assigns.  "Hereof," "herein," "hereunder" and comparable terms refer to the
entire instrument in which such terms are used and not to any particular
article, section or other subdivision thereof or attachment thereto.  References
to the singular include, unless the context otherwise requires, references to
the plural and vice versa.  References in an instrument to "Article", "Section"
or another subdivision or to an attachment are, unless the context otherwise
requires, to an article, section or subdivision of or an attachment to such
instrument.

                                     DEFINITIONS

              "ACCOUNTS RECEIVABLE" means all trade accounts and notes
receivable of the Business (net of reserves and applicable allowances).

              "ADJUSTED PURCHASE PRICE" has the meaning specified in SECTION
3.3.

              "AEA" means the Atomic Energy Act of 1954 (42 U.S.C. Section 2011
ET SEQ.).

              "AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person.

              "AGREEMENT" means the Asset Purchase Agreement dated as of
December 7, 1999, by and between Buyer and Seller, as may be amended, modified
or supplemented from time to time.

              "ASSERTED LIABILITY" has the meaning specified in SECTION 12.3.

              "ASSETS" has the meaning specified in SECTION 1.1.


                                      39
<PAGE>

              "ASSUMED LIABILITIES" has the meaning specified in SECTION 2.1.

              "BENEFIT ARRANGEMENTS" means each and all retirement, savings,
bonus, commission, deferred compensation, incentive compensation, holiday,
vacation, severance pay, stock option, stock purchase, performance, sick pay,
sick leave, disability, tuition refund, service award, company car, scholarship,
relocation, patent award, fringe benefit or other employee benefit plans, and
contracts, policies, practices or arrangements of Seller providing employee or
executive compensation benefits to employees of the Business, other than the
Benefit Plans.

              "BENEFIT PLANS" means each and all "employee benefit plans" as
defined in Section 3(3) of ERISA, currently or at any time during the past six
years maintained or contributed to by the Controlled Group, including (i) any
such plans that are "employee welfare benefit plans" as defined in Section 3(1)
of ERISA, and (ii) any such plans that are "employee pension benefit plans" as
defined in Section 3(2) of ERISA, regardless of whether such Benefit Plans are
excluded from ERISA coverage by Section 4 of ERISA.

              "BUSINESS" has the meaning specified in the second introductory
paragraph of the Agreement.

              "BUSINESS DAY" means, any day other than Saturday, Sunday or a
United States federal holiday on which federally chartered banking and financial
institutions are not open for the transaction of business.

              "BUYER" has the meaning specified in the first introductory
paragraph of the Agreement.

              "BUYER DOCUMENTS" means the documents to be delivered on or prior
to the Closing Date by Buyer pursuant to the Agreement or any mutually
satisfactory list of closing documents.

              "BUYER INDEMNITIES" has the meaning specified in SECTION 12.1.

              "CAA" means the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.).

              "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 ET SEQ.).

              "CLAIMS NOTICE" has the meaning specified in SECTION 12.3.

              "CLOSING" has the meaning specified in SECTION 4.

              "CLOSING DATE" has the meaning specified in SECTION 4.

              "CODE" means the Internal Revenue Code of 1986, as amended.


                                      40
<PAGE>

              "CONDITION OF THE BUSINESS" means the business, operations,
assets, liabilities, properties, condition (financial or otherwise) or prospects
of the Business.

              "CONSULTING PAYMENTS" has the meaning specified in SECTION 3.2(d).

              "CONTAMINANT" means (i) those substances defined as "hazardous
substances," "pollutants" or "contaminants" in Section 101 of CERCLA, (ii) those
substances defined as "hazardous waste," "hazardous materials" or "regulated
substances" by RCRA, (iii) those substances designated as a "hazardous
substance" pursuant to Section 311 of CWA, (iv) those substances defined as
"hazardous materials" in Section 103 of HMTA, (v) those substances regulated as
a hazardous chemical substance or mixture or as an imminently hazardous chemical
substance or mixture pursuant to Section 6 or 7 of TCSA, (vi) those substances
regulated by OPA, (vii) those substances defined as a source, special nuclear or
by-product material by Section 11 of AEA, (viii) those substances defined as
"residual radioactive material" by Section 101 of UMTRCA, (ix) those substances
defined as "toxic materials" or "harmful physical agents" pursuant to Section 6
of OSHA, (x) those substances defined as hazardous wastes in 40 C.F.R. Part
261.3, (xi) those substances defined as hazardous waste constituents in 40
C.F.R. Part 260.10, specifically including Appendix VII and VIII of Subpart D of
40 C.F.R. Part 261, (xii) those substances designated as hazardous substances in
40 C.F.R. Parts 116.4 and 302.4, (xiii) those substances defined as hazardous
substances or hazardous materials in 49 C.F.R. Part 171.8, (xiv) those
substances regulated in the regulations adopted pursuant to such Laws (or any
amendments to such Laws), whether or not such regulations are specifically
referenced herein, and (xv) any other material, substance or waste that poses or
causes, or is alleged to pose or cause, any damage to property or personal
injury or threat to the environment.

              "CONTINUING EMPLOYEE" means each Person employed by Seller in
connection with the Business, immediately prior to the Closing Date, who becomes
an employee of Buyer as of the Closing Date or within 60 days thereafter.

              "CONTROLLED GROUP" means Seller, any Affiliate of Seller or any
other organization that together with Seller is treated as a single employer
under Section 414 of the Code.

              "CREDITOR'S PLAN" has the meaning specified in SECTION 5.31.

              "CURRENT LIABILITIES" means all liabilities listed on SCHEDULE
2.1.

              "CWA" means the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 ET SEQ.).

              "EMPLOYEES" means all regular, full-time employees (excluding
those on lay-off or leave of absence, whether paid or unpaid, seasonal,
temporary and/or part-time employees) of the Business immediately prior to the
Closing Date.


                                      41
<PAGE>

              "ENVIRONMENTAL CLAIM" means any written accusation, allegation,
notice of violation, claim, demand, order, consent decree, directive, cost
recovery action or other cause of action by or on behalf of any Governmental
Entity or any other Person for damages, injunctive or equitable relief, personal
injury, remedial action costs, tangible or intangible property damage, natural
resource damage, nuisance, pollution or any adverse effect on the environment
caused by any Contaminant, or for fines, penalties or restrictions, resulting
from or based upon (i) the existence or continuation of a release of any
Contaminant, (ii) exposure to any Contaminant, (iii) the presence, use,
handling, transportation, storage, treatment or disposal of any Contaminant, or
(iv) the violation or alleged violation of any Environmental Law.

              "ENVIRONMENTAL LAWS" means (i) CERCLA, (ii) CWA, (iii) RCRA, (iv)
AEA, (v) CAA, (vi) EPCRA, (vii) FIFRA, (viii) OPA, (ix) SDWA, (x) SMCRA, (xi)
TSCA, (xii) UMTRCA, (xiii) the Pollution Prevention Act of 1990 (42 U.S.C.
Section 13101 ET SEQ), (xiv) HMTA, (xv) NWPA, (xvi) the regulations adopted
pursuant to all such foregoing Laws, and (xvii) all other Laws concerning
Contaminants, pollution or the protection of air, water or land, but excluding
any such Laws concerning occupational health and safety (including OSHA and all
regulations thereunder).

              "EPCRA" means the Emergency Planning and Community Right to Know
Act (42 U.S.C. Section 11001 ET SEQ.).

              "EQUIPMENT" means the machinery, equipment, tools, furniture,
furnishings, automobiles, trucks, tractors, trailers, forklifts and other
vehicles and mobile equipment, computers, software, copiers, fax machines,
telephones and all related equipment, spare parts and all other tangible
personal property owned or held by Seller, wherever located, used or useful in
connection with the conduct of the Business.

              "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

              "FACILITIES" has the meaning specified in the second introductory
paragraph of the Agreement.

              "FIFRA" means the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. Section 136 ET SEQ.).

              "GAAP" means United States generally accepted accounting
principles applied on a consistent basis throughout the periods involved.

              "GOVERNMENTAL ENTITY" means any government or political
subdivision, whether federal, state, provincial, local or foreign, or any
administrative, regulatory or other agency, commission or instrumentality of
such government or political subdivision, or any arbitrator or arbitral
tribunal, including any court of law.


                                      42
<PAGE>

              "HMTA" means the Hazardous Materials Transportation Act (49 U.S.C.
App. Section 1801 ET SEQ.).

              "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

              "INDEMNIFYING PARTY" has the meaning specified in SECTION 12.3.

              "INDEMNITEE" has the meaning specified in SECTION 12.3.

              "INFORMATION TECHNOLOGY" means any computer software or hardware
(whether general or specific purpose) and any similar or related items of
automated, computerized or management information systems.

              "INTELLECTUAL PROPERTY" means (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissues, continuations, continuations-in-part,
divisionals, revisions, utility models, extensions and reexaminations thereof;
(ii) all trademarks, service marks, trade dress, logos, trade names and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith; (iii) all
copyrightable works, all copyrights and all applications, registrations,
renewals and derivatives in connection therewith; (iv) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, product certifications, designs (including board
designs), drawings, specifications, customer, prospect and supplier lists,
distribution and manufacturer's representative lists, pricing and cost
information, and business and marketing plans and proposals); (v) all computer
software (including data and related documentation); (vi) all other proprietary
rights; (vii) all copies and tangible embodiments thereof (in whatever form or
medium); and (viii) all licenses or agreements in connection with the foregoing,
in each case on a worldwide basis and used or useful in the Business.

              "INTERIM BALANCE SHEET" has the meaning specified in SECTION 5.16.

              "INTERIM FINANCIAL STATEMENTS" has the meaning specified in
SECTION 5.16.

              ""INVENTORY" means all inventory (net reserves and allowances)
used or useful in the Business owned or held by Seller, wherever located,
including all raw materials, chemicals, packaging materials, supplies, work in
process and finished goods.

              "IRS" means the Internal Revenue Service.

              "KNOWLEDGE" means (a) with respect to Seller, (i) any knowledge
attributable to Seller or any Affiliate of Seller based on its files, books and
records, Tax Returns or any other


                                      43
<PAGE>

written documentation; and (ii) the actual personal knowledge of any of the
employees, officers and directors of Seller or any Affiliate of Seller; and
(b) with respect to Buyer, (i) any knowledge attributable to Buyer or any
Affiliate of Buyer based on its files, books and records, Tax Returns or any
other written documentation; and (ii) the actual personal knowledge of any of
the employees, officers and directors of Buyer or any Affiliate of Buyer.

              "LAWS" means all federal, state, provincial, local and foreign
laws, statutes, ordinances, rules, regulations, orders, judgments, decrees,
writs, arbitral orders, settlement agreements, conciliation agreements,
injunctions or other requirements of all applicable governmental, judicial,
legislative, executive, administrative and regulatory authorities.

              "LEASED REAL PROPERTY" has the meaning specified in SECTION 5.9.

              "LIENS" means all liens, pledges, mortgages, security interests,
claims, covenants, leases, subleases, charges, conditions, options, rights of
first refusal, licenses, easements, servitudes, rights of way, encumbrances or
any other restriction or limitation whatsoever.

              "LOSSES" has the meaning specified in SECTION 12.1.

              "MEETING DATE" means the date Seller's shareholders meet to vote
on a proposal to ratify the transactions consummated under this Agreement.

              "NOTICES" means all notices of violation, Liens, complaints,
suits, orders, citations, fines, penalties or other notices.

              "NWPA" means the Nuclear Waste Policy Act (42 U.S.C. Section 10101
ET SEQ.).

              "OBSOLETE INVENTORY" means any Inventory that is obsolete or
otherwise unusable or unsalable in the ordinary course of business.

              "OFF-SITE ENVIRONMENTAL LIABILITIES" means all liabilities,
obligations, claims, damages, costs and expenses, including capital expenditures
and natural resource damage claims (whether arising before, on or after the
Closing Date) incurred (i) as a result of any requirement or violation of any
Environmental Laws; or (ii) as a result of or in connection with any
investigation, inquiry, order, demand, claim, action, citation, fine or other
proceeding by any Governmental Entity or by any other Person, and that in either
case arises as a result of the off-site treatment, storage or disposal (or any
arrangement with respect thereto by Seller) of any Contaminant or other
materials generated or handled in connection with Seller's ownership or
operation of the Real Property, the Assets or the Business.

              "ON-SITE ENVIRONMENTAL LIABILITIES" means all liabilities,
obligations, claims, damages, costs and expenses, including capital expenditures
and natural resource damage claims (whether arising before, on or after the
Closing Date) incurred (i) as a result of any requirement of or violation of any
Environmental Laws; or (ii) as a result of or in connection with any


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investigation, inquiry, order, demand, claim, action, citation, fine or other
proceeding by any Governmental Entity or by any other Person and that in either
case arises as a result of Seller's ownership, occupancy or use of the Real
Property, or operation of the Assets or the Business thereon, including the
migration of Contaminants originating from the Real Property in or by means of
soil, groundwater or surface water; PROVIDED, that On-Site Environmental
Liabilities will not include (x) any Off-Site Environmental Liabilities or (y)
any liabilities, obligations, claims, damages, costs and expenses resulting from
any failure by Seller (A) to obtain or comply with permits; (B) to file
required, complete or accurate reports, documents or other paperwork with
Governmental Entities or any other Person; (C) to retain reports, documents,
records or other paperwork for required periods of time; (D) to comply with any
consent orders, consent agreements or other settlement agreements with any
Governmental Entity or any other Person; (E) to perform or to document any
required employee training; (F) to report any release of any material required
to be reported to any Governmental Entity or any other Person; (G) to prepare or
implement plans, including any stormwater pollution prevention plan or spill
prevention and control plan, that meet the requirements of any Environmental
Law; (H) to comply with any emergency preparedness or waste minimization
requirement; (I) to comply with any above ground storage tank regulatory
requirement; or (J) to store material in compliance with Environmental Laws,
except to the extent that any such failure has resulted in the presence of a
Contaminant in or on the soil, groundwater or surface water at the Owned Real
Property.

              "OPA" means the Oil Pollution Act of 1990 (33 U.S.C. Section 2701
ET SEQ.).

              "OPERATIVE DOCUMENTS" means, collectively, the Agreement, the
Buyer Documents and the Seller Documents.

              "OSHA" means the Occupational Safety and Health Act, 29 U.S.C.
Section 651 ET SEQ.) and the regulations thereunder.

              "PERMITS" has the meaning specified in SECTION 5.5.

              "PERMITTED LIENS" means (i) any Liens securing Taxes; or (ii) any
claims of materialmen, carriers, landlords and like Persons, in each case, which
are not yet due and payable or are being contested in good faith and which,
either individually or in the aggregate, would not interfere with Buyer's
ownership, use or operation of such Assets or conduct of the Business and would
not create the risk of imposition of criminal penalties on Buyer.

              "PERSON" means any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Entity or other entity.

              "PURCHASE PRICE" has the meaning specified in SECTION 3.1.


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              "RCRA" means the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901 ET SEQ.).

              "REAL PROPERTY" has the meaning specified in SECTION 5.9.

              "REAL PROPERTY LEASES" has the meaning specified in SECTION 5.9.

              "RECORDS" means all books and records of Seller relating to the
Business, including all original agreements, files, documents, records, computer
files and programs, operating data, drawings, specifications, environmental
studies, maintenance records, operational manuals and personnel records with
regard to the Continuing Employees.

              "REQUIRED CONSENTS" has the meaning specified in SECTION 5.8.

              "RETAINED ASSETS" has the meaning specified in SECTION 1.2.

              "RETAINED LIABILITIES" has the meaning specified in SECTION 2.2.

              "SDWA" means the Safe Drinking Water Act (42 U.S.C. Sections 300f
ET SEQ.).

              "SELLER" has the meaning specified in the first introductory
paragraph of the Agreement.

              "SELLER DOCUMENTS" means the documents to be delivered on or prior
to the Closing by Seller pursuant to this Agreement or any list of closing
documents satisfactory to Seller and Buyer.

              "SELLER INDEMNITIES" has the meaning specified in SECTION 12.2.

              "SETTLEMENT AMOUNT" has the meaning specified in SECTION 3,2(c).
The Settlement Agreement has been calculated by the parties with respect to the
Business as:  Accounts Receivable plus Inventory less the amount of the secured
liability to Bank of America relating to the Business.

              "SMCRA" means the Surface Mining Control and Reclamation Act of
1974 (30 U.S.C. Sections 1201 ET SEQ.).

              "STRADDLE PERIOD" means a taxable year or period beginning before
and ending after the close of the day the Closing occurs, which will be treated
on a "closing of the books" basis as two partial periods, one ending on the
close of the day the Closing occurs and the other beginning on the day
immediately following the day on which the Closing occurs, except that Taxes
(such as property Taxes) imposed on a periodic basis will be allocated on a
daily basis.

              "TAX" means (i) any federal, state, provincial, local or foreign
net income, gross income, gross receipts, windfall profits, severance,
production, property, sales, use, license,


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excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, AD VALOREM, excise, value added, transfer, stamp, environmental,
registration or inventory tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest or penalty, imposed by any Governmental Entity; and (ii) any
liability for the payment of amounts with respect to any tax, duty, fee,
assessment and charge described in clause (i) as a result of being a member
of an affiliated, consolidated, combined or unitary group, or as a result of
any obligation under any tax sharing arrangement or tax indemnity agreement.

              "TAX RETURN" means any return, report or similar statement
required to be filed with respect to any federal, state, local, provincial or
foreign Taxes (including any attached schedules), including, any information
return, claim for refund, amended return or declaration of estimated Tax.

              "TREASURY REGULATIONS" means the regulations of the United States
Department of Treasury promulgated thereunder.

              "TSCA" means the Toxic Substances Control Act (15 U.S.C. Section
2601 ET SEQ.).

              "UMTRCA" means the Uranium Mill Tailings Radiations Control Act of
1978 (42 U.S.C. Section 7901 ET SEQ.).

              " ANNUAL FINANCIAL STATEMENTS" has the meaning specified in
Section 5.16.

              "YEAR 2000 COMPLIANT" means that Information Technology is capable
of being used prior to, during and after the calendar year 2000 A.D., that such
Information Technology used during each such time period will accurately
receive, provide and process date/time data (including but not limited to
calculating, comparing and sequencing from, into and between the 20th and 21st
centuries, including the calendar years 1999 and 2000, and leap year
calculations), and that such Information Technology will not malfunction, cease
to function or provide invalid or incorrect results as a result of such
date/time data.


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