EXHIBIT 2.2

                          ----------------------------

                            ASSET PURCHASE AGREEMENT
                          ----------------------------



                                      Among



                                Jack Young, Inc.



                               Pocono Knits, Inc.,



                                       and

                     The Shareholders of Pocono Knits, Inc.




                                 March 15, 2002



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I. - SALE AND PURCHASE OF ASSETS.......................................1
   1.01    Sale and Purchase of Assets.........................................1
   1.02    Payment for Assets..................................................3

ARTICLE II. - CLOSING 3
   2.01    Closing.............................................................3
   2.02    Deliveries by the Company...........................................3
   2.03    Deliveries by Buyer.................................................4
   2.04    Termination in Absence of Closing...................................4

ARTICLE III. - REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
                 AND THE COMPANY...............................................4
   3.01    Corporate Existence and Qualification...............................4
   3.02    Authority, Approval and Enforceability..............................5
   3.03    Capitalization and Corporate Records................................5
   3.04    No Shareholder Defaults or Consents.................................5
   3.05    No Company Defaults or Consents.....................................6
   3.06    No Proceedings......................................................6
   3.07    Employee Benefit Matters............................................6
   3.08    Financial Statements; Liabilities; Accounts Receivable;
             Inventories.......................................................9
   3.09    Absence of Certain Changes..........................................9
   3.10    Compliance with Laws...............................................11
   3.11    Litigation.........................................................11
   3.12    Real Property......................................................11
   3.13    Commitments........................................................12
   3.14    Insurance..........................................................13
   3.15    Intangible Rights..................................................13
   3.16    Equipment and Other Tangible Property..............................14
   3.17    Permits; Environmental Matters.....................................14
   3.18    Banks..............................................................15
   3.19    Reserved...........................................................15
   3.20    Absence of Certain Business Practices..............................15
   3.21    Reserved...........................................................15
   3.22    Transactions With Affiliates.......................................15
   3.23    Other Information..................................................16
   3.24    Investment Representations of the Shareholders.....................16

ARTICLE IV. - REPRESENTATIONS AND WARRANTIES OF BUYER.........................16
   4.01    Corporate Existence and Qualification..............................16
   4.02    Authority, Approval and Enforceability.............................16
   4.03    No Default or Consents.............................................17
   4.04    No Proceedings.....................................................17

ARTICLE V. - OBLIGATIONS PRIOR TO CLOSING.....................................17
   5.01    Buyer's Access to Information and Properties.......................17
   5.02    Company's Conduct of Business and Operations.......................17
   5.03    General Restrictions...............................................18
   5.04    Notice Regarding Changes...........................................19
   5.05    Preferential Purchase Rights.......................................19
   5.06    Ensure Conditions Met..............................................19
   5.07    Termination of Insurance Policies..................................20
   5.08    Casualty Loss......................................................20

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<PAGE>

   5.09    Employee Matters...................................................20
   5.10    Reserved...........................................................20
   5.11    Reserved...........................................................20
   5.12    Reserved...........................................................20
   5.13    Payoff and Estoppel Letters........................................20
   5.14    No Shop............................................................21
   5.15    Name Change........................................................21

ARTICLE VI. - CONDITIONS TO COMPANY'S AND BUYER'S OBLIGATIONS.................21
   6.01    Conditions to Obligations of the Company...........................21
   6.02    Conditions to Obligations of Buyer.................................21

ARTICLE VII. -  POST-CLOSING OBLIGATIONS......................................22
   7.01       Further Assurances..............................................22
   7.02    Publicity..........................................................23
   7.03    Post-Closing Indemnity by the Company and the Shareholders.........23
   7.04    Non-Competition, Non-Solicitation and Non-Disclosure...............23
   7.05    Delivery of Property Received by the Company After Closing.........24
                      -
   7.06    Buyer Appointed Attorney for the Company...........................24
                                       -
   7.07    Assignment of Contracts............................................25
   7.08    Capital Infusion

ARTICLE VIII. - TAX MATTERS...................................................25
   8.01    Representations and Obligations Regarding Taxes....................25

ARTICLE IX. - MISCELLANEOUS...................................................26
   9.01    Limitation on Liability............................................26
   9.02    Confidentiality....................................................27
   9.03    Brokers............................................................28
   9.04    Costs and Expenses.................................................28
   9.05    Notices............................................................28
   9.06    Governing Law......................................................29
   9.07    Representations and Warranties.....................................29
   9.08    Entire Agreement; Amendments and Waivers...........................29
   9.09    Binding Effect and Assignment......................................29
   9.10    Remedies...........................................................29
   9.11    Reserved...........................................................29
   9.12    Withholding of Payments............................................30
   9.13    Exhibits and Schedules.............................................30
   9.14    Multiple Counterparts..............................................30
   9.15    References and Construction........................................30
   9.16    Survival...........................................................30
   9.17    Attorneys' Fees....................................................30
   9.18    Risk of Loss.......................................................30
   9.19    Representative of Company and Shareholders.........................31

ARTICLE X. - DEFINITIONS......................................................31
   10.01   Affiliate..........................................................31
   10.02   Available Cash.....................................................31
   10.03   Collateral Agreements..............................................31
   10.04   Confidential Information...........................................31
   10.05   Contracts..........................................................31
   10.06   Damages............................................................31
   10.07   Financial Statements...............................................31
   10.08   Funded Indebtedness................................................32
   10.09   GAAP...............................................................32


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<PAGE>

   10.10   Governmental Authorities...........................................32
   10.11   Hazardous Material.................................................32
   10.12   Inventory..........................................................32
   10.13   Knowledge of the Company...........................................32
   10.14   Legal Requirements.................................................32
   10.15   Net Worth..........................................................33
   10.16   Permits............................................................33
   10.17   Person.............................................................33
   10.18   Product............................................................33
   10.19   Properties.........................................................33
   10.20   Real Property......................................................33
   10.21   Regulations........................................................33
   10.22   Subsidiary.........................................................33
   10.23   Trade Secrets......................................................33
   10.24   Used...............................................................33
   10.25   Working Capital....................................................33






                                   iii
<PAGE>


                                LIST OF SCHEDULES


Schedule 1.01(a)      Excluded Assets
Schedule 3.01         Qualifications as Foreign Corporation
Schedule 3.03(c)      Subsidiaries
Schedule 3.04         Seller Defaults or Consents
Schedule 3.05         Company Defaults or Consents
Schedule 3.07(a)      Employee Arrangements
Schedule 3.07(c)      Benefit Plan Liabilities
Schedule 3.07(e)      Current Employees
Schedule 3.08(a)      Financial Statements
Schedule 3.08(b)      Scheduled Liabilities
Schedule 3.08(c)      Accounts Receivable
Schedule 3.08(d)      Inventory Condition
Schedule 3.08(e)      Encumbrances
Schedule 3.09(a)      Certain Changes
Schedule 3.09(b)      Certain Actions
Schedule 3.10(1)      Compliance with Law
Schedule 3.10(2)      Citations
Schedule 3.11         Litigation
Schedule 3.12(a)      Owned Premises
Schedule 3.12(b)      Leased Premises
Schedule 3.13         Commitments
Schedule 3.13(c)      Non-Arm's Length Contracts
Schedule 3.14         Insurance
Schedule 3.15         Intangible Rights
Schedule 3.16         Tangible Assets Condition
Schedule 3.17(a)      Permits
Schedule 3.17(b)      Environmental Claims
Schedule 3.17(c)      Storage of Hazardous Materials
Schedule 3.17(d)      Noncompliance with Environmental Laws
Schedule 3.18         Banks, Accounts and Authorized Signatories
Schedule 3.22         Affiliate Transactions
Schedule 4.03         Buyer Defaults or Consents
Schedule 8.01(a)      Tax Returns

                                       iv

<PAGE>


                                LIST OF EXHIBITS

Exhibit A   -   Certificate of Rights, Preferences and Designations..........A-1
Exhibit B   -   Investment Representation Letter.............................B-1
Exhibit C   -   Opinion of Seller's Counsel..................................C-1
Exhibit D   -   Employment Agreement.........................................D-1




                                       v
<PAGE>

                            ASSET PURCHASE AGREEMENT
                            ------------------------


     This ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the ___ day of _______,  2002, by and among (i) Jack Young,  Inc., a Delaware
corporation  (the "Buyer"),  (ii) Pocono Knits,  Inc., a New Jersey  corporation
("Pocono")  (Pocono  individually and collectively  with its  Subsidiaries,  the
"Company"),  and  (iii)  Jack  Young,  an  individual  resident  of the state of
Pennsylvania (the "Shareholder").

                                    Recitals
                                    --------

     A.   Buyer desires to purchase substantially all of the Company's assets.

     B. The Company  desires to sell and Buyer  desires to purchase  such assets
upon the terms and subject to the conditions set forth herein.

     C. The Shareholder owns 100% of the Company's outstanding capital stock.

                                    Agreement
                                    ---------

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants contained herein, the parties agree as follows:


                    ARTICLE I. - SALE AND PURCHASE OF ASSETS

     1.01 Sale and Purchase of Assets.

     (a) On the terms and subject to the  conditions of this  Agreement,  at the
Closing  referred to in Section 2.01  hereof,  the Company  shall sell,  convey,
assign,  transfer and deliver to Buyer,  and Buyer shall  purchase,  acquire and
accept  delivery of, all assets and  properties  owned or Used by the Company in
connection with its business, except for (i) the Purchase Price and other rights
of the Company under this Agreement,  (ii) the Company's  corporate  minute book
and stock  records,  and (iii)  those  assets  specifically  listed on  Schedule
1.01(a) (such specifically listed assets in clauses (i), (ii) and (iii) (of this
introductory  paragraph) being referred to as the "Excluded Assets"),  including
without limiting the generality of the foregoing:

          (i) all accounts receivable as reflected on the Financial Statements;

          (ii)  all  raw  materials,  works-in-process,  inventories  and  other
     materials of the Company  wherever  located and  including  all  inventory,
     wherever located, in transit or on order and not yet delivered as reflected
     on the Financial Statements,  and all rights with respect to the processing
     and completion of any works-in-process of the Company,  including the right
     to collect and receive  charges for services  performed by the Company with
     respect thereto;

          (iii)  all  supplies,  equipment,   vehicles,  machinery,   furniture,
     fixtures,  leasehold  improvements and other tangible  property Used by the
     Company in  connection  with its business,  and the  Company's  interest as
     lessee in any leases with respect to any of the foregoing;

          (iv) all of the  Company's  right,  title and  interest  in and to its
     Contracts,  including  the  Contracts  listed or  required  to be listed on
     Schedule 3.13 hereto; provided that, the proceeds from the contract for the
     sale of berets pursuant to the contract with the Defense  Logistic  Agency,
     Defense Supply Center,  PA (as listed on Schedule 3.13) will be distributed
     as follows - 25% to Buyer,  50% to Company and 25% to the  manufacturer  in
     Romania,  provided,  however,  that  Buyer  must pay to  Seller  the sum of
     $250,000 for the right to participate in the proceeds;

<PAGE>

          (v)   all   proprietary   knowledge,   Trade   Secrets,   Confidential
     Information,   computer  software  and  licenses,   formulae,  designs  and
     drawings, quality control data, processes (whether secret or not), methods,
     inventions and other similar  know-how or rights Used in the conduct of the
     Company's   business,   including,   but  not  limited  to,  the  areas  of
     manufacturing,   marketing,   advertising   and   personnel   training  and
     recruitment,  together with all other Intangible  Rights Used in connection
     with the Company's business,  including all files,  manuals,  documentation
     and source and object codes related thereto;

          (vii) all utility, security and other deposits and prepaid expenses;

          (viii) the Company's  business as a going concern and its  franchises,
     Permits and other authorizations of Governmental Authorities (to the extent
     such  Permits and other  authorizations  of  Governmental  Authorities  are
     transferable)  and third parties,  licenses,  telephone  numbers,  customer
     lists, vendor lists,  referral lists and contracts,  advertising  materials
     and data, restrictive  covenants,  choses in action and similar obligations
     owing to the Company  from its present and former  shareholders,  officers,
     employees,  agents and others,  together with all books, operating data and
     records  (including  financial,  accounting  and  credit  records),  files,
     papers, records and other data of the Company;

          (viii) all rights of the Company in and to all tradenames,  trademarks
     and slogans Used in its  business,  all  variants  thereof and all goodwill
     associated therewith;

          (ix) all rights to real property Used by the Company; and

          (viii) all other  property  and rights of every kind or nature Used by
     the Company in the operation of its business.

     It is  specifically  understood  and agreed by the parties  hereto that the
Buyer is acquiring,  and Company is selling,  all of the tangible and intangible
assets  attributable  to or Used by the  Company  in its  business,  except  the
Excluded  Assets.  The aforesaid  assets and properties to be transferred to the
Buyer hereunder are hereinafter collectively referred to as the "Assets."

     (b) Method of Conveyance.  The sale, transfer,  conveyance,  assignment and
delivery by the Company of the Assets to the Buyer in  accordance  with  Section
1.01(a) hereof shall be effected on the Closing Date by the Company's  execution
and  delivery to the Buyer of one or more Bills of Sale,  Assignments  and other
conveyance  instruments  with respect to the  Company's  transfer of  Intangible
Rights,  real property  interests and other Assets in form and scope  reasonably
satisfactory to Buyer (collectively the "Conveyance Documents"). At the Closing,
good,  valid and  marketable  title to all of the Assets  shall be  transferred,
conveyed,  assigned and  delivered  by the Company to the Buyer  pursuant to the
Conveyance  Documents,  free  and  clear  of any  and all  liens,  encumbrances,
mortgages,  security interests, pledges, claims, equities and other restrictions
or charges of any kind or nature whatsoever, excepting, however, the liabilities
set forth in Schedule 1.01(c).

     (c) Assumed Obligations.  At the Closing, the Buyer shall assume, and agree
to satisfy and  discharge as the same shall  become due, (i) all trade  accounts
payable and accrued  expenses that have been incurred in the ordinary  course of
the Company's business and are reflected on the Financial  Statements,  (ii) the
Company's  liabilities  and other  obligations  arising  under (x) the Contracts
listed on Schedule 3.13, and (y) all other Contracts entered into by the Company
in the ordinary course of its business  (including open purchase orders) and not
required  to be listed on  Schedule  3.13,  in each case to the extent  that the
Company's rights thereunder are effectively transferred to Buyer at Closing, and
(iii) the  obligations  listed on  Schedule  1.01(c)  hereto  (collectively  the
"Assumed Obligations"). Except as expressly set forth in this paragraph (c), the
Buyer  shall  not  assume  or be  responsible  at any  time  for any  liability,
obligation,  debt or commitment of the Company,  whether absolute or contingent,
accrued or unaccrued,  asserted or unasserted,  or otherwise,  including but not
limited to any  liabilities,  obligations,  debts or  commitments of the Company
incident to,  arising out of or incurred with respect to, this Agreement and the
transactions  contemplated  hereby (including any and all sales, income or other


                                       2
<PAGE>

taxes arising out of the transactions contemplated hereby). Without limiting the
generality  of  the  foregoing,  the  Company  and  the  Shareholders  expressly
acknowledge  and agree that the Company shall  retain,  and that Buyer shall not
assume or otherwise be obligated to pay, perform,  defend or discharge,  (a) any
liability  of the  Company in  connection  with any Plan or  Benefit  Program or
Agreement,  including,  without  limitation,  any liability of the Company under
ERISA,  (b) any liability of the Company under any federal,  state or local law,
rule,  regulation,  ordinance,  program,  Permit,  or  other  Legal  Requirement
relating  to health,  safety,  Hazardous  Materials  and  environmental  matters
applicable to the Company's  business  and/or the facilities Used by the Company
(whether or not owned by the Company),  (c) any product liability  pertaining to
products sold or  manufactured by the Company prior to the Closing Date, (d), or
(e) any  obligation  of the  Company to any Person  claiming  to have a right to
acquire  any  capital  stock or other  securities  of the  Company.  The Company
further  agrees to  satisfy  and  discharge  as the same  shall  become  due all
obligations and liabilities of the Company not specifically assumed by the Buyer
hereunder.

     At Closing,  Buyer's Shareholder,  Armitec,  Inc., a Delaware  corporation,
shall deliver to Shareholder a Pledge Agreement, pledging all of the outstanding
shares of stock of Buyer (the "Shares") to Shareholder to secure the Obligations
assumed by Buyer as set forth in this Subsection.  The Shares shall be delivered
to a mutually acceptable Escrow Agent who shall hold the Shares until either (i)
the  Obligations  are paid in full,  or (ii)  Shareholder  receives a release of
liability from all of the named  Obligees,  or (iii) a Default by Buyer.  Upon a
Default in the payment of the  Obligations  by Buyer,  Seller shall notify Buyer
and Escrow  Agent in writing of such Default and on the failure by Buyer to cure
the  Default  within 10 days,  Escrow  Agent  shall  deliver  the  Shares to the
Shareholder.

     1.02 Payment for Assets.  As payment in full for the Assets being  acquired
by the  Buyer  hereunder,  Buyer  shall  deliver  to  the  Company  two  million
(2,000,000) shares of the Armitec, Inc.'s common stock (the "Stock"),  including
but not  limited to the right of Company to  exercise a put  requiring  Buyer to
repurchase  the Stock on the fifth  anniversary  date of Closing  for  $500,000,
subject to further  adjustment  as  provided  in Section  7.03 (such sum,  as so
adjusted from time to time, is herein referred to as the "Purchase Price").

     The Purchase Price shall be allocated,  apportioned  and adjusted among the
Assets in the manner  specified in IRS Form 8594  attached as Schedule  1.02 and
the parties agree to abide by such allocations for all tax reporting purposes.


                              ARTICLE II. - CLOSING

     2.01  Closing.  Subject  to the  conditions  stated in  Article  VI of this
Agreement,  the closing of the transactions  contemplated hereby (the "Closing")
shall be on March 18, 2002, or, if the conditions set forth in Section 6.02 have
not been satisfied or waived on such date, on the fifth (5th) business day after
all such  conditions  shall have been  satisfied  or waived,  at the  offices of
Seller,  or at such other location as the parties agree. The date upon which the
Closing  occurs is  hereinafter  referred to as the "Closing  Date." The Closing
shall be deemed  completed as of 12:01 a.m. eastern standard time on the morning
of the Closing Date.

     2.02  Deliveries  by the Company.  At or prior to the Closing,  the Company
shall deliver to Buyer:

          (i) the Conveyance Documents;

          (ii)  a  certificate  executed  by  Pocono  to  the  effect  that  the
     conditions set forth in Sections 6.02(a) and 6.02(c) have been satisfied;

          (iii)   possession  of  all   originals  and  copies  of   agreements,
     instruments,  documents,  deeds, books,  records,  files and other data and
     information  within the  possession  of the Company or any Affiliate of the
     Company pertaining to the Company (collectively,  the "Records"); provided,


                                       3
<PAGE>

     however,  that the  Company  may retain (1) copies of any tax  returns  and
     copies of Records  relating  thereto;  (2) copies of any  Records  that the
     Company is reasonably  likely to need for complying  with  requirements  of
     law;  and (3) copies of any Records that in the  reasonable  opinion of the
     Company  will  be  required  in  connection  with  the  performance  of its
     obligations under Article VIII hereof; and

     2.03 Deliveries by Buyer.  At or prior to the Closing,  Buyer shall deliver
to the Company:


          (i) the form of Purchase Price required to be paid at Closing pursuant
     to Section 1.02(a) hereof; and

          (ii) a certificate  executed by an authorized officer of the Buyer, on
     behalf of the Buyer, to the effect that the conditions set forth in Section
     6.01(b) have been satisfied.

     2.04 Termination in Absence of Closing.

     (a)  Subject  to the  provisions  of  Section  2.04(b),  if by the close of
business  on March 18,  2002,  the  Closing  has not  occurred,  then either the
Company or the Buyer may  thereafter  terminate this Agreement by written notice
to such effect,  to the other  parties  hereto,  without  liability of or to any
party to this  Agreement  or any  shareholder,  director,  officer,  employee or
representative  of such party unless the reason for Closing  having not occurred
is (i) such party's willful breach of the provisions of this Agreement,  or (ii)
if all of the  conditions  to such party's  obligations  set forth in Article VI
have been  satisfied or waived in writing by the date  scheduled for the Closing
pursuant to Section 2.01,  the failure of such party to perform its  obligations
under this Article II on such date;  provided,  however,  that the provisions of
Sections  9.02 through  9.06 shall  survive any such  termination;  and provided
further,  however,  that any termination pursuant to this Section 2.04 shall not
relieve any party hereto who was  responsible for Closing having not occurred as
described  in clauses (i) or (ii) above of any  liability  for (x) such  party's
willful  breach  of  the  provisions  of  this  Agreement,  or (y) if all of the
conditions  to such  party's  obligations  set  forth in  Article  VI have  been
satisfied or waived in writing by the date scheduled for the Closing pursuant to
Section 2.01,  the failure of such party to perform its  obligations  under this
Article II on such date.

     (b)  Notwithstanding  the approval of the Board of Directors of Buyer, this
Agreement  and  the  transactions  contemplated  herein  may be  terminated  and
abandoned at any time on or prior to the Closing Date by the Buyer if:

          (i) any  representation  or  warranty  made  herein for the benefit of
     Buyer, or any certificate, schedule or document furnished to Buyer pursuant
     to this Agreement is untrue in any material respect; or

          (ii) The  Company  or the  Shareholders  shall have  defaulted  in any
     material  respect in the performance of any material  obligation under this
     Agreement.


        ARTICLE III. - REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
                                 AND THE COMPANY

     Each of the  Shareholders  and the Company  hereby  jointly  and  severally
represents and warrants to Buyer that:

     3.01 Corporate  Existence and  Qualification.  Pocono is a corporation duly
organized,  validly existing and in good standing under the laws of the State of
New Jersey;  Pocono has the corporate power to own,  manage,  lease and hold its
Properties  and to  carry on its  business  as and  where  such  Properties  are
presently  located  and  such  business  is  presently  conducted.  Neither  the
character of the Company's  Properties nor the nature of the Company's  business
requires  the  Company  to  be  duly  qualified  to  do  business  as a  foreign
corporation  in any  jurisdiction  outside  those  identified  in Schedule  3.01


                                       4
<PAGE>

attached  hereto,  and the Company is qualified as a foreign  corporation and in
good  standing  in  each  listed  jurisdiction.  3.02  Authority,  Approval  and
Enforceability.  This  Agreement  has been duly  executed  and  delivered by the
Company and the  Shareholders,  and each of the Shareholders and the Company has
all requisite power and legal capacity to execute and deliver this Agreement and
all Collateral Agreements executed and delivered or to be executed and delivered
in connection  with the  transactions  provided for hereby,  to  consummate  the
transactions  contemplated  hereby  and by  the  Collateral  Agreements,  and to
perform its and his obligations  hereunder and under the Collateral  Agreements.
This Agreement and each  Collateral  Agreement to which any of the  Shareholders
and/or the Company is a party  constitutes,  or upon execution and delivery will
constitute,  the legal, valid and binding obligation of such party,  enforceable
in  accordance  with its  terms,  except as such  enforcement  may be limited by
general   equitable   principles  or  by  applicable   bankruptcy,   insolvency,
moratorium,  or similar laws and judicial  decisions from time to time in effect
which affect creditors' rights generally.

     3.03 Capitalization and Corporate Records.

     (a) All issued and  outstanding  shares of the Company's  capital stock are
owned of record by Shareholders.

     (b) The  copies  of the  Articles  of  Incorporation  and  Bylaws of Pocono
provided to Buyer are true,  accurate,  and complete and reflect all  amendments
made through the date of this  Agreement.  Pocono's  stock and minute books made
available  to Buyer for review were  correct and complete as of the date of such
review,  no further  entries have been made through the date of this  Agreement,
and such  minute  books  contain  an  accurate  record  of all  shareholder  and
corporate actions of the shareholders and directors. All corporate actions taken
by the Company have been duly  authorized  or  ratified.  All  accounts,  books,
ledgers and  official  and other  records of the Company  fairly and  accurately
reflect all of the Company's transactions, properties, assets and liabilities.

     (c) Except for the subsidiaries of the Company listed on Schedule  3.03(c),
the  Company  does not own,  directly  or  indirectly,  any  outstanding  voting
securities of or other interests in any other  corporation,  partnership,  joint
venture or other business entity. Schedule 3.03(c) hereto sets forth the name of
each  Subsidiary  of the  Company,  and,  with respect to each  Subsidiary,  the
jurisdiction in which it is  incorporated or organized,  the number of shares of
its authorized capital stock, the number and class of shares thereof duly issued
and  outstanding,  the names of all  stockholders or other equity owners and the
number of  shares of stock  owned by each  stockholder  or the  amount of equity
owned by each equity owner.  The  outstanding  shares of capital stock or equity
interests of each Subsidiary are validly issued,  fully paid and non-assessable,
and all such  shares or other  equity  interests  represented  as being owned by
Company or another  Subsidiary  of the Company are owned by it free and clear of
any and all liens, pledges,  encumbrances,  charges, agreements or claims of any
kind  whatsoever,  except as set forth in  Schedule  3.03  hereto.  No shares of
capital stock are held by any Subsidiary as treasury stock. There is no existing
option,  warrant,  call,  commitment  or agreement to which any  Subsidiary is a
party  requiring,  and there are no  convertible  securities  of any  Subsidiary
outstanding which upon conversion would require,  the issuance of any additional
shares of capital  stock or other equity  interests of any  Subsidiary  or other
securities convertible into shares of capital stock or other equity interests of
any Subsidiary or other equity security of any Subsidiary.  Each Subsidiary is a
duly organized and validly existing corporation or other entity in good standing
under the laws of the jurisdiction of its  reorganization  and is duly qualified
to do business and is in good standing  under the laws of (i) each  jurisdiction
in which it owns or leases real  property  and (ii) each other  jurisdiction  in
which the conduct of its business or the  ownership of its assets  requires such
qualification.  Each Subsidiary has all requisite  corporate power and authority
to own its  properties  and carry on its business as presently  conducted.]  [If
Subsidiaries, have separate conveyance of Subsidiary assets as sellers?]

     3.04 No Shareholder Defaults or Consents.  Except as otherwise set forth in
Schedule  3.04 hereto,  the  execution  and delivery of this  Agreement  and the
Collateral   Agreements  by  the   Shareholders   and  the  performance  by  the
Shareholders of their obligations  hereunder and thereunder will not violate any


                                       5
<PAGE>

provision of law or any judgment, award or decree or any indenture, agreement or
other instrument to which any Shareholder is a party, or by which the properties
or assets of the Shareholder is bound or affected, or conflict with, result in a
breach of or  constitute  (with  due  notice or lapse of time or both) a default
under, any such indenture, agreement or other instrument, in each case except to
the extent  that such  violation,  default  or breach  could not  reasonably  be
expected to delay or otherwise  significantly  impair the ability of the parties
to consummate the transactions contemplated hereby.

     3.05 No Company  Defaults or  Consents.  Except as  otherwise  set forth in
Schedule  3.05  attached  hereto,  neither the  execution  and  delivery of this
Agreement nor the carrying out of any of the  transactions  contemplated  hereby
will:

          (i)  violate  or  conflict  with  any  of  the  terms,  conditions  or
     provisions of the charter or bylaws of the Company;

          (ii) violate any Legal Requirements applicable to the Company;

          (iii)  violate,  conflict  with,  result in a breach of,  constitute a
     default  under  (whether  with or  without  notice  or the lapse of time or
     both), or accelerate or permit the acceleration of the performance required
     by, or give any other party the right to terminate,  any Contract or Permit
     binding upon or applicable to the Company;

          (iv) result in the creation of any lien,  charge or other  encumbrance
     on any Properties of the Company; or

          (v) require  either of the Seller or the Company to obtain or make any
     waiver,  consent,  action,  approval or authorization  of, or registration,
     declaration,  notice or filing  with,  any private  non-governmental  third
     party or any  Governmental  Authority,  except a Bulk Sales Notice with the
     Commonwealth  of the State of  Pennsylvania  Department  of Revenue and the
     Department of States, if requested.

     3.06 No Proceedings.  No suit, action or other proceeding is pending or, to
the  Knowledge  of the Company,  threatened  before any  Governmental  Authority
seeking to restrain the Company or the Seller or prohibit  their entry into this
Agreement or prohibit the Closing, or seeking damages against the Company or its
Properties as a result of the consummation of this Agreement.

     3.07 Employee Benefit Matters.

     (a) Schedule  3.07(a)  provides a description of each of the following,  if
any,  which is sponsored,  maintained or  contributed  to by the Company for the
benefit of the employees or agents of the Company,  which has been so sponsored,
maintained or contributed to at any time during the Company's  existence or with
respect to which the Company has or may have any actual or contingent liability:

          (i) each  "employee  benefit plan," as such term is defined in Section
     3(3) of the  Employee  Retirement  Income  Security  Act of 1974  ("ERISA")
     (including,  but not limited to,  employee  benefit plans,  such as foreign
     plans, which are not subject to the provisions of ERISA) ("Plan"); and,

          (ii)  each  personnel   policy,   employee  manual  or  other  written
     statements of rules or policies concerning  employment,  stock option plan,
     collective bargaining agreement, bonus plan or arrangement, incentive award
     plan or arrangement,  vacation and sick leave policy,  severance pay policy
     or agreement,  deferred compensation  agreement or arrangement,  consulting
     agreement,  employment  contract  and each  other  employee  benefit  plan,
     agreement,  arrangement,  program,  practice or understanding  which is not
     described in Section 3.07(a)(i) ("Benefit Program or Agreement").


                                       6
<PAGE>

     (b) True,  correct and complete  copies of each of the Plans (if any),  and
related  trusts,  if  applicable,  including all amendments  thereto,  have been
furnished to Buyer. There has also been furnished to Buyer, with respect to each
Plan required to file such report and description, the three most recent reports
on Form 5500 and the summary plan description. True, correct and complete copies
or descriptions  of all Benefit  Programs or Agreements have also been furnished
to Buyer.

     (c) Except as otherwise set forth in Schedule 3.07(c),

          (i) The  Company  does  not  contribute  to or have an  obligation  to
     contribute to, and the Company has not at any time contributed to or had an
     obligation  to  contribute  to, and the Company does not have any actual or
     contingent  liability  under a  multiemployer  plan  within the  meaning of
     Section 3(37) of ERISA  ("Multiemployer  Plan") or a multiple employer plan
     within the meaning of Section 413(b) and (c) of the Code.

          (ii) The Company has substantially performed all obligations,  whether
     arising by operation of law or by contract,  required to be performed by it
     in connection with the Plans and the Benefit  Programs and Agreements,  and
     to the Knowledge of the Company,  there have been no defaults or violations
     by any other party to the Plans or Benefit Programs or Agreements;

          (iii) All reports and disclosures relating to the Plans required to be
     filed with or furnished to governmental agencies, Plan participants or Plan
     beneficiaries  have been filed or furnished in accordance  with  applicable
     law in a timely manner, and each Plan and each Benefit Program or Agreement
     has  been  administered  in  substantial   compliance  with  its  governing
     documents;

          (iv) Each of the Plans  intended to be qualified  under Section 401 of
     the Code  satisfies  the  requirements  of such  Section and has received a
     favorable  determination letter from the Internal Revenue Service regarding
     such  qualified  status  and has not,  since  receipt  of the  most  recent
     favorable  determination  letter,  been  amended or operated in a way which
     could adversely affect such qualified status;

          (v) There are no actions,  suits or claims pending (other than routine
     claims  for  benefits)  or, to the  Knowledge  of the  Company,  threatened
     against,  or with  respect  to,  any of the Plans or  Benefit  Programs  or
     Agreements or their assets;

          (vi) All  contributions  required to be made to the Plans  pursuant to
     their terms and provisions and applicable law have been made timely;

          (vii) As to any Plan  subject to Title IV of ERISA,  there has been no
     event or condition which presents the material risk of Plan termination, no
     accumulated funding deficiency,  whether or not waived,  within the meaning
     of Section  302 of ERISA or Section 412 of the Code has been  incurred,  no
     reportable event within the meaning of Section 4043 of ERISA (for which the
     disclosure  requirements  of Regulation  Section 2615.3  promulgated by the
     Pension  Benefit  Guaranty  Corporation  ("PBGC") have not been waived) has
     occurred,  no notice of intent to  terminate  the Plan has been given under
     Section 4041 of ERISA, no proceeding has been instituted under Section 4042
     of ERISA to terminate the Plan,  there has been no  termination  or partial
     termination  of the Plan  within the  meaning of Section  411(d)(3)  of the
     Code,  no  liability to the PBGC has been  incurred,  and the assets of the
     Plan equal or exceed the aggregate present value of the benefit liabilities
     (within  the  meaning  of  Section  4001(a)(16)  of ERISA)  under the Plan,
     computed on a "plan  termination  basis"  based upon  reasonable  actuarial
     assumptions and the asset valuation principles established by the PBGC;

          (viii)  None of the  Plans nor any trust  created  thereunder  or with
     respect   thereto  has   engaged  in  any   "prohibited   transaction"   or


                                       7
<PAGE>

     "party-in-interest  transaction"  as such terms are defined in Section 4975
     of the Code and  Section 406 of ERISA  which  could  subject any Plan,  the
     Seller or any officer,  director or employee thereof to a tax or penalty on
     prohibited  transactions  or  party-in-interest  transactions  pursuant  to
     Section 4975 of the Code or Section 502(i) of ERISA;

          (ix) To the  Knowledge  of the  Company,  there is no  matter  pending
     (other than routine  qualification  determination  filings) with respect to
     any of the Plans or Benefit  Programs  or  Agreements  before the  Internal
     Revenue Service, the Department of Labor or the PBGC;

          (x) Each trust  funding a Plan,  which  trust is intended to be exempt
     from federal  income  taxation  pursuant to Section  501(c)(9) of the Code,
     satisfies  the  requirements  of such  section and has received a favorable
     determination  letter from the  Internal  Revenue  Service  regarding  such
     exempt  status  and has not,  since  receipt of the most  recent  favorable
     determination  letter,  been  amended  or  operated  in a way  which  would
     adversely affect such exempt status.

          (xi)  The  Company  does not have any  obligation  to  provide  health
     benefits or death  benefits  to former  employees,  except as  specifically
     required by law;

          (xii)  Neither the  execution  and delivery of this  Agreement nor the
     consummation of any or all of the  transactions  contemplated  hereby will:
     (A) entitle any current or former employee of the Company to severance pay,
     unemployment  compensation or any similar payment,  (B) accelerate the time
     of payment or vesting or increase the amount of any compensation due to any
     such employee or former employee,  or (C) directly or indirectly  result in
     any payment  made to or on behalf of any person to  constitute a "parachute
     payment" within the meaning of Section 280G of the Code;

          (xiii) The Company has not incurred any liability or taken any action,
     and no action or event has  occurred  that could cause the Company to incur
     any  liability  (A) under Section 412 of the Code or Title IV of ERISA with
     respect  to any  "single-employer  plan"  within  the  meaning  of  Section
     4001(a)(15) of ERISA that is not a Plan, or (B) to any Multiemployer  Plan,
     including without limitation an account of a partial or complete withdrawal
     within the meaning of Sections 4203 and 4205 of ERISA.

          (xiv)  Since  December  31,  2000,  there  have  not been any (i) work
     stoppages,  labor disputes or other significant  controversies  between the
     Company and its employees,  (ii) labor union  grievances or  organizational
     efforts,  or (iii) unfair labor practice or labor  arbitration  proceedings
     pending or threatened.

     (d) Except as set forth in Schedule 3.07(a),  the Company is not a party to
any agreement,  and has not  established  any policy or practice,  requiring the
Company to make a payment or provide any other form or  compensation  or benefit
to any person  performing  services  for the Company  upon  termination  of such
services  which  would  not  be  payable  or  provided  in  the  absence  of the
consummation of the transactions contemplated by this Agreement.

     (e) Schedule 3.07(e) sets forth by number and employment classification the
approximate  numbers of employees employed by the Company as of the date of this
Agreement,  and, except as set forth therein, none of said employees are subject
to union or collective bargaining agreements with the Company.

     (f) Neither the Buyer nor any of its Affiliates shall have any liability or
obligations  under  or  with  respect  to  the  Workers  Adjustment   Retraining
Notification  Act in connection  with any of the  transactions  contemplated  in
connection herewith.


                                       8
<PAGE>

     3.08 Financial Statements; Liabilities; Accounts Receivable; Inventories.

     (a) The  Company  has  delivered  to Buyer  true  and  complete  copies  of
Financial  Statements with respect to the Company and its business as of and for
the years ended December 31, 1999, 2000 and 2001, and the balance sheet dated as
of February 28, 2002 (the "Financial Statements"), and said Financial Statements
are  attached  hereto as  Schedule  3.08(a).  All of such  Financial  Statements
present fairly the financial  condition and results of operations of the Company
for the dates or periods  indicated  thereon.  All of such Financial  Statements
have been prepared in accordance with generally accepted  accounting  principles
("GAAP") applied on a consistent basis throughout the periods indicated.

     (b) Except for (i) the liabilities  reflected on the Company's February 28,
2002 balance sheet included with the Financial  Statements  attached as Schedule
3.08(a),  (ii) trade payables and accrued  expenses  incurred since February 28,
2002 in the  ordinary  course of  business,  none of which are  material,  (iii)
executory  contract  obligations  under (x) Contracts  listed on Schedule  3.13,
and/or (y)  Contracts not required to be listed on Schedule  3.13,  and (iv) the
liabilities set forth in Schedule 3.08(b) attached hereto,  the Company does not
have any  liabilities or obligations  (whether  accrued,  absolute,  contingent,
known,  unknown or  otherwise,  and  whether or not of a nature  required  to be
reflected or reserved against in a balance sheet in accordance with GAAP).

     (c)  Except  as  otherwise  set forth in  Schedule  3.08(c),  the  accounts
receivable  reflected on the February  28, 2002  balance  sheet  included in the
Financial  Statements  referenced  in Section  3.08(a) and all of the  Company's
accounts  receivable  arising since February 28, 2002 (the "Balance Sheet Date")
arose from bona fide  transactions in the ordinary  course of business,  and the
goods and  services  involved  have been sold,  delivered  and  performed to the
account obligors, and no further filings (with governmental  agencies,  insurers
or others) are required to be made, no further goods are required to be provided
and no further  services  are  required to be rendered in order to complete  the
sales and fully  render the  services  and to entitle the Company to collect the
accounts  receivable in full. Except as set forth in Schedule  3.08(c),  no such
account has been assigned or pledged to any other person,  firm or  corporation,
and,  except  only to the  extent  fully  reserved  against  as set forth in the
February  28, 2002  balance  sheet  included in such  Financial  Statements,  no
defense or set-off to any such account has been asserted by the account  obligor
or exists.

     (d) Except as otherwise set forth in Schedule 3.08(d), the Inventory of the
Company as of the Closing  Date shall  consist of items of a quality,  condition
and quantity consistent with normal seasonally-adjusted  Inventory levels of the
Company and be usable and  saleable in the ordinary and usual course of business
for the  purposes  for which  intended,  except to the  extent  written  down or
reserved against in the Financial  Statements.  Except as otherwise set forth in
Schedule  3.08(d),  the Company's  Inventory is valued on the Company's books of
account in accordance  with GAAP (on an average cost basis) at the lower of cost
or market, and the value of obsolete materials, materials below standard quality
and slow-moving materials have been written down in accordance with GAAP.

     (e) Except as provided under the provisions of the agreements  described in
Schedule 3.08(e), the Company has and will have as of the Closing Date legal and
beneficial  ownership  of its  Properties,  free and clear of any and all liens,
mortgages,  pledges,  adverse  claims,  encumbrances  or other  restrictions  or
limitations whatsoever ("Liens").

     3.09 Absence of Certain Changes.

     (a) Except as  otherwise  set forth in Schedule  3.09(a)  attached  hereto,
since February 28, 2002, there has not been:

          (i) any  event,  circumstance  or  change  that  had or  might  have a
     material adverse effect on the business, operations, prospects, Properties,
     financial condition or working capital of the Company;


                                       9
<PAGE>

          (ii) any  damage,  destruction  or loss  (whether  or not  covered  by
     insurance)  that  had  or  might  have a  material  adverse  effect  on the
     business, operations,  prospects,  Properties or financial condition of the
     Company; or

          (iii) any material  adverse  change in the Company's  sales  patterns,
     pricing policies, accounts receivable or accounts payable.

     (b) Except as  otherwise  set forth in Schedule  3.09(b)  attached  hereto,
since the Balance Sheet Date, the Company has not done any of the following:

          (i) merged into or with or consolidated with, any other corporation or
     acquired the business or assets of any Person;

          (ii) purchased any securities of any Person;

          (iii)  created,  incurred,  assumed,  guaranteed  or otherwise  become
     liable or obligated with respect to any  indebtedness,  or made any loan or
     advance to, or any  investment  in, any person,  except in each case in the
     ordinary course of business;

          (iv)  made  any  change  in any  existing  election,  or made  any new
     election,  with respect to any tax law in any  jurisdiction  which election
     could have an effect on the tax  treatment of the Company or the  Company's
     business operations;

          (v) entered into, amended or terminated any material agreement;

          (vi) sold,  transferred,  leased,  mortgaged,  encumbered or otherwise
     disposed  of, or agreed to sell,  transfer,  lease,  mortgage,  encumber or
     otherwise  dispose of, any Properties  except (i) in the ordinary course of
     business, or (ii) pursuant to any agreement specified in Schedule 3.13;

          (vii) settled any claim or litigation,  or filed any motions,  orders,
     briefs or settlement  agreements in any proceeding  before any Governmental
     Authority or any arbitrator;

          (viii)  incurred  or  approved,  or  entered  into  any  agreement  or
     commitment to make, any  expenditures in excess of $5,000 (other than those
     arising in the ordinary  course of business or those  required  pursuant to
     any agreement specified in Schedule 3.13);

          (ix) maintained its books of account other than in the usual,  regular
     and  ordinary  manner in  accordance  with  generally  accepted  accounting
     principles and on a basis  consistent with prior periods or made any change
     in any of its accounting  methods or practices that would be required to be
     disclosed under generally accepted accounting principles;

          (x) adopted any Plan or Benefit  Program or Agreement,  or granted any
     increase in the  compensation  payable or to become  payable to  directors,
     officers or employees  (including,  without  limitation,  any such increase
     pursuant to any bonus,  profit-sharing or other plan or commitment),  other
     than merit  increases to  non-officer  employees in the ordinary  course of
     business and consistent with past practice;

          (xi)  suffered  any  extraordinary  losses  or  waived  any  rights of
     material value;

          (xii) made any payment to any  Affiliate or forgiven any  indebtedness
     due or owing from any Affiliate to
         the Company;

          (xiii) (A) liquidated Inventory or accepted product returns other than
     in the ordinary course, (B) accelerated receivables,  (C) delayed payables,
     or  (D)  changed  in  any  material  respect  the  Company's  practices  in
     connection   with  the  payment  of  payables   and/or  the  collection  of
     receivables;


                                       10
<PAGE>

          (xiv) engaged in any one or more  activities or  transactions  with an
     Affiliate or outside the ordinary course of business;

          (xv)  declared,  set  aside  or  paid  any  dividends,   or  made  any
     distributions  or other  payments in respect of its equity  securities,  or
     repurchased, redeemed or otherwise acquired any such securities;

          (xvi) amended its charter or bylaws;

          (xvii) issued any capital stock or other  securities,  or granted,  or
     entered into any agreement to grant, any options, convertible rights, other
     rights, warrants, calls or agreements relating to its capital stock; or

          (xviii) committed to do any of the foregoing.

     3.10  Compliance  with  Laws.  Except as  otherwise  set forth in  Schedule
3.10(1),  the Company is and has been in compliance in all respects with any and
all Legal  Requirements  applicable  to the Company,  other than  failures to so
comply  that  would  not have an  adverse  effect on the  business,  operations,
prospects, Properties or financial condition of the Company. Except as otherwise
set forth in Schedule 3.10(2),  the Company (x) has not received or entered into
any  citations,  complaints,  consent  orders,  compliance  schedules,  or other
similar  enforcement orders or received any written notice from any Governmental
Authority  or any other  written  notice that would  indicate  that there is not
currently compliance with all such Legal Requirements, except for failures to so
comply  that  would  not have an  adverse  effect on the  business,  operations,
prospects,  Properties or financial condition of the Company,  and (y) is not in
default under,  and no condition  exists  (whether  covered by insurance or not)
that with or without notice or lapse of time or both would  constitute a default
under, or breach or violation of, any Legal  Requirement or Permit applicable to
the Company.  Without limiting the generality of the foregoing,  the Company has
not  received  notice of and there is no basis  for,  any claim,  action,  suit,
investigation  or proceeding  that might result in a finding that the Company is
not or has not been in compliance  with Legal  Requirements  relating to (a) the
development,  testing,  manufacture,  packaging,  distribution  and marketing of
products,  (b)  employment,  safety and health,  (c)  environmental  protection,
building,  zoning and land use and/or (d) the Foreign Corrupt  Practices Act and
the rules and regulations promulgated thereunder.

     3.11 Litigation.  Except as otherwise set forth in Schedule 3.11, there are
no claims,  actions,  suits,  investigations or proceedings  against the Company
pending or, to the  Knowledge of the Company,  threatened in any court or before
or by any Governmental Authority,  or before any arbitrator,  that might have an
adverse  effect  (whether   covered  by  insurance  or  not)  on  the  business,
operations,  prospects,  Properties  or  financial  condition of the Company and
there is no basis for any such claim, action, suit, investigation or proceeding.
Schedule 3.11 also includes a true and correct listing of all material  actions,
suits,  investigations,  claims or  proceedings  that were  pending,  settled or
adjudicated since January 1, 199_.

     3.12 Real Property.

     (a) Schedule 3.12(a) sets forth a list of all real property or any interest
therein (including without limitation any option or other right or obligation to
purchase any real property or any interest  therein)  currently  owned,  or ever
owned,  by the Company,  in each case setting forth the street address and legal
description of each property covered thereby (the "Owned Premises").

     (b) Schedule  3.12(b) sets forth a list of all leases,  licenses or similar
agreements  relating to the Company's use or occupancy of real estate owned by a
third party  ("Leases"),  true and correct copies of which have  previously been


                                       11
<PAGE>

furnished to Buyer, in each case setting forth (i) the lessor and lessee thereof
and the commencement date, term and renewal rights under each of the Leases, and
(ii) the street address and legal  description of each property  covered thereby
(the "Leased  Premises").  Except as listed on Schedule 3.12(a),  the Leases and
all guaranties with respect  thereto,  are in full force and effect and have not
been  amended  in writing or  otherwise,  and no party  thereto is in default or
breach under any such Lease,  no event has occurred  which,  with the passage of
time or the  giving of  notice  or both,  would  cause a  material  breach of or
default  under any of such  Leases,  and  neither  the Company nor its agents or
employees  have  received  written  notice of any claimed  abatements,  offsets,
defenses or other bases for relief or adjustment.

     (c) With respect to each Owned Premises and Leased Premises, as applicable:
(i) the Company has good,  marketable  and insurable fee simple  interest in the
Owned Premises and a month-to-month  in the Leased  Premises,  free and clear of
any Liens, encumbrances,  covenants and easements or title defects that have had
or could have an adverse  effect on the Company's use and occupancy of the Owned
Premises and the Leased Premises;  (ii) the portions of the buildings located on
the Owned Premises and the Leased  Premises that are used in the business of the
Company are each in good repair and  condition,  normal wear and tear  excepted,
and are in the  aggregate  sufficient  to  satisfy  the  Company's  current  and
reasonably  anticipated normal business  activities as conducted thereon and, to
the  Knowledge  of the  Company,  there  is no  latent  material  defect  in the
improvements on any Owned Premises,  structural elements thereof, the mechanical
systems  (including,   without  limitation,   all  heating,   ventilating,   air
conditioning,  plumbing, electrical, utility and sprinkler systems) therein, the
utility  system  servicing each Owned Premises and the roofs which have not been
disclosed to Buyer in writing prior to the date of this Agreement; (iii) each of
the Owned Premises and the Leased Premises (a) has direct access to public roads
or access to public roads by means of a perpetual access  easement,  such access
being  sufficient  to satisfy the  current  transportation  requirements  of the
business presently  conducted at such parcel; and (b) is served by all utilities
in such  quantity and quality as are  necessary  and  sufficient  to satisfy the
current  normal  business  activities  conducted  at such  parcel;  and (iv) the
Company  has not  received  notice of (a) any  condemnation,  eminent  domain or
similar  proceeding  affecting  any portion of the Owned  Premises or the Leased
Premises or any access  thereto,  and, to the Knowledge of the Company,  no such
proceedings are contemplated,  (b) any special assessment or pending improvement
liens to be made by any governmental authority which may affect any of the Owned
Premises or the Leased Premises,  or (c) any violations of building codes and/or
zoning  ordinances or other  governmental  regulations with respect to the Owned
Premises or the Leased Premises.

         3.13     Commitments.

     (a) Except as otherwise  set forth in Schedule  3.13,  the Company is not a
party to or bound by any of the following, whether written or oral:

          (i) any Contract that cannot by its terms be terminated by the Company
     with 30 days' or less notice without penalty or whose term continues beyond
     one year after the date of this Agreement;

          (ii) contract or commitment for capital expenditures by the Company in
     excess of $5,000 per calendar quarter in the aggregate;

          (iii)  lease  or  license  with  respect  to any  Properties,  real or
     personal, whether as landlord, tenant, licensor or licensee;

          (iv) agreement,  contract,  indenture or other instrument  relating to
     the borrowing of money or the  guarantee of any  obligation or the deferred
     payment of the purchase price of any Properties;

          (v) partnership agreement;


                                       12
<PAGE>

          (vi) contract with any Affiliate of the Company (including the Seller)
     relating to the provision of goods or services by or to the Company;

          (vii)  agreement for the sale of any assets that in the aggregate have
     a net book value on the Company's books of greater than $5,000;

          (viii)  agreement  that  purports  to limit the  Company's  freedom to
     compete freely in any line of business or in any geographic area;

          (ix) preferential  purchase right, right of first refusal,  or similar
     agreement; or

          (x) other Contract that is material to the business of the Company.

     (b) All of the  Contracts  listed or required to be listed in Schedule 3.13
are valid,  binding and in full force and  effect,  and the Company has not been
notified or advised by any party thereto of such party's  intention or desire to
terminate  or modify any such  Contract in any  respect,  except as disclosed in
Schedule  3.13.  Neither the Company nor, to the  Knowledge of the Company,  any
other party is in breach of any of the terms or covenants of any Contract listed
or required to be listed in Schedule  3.13.  Following the Closing,  the Company
will  continue  to be  entitled  to all of the  benefits  currently  held by the
Company under each Contract listed or required to be listed in Schedule 3.13.

     (c) Except as otherwise set forth in Schedule 3.13(c), the Company is not a
party to or bound by any Contract or  Contracts  the terms of which were arrived
at by or otherwise reflect less-than-arm's-length negotiations or bargaining.

     3.14 Insurance.  Schedule 3.14 hereto is a complete and correct list of all
insurance policies  (including,  without limitation,  fire,  liability,  product
liability,  workers' compensation and vehicular) presently in effect that relate
to the Company or its  Properties,  including the amounts of such  insurance and
annual premiums with respect  thereto,  all of which have been in full force and
effect from and after the date(s) set forth on Schedule 3.14.  Such policies are
sufficient for compliance by the Company with all applicable Legal  Requirements
and all material Contracts.  None of the insurance carriers has indicated to the
Company an  intention  to cancel any such policy or to  materially  increase any
insurance  premiums  (including,   without  limitation,   workers'  compensation
premiums), or that any insurance required to be listed on Schedule 3.14 will not
be  available  in the future on  substantially  the same terms as  currently  in
effect.  The  Company  has no claim  pending or  anticipated  against any of its
insurance  carriers  under any of such  policies  and, to the  Knowledge  of the
Company,  there has been no actual or alleged occurrence of any kind which could
reasonably  be expected  to give rise to any such claim.  During the prior three
years,  all notices  required to have been given by the Company or the Seller to
any insurance  company have been timely and duly given, and no insurance company
has asserted that any claim is not covered by the applicable  policy relating to
such claim.

     3.15  Intangible  Rights.  Set  forth  on  Schedule  3.15  is  a  list  and
description  of all  material  foreign  and  domestic  patents,  patent  rights,
trademarks,  service marks, trade names,  brands and copyrights  (whether or not
registered and, if applicable,  including pending applications for registration)
owned, Used,  licensed or controlled by the Company and all goodwill  associated
therewith.  The Company owns or has the right to use and shall as of the Closing
Date  own or have  the  right to use any and all  information,  know-how,  trade
secrets,  patents,  copyrights,   trademarks,  tradenames,  software,  formulae,
methods,  processes  and  other  intangible  properties  that are  necessary  or
customarily  Used by the Company for the  ownership,  management or operation of
its  Properties  ("Intangible  Rights")  including,  but  not  limited  to,  the
Intangible Rights listed on Schedule 3.15. Except as set forth on Schedule 3.15,
(i) the Company is the sole and exclusive owner of all right, title and interest
in and to all of the Intangible  Rights,  and has the exclusive right to use and
license the same,  free and clear of any claim or conflict  with the  Intangible
Rights of others;  (ii) no  royalties,  honorariums  or fees are  payable by the
Company to any person by reason of the ownership or use of any of the Intangible
Rights;  (iii) there have been no claims made against the Company  asserting the
invalidity,  abuse,  misuse, or unenforceability of any of the Intangible Rights
and no grounds  for any such  claims  exist;  (iv) the  Company has not made any


                                       13
<PAGE>

claim of any violation or infringement by others of any of its Intangible Rights
or interests  therein and, to the  Knowledge of the Company,  no grounds for any
such claims  exist;  (v) the Company has not  received  any notice that it is in
conflict with or infringing  upon the asserted  intellectual  property rights of
others in  connection  with the  Intangible  Rights,  and neither the use of the
Intangible Rights nor the operation of the Company's businesses is infringing or
has  infringed  upon  any  intellectual  property  rights  of  others;  (vi) the
Intangible  Rights are sufficient and include all  intellectual  property rights
necessary  for the Company to lawfully  conduct its business as presently  being
conducted;  (vii) no interest in any of the Company's Intangible Rights has been
assigned,  transferred,  licensed  or  sublicensed  by the Company to any person
other than the Buyer pursuant to this  Agreement;  (viii) to the extent that any
item  constituting part of the Intangible Rights has been registered with, filed
in or issued by, any  Governmental  Authority,  such  registrations,  filings or
issuances  are  listed on  Schedule  3.15 and were duly made and  remain in full
force and effect;  (ix) to the Knowledge of the Company,  there has not been any
act  or  failure  to  act by the  Company  or  any of its  directors,  officers,
employees, attorneys or agents during the prosecution or registration of, or any
other proceeding  relating to, any of the Intangible Rights or of any other fact
which could render invalid or unenforceable,  or negate the right to issuance of
any of the Intangible  Rights;  (x) to the extent any of the  Intangible  Rights
constitutes proprietary or confidential information,  the Company has adequately
safeguarded  such  information  from  disclosure;  and (xi) all of the Company's
current  Intangible  Rights will remain in full force and effect  following  the
Closing without alteration or impairment.

     3.16 Equipment and Other Tangible  Property.  Except as otherwise set forth
on Schedule  3.16,  the Company's  equipment,  furniture,  machinery,  vehicles,
structures, fixtures and other tangible property included in the Properties (the
"Tangible  Company  Properties"),  other than  Inventory,  is  suitable  for the
purposes  for  which  intended  and  in  good  operating  condition  and  repair
consistent  with normal industry  standards,  except for ordinary wear and tear,
and except for such Tangible Company  Properties as shall have been taken out of
service on a temporary  basis for  repairs or  replacement  consistent  with the
Company's prior practices and normal industry standards. To the Knowledge of the
Company,  the  Tangible  Company  Properties  are  free  of  any  structural  or
engineering  defects,  and  during  the past five  years  there has not been any
significant interruption of the Company's business due to inadequate maintenance
or obsolescence of the Tangible Company Properties.

     3.17 Permits; Environmental Matters.

     (a) Except as otherwise set forth in Schedule 3.17(a),  the Company has all
Permits  necessary  for the Company to own,  operate,  use and/or  maintain  its
Properties and to conduct its business and operations as presently conducted and
as expected to be  conducted  in the future.  Except as  otherwise  set forth in
Schedule  3.17(a),  all such Permits are in effect, no proceeding is pending or,
to the  Knowledge  of the  Company,  threatened  to  modify,  suspend or revoke,
withdraw,  terminate, or otherwise limit any such Permits, and no administrative
or  governmental  actions  have been taken or, to the  Knowledge of the Company,
threatened  in connection  with the  expiration or renewal of such Permits which
could  adversely  affect the  ability of the  Company  to own,  operate,  use or
maintain any of its  Properties  or to conduct its business  and  operations  as
presently  conducted  and as expected to be conducted  in the future.  Except as
otherwise set forth in Schedule  3.17(a),  (i) no violations  have occurred that
remain uncured,  unwaived, or otherwise unresolved,  or are occurring in respect
of any  such  Permits,  other  than  inconsequential  violations,  and  (ii)  no
circumstances  exist that would  prevent or delay the obtaining of any requisite
consent,   approval,   waiver  or  other   authorization   of  the  transactions
contemplated  hereby with  respect to such  Permits that by their terms or under
applicable law may be obtained only after Closing.

     (b)  Except  as set  forth  on  Schedule  3.17(b),  there  are  no  claims,
liabilities,  investigations,  litigation,  administrative proceedings,  whether
pending or, to the Knowledge of the Company,  threatened, or judgments or orders
relating to any Hazardous Materials (collectively called "Environmental Claims")
asserted or  threatened  against  the  Company or relating to any real  property
currently or formerly  owned,  leased or otherwise Used by the Company.  Neither
the Company nor, to the  Knowledge of the  Company,  any prior owner,  lessee or
operator of said real property,  has caused or permitted any Hazardous  Material
to be used, generated,  reclaimed,  transported,  released,  treated,  stored or


                                       14
<PAGE>

disposed of in a manner  which could form the basis for an  Environmental  Claim
against the Company or the Buyer.  Except as set forth on Schedule 3.17(b),  the
Company has not assumed any  liability of any Person for cleanup,  compliance or
required capital expenditures in connection with any Environmental Claim.

     (c) Except as set forth on Schedule 3.17(c),  no Hazardous Materials are or
were stored or otherwise  located,  and no underground  storage tanks or surface
impoundments are or were located,  on real property currently or formerly owned,
leased or Used by the Company or, to the  Knowledge of the Company,  on adjacent
parcels of real property, and no part of such real property or, to the Knowledge
of the Company,  any part of such adjacent  parcels of real property,  including
the  groundwater  located  thereon,  is  presently   contaminated  by  Hazardous
Materials.

     (d) Except as set forth on  Schedule  3.17(d),  the Company has been and is
currently  in  compliance  with all  applicable  Environmental  Laws,  including
obtaining  and  maintaining  in  effect  all  Permits   required  by  applicable
Environmental Laws.

     3.18  Banks.  Schedule  3.18 sets  forth (i) the name of each  bank,  trust
company or other financial  institution and stock or other broker with which the
Company has an account, credit line or safe deposit box or vault, (ii) the names
of all persons  authorized to draw thereon or to have access to any safe deposit
box or vault, (iii) the purpose of each such account, safe deposit box or vault,
and (iv) the names of all persons  authorized by proxies,  powers of attorney or
other like instrument to act on behalf of the Company in matters  concerning any
of its business or affairs.  Except as otherwise set forth in Schedule  3.18, no
such proxies, powers of attorney or other like instruments are irrevocable.

     3.19 Reserved.

     3.20 Absence of Certain Business Practices.  None of the Shareholders,  the
Company,  nor any other  Affiliate or agent of the Company,  or any other person
acting on behalf of or  associated  with the Company,  acting alone or together,
has (a) received,  directly or indirectly, any rebates,  payments,  commissions,
promotional  allowances  or any other  economic  benefits,  regardless  of their
nature or type, from any customer,  supplier,  employee or agent of any customer
or supplier;  or (b) directly or  indirectly  given or agreed to give any money,
gift or similar  benefit to any  customer,  supplier,  employee  or agent of any
customer or supplier,  any official or employee of any  government  (domestic or
foreign),  or any political party or candidate for office (domestic or foreign),
or other  person  who was,  is or may be in a  position  to help or  hinder  the
business of the Company (or assist the Company in connection  with any actual or
proposed  transaction),  in each case which (i) may  subject  the Company to any
damage  or  penalty  in  any  civil,  criminal  or  governmental  litigation  or
proceeding, (ii) if not given in the past, may have had an adverse effect on the
assets,  business,  operations  or  prospects  of the  Company,  or (iii) if not
continued in the future, may adversely affect the assets,  business,  operations
or prospects of the Company.

     3.21 Reserved.

     3.22 Transactions With Affiliates. Except as set forth on Schedule 3.22 and
except for normal advances to employees consistent with past practices,  payment
of compensation for employment to employees consistent with past practices,  and
participation   in  scheduled  Plans  or  Benefit  Programs  and  Agreements  by
employees,  the Company has not  purchased,  acquired or leased any  property or
services  from, or sold,  transferred  or leased any property or services to, or
loaned or advanced any money to, or borrowed any money from,  or entered into or
been subject to any management, consulting or similar agreement with, or engaged
in any other  significant  transaction with any of the Shareholders or any other
officer,  director  or  shareholder  of the  Company or any of their  respective
Affiliates.  Except as set forth on Schedule 3.22, none of the  Shareholders nor
any other Affiliate of the Company is indebted to the Company for money borrowed
or  other  loans  or  advances,  and the  Company  is not  indebted  to any such
Affiliate.


                                       15
<PAGE>

     3.23 Other Information.  The information  furnished by the Shareholders and
the Company to Buyer pursuant to this Agreement (including,  without limitation,
information  contained in the exhibits hereto, the Schedules  identified herein,
the  instruments  referred to in such Schedules and the  certificates  and other
documents to be executed or delivered pursuant hereto by the Shareholders and/or
the  Company at or prior to the  Closing) is not,  nor at the  Closing  will be,
false or misleading in any material respect, or contains, or at the Closing will
contain,  any  misstatement  of material fact, or omits,  or at the Closing will
omit,  to state any  material  fact  required  to be stated in order to make the
statements therein not misleading.

     3.24 Investment Representations of the Shareholders. In connection with its
acquisition  of the  Preferred  Stock  of the  Buyer,  each  Shareholder  hereby
severally represents and warrants to Buyer as follows:

     (a) On or before the Closing,  each of the  Shareholders  shall execute and
deliver to Buyer an Investment Representation Letter in the form attached hereto
as Exhibit B.

     (b) The Preferred Stock issued pursuant to this Agreement will be issued by
Buyer relying on an exemption from  registration  pursuant to Section 4(2) under
the Securities Act and Regulation D thereunder or similar  exemptions  under the
Securities Act and any certificates representing the shares of Buyer's Preferred
Stock  shall bear  appropriate  legends to identify  such shares as  "restricted
securities" under the Securities Act, to comply with applicable state securities
laws. Each  Shareholder  acknowledges and agrees that in order for Buyer to rely
on such exemptions from  registration,  Buyer will be required to obtain certain
representations  made  by  the  Shareholders  including,  but  not  limited  to,
representations regarding limitations on resales of Buyer's Preferred Stock.

     So long as required in the  reasonable  opinion of Buyer's  counsel,  stock
transfer  orders will be given to Buyer's  Transfer Agent in connection with the
certificates  to  be  issued  representing  Buyer's  Preferred  Stock  and  such
certificates will bear legends substantially as follows:

     THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED
UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE "ACT") NOR ANY  APPLICABLE
STATE SECURITIES LAWS BY REASON OF SPECIFIC  EXEMPTIONS  THEREUNDER  RELATING TO
THE LIMITED  AVAILABILITY  OF THE  OFFERING.  THESE  SECURITIES  CANNOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY
REGISTERED  UNDER THE ACT AND THE  [SPECIFIC  STATE  SECURITIES  CODE],  IF SUCH
REGISTRATION IS REQUIRED.]


              ARTICLE IV. - REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to the Company that:

     4.01 Corporate  Existence and  Qualification.  Buyer is a corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware;  has the corporate power to own, manage, lease and hold its properties
and to carry on its business as and where such properties are presently  located
and such business is presently  conducted;  and is duly qualified to do business
and is in good standing as a foreign  corporation  in each of the  jurisdictions
where the character of its properties or the nature of its business  requires it
to be so qualified.

     4.02 Authority,  Approval and Enforceability.  This Agreement has been duly
executed and delivered by Buyer and Buyer has all requisite  corporate power and
legal  capacity  to  execute  and  deliver  this  Agreement  and all  Collateral
Agreements  executed and  delivered or to be executed and  delivered by Buyer in
connection  with  the  transactions  provided  for  hereby,  to  consummate  the
transactions  contemplated  hereby  and by  the  Collateral  Agreements,  and to
perform its obligations hereunder and under the Collateral Agreements.  Upon the
approval of this Agreement by the Board of Directors of Buyer, the execution and
delivery of this Agreement and the Collateral  Agreements and the performance of


                                       16
<PAGE>

the  transactions  contemplated  hereby  and  thereby  will be duly and  validly
authorized  and approved by all corporate  action  necessary on behalf of Buyer.
Subject to such Board approval,  this Agreement and each Collateral Agreement to
which  Buyer  is a  party  constitutes,  or upon  execution  and  delivery  will
constitute,  the legal,  valid and binding  obligation of Buyer,  enforceable in
accordance with its terms,  except as such enforcement may be limited by general
equitable principles or by applicable  bankruptcy,  insolvency,  moratorium,  or
similar  laws and  judicial  decisions  from time to time in effect which affect
creditors' rights generally.

     4.03 No Default or  Consents.  Except as  otherwise  set forth in  Schedule
4.03,  neither the execution and delivery of this Agreement nor the carrying out
of the transactions contemplated hereby will:

          (i)  violate  or  conflict  with  any  of  the  terms,  conditions  or
     provisions of Buyer's Articles of Incorporation or bylaws;

          (ii) violate any Legal Requirements applicable to Buyer;

          (iii)  violate,  conflict  with,  result in a breach of,  constitute a
     default  under  (whether  with or  without  notice  or the lapse of time or
     both), or accelerate or permit the acceleration of the performance required
     by, or give any other party the right to terminate,  any contract or Permit
     applicable to Buyer;

          (iv) result in the creation of any lien,  charge or other  encumbrance
     on any property of Buyer; or

          (v)  require  Buyer to obtain  or make any  waiver,  consent,  action,
     approval  or  authorization  of, or  registration,  declaration,  notice or
     filing with, any private  non-governmental  third party or any Governmental
     Authority.

     4.04 No Proceedings.  No suit, action or other proceeding is pending or, to
Buyer's  knowledge,  threatened  before any  Governmental  Authority  seeking to
restrain  Buyer or  prohibit  its entry  into this  Agreement  or  prohibit  the
Closing,  or seeking  Damages against Buyer or its properties as a result of the
consummation of this Agreement.


                    ARTICLE V. - OBLIGATIONS PRIOR TO CLOSING

     From the date of this Agreement through the Closing:

     5.01 Buyer's Access to Information and Properties. The Company shall permit
Buyer and its authorized employees, agents, accountants, legal counsel and other
representatives  to have  access  to the  books,  records,  employees,  counsel,
accountants,  engineers  and other  representatives  of the Company at all times
reasonably  requested by Buyer for the purpose of conducting an investigation of
the Company's  financial  condition,  corporate status,  operations,  prospects,
business  and  Properties.  The  Company  shall  make  available  to  Buyer  for
examination and  reproduction all documents and data of every kind and character
relating to the Company in  possession  or control of, or subject to  reasonable
access by, the Company and/or the Seller,  including,  without  limitation,  all
files,  records, data and information relating to the Properties (whether stored
in paper,  magnetic or other  storage  media) and all  agreements,  instruments,
contracts, assignments,  certificates, orders, and amendments thereto. Also, the
Company shall allow Buyer access to, and the right to inspect,  the  Properties,
except  to the  extent  that  such  Properties  are  operated  by a  third-party
operator,  in which  case the  Company  shall use its best  efforts to cause the
operator of such  Properties to allow Buyer access to, and the right to inspect,
such Properties.

     5.02  Company's  Conduct of Business  and  Operations.  The Company and the
Shareholders shall keep Buyer advised as to all material operations and proposed
material operations  relating to the Company.  The Company shall (a) conduct its


                                       17
<PAGE>

business in the  ordinary  course,  (b) keep  available  the services of present
employees,  (c) maintain and operate its  Properties  in a good and  workmanlike
manner,  (d) pay or cause to be paid all costs and expenses  (including  but not
limited to  insurance  premiums)  incurred in  connection  therewith in a timely
manner,  (e) use reasonable  efforts to keep all Contracts listed or required to
be listed on Schedule 3.13 in full force and effect,  (f) comply with all of the
covenants contained in all such material Contracts,  (g) maintain in force until
the Closing Date insurance  policies (subject to the provisions of Section 5.07)
equivalent to those in effect on the date hereof, and (h) comply in all material
respects  with  all   applicable   Legal   Requirements.   Except  as  otherwise
contemplated  in this  Agreement,  the  Company  will  use its best  efforts  to
preserve  the  present   relationships   of  the  Company  with  persons  having
significant business relations therewith.

     5.03 General Restrictions.  Except as otherwise expressly permitted in this
Agreement,  without the prior written consent of Buyer,  which consent shall not
be unreasonably withheld, the Company shall not:

          (i) declare, set aside or pay any dividends, or make any distributions
     or other  payments  in  respect of its equity  securities,  or  repurchase,
     redeem or otherwise acquire any such securities;

          (ii) merge into or with or consolidate  with, any other corporation or
     acquire the business or assets of any person;

          (iii) purchase any securities of any person;

          (iv) amend its charter or bylaws;

          (v) issue any capital stock or other  securities,  or grant,  or enter
     into any  agreement to grant,  any options,  convertibility  rights,  other
     rights, warrants, calls or agreements relating to its securities;

          (vi) create,  incur,  assume,  guarantee or otherwise become liable or
     obligated with respect to any indebtedness, or make any loan or advance to,
     or any  investment  in,  any  person,  except in each case in the  ordinary
     course of business;

          (vii)  make  any  change  in any  existing  election,  or make any new
     election,  with respect to any tax law in any  jurisdiction  which election
     could have an effect on the tax  treatment of the Company or the  Company's
     business operations;

          (viii) enter into, amend or terminate any material agreement;

          (ix) sell, transfer,  lease,  mortgage,  encumber or otherwise dispose
     of, or agree to sell,  transfer,  lease,  mortgage,  encumber or  otherwise
     dispose of, any Properties  except (i) in the ordinary  course of business,
     or (ii) pursuant to any agreement specified in Schedule 3.13;

          (x) settle any  material  claim or  litigation,  or file any  material
     motions,  orders,  briefs or settlement agreements in any proceeding before
     any Governmental Authority or any arbitrator;

          (xi) other than in the  ordinary  course of business  consistent  with
     past practices, incur or approve, or enter into any agreement or commitment
     to make, any  expenditures  in excess of $10,000 (other than those required
     pursuant to any agreement specified in Schedule 3.13);


                                       18
<PAGE>

          (xii)  maintain its books of account other than in the usual,  regular
     and  ordinary  manner in  accordance  with  generally  accepted  accounting
     principles and on a basis  consistent with prior periods or make any change
     in any of its accounting methods or practices;

          (xiii) make any change,  whether  written or oral, to any agreement or
     understanding  with any of the suppliers or customers listed or required to
     be listed on Schedule 3.19;

          (xiv)  accelerate  or  delay  collection  of  any  notes  or  accounts
     receivable  in advance of or beyond  their  regular  due dates or the dates
     when they would have been  collected  in the  ordinary  course of  business
     consistent with past practices;

          (xv) delay or accelerate payment of any accrued expense, trade payable
     or other  liability  beyond or in  advance of its due date or the date when
     such  liability  would have been paid in the  ordinary  course of  business
     consistent with past practices;

          (xvi) allow its levels of inventory  to vary in any  material  respect
     from the levels customarily maintained;

          (xvii) adopt any Plan or Benefit  Program or Agreement or increase the
     compensation  payable to any employee (including,  without limitation,  any
     increase  pursuant to any bonus,  profit-sharing or other incentive plan or
     commitment);

          (xviii)  become  a  party  to or  bound  by any  of  the  arrangements
     described in Section 3.13(a), whether written or oral;

          (xix) engage in any one or more activities or transactions outside the
     ordinary course of business;

          (xx) enter into any  transaction  or make any  commitment  which could
     result  in any of  the  representations,  warranties  or  covenants  of the
     Company  and/or  Seller  contained  in this  Agreement  not being  true and
     correct after the occurrence of such transaction or event; or

          (xxi) commit to do any of the foregoing.

     5.04 Notice  Regarding  Changes.  The Company  and the  Shareholders  shall
promptly inform Buyer in writing of any change in facts and  circumstances  that
could  render  any of the  representations  and  warranties  made  herein by the
Company and/or the Shareholders inaccurate or misleading if such representations
and warranties had been made upon the occurrence of the fact or  circumstance in
question.  The Buyer shall promptly  inform the Company in writing of any change
in facts and  circumstances  that could  render any of the  representations  and
warranties  made herein by it inaccurate  or misleading if such  representations
and warranties had been made upon the occurrence of the fact or  circumstance in
question.

     5.05  Preferential  Purchase  Rights.  To the extent  there are any parties
entitled or who may become entitled to exercise preferential purchase or consent
rights with respect to the transactions contemplated hereby, the Company and the
Shareholders  shall  promptly use their best efforts to obtain the  agreement in
writing of such parties to waive or not  exercise  such  rights,  which  request
shall be in form reasonably satisfactory to and approved by Buyer.

     5.06 Ensure  Conditions  Met.  Subject to the terms and  conditions of this
Agreement, each party hereto shall use all reasonable commercial efforts to take
or cause to be taken all actions and do or cause to be done all things  required
under  applicable  Legal  Requirements  in order to consummate the  transactions
contemplated hereby, including,  without limitation,  (i) obtaining all Permits,
authorizations,  consents and approvals of any  Governmental  Authority or other


                                       19
<PAGE>

person which are  required for or in  connection  with the  consummation  of the
transactions  contemplated hereby and by the Collateral Agreements,  (ii) taking
any and all  reasonable  actions  necessary to satisfy all of the  conditions to
each  party's  obligations  hereunder  as set  forth in  Article  VI,  and (iii)
executing and  delivering  all  agreements  and documents  required by the terms
hereof to be executed and delivered by such party on or prior to the Closing.

     5.07 Termination of Insurance Policies.  The Company shall take all actions
necessary  or  appropriate  to cause any and all  insurance  coverage  currently
carried by or for the benefit of the Company to remain in full force and effect;
provided,  however,  that  the  Company  shall  cooperate  with  Buyer  to cause
termination  as of the Closing  Date of the  insurance  coverage  identified  in
writing for this purpose by Buyer to the Company and the Company  shall take all
actions  necessary to discharge any and all  liabilities  or  obligations of the
Company  arising  with  respect to any such  coverage  that is to be  terminated
hereunder.

     5.08 Casualty Loss. If, between the date of this Agreement and the Closing,
any of the  Properties  of the Company shall be destroyed or damaged in whole or
in part by fire, earthquake,  flood, other casualty or any other cause, then the
Company shall, at Buyer's election,  (i) cause such Properties to be repaired or
replaced  prior  to the  Closing  with  Properties  of  substantially  the  same
condition and function,  (ii) deposit in a separate account an amount sufficient
to cause such  Properties  to be so  repaired or  replaced,  or (iii) enter into
contractual arrangements  satisfactory to Buyer so that the Company will have at
the Closing the same economic value as if such casualty had not occurred.

     5.09 Employee Matters.

     (a)  Effective as of 12:01 a.m.,  local time,  on the day after the Closing
Date, the employment by the Company of the employees  listed on Schedule 3.07(e)
shall terminate and the Buyer shall be deemed to have offered employment to each
individual  whose  employment  was so  terminated  (the  "Business  Employees"),
effective  at 12:01 a.m.,  local time,  on the day after the Closing Date or, in
the case of a Business  Employee  not  actively at work on the  Closing  Date on
account  of a  disability,  on the day such  employee  reports  for  work  after
termination of such disability upon  substantially the same terms and conditions
with substantially the same duties and responsibilities and at substantially the
same rate of pay as in effect on the Closing  Date while such  individuals  were
employed by the Company.  The Buyer shall assume  responsibility for the payment
of any  employee  benefits or  entitlement,  including  severance  pay,  accrued
vacation,  sick or holiday pay, to any Business  Employee  pursuant to any Plan,
Benefit  Program  or  Agreement  or  law  or  regulation  as  a  result  of  the
consummation of the transactions contemplated hereby.

     (b) Nothing in this  Agreement,  express or implied,  shall confer upon any
employee of the Company, or any representative of any such employee,  any rights
or remedies,  including any right to employment or continued  employment for any
period, of any nature whatsoever.

     (c) The Company  shall permit Buyer to contact and make  arrangements  with
the Company's  employees for the purpose of assuring their continued  employment
by the Company after the Closing and for the purpose of ensuring the  continuity
of the Company's  business,  and the Company  agrees not to discourage  any such
employees from consulting with Buyer.

     (d) The Company  shall use its best efforts to keep  available the services
of its present employees through the Closing Date.

     5.10 Reserved

     5.11 Reserved.

     5.12 Reserved.


                                       20
<PAGE>

     5.13 No Shop.  From the date of this Agreement until the earlier of (i) the
Closing Date, or (ii) the termination of this Agreement,  the Company shall not,
and the Company shall cause the  Company's  shareholders,  officers,  directors,
employees and other agents not to,  directly or  indirectly,  take any action to
solicit,  initiate or encourage  any offer or proposal or indication of interest
in a merger,  consolidation or other business  combination  involving any equity
interest in, or a substantial  portion of the assets of the Company,  other than
in connection with the transactions  contemplated by this Agreement. The Company
shall  immediately  advise  the Buyer of the  terms of any  offer,  proposal  or
indication of interest that it receives or otherwise becomes aware of.

     5.14 Name Change. The Company hereby represents,  warrants and covenants to
the Buyer that the corporate name "Jack Young Associates, Inc." is included with
the Assets and that the exclusive  right to use such name will be transferred to
the Buyer on the Closing Date. The Company and the Shareholders  shall, prior to
Closing,  file an appropriate amendment to the Company's Articles or Certificate
of  Incorporation,  if required,  changing its name to a name which is in no way
similar to the corporate  name set forth on the signature  page hereof and shall
furnish  such  written  consents and  assignments  as the Buyer shall  hereafter
reasonably request in connection with such name change.


          ARTICLE VI. - CONDITIONS TO COMPANY'S AND BUYER'S OBLIGATIONS

     6.01  Conditions to  Obligations  of the Company.  The  obligations  of the
Company  to  carry  out the  transactions  contemplated  by this  Agreement  are
subject,  at the option of the  Company,  to the  satisfaction  or waiver of the
following conditions:

     (a) Buyer shall have  furnished  the Company  with a copy of all  necessary
corporate action on its behalf approving its execution, delivery and performance
of this Agreement.

     (b) All representations and warranties of Buyer contained in this Agreement
shall be true and correct in all material respects at and as of the Closing, and
Buyer shall have performed and satisfied in all material  respects all covenants
and agreements required by this Agreement to be performed and satisfied by Buyer
at or prior to the Closing.

     (c) As of the Closing Date, no suit, action or other proceeding  (excluding
any such matter  initiated  by or on behalf of the  Company or any  Shareholder)
shall be pending or  threatened  before any  Governmental  Authority  seeking to
restrain  the Company or prohibit  the  Closing or seeking  Damages  against the
Company as a result of the consummation of this Agreement.

     6.02 Conditions to Obligations of Buyer.  The obligations of Buyer to carry
out the transactions  contemplated by this Agreement are subject,  at the option
of Buyer, to the satisfaction, or waiver by Buyer, of the following conditions:

     (a) All  representations and warranties of the Company and the Shareholders
contained in this Agreement  shall be true and correct in all material  respects
at and as of the  Closing,  and the  Company  and the  Shareholders  shall  have
performed and satisfied in all material  respects all  agreements  and covenants
required by this  Agreement to be performed and satisfied by them at or prior to
the Closing.

     (b) As of the Closing Date, no suit, action or other proceeding  (excluding
any such  matter  initiated  by or on  behalf  of  Buyer)  shall be  pending  or
threatened before any court or governmental  agency seeking to restrain Buyer or
prohibit  the  Closing or seeking  Damages  against  Buyer or the Company or its
Properties as a result of the consummation of this Agreement.

     (c) Except for matters  disclosed in Schedule  3.09(a) or 3.09(b)  attached
hereto, since the Balance Sheet Date and up to and including the Closing,  there
shall not have been any event, circumstance, change or effect that, individually
or in the  aggregate,  had  or  might  have a  material  adverse  effect  on the
Company's business, operations, prospects, Properties or financial condition.


                                       21
<PAGE>

     (d)  The  Buyer  shall  have  received  the  opinion  of  Mylotte,  David &
Fitzpatrick, counsel to the Company ("Company Counsel"), dated as of the Closing
Date, addressed to the Buyer and in form and substance  reasonably  satisfactory
to the Buyer,  to the effect set forth on Exhibit C hereto.  In  rendering  such
opinion,  Company  Counsel  may rely as to factual  matters on  certificates  of
officers,  directors  and  shareholders  of the Company and on  certificates  of
governmental officials.

     (e) The Company  shall have  furnished  Buyer with a copy of all  necessary
corporate action on its behalf approving the Company's  execution,  delivery and
performance of this Agreement.

     (f) All agreements,  commitments and understandings between the Company and
any  Affiliate  thereof  shall have been  terminated  in all  respects  on terms
satisfactory to Buyer,  and all obligations,  claims or entitlements  thereunder
shall be  unconditionally  waived and  released by such  Affiliates  and written
evidence  thereof  satisfactory  in form and  substance to Buyer shall have been
delivered to Buyer.

     (g) Buyer shall have  completed  its due diligence  investigation,  and the
results thereof shall not have revealed that any of the  representations  of the
Company or the  Shareholders  set forth  herein are untrue or  incorrect  in any
respect or otherwise be unsatisfactory to Buyer.

     (h) All  proceedings  to be taken by the  Company  in  connection  with the
transactions  contemplated  hereby and all documents  incident  thereto shall be
satisfactory in form and substance to Buyer and its counsel,  and Buyer and said
counsel shall have received all such counterpart originals or certified or other
copies of such documents as it or they may reasonably request.

     (i) The Board of Directors of Buyer shall have approved this  Agreement and
Buyer's acquisition of the Assets contemplated hereby.

     (j) No proceeding in which any of the  Shareholders or the Company shall be
a  debtor,   defendant  or  party  seeking  an  order  for  its  own  relief  or
reorganization  shall have been  brought or be pending by or against such person
under any United States or state bankruptcy or insolvency law.

     (k) The Buyer shall have received copies of "payoff" or "estoppel"  letters
or other  evidence,  reasonably  satisfactory to it, of the  termination,  at or
prior to Closing, of all Funded Indebtedness and any and all Liens that encumber
the Company's Properties pursuant thereto.

     (l) Jack Young and Tony  Anzovino  shall have executed and delivered to the
Buyer Consulting Agreements in the form attached hereto as Exhibit D.

     (m) Buyer shall be satisfied that it will be able to obtain, not later than
sixty (60) days after the Closing Date, all audited historical and unaudited pro
forma  Financial  Statements  with  respect  to the  Company  Business,  if any,
together  with  any  required  consent  of  the  Company's   independent  public
accountants,  that may be required  to be  included in a Current  Report on Form
8-K.

     (n) The  Company's  landlord  shall have agreed to accept  $40,000 upon the
execution  of this  Agreement  and to modify the current  lease to allocate  the
remaining  arrearages  (after the $40,000  payment) over  twenty-four (24) equal
monthly payments in addition to the regular monthly rental payments.


                     ARTICLE VII. - POST-CLOSING OBLIGATIONS

     7.01  Further  Assurances.   Following  the  Closing,   the  Company,   the
Shareholders  and the Buyer shall execute and deliver such  documents,  and take
such other action, as shall be reasonably requested by any other party hereto to
carry out the transactions contemplated by this Agreement.


                                       22
<PAGE>

     7.02 Publicity. None of the parties hereto shall issue or make, or cause to
have  issued  or made,  any  public  release  or  announcement  concerning  this
Agreement or the transactions  contemplated hereby, without the advance approval
in  writing  of the form and  substance  thereof  by each of the other  parties,
except as  required by law (in which case,  so far as  possible,  there shall be
consultation  among the  parties  prior to such  announcement),  and the parties
shall endeavor  jointly to agree on the text of any  announcement or circular so
approved or required.

     7.03 Post-Closing Indemnity by the Company and the Shareholders. Subject to
the provisions of Section 9.01, from and after the Closing,  the Company and the
Shareholders  shall jointly and severally  indemnify and hold harmless Buyer and
its Affiliates,  directors,  officers and employees from and against any and all
Damages arising out of, resulting from or in any way related to (i) a breach of,
or the  failure to perform or satisfy any of, the  representations,  warranties,
covenants and  agreements  made by the  Shareholders  and/or the Company in this
Agreement or in any document or certificate delivered by the Shareholders and/or
the Company at the Closing pursuant hereto,  (ii) the occurrence of any event on
or prior to the date of  Closing  that is (or would be,  but for any  deductible
thereunder)  covered by  individual  policies of  insurance,  blanket  insurance
policies  or self  insurance  programs  maintained  by the  Company,  (iii)  the
Excluded  Assets,  (iv) the existence of any  liabilities  or obligations of the
Company or any of the Shareholder (whether accrued, absolute,  contingent, known
or  unknown,  or  otherwise,  and  whether  or not of a nature  appropriate  for
inclusion  in a balance  sheet in  accordance  with GAAP) other than the Assumed
Obligations.  Any  payment  made to Buyer  by the  Company  or the  Shareholders
pursuant  to the  indemnification  obligations  under  this  Section  7.03 shall
constitute a reduction in the Purchase Price hereunder.

     7.04 Non-Competition, Non-Solicitation and Non-Disclosure.

     (a) General.  In consideration of the payment of the Purchase Price, and in
order to induce the Buyer to enter into this  Agreement  and to  consummate  the
transactions  contemplated  hereby, each of the Shareholders hereby acknowledges
that he is a beneficiary  of the Purchase Price payments to the Company and each
of the Shareholders hereby severally covenants and agrees as follows:

          (i) Except as set forth in Schedule  7.04,  without the prior  written
     consent of the Buyer,  such Shareholder  shall not for a period of five (5)
     years from and after the Closing Date (A) directly or indirectly acquire or
     own  in  any  manner  any  interest  in  any  person,  firm,   partnership,
     corporation,  association  or other entity which engages or plans to engage
     in any facet of the  Business or which  competes or plans to compete in any
     way with the Buyer or any of its  subsidiaries  or Affiliates,  anywhere in
     the [states in which business is currently  conducted]  (the  "Territory"),
     (B) be employed by or serve as an employee, agent, officer, director of, or
     as a consultant to, any person, firm, partnership, corporation, association
     or other  entity  which  engages  or plans to  engage  in any  facet of the
     Business or which competes or plans to compete in any way with the Buyer or
     any of its subsidiaries or Affiliates within the Territory,  or (C) utilize
     his  special  knowledge  of the  business  of the  Company  and  his or its
     relationships  with  customers,  suppliers and others to compete with Buyer
     and/or any of its  Affiliates  in any  business  which  engages or plans to
     engage in the [describe business];  provided,  however, that nothing herein
     shall be deemed to prevent such Shareholder  from acquiring  through market
     purchases and owning,  solely as an investment,  less than three percent in
     the  aggregate  of the equity  securities  of any class of any issuer whose
     shares are registered  under  ss.12(b) or 12(g) of the Securities  Exchange
     Act of 1934,  as  amended,  and are listed or  admitted  for trading on any
     United States  national  securities  exchange or are quoted on the National
     Association  of  Securities  Dealers  Automated  Quotation  System,  or any
     similar  system of automated  dissemination  of  quotations  of  securities
     prices in common  use, so long as such  Shareholder  is not a member of any
     "control  group"  (within the meaning of the rules and  regulations  of the
     United States Securities and Exchange  Commission) of any such issuer. Such
     Shareholder acknowledges and agrees that the covenants provided for in this
     Section  7.04(a) are  reasonable  and necessary in terms of time,  area and
     line of business to protect the Company's Trade Secrets.  Such  Shareholder
     further  acknowledges  and agrees that such  covenants are  reasonable  and
     necessary  in terms of time,  area and  line of  business  to  protect  the
     Buyer's  legitimate  business  interests,  which  include its  interests in


                                       23
<PAGE>

     protecting the Buyer's (i) valuable confidential business information, (ii)
     substantial  relationships with customers throughout the United States, and
     (iii) customer goodwill  associated with the ongoing Business.  Shareholder
     expressly  authorizes the enforcement of the covenants provided for in this
     Section  7.04(a)  by (A) the Buyer and its  subsidiaries,  (B) the  Buyer's
     permitted assigns,  and (C) any successors to the Buyer's business.  To the
     extent that the covenants provided for in this Section 7.04(a) may later be
     deemed  by a court  to be too  broad to be  enforced  with  respect  to its
     duration or with respect to any particular activity or geographic area, the
     court making such determination shall have the power to reduce the duration
     or scope of the provision,  and to add or delete  specific words or phrases
     to or from the provision. The provision as modified shall then be enforced.

          (ii) Without the prior consent of Buyer,  such  Shareholder  shall not
     for a  period  of five  (5)  years  from  the  Closing  Date,  directly  or
     indirectly,  for  himself  or for  any  other  person,  firm,  corporation,
     partnership,  association  or other entity  (including  the  Company),  (i)
     attempt  to  employ  or enter  into any  contractual  arrangement  with any
     employee or former employee of the Business, unless such employee or former
     employee  has not been  employed by the  Business for a period in excess of
     nine  months,  and/or (ii) call on or solicit any of the actual or targeted
     prospective   customers  or  clients  of  the  Business,   nor  shall  such
     Shareholder  make known the names and  addresses  of such  customers or any
     information  relating  in any  manner to the  Company's  trade or  business
     relationships with such customers.

          (iii) Such Shareholder shall not at any time divulge, communicate, use
     to the  detriment  of the Buyer or for the  benefit of any other  person or
     persons, or misuse in any way, any Confidential  Information  pertaining to
     the Business.  Any confidential  information or data now known or hereafter
     acquired by such Shareholder with respect to the Business shall be deemed a
     valuable,  special  and unique  asset of the Buyer that is received by such
     Shareholder in confidence and as a fiduciary,  and such  Shareholder  shall
     remain a fiduciary to the Buyer with respect to all of such information.

     (b)  Injunction.  It is recognized and hereby  acknowledged  by the parties
hereto  that  a  breach  or  violation  by a  Shareholder  of  any or all of the
covenants and  agreements  contained in this Section 7.04 may cause  irreparable
harm and damage to Buyer in a monetary amount which may be virtually  impossible
to ascertain.  As a result, each Shareholder  recognizes and hereby acknowledges
that  Buyer  shall be  entitled  to an  injunction  from any court of  competent
jurisdiction  enjoining and restraining any breach or violation of any or all of
the covenants and agreements  contained in this Section 7.04 by such Shareholder
and/or his  associates,  Affiliates,  partners  or agents,  either  directly  or
indirectly,  and that  such  right to  injunction  shall  be  cumulative  and in
addition to whatever  other rights or remedies the Buyer may possess  hereunder,
at law or in equity.  Nothing  contained in this Section 7.04 shall be construed
to  prevent  Buyer  from  seeking  and  recovering  from a  Shareholder  damages
sustained by it as a result of any breach or violation  by such  Shareholder  of
any of the covenants or agreements contained herein.

     7.05 Delivery of Property  Received by the Company After Closing.  From and
after the Closing,  Buyer shall have the right and authority to collect, for the
account of Buyer,  all receivables and other items which shall be transferred or
are  intended  to be  transferred  to Buyer as part of the Assets as provided in
this Agreement, and to endorse with the name of the Company any checks or drafts
received on account of any such receivables or other Assets.  The Company agrees
that it will transfer or deliver to Buyer,  promptly after the receipt  thereof,
any cash or other property which the Company  receives after the Closing Date in
respect of any claims, contracts,  licenses, leases, commitments,  sales orders,
purchase orders,  receivables of any character or any other items transferred or
intended to be transferred to Buyer as part of the Assets under this Agreement.

     7.06 Buyer  Appointed  Attorney for the  Company.  Effective at the Closing
Date, the Company hereby  constitutes and appoints Buyer, and Buyer's successors
and assigns,  its true and lawful  attorney,  in the name of either Buyer or the
Company (as Buyer shall  determine in its sole  discretion)  but for the benefit
and at the  expense  of Buyer  (except as  otherwise  herein  provided),  (a) to
institute and prosecute all proceedings  which Buyer may deem proper in order to


                                       24
<PAGE>

collect,  assert or enforce  any claim,  right or title of any kind in or to the
Assets as provided for in this  Agreement;  (b) to defend or compromise  any and
all actions, suits or proceedings in respect of any of the Assets, and to do all
such  acts and  things  in  relation  thereto  as Buyer  shall  reasonably  deem
advisable;  and (c) to take all action which Buyer may reasonably deem proper in
order to  provide  for Buyer the  benefits  under  any of the  Assets  where any
required  consent of another  party to the sale or  assignment  thereof to Buyer
pursuant  to  this  Agreement   shall  not  have  been  obtained.   The  Company
acknowledges that the foregoing powers are coupled with an interest and shall be
irrevocable.  Buyer  shall be entitled to retain for its own account any amounts
respecting the Assets collected pursuant to the foregoing powers,  including any
amounts payable as interest in respect thereof.

     7.07 Assignment of Contracts.  At the option of Buyer, and  notwithstanding
anything in this Agreement to the contrary,  this Agreement shall not constitute
an assignment of any claim, contract,  license,  franchise,  lease,  commitment,
sales order, sales contract, supply contract, service agreement,  purchase order
or purchase commitment if an attempted assignment thereof without the consent of
a third party thereto would  constitute a breach thereof or in any way adversely
affect the rights of Buyer  thereunder.  If such consent is not obtained,  or if
any attempt at an assignment  thereof would be  ineffective  or would affect the
rights of the Company  thereunder  so that Buyer  would not in fact  receive all
such rights,  the Company shall cooperate with Buyer to the extent  necessary to
provide for Buyer the benefits under such claim, contract,  license,  franchise,
lease,  commitment,  sales  order,  sales  contract,  supply  contract,  service
agreement, purchase order or purchase commitment,  including enforcement for the
benefit  of Buyer of any and all  rights of the  Company  against a third  party
thereto  arising  out of the  breach  or  cancellation  by such  third  party or
otherwise.

     7.08  Capital  Infusion.  Immediately  after the  Closing,  the Buyer shall
provide the Company with $200,000 for general working capital.


                           ARTICLE VIII. - TAX MATTERS

     8.01  Representations and Obligations  Regarding Taxes. The Company and the
Shareholders  jointly and severally  represent and warrant to and agree with the
Buyer as follows:

     (a) Except as set forth on Schedule 8.01(a),  the Company has filed all Tax
Returns  that it was  required to file.  All such Tax Returns  were  correct and
complete in all respects. All Taxes owed by the Company (whether or not shown on
any Tax Return and whether or not any Tax Return was  required)  have been paid.
The Company is not  currently  the  beneficiary  of any extension of time within
which to file any Tax Return.  No claim has ever been made by a taxing authority
in a jurisdiction  where the Company does not file Tax Returns that it is or may
be subject to  taxation by that  jurisdiction.  There are no liens on any of the
assets of the  Company  that arose in  connection  with any  failure (or alleged
failure) to pay any Tax, except for liens for Taxes not yet due.

     (b) Except as set forth on Schedule  8.01(b),  the Company has withheld and
paid all  Taxes  required  to have been  withheld  and paid in  connection  with
amounts  paid  or  owing  to any  employee,  independent  contractor,  creditor,
stockholder or other third party.

     (c) Except as set forth on Schedule 8.01(c),  there are, and after the date
of  this  Agreement  will  be,  no Tax  deficiencies  (including  penalties  and
interest) or claims of any kind  assessed  against or relating to Company or the
Assets with respect to any taxable  periods  ending on or before,  or including,
the Closing  Date of a character  or nature that could result in Liens or claims
on any of the Assets on Buyer's  title or use of the Assets or that could result
in any claim against, or liability or obligation of , Buyer.

     (d) Buyer and Company  shall  reasonably  cooperate,  and shall cause their
respective Affiliates, officers, employees, agents, auditors and representatives
reasonably to cooperate, in preparing and filing all returns,  reports and forms


                                       25
<PAGE>

relating to Taxes,  including maintaining and making available to each other all
records  necessary in  connection  with Taxes and in resolving  all disputes and
audits with respect to all Taxable periods relating to Taxes.  Each of Buyer and
Company  recognizes  that Buyer and Company may need access,  from time to time,
after the Closing Date, to certain  accounting  and Tax records and  information
held  by  Company  or  Buyer,  respectively,  to the  extent  such  records  and
information  pertain to events  occurring prior to the Closing Date;  therefore,
Company and Buyer each agrees,  (a) to properly retain and maintain such records
until the earlier to occur of (i) the  expiration of any  applicable  statute of
limitations  or (ii) such time as Buyer and Company  agree in writing  that such
retention  and  maintenance  is no longer  necessary  and (b) to allow the other
party and its agents and representatives, at times and dates mutually acceptable
to the parties, to inspect, review and make copies of such records as such party
or its representatives reasonably may deem necessary or appropriate from time to
time,  such  activities to be conducted  during normal business hours and at the
expense of the requesting party.

     (e) As used in this  Agreement,  "Affiliated  Group"  means any  affiliated
group  within the meaning of Section  1504(a) of the Code or any  similar  group
defined under a similar  provision of state,  local or foreign law; "Code" means
the  Internal  Revenue  Code of 1986,  as amended;  "Company"  means the Company
and/or any  corporation  that at any time has been a subsidiary  of the Company;
"Person" means an individual, a partnership,  a corporation,  an association,  a
joint stock company, a trust, a joint venture, an unincorporated organization or
a  governmental  entity  (or any  department,  agency or  political  subdivision
thereof);  "Tax"  means any  Federal,  state,  local or  foreign  income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall profits,  environmental (including taxes under Section 59A of
the Code),  customs  duties,  capital stock,  franchise,  profits,  withholding,
social security (or similar), unemployment,  disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever,  including any interest,
penalty or addition  thereto,  whether disputed or not, and "Taxes" means any or
all  of  the  foregoing  collectively;   and  "Tax  Return"  means  any  return,
declaration,  report,  claim for  refund  or  information  return  or  statement
relating to Taxes,  including any schedule or  attachment  thereto and including
any amendment thereof.


                           ARTICLE IX. - MISCELLANEOUS

     9.01 Limitation on Liability.

     (a) The  representations,  warranties,  agreements,  and indemnities of the
Buyer, Company and the Shareholders set forth in this Agreement or in connection
with the  transactions  contemplated  hereby shall survive the Closing except as
expressly provided in Section 9.01(b).

     (b) The  Company and the  Shareholders  shall have no  liability  under the
agreement to indemnify  under  either (A) clause (iii) of Section  7.03,  or (B)
clause (i) of Section 7.03 against  breaches of the  provisions of Sections 3.05
(clauses (ii), (iii),  (iv) and (v)), 3.06, and 3.08 through 3.24  (collectively
the "Business Indemnities"),  in each case unless the Company receives notice in
writing  from  Buyer of Buyer's  claim  under  said  indemnity  on or before the
three-year  anniversary of the Closing Date. Said limitations shall not apply to
any breaches of or  obligations  to comply with any of the other  provisions  of
this Agreement, regardless of whether such breach or obligation also constitutes
a breach or obligation under any of the provisions  specifically  listed in this
Section 9.01(b).  Buyer's indemnity shall be limited to its obligation described
in Section 1.01.

     (c) The Company and the Shareholders shall be obligated to indemnify as and
to the extent set forth in Section 7.03 of this  Agreement only if the aggregate
of all of their  liability  under such indemnity  obligations  exceeds $5000, it
being  understood  that such  $5000  figure is to serve as a  "trigger"  for the
indemnification  and not as a "deductible" (for example, if the indemnity claims
for which the Company and the Shareholders would, but for the provisions of this
paragraph (c), be liable aggregate $6000, the Company and the Shareholders would
then be liable for the full $6000,  and not just  $1,000).  In  addition,  in no
event shall the  aggregate  liability of the Company and the  Shareholders  with
respect  to the  Business  Indemnities  exceed  Nine  Hundred  Thousand  Dollars
($900,000).


                                       26
<PAGE>

     (d) For  purposes  of this  Section  9.01(d),  a party  making a claim  for
indemnity  under  Section  7.03 is  hereinafter  referred to as an  "Indemnified
Party" and the party against whom such claim is asserted is hereinafter referred
to as the  "Indemnifying  Party."  All  claims by any  Indemnified  Party  under
Section  7.03 hereof  shall be asserted  and  resolved  in  accordance  with the
following  provisions.  If any claim or demand for which an  Indemnifying  Party
would be liable to an  Indemnified  Party is  asserted  against  or sought to be
collected  from such  Indemnified  Party by such third party,  said  Indemnified
Party shall with reasonable  promptness notify in writing the Indemnifying Party
of such claim or demand stating with reasonable specificity the circumstances of
the Indemnified Party's claim for indemnification;  provided,  however, that any
failure to give such notice will not waive any rights of the  Indemnified  Party
except  to  the  extent  the  rights  of the  Indemnifying  Party  are  actually
prejudiced  or to the  extent  that any  applicable  period set forth in Section
9.01(b) has  expired  without  such notice  being  given.  After  receipt by the
Indemnifying  Party  of such  notice,  then  upon  reasonable  notice  from  the
Indemnifying  Party  to the  Indemnified  Party,  or  upon  the  request  of the
Indemnified Party, the Indemnifying  Party shall defend,  manage and conduct any
proceedings,  negotiations or communications  involving any claimant whose claim
is the subject of the Indemnified  Party's notice to the  Indemnifying  Party as
set forth above, and shall take all actions necessary, including but not limited
to the  posting  of such  bond  or  other  security  as may be  required  by any
Governmental  Authority,  so as to enable  the claim to be  defended  against or
resolved without expense or other action by the Indemnified  Party. Upon request
of the  Indemnifying  Party,  the Indemnified  Party shall, to the extent it may
legally  do so and to the  extent  that  it is  compensated  in  advance  by the
Indemnifying Party for any costs and expenses thereby incurred,

          (i) take such action as the Indemnifying  Party may reasonably request
     in connection with such action,

          (ii) allow the  Indemnifying  Party to dispute such action in the name
     of the Indemnified  Party and to conduct a defense to such action on behalf
     of the Indemnified Party, and

          (iii)  render to the  Indemnifying  Party all such  assistance  as the
     Indemnifying  Party may reasonably  request in connection with such dispute
     and defense.

     9.02 Confidentiality.

     (a) Prior to the Closing,  Buyer shall,  and shall cause its Affiliates and
its  and  their  employees,   agents,  accountants,   legal  counsel  and  other
representatives  and advisers to, hold in strict confidence all, and not divulge
or  disclose  any,  information  of any  kind  concerning  the  Company  and its
business;  provided,  however, that the foregoing obligation of confidence shall
not apply to (i)  information  that is or  becomes  generally  available  to the
public other than as a result of a disclosure by Buyer or its  Affiliates or any
of  its  or  their  employees,  agents,  accountants,  legal  counsel  or  other
representatives  or advisers,  (ii) information that is or becomes  available to
Buyer or its Affiliates or any of its or their employees,  agents,  accountants,
legal counsel or other  representatives  or advisers on a nonconfidential  basis
prior  to its  disclosure  by  Buyer  or its  Affiliates  or any of its or their
employees,  agents,  accountants,  legal  counsel  or other  representatives  or
advisers and (iii)  information that is required to be disclosed by Buyer or its
Affiliates or any of its or their employees, agents, accountants,  legal counsel
or other  representatives or advisers as a result of any applicable law, rule or
regulation  of any  Governmental  Authority;  and  provided  further  that Buyer
promptly shall notify the Company of any disclosure  pursuant to clause (iii) of
this Section 9.02(a);  and, provided,  further, that the foregoing obligation of
confidence  shall not apply to the  furnishing of  information  by Buyer in bona
fide discussions or negotiations with prospective lenders.

     (b) The Company and each of the Shareholders  shall, and shall cause its or
his  Affiliates  and their  respective  employees,  agents,  accountants,  legal
counsel and other  representatives  and advisers  to, hold in strict  confidence
all, and not divulge or disclose any,  information  of any kind  concerning  the
transactions  contemplated  by this  Agreement,  the  Company,  Buyer  or  their
respective  businesses;  provided,  however,  that the  foregoing  obligation of
confidence  shall  not apply to (i)  information  that is or  becomes  generally
available to the public  other than as a result of a disclosure  by the Company,
any  of the  Shareholders  or any of  their  respective  Affiliates,  employees,


                                       27
<PAGE>

agents,  accountants,  legal counsel or other representatives or advisers,  (ii)
information that is or becomes available to the Company, any of the Shareholders
or any of their respective Affiliates,  employees,  agents,  accountants,  legal
counsel  or  other   representatives   or  advisers   after  the  Closing  on  a
nonconfidential  basis  prior  to  its  disclosure  by the  Company,  any of the
Shareholders or any of their respective employees,  agents,  accountants,  legal
counsel or other  representatives  or  advisers  and (iii)  information  that is
required to be disclosed by the Company, any of the Shareholders or any of their
respective   employees,   agents,   accountants,    legal   counsel   or   other
representatives  or  advisers  as a  result  of  any  applicable  law,  rule  or
regulation of any Governmental Authority;  and provided further that the Company
shall promptly shall notify Buyer of any disclosure  pursuant to clause (iii) of
this Section 9.02(b).

     9.03  Brokers.  Regardless  of whether the  Closing  shall  occur,  (i) the
Company and the  Shareholders  shall  jointly and  severally  indemnify and hold
harmless  Buyer  from and  against  any and all  liability  for any  brokers  or
finders' fees arising with respect to brokers or finders  retained or engaged by
the  Company  or  any  of  the  Shareholders  in  respect  of  the  transactions
contemplated by this Agreement, and (ii) Buyer shall indemnify and hold harmless
the Company from and against any and all  liability for any brokers' or finders'
fees arising with respect to brokers or finders  retained or engaged by Buyer in
respect of the transactions contemplated by this Agreement.

     9.04 Costs and Expenses.  Each of the parties to this Agreement  shall bear
his  or  its  own  expenses   incurred  in  connection  with  the   negotiation,
preparation,  execution  and  closing  of this  Agreement  and the  transactions
contemplated hereby.

     9.05 Notices.  Any notice,  request,  instruction,  correspondence or other
document  to  be  given  hereunder  by  any  party  hereto  to  another  (herein
collectively  called  "Notice") shall be in writing and delivered  personally or
mailed by  registered  or certified  mail,  postage  prepaid and return  receipt
requested, or by telecopier, as follows:

IF TO BUYER:                                       Jack Young, Inc.
                                                   4479 Atlanta Road
                                                   Atlanta, GA  30080
                                                   Attn:  Bruce Davis
                                                   Telephone No.  (404) 261-8944

                                                   With a copy to:
                                                   --------------
                                                   Greenberg Traurig, LLP
                                                   3290 Northside Parkway
                                                   The Forum, Suite 400
                                                   Atlanta, GA  30327
                                                   Attn.:  Robert E. Altenbach
                                                   Telephone No.  (678) 553-2440
IF TO THE COMPANY AND/OR THE ANY OF THE
SHAREHOLDERS:                                      Pocono Knits, Inc.
                                                   100 East Diamond Road
                                                   Hazelton, PA  18201
                                                   Telephone No.  (570) 455-7706

                                                   With a copy to:
                                                   --------------
                                                   Robert J. Gillespie, Jr.
                                                   15 Public Square
                                                   Suite 200
                                                   Wilkes Barre, PA  18701
                                                   Telephone No.  (570) 824-7739


                                       28
<PAGE>

Each of the above  addresses  for notice  purposes  may be changed by  providing
appropriate  notice  hereunder.  Notice given by personal delivery or registered
mail shall be effective upon actual receipt. Notice given by telecopier shall be
effective upon actual receipt if received during the recipient's normal business
hours,  or at the beginning of the  recipient's  next normal  business day after
receipt if not  received  during the  recipient's  normal  business  hours.  All
Notices by telecopier  shall be confirmed by the sender  thereof  promptly after
transmission in writing by registered mail or personal delivery. Anything to the
contrary contained herein notwithstanding, notices to any party hereto shall not
be deemed  effective with respect to such party until such Notice would, but for
this sentence, be effective both as to such party and as to all other persons to
whom copies are provided above to be given.

     9.06  Governing  Law. The  provisions  of this  agreement and the documents
delivered  pursuant hereto shall be governed by and construed in accordance with
the laws of the State of  Pennsylvania  (excluding  any  conflict of law rule or
principle  that  would  refer to the laws of another  jurisdiction).  Each party
hereby  irrevocably  agrees  that all claims in  respect  of any such  action or
proceeding  shall be under the exclusive  jurisdiction of the Federal courts and
shall be brought  in the  Federal  District  Court for the  Middle  District  of
Pennsylvania.  Each  party  hereto  consents  to service of process by any means
authorized  by the  applicable  law of the forum in any action  brought under or
arising out of this  Agreement  or any of the  Collateral  Agreements,  and each
party irrevocably  waives, to the fullest extent each may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.  EACH PARTY HERETO  HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY
WAIVES,  TO THE FULLEST  EXTENT IT MAY LEGALLY AND  EFFECTIVELY  DO SO, TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.

     9.07  Representations  and  Warranties.  Each  of the  representations  and
warranties of each of the parties to this Agreement shall be deemed to have been
made, and the certificates delivered pursuant to clause (iv) of Section 2.02 and
clause  (ii) of  Section  2.03 by a party  are  agreed to and shall be deemed to
constitute the making of such representations and warranties, again at and as of
the  Closing  by and on behalf of the party on behalf of whom such  certificates
are delivered.

     9.08 Entire  Agreement;  Amendments and Waivers.  This Agreement,  together
with  all  exhibits  and  schedules  attached  hereto,  constitutes  the  entire
agreement  between and among the parties hereto pertaining to the subject matter
hereof and supersedes all prior  agreements,  understandings,  negotiations  and
discussions,  whether  oral  or  written,  of  the  parties,  and  there  are no
warranties,   representations   or  other  agreements  between  the  parties  in
connection  with the  subject  matter  hereof  except as set forth  specifically
herein or  contemplated  hereby.  No supplement,  modification or waiver of this
Agreement  shall be binding unless  executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision  hereof  (regardless of whether
similar),  nor shall any such  waiver  constitute  a  continuing  waiver  unless
otherwise expressly provided.

     9.09 Binding Effect and  Assignment.  This Agreement  shall be binding upon
and inure to the benefit of the parties  hereto and their  respective  permitted
successors  and  assigns;  but  neither  this  Agreement  nor any of the rights,
benefits or  obligations  hereunder  shall be  assigned,  by operation of law or
otherwise,  by any party hereto  without the prior written  consent of the other
party,  provided,  however, that nothing herein shall prohibit the assignment of
Buyer's rights and obligations to any direct or indirect  subsidiary or prohibit
the assignment of Buyer's rights (but not obligations) to any lender. Nothing in
this  Agreement,  express or  implied,  is intended to confer upon any person or
entity other than the parties hereto and their respective  permitted  successors
and assigns, any rights, benefits or obligations hereunder.

     9.10  Remedies.  The rights and  remedies  provided by this  Agreement  are
cumulative, and the use of any one right or remedy by any party hereto shall not
preclude or  constitute a waiver of its right to use any or all other  remedies.
Such rights and  remedies are given in addition to any other rights and remedies
a party may have by law, statute or otherwise.

     9.11 Reserved.


                                       29
<PAGE>

     9.12 Withholding of Payments.  Notwithstanding  any other provision of this
Agreement,  the  Company and the  Shareholders  agree that Buyer shall after the
Closing have the right to withhold any payment  owing to the Company  and/or the
Shareholders  to the extent of any and all  payments due to but not yet received
by the  Buyer  from  the  Company  and/or  the  Shareholders  pursuant  to  this
Agreement.  The  Shareholders  and the Company  specifically  agree that (i) any
claims for indemnification by Buyer against the Shareholders and the Company (or
any of them)  hereunder may be satisfied by deducting  and otherwise  offsetting
such claims against any amounts that might otherwise be payable by Buyer to such
persons  hereunder,  and  (ii)  to the  extent  that  there  remain  unsatisfied
indemnification  claims after the deductions and set-offs described above, Buyer
shall have full recourse  against the  Shareholders  and the Company  (including
their assets of whatsoever  kind or nature) for payment of such  indemnification
claims.

     9.13 Exhibits and Schedules.  The exhibits and Schedules referred to herein
are attached hereto and incorporated  herein by this reference.  Disclosure of a
specific item in any one Schedule shall be deemed restricted only to the Section
to which  such  disclosure  specifically  relates  except  where (i) there is an
explicit cross-reference to another Schedule, and (ii) Buyer could reasonably be
expected to ascertain the scope of the modification to a representation intended
by such cross-reference.

     9.14 Multiple  Counterparts.  This Agreement may be executed in one or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

     9.15 References and Construction.

     (a) Whenever  required by the context,  and is used in this Agreement,  the
singular number shall include the plural and pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural,
as the  identification  the person may require.  References to monetary amounts,
specific  named  statutes  and  generally  accepted  accounting  principles  are
intended to be and shall be construed as references  to United  States  dollars,
statutes  of the United  States of the stated name and United  States  generally
accepted  accounting  principles,  respectively,  unless the  context  otherwise
requires.

     (b) The provisions of this Agreement shall be construed  according to their
fair meaning and neither for nor against any party hereto  irrespective of which
party caused such provisions to be drafted. Each of the parties acknowledge that
it has been  represented by an attorney in connection  with the  preparation and
execution of this Agreement.

     9.16  Survival.   Any  provision  of  this  Agreement  which   contemplates
performance or the existence of obligations  after the Closing Date, and any and
all  representations  and warranties set forth in this  Agreement,  shall not be
deemed  to be  merged  into or  waived  by the  execution  and  delivery  of the
instruments  executed at the Closing,  but shall  expressly  survive Closing and
shall be binding upon the party or parties  obligated thereby in accordance with
the terms of this Agreement,  subject to any limitations  expressly set forth in
this Agreement.

     9.17  Attorneys'  Fees. In the event any suit or other legal  proceeding is
brought for the  enforcement  of any of the  provisions of this  Agreement,  the
parties hereto agree that the  prevailing  party or parties shall be entitled to
recover  from the other  party or  parties  upon  final  judgment  on the merits
reasonable  attorneys'  fees  (and  sales  taxes  thereon,  if  any),  including
attorneys'  fees for any appeal,  and costs  incurred  in bringing  such suit or
proceeding.

     9.18 Risk of Loss. Prior to the Closing,  the risk of loss of damage to, or
destruction  of,  any  and  all  of  the  Company's  assets,  including  without
limitation the Properties, shall remain with the Company, and the legal doctrine
known as the "Doctrine of Equitable  Conversion" shall not be applicable to this
Agreement or to any of the transactions contemplated hereby.


                                       30
<PAGE>

     9.19  Representative  of the  Company  and  the  Shareholders.  Each of the
Shareholders and the Company designates Jack Young as its representative for all
purposes under this Agreement, including receipt of disclosures, granting and/or
executing  consents or waivers,  receiving notices and agreeing to and executing
amendments  and/or  modifications  to this Agreement.  Any such receipt,  grant,
agreement  and/or  execution  by Jack  Young  shall be valid and  binding on the
Company  and  the   Shareholders.   The  designation  by  the  Company  and  the
Shareholders  of such  representative  may not be revoked  without  the  written
consent of Buyer.


                            ARTICLE X. - DEFINITIONS

     Capitalized  terms  used in this  Agreement  are  used as  defined  in this
Article X or elsewhere in this Agreement.

     10.01  Affiliate.  The term  "Affiliate"  shall mean,  with  respect to any
person, any other person controlling, controlled by or under common control with
such person.  The term "Control" as used in the preceding  sentence means,  with
respect to a corporation,  the right to exercise,  directly or indirectly,  more
than 50% of the  voting  rights  attributable  to the  shares of the  controlled
corporation  and,  with  respect to any person  other  than a  corporation,  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction of the management or policies of such person.

     10.02  Available  Cash. The term  "Available  Cash" shall mean all cash and
cash equivalents  (including marketable  securities and short-term  investments)
held by the Company as of  midnight on the day before the Closing  Date less the
amount of cash and cash equivalents  necessary to cover outstanding checks which
have been mailed or otherwise delivered by the Company but have not cleared.

     10.03 Collateral  Agreements.  The term "Collateral  Agreements" shall mean
any or all of the exhibits to this  Agreement and any and all other  agreements,
instruments or documents  required or expressly provided under this Agreement to
be executed and delivered in connection  with the  transactions  contemplated by
this Agreement.

     10.04 Confidential Information.  The term "Confidential  Information" shall
mean confidential data and confidential  information relating to the business of
the  Company  (which  does  not  rise  to the  status  of a Trade  Secret  under
applicable law) which is or has been disclosed to any of the  Shareholders or of
which any of the  Shareholders  became aware as a consequence  of or through his
employment  or other  relationship  with the  Company and which has value to the
Company  and  is  not  generally  known  to  the  competitors  of  the  Company.
Confidential  Information shall not include any data or information that (i) has
been  voluntarily  disclosed  to  the  general  public  by  the  Company  or its
Affiliates,  (ii) has been independently  developed and disclosed to the general
public by others,  or (iii)  otherwise  enters the public domain  through lawful
means.

     10.05 Contracts.  The term "Contracts," when described as being those of or
applicable  to any  person,  shall  mean  any  and  all  contracts,  agreements,
franchises,  understandings,   arrangements,  leases,  licenses,  registrations,
authorizations,  easements,  servitudes, rights of way, mortgages, bonds, notes,
guaranties, liens, indebtedness,  approvals or other instruments or undertakings
to which  such  person  is a party or to which or by which  such  person  or the
property of such person is subject or bound, excluding any Permits.

     10.06  Damages.  The  term  "Damages"  shall  mean  any  and  all  damages,
liabilities,  obligations,  penalties, fines, judgments,  claims,  deficiencies,
losses, costs, expenses and assessments (including without limitation income and
other taxes,  interest,  penalties  and  attorneys'  and  accountants'  fees and
disbursements).

     10.07 Financial Statements.  The term "Financial Statements" shall mean any
or all  of the  financial  statements,  including  balance  sheets  and  related
statements  of income and  statements  of changes in financial  position and the


                                       31
<PAGE>

accompanying  notes thereto,  of the Company's  business  prepared in accordance
with generally accepted accounting principles  consistently  applied,  except as
may be otherwise provided herein.

     10.08 Funded Indebtedness.  "Funded  Indebtedness" shall mean the aggregate
amount  (including the current  portions  thereof) of all (i)  indebtedness  for
money borrowed from others, capital lease obligations,  dividends payable to the
Shareholders,  bonus payables to employees,  and purchase money  indebtedness of
the  Company,  (ii)  indebtedness  of the type  described  in  clause  (i) above
guaranteed,  directly or indirectly,  in any manner by the Company, or in effect
guaranteed,  directly or  indirectly,  in any manner by the Company,  through an
agreement,  contingent or otherwise,  to supply funds to, or in any other manner
invest in, the debtor, or to purchase  indebtedness,  or to purchase and pay for
property if not delivered or to pay for services if not performed, primarily for
the purpose of enabling  the debtor to make  payment of the  indebtedness  or to
assure the owners of the indebtedness  against loss, but excluding  endorsements
of checks and other  instruments in the ordinary course,  (iii)  indebtedness of
the type  described in clause (i) above secured by any Lien upon property  owned
by the Company,  even though the Company has not in any manner become liable for
the payment of such  indebtedness  and (iv) interest expense accrued but unpaid,
and all prepayment premiums, on or relating to any of such indebtedness.

     10.09 GAAP. "GAAP" means U.S. generally accepted accounting principles.


     10.10 Governmental Authorities.  The term "Governmental  Authorities" shall
mean any nation or country  (including but not limited to the United States) and
any commonwealth,  territory or possession thereof and any political subdivision
of any of the  foregoing,  including  but not  limited to  courts,  departments,
commissions, boards, bureaus, agencies, ministries or other instrumentalities.

     10.11 Hazardous Material.  The term "Hazardous  Material" shall mean all or
any of the following: (a) substances that are defined or listed in, or otherwise
classified  pursuant  to,  any  applicable  laws or  regulations  as  "hazardous
substances,"  "hazardous  materials,"  "Hazardous wastes," "toxic substances" or
any other formulation  intended to define, list or classify substances by reason
of  deleterious  properties  such  as  ignitability,   corrosivity,  reactivity,
carcinogenicity,  reproductive toxicity or "EP toxicity";  (b) oil, petroleum or
petroleum derived substances,  natural gas, natural gas liquids or synthetic gas
and  drilling  fluids,  produced  waters and other  wastes  associated  with the
exploration,  development or production of crude oil,  natural gas or geothermal
resources;  (c)  any  flammable  substances  or  explosives  or any  radioactive
materials;  and (d) asbestos in any form or electrical  equipment which contains
any oil or dielectric fluid containing  levels of  polychlorinated  biphenyls in
excess of fifty parts per million.

     10.12 Inventory. The term "Inventory" shall mean all goods, merchandise and
other  personal  property  owned  and  held  for  sale,  and all raw  materials,
works-in-process, materials and supplies of every nature which contribute to the
finished  products  of the  Company  in the  ordinary  course  of its  business,
specifically  excluding,  however,  damaged,  defective or otherwise  unsaleable
items.

     10.13  Knowledge of the Company.  The term "Knowledge of the Company" shall
mean the actual  knowledge  of Jack  Young,  Tony  Anzovino  or any of the other
directors,  officers or managerial  personnel of the Company with respect to the
matter in question,  and such  knowledge as Jack Young,  Tony Anzovino or any of
the other directors,  officers or managerial personnel of the Company reasonably
should have obtained upon diligent  investigation and inquiry into the matter in
question.

     10.14 Legal Requirements.  The term "Legal Requirements," when described as
being applicable to any person, shall mean any and all laws (statutory, judicial
or  otherwise),   ordinances,   regulations,   judgments,   orders,  directives,
injunctions,   writs,  decrees  or  awards  of,  and  any  Contracts  with,  any
Governmental  Authority,  in each case as and to the extent  applicable  to such
person or such person's business, operations or properties.


                                       32
<PAGE>

     10.15  Net  Worth.   The  term  "Net  Worth"   shall  mean  the   Company's
"stockholders'  equity"  computed in accordance  with GAAP except that no effect
shall be given to any purchase accounting or other similar adjustments resulting
from the consummation of the transaction contemplated herein.

     10.16 Permits.  The term "Permits" shall mean any and all permits,  rights,
approvals, licenses, authorizations, legal status, orders or Contracts under any
Legal Requirement or otherwise granted by any Governmental Authority.

     10.17 Person.  The term "Person"  shall mean any  individual,  partnership,
joint venture, firm, corporation,  association, limited liability company, trust
or other enterprise or any governmental or political  subdivision or any agency,
department or instrumentality thereof.

     10.18 Product.  The term "Product" shall mean each product,  repair process
or service under development, developed, manufactured,  licensed, distributed or
sold by the  Company  and any  other  products  in  which  the  Company  has any
proprietary rights or beneficial interest.

     10.19 Properties.  The term "Properties"  shall mean any and all properties
and assets (real,  personal or mixed,  tangible or intangible)  owned or Used by
the  Company,  including  all Assets to be  conveyed  to Buyer  pursuant to this
Agreement.

     10.20 Real Property.  The term "Real Property" shall mean the real property
Used by the Company in the conduct of its business.

     10.21  Regulations.   The  term  "Regulations"   shall  mean  any  and  all
regulations  promulgated  by the  Department  of the  Treasury  pursuant  to the
Internal Revenue Code.

     10.22 Subsidiary.  The term  "Subsidiary"  shall mean any Person of which a
majority of the outstanding  voting  securities or other voting equity interests
are owned, directly or indirectly, by the Company.

     10.23 Trade Secrets. The term "Trade Secrets" shall mean information of the
Company including, but not limited to, technical or nontechnical data, formulas,
patterns,  compilations,  programs,  financial data, financial plans, product or
service plans or lists of actual or potential  customers or suppliers  which (i)
derives economic value, actual or potential,  from not being generally known to,
and not being  readily  ascertainable  by proper means by, other persons who can
obtain  economic  value from its  disclosure  or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.

     10.24 Used.  The term "Used" shall mean,  with  respect to the  Properties,
Contracts or Permits of the Company, those owned, leased,  licensed or otherwise
held by the Company  which were  acquired for use or held for use by the Company
in  connection  with the  Company's  business  and  operations,  whether  or not
reflected on the Company's books of account.

     10.25 Working Capital. The term "Working Capital" shall mean the difference
between  (i)  the  Company's  current  assets,  including  accounts  receivable,
inventory,  prepaid expenses and deposits  included in the Assets,  and (ii) the
Company's current liabilities,  including accounts payable and accrued expenses,
assumed by Buyer hereunder, in each case calculated in accordance with GAAP.

     EXECUTED as of the date first written above.


                                       34
<PAGE>



                                    BUYER:
                                    -----


                                    Jack Young Associates, Inc.
                                    --------------------------------------------


                                    By: /s/ Bruce R. Davis
                                       -----------------------------------------

                                    COMPANY:


                                    Pocono Knits, Inc.
                                    --------------------------------------------

                                    By: /s. Jack Young
                                       -----------------------------------------

                                    SHAREHOLDERS:



                                     /s/ Jack Young
                                    --------------------------------------------

                                    --------------------------------------------