E-5

                                                                   Exhibit 10.11

                            ASSET PURCHASE AGREEMENT

                                 EFFECTIVE AS OF

                                February 28, 1998

                                      among

                                  CAE U.S. INC.
                                     (Buyer)

                                       and

                              NEY ULTRASONICS INC.
                                    (Seller)

                                       and

                              ANDERSEN GROUP, INC.
                                   (Andersen)

















<PAGE>


                            ASSET PURCHASE AGREEMENT


         THIS ASSET PURCHASE AGREEMENT ("Agreement") is effective as of February
28, 1998, among CAE U.S. INC., a Delaware corporation ("Buyer"), NEY ULTRASONICS
INC., a Delaware corporation  ("Seller") and ANDERSEN GROUP, INC., a Connecticut
corporation ("Andersen").


                                R E C I T A L S:

         The Seller desires to sell to Buyer,  and Buyer desires to acquire from
the Seller,  all of the assets used by Seller in the  operation of its business,
except as specifically  excluded herein (the  "Business") for the  consideration
and on the terms and conditions set forth in this Agreement.

         Andersen  is the  ultimate  parent  company of Seller and has agreed to
make certain  representations  and  warranties  contained in this  Agreement and
indemnify the Buyer pursuant to the terms hereof.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements and undertakings hereinafter set forth, the parties hereto, intending
to be legally bound, do hereby agree as follows:

         1.       DEFINITIONS

                  Certain  capitalized  terms  used in this  Agreement  have the
meanings specified in the Glossary attached hereto.  Other capitalized terms are
defined in the body of this Agreement.

         2.       SALE AND TRANSFER OF ASSETS

                                   2.1 ASSETS

     (a) Subject to the terms and conditions of this Agreement,  at the Closing,
the Seller will sell,  transfer and convey all of the following assets to Buyer,
and Buyer  will  purchase  all of the  following  assets and  business  from the
Seller:
     (i)  all   inventory,   including   without   limitation,   raw  materials,
work-in-progress,  finished  goods  and  replacement  parts  (collectively,  the
"Inventory") which exists on the Closing Date (as defined below);
     (ii) all office supplies,  maintenance supplies, packaging materials, spare
parts and similar items of the Business  (collectively,  the "Office  Supplies")
which exist on the Closing Date (as defined below);
     (iii)  all  accounts,  accounts  receivable,  notes  and  notes  receivable
relating to the Business existing on the Closing Date which are payable to the
<PAGE>



Seller,  including any  security held by the Seller for the payment thereof (the
accounts, accounts receivable, notes and notes receivable, including any related
security   therein,   to  be  transferred  to  the  Buyer  pursuant  hereto  are
collectively referred to herein as the "Accounts Receivable");

      (iv)  all prepaid expenses of the Seller relating to the Business existing
on  the Closing  Date other than those  related to  Excluded  Assets (as defined
below).

      (v)   all rights of the Seller under the  contracts,  agreements,  leases,
licenses and other instruments relating to the Business all as set forth in Part
3.17(a) and Part 3.17(b) of the Disclosure Schedule (as defined below);

      (vi)  originals  or  copies  of  all  of  the  Seller's books, records and
accounts,    correspondence,    production   records,   technical,   accounting,
manufacturing  and  procedural  manuals,  customer  lists,  employment  records,
studies,  reports or  summaries  relating  to any  environmental  conditions  or
consequences of any operation  relating to the Business,  present or former,  as
well as all studies,  reports or summaries relating to any environmental  aspect
or the general condition of the Assets (as defined below),  and any confidential
information  which has been reduced to writing relating to or arising out of the
Business;

     (vii) all rights of the Seller under express or implied warranties from the
 suppliers of the Business;

     (viii) all of the machinery, computer and other equipment, tools, hardware,
maintenance,  machinery  and  equipment and  furniture,  vehicles,  and personal
property  relating to the  Business  owned,  leased or used by the Seller on the
Closing  Date  unless  specifically  excluded  herein as an  Excluded  Asset (as
defined  below),  whether or not reflected as capital  assets in the  accounting
records  of the  Seller  relating  to the  Business  (collectively,  the  "Fixed
Assets");

     (ix)  all  of  the  Seller's  right,  title  and  interest  in  and  to all
Intellectual Property Assets, as defined in Section 3.22; and

     (x) except as specifically  provided in Subsection 2.1(b) hereof, all other
assets,  properties,  claims, rights and interests of the Seller relating to the
Business  which  exist on the  Closing  Date,  of  every  kind  and  nature  and
description, whether tangible or intangible, real, personal or mixed.

     (b) Notwithstanding the provisions of paragraph (a) above, the assets to be
transferred  to the Buyer under this  Agreement  shall not include  those assets
listed in Part 2.1(b) of the Disclosure Schedule (the "Excluded Assets").


<PAGE>


     (c) The Inventory, Office Supplies, Accounts Receivable, Assumed Contracts,
Fixed  Assets,  Intellectual  Property  Assets,  Software and other  properties,
assets  and  business  of the  Seller  relating  to the  Business  described  in
paragraph  (a) above,  other than the  Excluded  Assets,  shall be  referred  to
collectively as the "Assets."

                          2.2 ASSUMPTION OF LIABILITIES

     (a) On and after the Closing Date, the Buyer shall be  responsible  for and
hereby  assumes  and  agrees  to  perform,   pay  and  discharge  the  following
liabilities,  obligations and commitments of the Seller relating to the Business
(the "Assumed Liabilities"):

     (i) all trade accounts  payable and accrued expenses of the Seller relating
to the Business  incurred in the ordinary course of business through the Closing
Date,  other than  liabilities and liens for Taxes or deferred  Taxes,  accounts
payable which are  outstanding  for more than three (3) months as of the Closing
Date and accounts  payable that are  contingent or are not fixed in amount as of
the Closing Date;

     (ii) all  obligations  of the Seller  relating to the  Business  continuing
after the Closing  under the Assumed  Contracts set forth in Part 3.17(a) of the
Disclosure Schedule;

     (iii) all other  liabilities and obligations of the Seller specifically set
forth in Part 2.2 of the Disclosure Schedule; and

     (iv) any liability in respect of product  liability,  product  warranty and
other claims and obligations respecting products and services as contemplated in
Section 2.3(a).

     (b) The Buyer shall not at the Closing  assume or agree to perform,  pay or
discharge,   and  the  Seller  shall  remain  unconditionally  liable  for,  all
obligations,  liabilities and  commitments,  fixed or contingent,  of the Seller
other  than  the  Assumed  Liabilities  including,   but  not  limited  to,  all
pre-Closing  Date  obligations  and  liabilities  of the  Seller,  of any nature
whatsoever.

     (c) Notwithstanding  any provision herein to the contrary,  the Buyer shall
be solely  liable for the prompt and full  discharge of the Assumed  Liabilities
and also for any  liabilities  arising from,  or in  connection  with the Assets
acquired by the Buyer after the  consummation of the  transactions  contemplated
hereby.

     (d) For greater  certainty,  and without limiting the generality of Section
2.2(b),  Seller  shall  remain  liable  for and shall pay,  satisfy,  discharge,
perform and fulfill,  all other  obligations and liabilities of Seller which are
not  Assumed  Liabilities  existing,  accrued  or  accruing  (whether  direct or
indirect,  known or  unknown) as at the Closing  (the  "Excluded  Liabilities"),
including, without limitation, the following obligations and liabilities:

     (i) any  liability  for Taxes  payable,  collectible  or  remittable by the
Seller in respect of the  Business and the Assets in respect of the period prior
to the Closing Date, and, for greater  certainty real property and other similar
Taxes levied with respect to the Assets for a taxable  period that  includes but
does not end on the Closing Date shall be apportioned between the Seller and the
Buyer  such  that the  Seller  shall be  liable  for the  amount  determined  by
multiplying the Taxes to be apportioned by a fraction, the numerator of which is
the number of days in the taxable  period up to and  including  the Closing Date
and the denominator of which is the total number of days in the period,  and the
Buyer shall be liable for the balance.

     (ii) any  liability  owing to any lender of the Seller,  including  without
limitation,  any bank overdrafts or bank  indebtedness  and any  indebtedness or
liabilities  owing under any trust  indenture,  mortgage,  promissory note, loan
agreement, guaranty or other contract for the borrowing of money;

     (iii)  any  liability  in  respect  of a  Contract  not  disclosed  in this
Agreement;

      (iv)  any liability of Seller owing to Buyer or any Affiliate of Buyer;

       (v)  any liability or obligation  in  respect of the causes of action and
grievances described in the Disclosure Schedules;

       (vi) any liability or obligation relating to the Excluded Assets; and

      (vii) any intercompany  payables from Seller to any Affiliate of Seller.

                 2.3 PRODUCT LIABILITY AND WARRANTY OBLIGATIONS

     (a)  The  Buyer  shall  assume  any  and all  Liability  arising  out of or
resulting  from any  product  liability,  product  warranty  and  other  claims,
liabilities  and  obligations  arising  from the  products  manufactured  by the
Seller.

     (b) The Seller shall indemnify and hold harmless the Buyer from and against
any and all  Liability,  subject to the  limitations  provided in Section 2.3(c)
arising out of Section 2.3(a) to the extent that such Liability relates to:

     (i) products  manufactured,  sold or delivered and/or services provided, by
the Seller in connection  with the shop order numbers  identified on Part 2.3(a)
of the Disclosure Schedule;

     (ii) any  Recurring  Defect (as  defined  below)  existing on or before the
Closing Date and contained in the Inventory comprising the Assets,  whether such
Liability  arose before or after the Closing and whether  known or unknown as of
the Closing Date.  Recurring Defect shall mean a specific defect in workmanship,
design or  component  that  arises  in  twenty-five  percent  (25%) or more of a
particular type of product sold by the Seller.

     Notwithstanding  anything contained herein to the contrary, with respect to
any claim that may involve an obligation by the Seller  pursuant to this Section
2.3(b),  the Buyer shall  provide the Seller with an  opportunity  to assess the
claim and comment on its validity and the proposed response by the Buyer.

     (c) For purposes of calculating  the indemnity  provided in Section 2.3(b),
all product  warranty  work shall be performed by Buyer at Buyer's  Loaded Labor
Cost plus material cost and reasonable out-of-pocket expenses, including freight
costs,  travel,  lodging  and meals.  In any such case,  provided  such  product
warranty  obligation was a valid and enforceable  obligation or liability of the
Seller and the claim in respect  thereof was valid,  the Seller shall  reimburse
the Buyer forthwith following demand by the Buyer for all costs set forth herein
incurred by the Buyer in repairing or replacing products.

     (d)  Notwithstanding  the foregoing,  nothing contained in this Section 2.3
shall  affect the rights of the Buyer  under  Section 9 hereof in respect of any
Liability  suffered  or  incurred  by it as a result  of or  arising  out of any
inaccuracy of any representation or warranty.

                  2.4      ADDITIONAL SELLER LIABILITIES

                           [RESERVED]

                  2.5      PURCHASE PRICE

     Subject to the  adjustment as set forth in Section 2.10, the purchase price
("Purchase  Price") for the Assets will be Two Million Nine Hundred Thousand and
00/100 Dollars ($2,900,000.00) and shall be payable as follows:

     (a) Two Million Four Hundred  Thousand and 00/100  Dollars  ($2,400,000.00)
shall be paid in immediately available funds at the Closing; and

     (b) the remainder of the Purchase Price shall be paid into escrow  pursuant
to the terms of the Escrow  Agreement (as hereinafter  defined) and disbursed in
accordance with Section 2.10 of this Agreement.

                  2.6      OTHER CONSIDERATION

     In addition to the payment of the  Purchase  Price,  Buyer shall enter into
the Technology  Assignment  Agreement in the form of Exhibit 2.6 attached hereto
(the "Technology Assignment Agreement").



<PAGE>



                  2.7      CLOSING

     The closing of the purchase and sale of the Assets (the "Closing") provided
for in this  Agreement  will take place at the offices of Edwards & Angell,  750
Main Street, Hartford,  Connecticut 06103 at 10:00 a.m. (local time) on March 4,
1998 or at such other time and place as the  parties  may agree.  Subject to the
provisions  of Section  8.1(d),  failure to  consummate  the  purchase  and sale
provided for in this Agreement on the date and time and at the place  determined
pursuant  to this  Section  2.7  will  not  result  in the  termination  of this
Agreement and will not relieve any party of any obligation under this Agreement.

                  2.8      APPORTIONMENT

     If the  amounts of any common  area  charges  under  real  property  leases
transferred  to the Buyer have not been  determined  at the Closing  Date,  they
shall be  apportioned  on the basis of such charges  assessed for the  preceding
year, with a  reapportionment  upon and in the event of any new apportionment or
valuation  method or scheme;  and if such  charges  which are to be  apportioned
shall  thereafter be reduced,  the amount of such reduction shall be apportioned
between the Buyer and the Seller.

                  2.9      CLOSING OBLIGATIONS

     (a) At the Closing, the Seller will deliver to Buyer:

     (i) the Bill of Sale in the form of Exhibit 2.9(a)(i) (the "Bill of Sale");

     (ii) the assignments and such other certificates, documents and instruments
of sale,  transfer,  conveyance  and  assignment  as Buyer and its  counsel  may
reasonably request;

     (iii)  the   Technology   Assignment   Agreement  in  form  and   substance
satisfactory to the Buyer;

     (iv) a  certificate  executed by the Seller and Andersen  representing  and
warranting to Buyer that Seller's and Andersen's  representations and warranties
in this Agreement were accurate in all respects as of the date of this Agreement
and  are  accurate  in all  respects  as of the  Closing  Date as if made on the
Closing Date (giving full effect to any supplements to the Disclosure  Schedules
that  were  delivered  by the  Seller  to  Buyer  prior to the  Closing  Date in
accordance with this Agreement);

     (v) the  Disclosure  Schedule  in form and  substance  satisfactory  to the
Buyer;


<PAGE>




     (vi) the New Lease as set forth in Section 5.8(a);

     (vii) the Escrow Agreement in the form of Exhibit  2.9(a)(vii) (the "Escrow
Agreement");

     (viii)  the  Trademark   Assignment   Agreement  in  the  form  of  Exhibit
2.9(a)(viii) (the "Trademark Assignment Agreement"); and

     (ix)  the  Agreement  and Use of Name  and  Logo,  in the  form of  Exhibit
2.9(a)(ix).

     (b) At the Closing, Buyer will deliver to the Seller:

      (i) the Purchase Price in accordance with Section 2.5;

     (ii) a  certificate  executed by Buyer to the effect that,  each of Buyer's
representations  and  warranties in this Agreement were accurate in all respects
as of the date of this  Agreement  and are  accurate  in all  respects as of the
Closing  Date  as if  made  on the  Closing  Date  (giving  full  effect  to any
supplements  to the  Disclosure  Schedule  that were  delivered  by the Buyer to
Seller prior to the Closing Date in accordance with this Agreement);

     (iii)  the  Technology Assignment Agreement executed by Buyer;

      (iv)  the New Lease as set forth in Section 5.8(a) executed by the Buyer;

       (v)  the Escrow Agreement;

      (vi)  the Trademark Assignment Agreement; and

     (vii)  the Agreement and Use of Name and Logo.

                  2.10     PURCHASE PRICE ADJUSTMENT

     (a) Buyer and Seller have based the Purchase Price on the  assumption  that
(i) the Capital  Employed of the Seller  contained on the August 1, 1997 Balance
Sheet was One Million Nine Hundred  Thousand and 00/100 Dollars  ($1,900,000.00)
("Estimated Capital Employed");  and (ii) the Operating Income of the Seller for
the period ending Februaryy28,  1998 will be Four Hundred  Sixty-Eight  Thousand
and 00/100 Dollars ($468,000.00)  ("Estimated  Operating Income").  The Purchase
Price will be  adjusted as follows:  (i) if the  Capital  Employed  shown on the
Closing  Financial  Statements  exceeds  the  Estimated  Capital  Employed,  the
Purchase  Price  shall  be  increased  dollar-for-dollar  by the  amount  of the
increase; (ii) if the Capital Employed shown on the Closing Financial Statements
is less than the Estimated Capital Employed, the Purchase Price shall be reduced
dollar-for-dollar  by the amount of the decrease;  (iii) if the Operating Income
on the Closing Financial  Statements exceeds the Estimated Operating Income, the
Purchase  Price shall not be adjusted;  and (iv) if the Operating  Income on the
Closing  Financial  Statements,  after  giving  effect to the  audit  adjustment
referred to in Section  2.11(c),  is less than Four Hundred  Twenty One Thousand
and 00/100 Dollars  ($421,000.00),  the Purchase Price shall be reduced Five and
00/100  Dollars  ($5.00)  for  every One  Dollar  ($1.00)  of the  amount of the
difference  between the  Operating  Income on the Closing  Financial  Statements
after giving effect to such  adjustments in Section  2.11(c),  and the Estimated
Operating Income.

     (b) Solely for purposes of calculating  the adjustment to Operating  Income
referred to in Section  2.10(a)(iv)  in connection  with the  preparation of the
Closing Financial Statements,  there shall be a post closing adjustment equal to
the difference between (i) the amount of revenue,  cost and income recognized by
Seller in preparing the Closing Financial Statements,  for the Pratt and Whitney
job,  and two Johnson & Johnson  jobs (shop order  numbers  34244 and 34905) and
(ii) the final revenue,  cost and income attributable to the Pratt & Whitney job
and the Johnson & Johnson jobs (shop order numbers 34244 and 34905).

     (c) The amount of the adjustment to the Purchase Price set forth in Section
2.10(a)  shall be added to the sum of Five Hundred  Thousand and 00/100  Dollars
($500,000.00),  if an  increase  is due,  and  subtracted  from  the sum of Five
Hundred  Thousand and 00/100 Dollars  ($500,000.00),  if a reduction is due, and
paid by Buyer in  accordance  with the time  periods  set forth in Section  2.11
below. If the amount of the adjustment  pursuant to Section 2.10(a) exceeds Five
Hundred Thousand and 00/100 Dollars  ($500,000.00),  and is a reduction,  Seller
shall pay the  additional  amount in excess of Five Hundred  Thousand and 00/100
Dollars  ($500,000.00) to Buyer in accordance with the time periods set forth in
Section 2.11 below.

                  2.11     ADJUSTMENT PROCEDURE

     (a) The Seller  will  prepare and the Buyer's  Auditors,  Price  Waterhouse
L.L.P.,  will audit the Closing Financial  Statements of the Seller.  The Seller
will deliver the Closing  Financial  Statements to Buyer and the Buyer's Auditor
within  forty-five  (45) days after the Closing Date.  The Buyer and the Buyer's
Auditor shall have forty-five  (45) days after receipt of the Closing  Financial
Statements  from the  Seller to review  the  Closing  Financial  Statements  and
deliver  to the Buyer and the  Seller  the  Auditor's  Report  stating  that the
Closing  Financial  Statements  fairly  present  (1) the  Balance  Sheet and the
statement  of Net  Assets of Seller at  February  28,  1998 in  conformity  with
Generally Accepted Accounting  Principles applied on a consistent basis with the
past  practices of Seller and with the August 1, 1997 Balance  Sheet and (2) the
Operating  Income of Seller  for the  fiscal  year ended  February  28,  1998 in
conformity with Generally Accepted Accounting Principles applied on a consistent
basis with the past practices of the Seller and with Seller's  Operating  Income
Statement  for the five  (5)  months  ended  July 31,  1997 and the  March  1997
Forecast.  If within ten (10) days following  delivery of the Auditor's  Report,
either  party has not given  notice of its  objection  to the Closing  Financial
Statements  (such  notice  must  contain  a  statement  of  the  basis  of  such
objection),  then the Capital  Employed and  Operating  Income  reflected in the
Closing Financial Statements will be used in computing the adjustment amount set
forth in Section  2.10(c).  If either party gives such notice of objection,  the
Buyer and the  Seller  shall  attempt  in good  faith to  resolve  the matter or
matters in dispute. If the Buyer and the Seller, notwithstanding such good faith
effort,  shall have  failed to resolve  the matter or matters in dispute  within
twenty (20) business days after receipt of the written  notice of dispute,  then
any remaining  disputed matters shall be finally and conclusively  determined by
an independent  auditing firm of recognized  national  standing (the  "Arbiter")
selected by the Buyer and the Seller,  which  shall be Arthur  Andersen  L.L.P.,
unless such firm shall have a conflict of interest  with the Buyer or the Seller
which is not  waived by the  appropriate  party.  Promptly,  but not later  than
twenty (20) business days after its acceptance of its  appointment,  the Arbiter
shall  determine  (based  upon a review of work papers and other  documents  and
information  relating to the disputed  issues as the Arbiter may  request)  only
those  issues in dispute  and shall  render a report as to the  disputes,  which
report shall be conclusive and binding upon the parties hereto. If within twenty
(20)  business  days of the  receipt of a written  notice of dispute the parties
determine that Arthur Andersen cannot serve as the Arbiter because of a conflict
of interest  with either the Buyer or the Seller and the  parties  cannot  agree
upon a substitute within such period, the parties shall submit the matter of the
selection of the Arbiter to the  American  Arbitration  Association  ("AAA") for
resolution. Any such arbitration shall take place in, and shall be in accordance
with the Commercial Arbitration Rules of the AAA in Hartford,  Connecticut. Each
of the Buyer and the Seller shall promptly  select a single  arbitrator and file
with the AAA a notice of  appointment.  The two (2)  arbitrators so chosen shall
select a third  arbitrator who shall act as chairperson of the  arbitration.  If
either the Buyer or the Seller should abstain from  selecting an arbitrator,  or
should the two  arbitrators  selected above fail to select a third,  then at the
request of either party, the President of the AAA shall select an arbitrator, to
fill the vacant  position  within ten (10) business  days of such  request.  The
arbitration  panel shall  thereafter  select the Arbiter,  and the Buyer and the
Seller agree to cooperate  with the  arbitration  panel to facilitate the speedy
selection of the Arbiter.  The fees and expenses of the arbitration  panel shall
be borne fifty percent (50%) by the Buyer and fifty percent (50%) by the Seller.
In  resolving  any  disputed  item,  the  Arbiter  may not assign a value to any
particular  item greater than the greatest value for such item claimed by either
party or less than the  smallest  value for such item claimed by either party in
each case,  as  presented  to the  Arbiter.  The fees and  disbursements  of the
Arbiter  shall be  allocated  between  the Buyer and the  Seller  based upon the
percentage  ratio that the sum of the net  amounts  subject to dispute  resolved
against  each of the parties  bears to the total of the net  amounts  subject to
dispute.  For this purpose, the "net amounts subject to dispute" shall represent
the difference between the amount of such items as proposed by the Buyer and the
corresponding  amount of such  items  proposed  by the  Seller,  in each case as
submitted to the Arbiter.

     (b) On the  tenth  (10th)  business  day  following  the date on which  the
Closing  Financial  Statements are agreed to in accordance with Section 2.11(a),
the final determination of the Purchase Price Adjustment shall be made, and paid
in accordance with Section 2.10(c).

     (c) For purposes of complying  with the terms set forth herein,  each party
shall  cooperate  with and  promptly  make  available to the other party and its
auditors and representatives,  all information, records, data, auditors' working
papers,  and access to its personnel,  shall permit access to its facilities and
shall permit the other party and its auditors and representatives to make copies
of all information,  records, data and auditors' working papers, in each case as
may be  reasonably  required  in  connection  with the  analysis  of the Closing
Financial  Statements,  the  calculation  of the Capital  Employed and Operating
Income and the resolution of any dispute(s) thereunder.  Buyer acknowledges that
the  Percentage-of-Completion   Method  of  Accounting  shall  be  used  in  the
preparation of the Closing  Financial  Statements in connection with shop orders
related to the Pratt and Whitney job and the Johnson & Johnson  jobs (shop order
numbers 34244 and 34905).  Seller represents that the Johnson & Johnson jobs are
scheduled for  substantial  completion  in February 1998 and actual  delivery in
February  or March  1998 and the Pratt & Whitney  job is  scheduled  for  actual
delivery in April 1998. Seller agrees that the consideration required to be paid
by Buyer under the Technology  Assignment Agreement shall not apply to the Pratt
and Whitney job and the Johnson and Johnson jobs (shop order  numbers  34244 and
34905).

         Buyer and  Seller  agree  that any  audit  adjustments  (excluding  the
adjustment  pursuant  to Section  2.10(b)  proposed  by  Buyer's  Auditor to the
Closing  Financial  Statements  will be  included  only to the extent such audit
adjustments  exceed Ten Thousand and 00/100 Dollars  ($10,000.00) and such audit
adjustments  will not include any adjustments to (1) the  Intellectual  Property
Assets,  as  long  as  the  Intellectual   Property  Assets  are  accounted  for
consistently  with the past practices of Seller (2) Taxes and (3)  Environmental
Laws.


         3.       REPRESENTATIONS AND WARRANTIES OF THE SELLER AND ANDERSEN

                  The Seller and Andersen, jointly and severally,  represent and
warrant to Buyer as follows:


                  3.1      ORGANIZATION AND GOOD STANDING

     (a) The Seller is a corporation  duly  organized,  validly  existing and in
good  standing  under  the laws of  Delaware,  with  full  corporate  power  and
authority to conduct its business as it is now being conducted and to own or use
the  properties  and  assets  that it  purports  to own or use.  The  Seller  is
qualified to do business and is in good standing as a foreign  corporation under
the laws of each jurisdiction in which it is required to be so qualified, except
where its  failure  to qualify  would not have  Material  Adverse  Effect on the
Business.

     (b) Andersen is a corporation duly organized,  validly existing and in good
standing under the laws of Connecticut,  with full corporate power and authority
to  conduct  its  business  as it is now being  conducted  and to own or use the
properties  and assets that it purports to own or use.  Andersen is qualified to
do business and is in good standing as a foreign  corporation  under the laws of
each  jurisdiction in which it is required to be so qualified,  except where its
failure to qualify would not have a Material Adverse Effect on Andersen.


<PAGE>



     (c)  The  Seller  and  Andersen  have  delivered  to  Buyer  copies  of its
respective   Organizational   Documents,   as  currently  in  effect,  and  such
Organization Documents have not been amended, modified or terminated.

3.2               AUTHORITY; NO CONFLICT

     (a) This Agreement  constitutes the legal, valid, and binding obligation of
the  Seller and  Andersen,  enforceable  against  the  Seller  and  Andersen  in
accordance  with its terms.  Each of Seller and Andersen has the full  corporate
power  and  authority  to  execute  and  deliver  this  Agreement  and the other
documents contemplated to be executed and delivered at the Closing by the Seller
and Andersen and to perform its respective  obligations under this Agreement and
such other documents.

     (b) Except as set forth in Part 3.2 of the Disclosure Schedule, neither the
execution and delivery of this Agreement nor the  consummation or performance of
any of the transactions  contemplated  hereby will, directly or indirectly (with
or without notice or lapse of time):

                                    (i) contravene,  conflict with, or result in
                           a   violation   of   (A)   any   provision   of   the
                           Organizational  Documents  of the Seller or Andersen,
                           or  (B)  any  resolution  adopted  by  the  Board  of
                           Directors  of Andersen or Seller or the  stockholders
                           of the Seller;

                                    (ii) contravene, conflict with, or result in
                           a  violation  of,  or give any  Governmental  Body or
                           other  Person  the  right  to  challenge  any  of the
                           transactions  contemplated  hereby or to exercise any
                           remedy  or  obtain  any  relief   under,   any  Legal
                           Requirement  or any  Order to  which  the  Seller  or
                           Andersen may be subject;

                                    (iii)  contravene,  conflict with, or result
                           in a  violation  of any of the terms or  requirements
                           of,  or give  any  Governmental  Body  the  right  to
                           revoke,  withdraw,  suspend,  cancel,  terminate,  or
                           modify, any material Governmental  Authorization that
                           is held by the  Seller or that  otherwise  relates to
                           the Seller's Business;

                                    (iv) cause Buyer to become subject to, or to
                           become  liable for the  payment of any Tax (except as
                           relates to Buyer's ownership of the Assets or conduct
                           of the Seller's Business after the Closing);

                                    (v) cause any of the  Seller's  Assets to be
                           reassessed  or  revalued by any taxing  authority  or
                           other Governmental Body (except as relates to Buyer's
                           purchase  or  ownership  of the  Seller's  Assets  or
                           conduct of the Seller's Business after the Closing);


<PAGE>



                                    (vi) contravene, conflict with, or result in
                           a violation  or breach of any  provision  of, or give
                           any Person the right to declare a default or exercise
                           any remedy under,  or to  accelerate  the maturity or
                           performance of, or to cancel,  terminate,  or modify,
                           any material Contract; or

                                    (vii) result in the  imposition  or creation
                           of any Encumbrance upon or with respect to any of the
                           Seller's Assets.

         Except as set forth in Part 3.2 of the Disclosure Schedule,  the Seller
         is not  required to give any notice to or obtain any  Consent  from any
         Person in connection  with the execution and delivery of this Agreement
         or  the   consummation  or  performance  of  any  of  the  transactions
         contemplated hereby.

                  3.3      OWNERSHIP OF SELLER

     The Stockholders  set forth in Part 3.3 of the Disclosure  Schedule are and
will be on the Closing Date all of the record and beneficial  owners and holders
of all of the issued and outstanding shares of Seller.  There are no outstanding
or  authorized  options,   warrants,   purchase  rights,   subscription  rights,
conversion rights,  exchange rights or other contracts that could require Seller
to issue,  sell or  otherwise  cause to become  outstanding  any of its  capital
stock. There are no outstanding or authorized stock appreciation, phantom stock,
or other similar  agreements  with respect to Seller except as disclosed in Part
3.3 of the Disclosure Schedule.

                  3.4      FINANCIAL STATEMENTS

     (a) The Seller has  delivered to the Buyer (or will deliver to the Buyer in
accordance with this Agreement) (i) unaudited Operating Income statements of the
Seller for the fiscal  years ended  February  1997 and 1998 and (ii) the interim
Operating  Income  statements of the Seller for periods within  Seller's  fiscal
year  ending  February  28,  1998,  including,  the  Seller's  Operating  Income
statements  of Seller for the five months  ended July 31,  1997 dated  August 1,
1997 (the "Income  Statements"),  copies of which are attached to Part 3.4(a) of
the Disclosure  Schedule.  Such Income Statements fairly present in all material
respects the results of operations of the Seller for the periods  referred to in
such  Income  Statements  in  conformity  with  Generally  Accepted   Accounting
Principles  applied on a basis  consistent with the past practices of the Seller
(except for certain  inter-company  allocations  reflected on Part 3.4(a) of the
Disclosure  Schedule which are consistent  with the past practices of the Seller
and except for the absence of income tax expense or benefit).

     (b) The Seller has  delivered to the Buyer (or will deliver to the Buyer in
accordance  with this  Agreement) (i) Balance Sheet of Seller as of February 28,
1997 and the Balance Sheet and statement of Net Assets of Seller at February 28,
1998,  and (ii) the August 1, 1997  Balance  Sheet,  (collectively  the "Balance
Sheet  Information"),  copies  of  which  are  attached  to Part  3.4(b)  of the
Disclosure  Schedule.  The Balance Sheet Information (i) was prepared based upon
the books of accounts and other financial  records of the Seller,  (ii) presents
fairly the Balance  Sheet  Information  of the Seller as of the date  thereof in
conformity  with Generally  Accepted  Accounting  Principles  applied on a basis
consistent  with the past  practices of the Seller,  and (iii) as of the Closing
Date,  the Balance  Sheet  Information  will  include all  adjustments  that are
necessary for a fair presentation of the such information as of the date hereof.

                  3.5      BOOKS AND RECORDS

     The books of account, minute books, stock record books and other records of
the Seller or the relevant portions of such documents relating to Seller, copies
of which have been made  available to Buyer,  are true,  complete,  accurate and
correct  in all  respects  and have been  maintained  in  accordance  with sound
business practices,  including the maintenance of an adequate system of internal
controls.

                  3.6      TITLE TO ASSETS; ENCUMBRANCES

     (a) Except as otherwise  indicated  in Parts 3.6 or 3.22 of the  Disclosure
Schedule,  the Seller  has good and  marketable  title to, or a valid  leasehold
interest in and has the right to convey,  all the Assets owned by it, located on
the Property or shown on the August 1, 1997 Balance Sheet or acquired  after the
date thereof,  including all of the Assets reflected in the Financial Statements
(except for personal  property sold since the date of the Financial  Statements,
as the case may be, in the Ordinary  Course of Business),  and all of the Assets
purchased or otherwise  acquired by the Seller since the date of such  Financial
Statements  (except for  personal  property  acquired and sold since the date of
such Financial Statements in the Ordinary Course of Business and consistent with
past practice).  All of the Assets are free and clear of all Encumbrances  other
than the Permitted Encumbrances. The delivery to the Buyer of the instruments of
transfer  of  ownership  contemplated  by this  Agreement  will  vest  good  and
marketable title to the Assets in the Buyer,  free of any  Encumbrances,  except
Permitted Encumbrances.

     (b)  Upon  the  consummation  of  the  transactions  contemplated  by  this
Agreement,  the  Buyer  will own,  lease or have the legal  right to use all the
Assets (used in the conduct of the Business or otherwise  owned,  leased or used
by the Seller) and, with respect to Assumed Contracts, will become a party to or
enjoy  the  right  to  the  benefits  of all  contracts,  agreements  and  other
arrangements  relating  to the  conduct  of the  Business  or  otherwise  retain
Seller's  interest in the Assets without incurring any material penalty or other
materially adverse  consequence,  including,  without  limitation,  any material
increase in rentals,  royalties,  or licenses or other fees  imposed as a result
of, or arising from, the consummation of the  transactions  contemplated by this
Agreement.  Immediately  following the Closing,  the Buyer shall own and possess
all  documents,  books,  records,  agreement and financial  data or the relevant
portions of such  documents of any sort used by the Seller in the conduct of the
Business or otherwise.

     (c) The Assets  and the  Excluded  Assets  constitute  all the  properties,
assets and rights  forming a part of, used,  held or intended to be used in, and
all such  properties,  assets and rights as are necessary in the conduct of, the
Business.


<PAGE>


                  3.7      REAL PROPERTY

     (a) All real property (including,  without limitation, all interests in and
rights to real property) and  improvements  located  thereon which are leased by
Seller  and used in  connection  with the  Seller's  Business  are listed on the
Disclosure  Schedule  in Section  3.7 in  response  to this  section  (the "Real
Property"). Seller does not own any Real Property.

     (b) With respect to the Real  Property  that is leased by Seller,  which is
identified on the Disclosure Schedule:

                                    (i) Seller has delivered to Buyer a true and
                           complete  copy of every  lease and  sublease to which
                           Seller is a tenant or subtenant (the  "Leases"),  and
                           shall describe each Lease on the Disclosure  Schedule
                           by listing the name of the landlord or sublandlord, a
                           description of the lease premises,  the  commencement
                           and  expiration   dates  of  the  current  term,  the
                           security  deposited  by Seller  with the  landlord or
                           sublandlord,  if any, the monthly  rental  (including
                           base and all  additional  rents),  and whether Seller
                           may assign the Lease to Buyer (if the  consent of the
                           landlord  or  sublandlord  is  required  for  such an
                           assignment,   that   should   be  set  forth  on  the
                           Disclosure Schedule); and

                                    (ii) each Lease is, and at Closing shall be,
                           in full force and  effect and has not been  assigned,
                           modified, supplemented or amended except as listed on
                           the  Disclosure  Schedule in Section 3.7, and neither
                           Seller  nor the  landlord  or  sublandlord  under any
                           Lease is in default  under any of the Leases,  and no
                           circumstances  or  state of  facts  presently  exists
                           which,  with the giving of notice or passage of time,
                           or both,  would  permit the  landlord or  sublandlord
                           under any Lease to terminate any lease.

     (c) Except as disclosed on Part 3.7(c) of the Disclosure Schedules,  to the
Seller's Knowledge,  the water, electric, gas and sewer utility services and the
septic  tank and  storm  drainage  facilities  currently  available  to the Real
Property  have been  properly  and  lawfully  operated  and are adequate for the
present use of the Real Property by Seller in conducting the Seller's  Business,
are not being  appropriated by Seller but rather are being supplied to Seller by
utility companies or municipalities pursuant to valid and enforceable contracts,
and there is no condition  which will result in the  termination  of the present
access from the Real Property to such utility services and other facilities.

     (d)  Seller  has not  received  any  notices,  oral or  written,  from  any
governmental body, and otherwise has no Knowledge that the assessed value of the
Real Property has been determined to be greater than that upon which any tax was
paid for the 1997 tax year  applicable  to each such tax, or from any  insurance
carrier  of Seller of fire  hazards  with  respect to the Real  Property  or any
portion thereof is affected by any assessment  which is or may become payable in
annual installments, of which one or more is then payable or has been paid, then
for the  purpose  of this  Agreement,  all the unpaid  installments  of any such
assessment  including,  without  limitation,  those  which are to become due and
payable  after  Closing,  shall be deemed to be liens on the Real  Property  and
shall be paid or discharged at or prior to Closing.

     (e) Seller has not received any notices, oral or written, and otherwise has
no Knowledge, that any governmental body having the power of eminent domain over
the Real  Property  has  commenced  or intends to exercise  the power of eminent
domain or a similar power with respect to all or any part of the Real  Property.
If between the date of this  Agreement  and  Closing,  the Real  Property or any
portion  thereof or interest  therein shall be taken or condemned as a result of
the exercise of the power of eminent  domain,  or if a governmental  body having
the power of eminent  domain informs Seller or the Buyer that it intends to take
or  condemn  all or part of the  Real  Property  then  the  Buyer  may  elect to
terminate  this  Agreement.  If the  Buyer  does  not  elect to  terminate  this
Agreement (a) the Buyer shall have the sole right, in the name of Seller, if the
Buyer so elects,  to negotiate  for,  claim,  consent and receive all damages on
account thereof, (b) Seller shall be relieved of its obligation to convey to the
Buyer the Real Property taken or condemned,  (c) at Closing, Seller shall assign
to the Buyer all of Seller's  rights to all  damages  payable for such taking or
injury of the Real  Property and shall pay to the Buyer all damages  theretofore
paid to Seller by reason thereof,  and (d) following Closing,  Seller shall give
the Buyer such further assurances of such rights and assignment as the Buyer may
from time to time reasonably request.

                           (f) The Real  Property  and the present  uses thereof
comply with all Regulations of
all governmental bodies having  jurisdiction over the Real Property,  and Seller
has  received  no notices,  oral or written,  from any  governmental  body,  and
otherwise has no Knowledge,  that the Real Property or any improvements  erected
or situated  thereon,  or the uses  conducted  thereon or  therein,  violate any
regulations of any governmental body having jurisdiction over the Real Property.

     (g) The improvements located on the Real Property are in good condition and
are structurally sound, and all mechanical and other systems located therein are
in good operating  condition,  subject to normal wear,  and no condition  exists
requiring material repairs, alterations or corrections.

     (h) Between the date of this Agreement and Closing,  Seller shall not sell,
mortgage or encumber the Real Property, or do or permit any act which diminishes
title to or value of the Real Property.

     (i) To the Seller's Knowledge,  no work for municipal improvements has been
commenced  on or in  connection  with the Real  Property or any street  adjacent
thereto.  To the Seller's  Knowledge,  no assessment for public improvements has
been made  against the Real  Property  which  remains  unpaid.  To the  Seller's
Knowledge,  no notice from any county,  township or other  governmental body has
been served upon the Real  Property or received by Seller  requiring  or calling
attention  to the  need  for  any  work,  repair,  construction,  alteration  or
installation  on or in  connection  with the Real  Property  which  has not been
complied with.


<PAGE>



                  3.8      CONDITION AND SUFFICIENCY OF ASSETS

     (a) Section 3.8 of the Disclosure  Schedule sets forth a true,  correct and
complete  list of all Fixed Assets,  including a description  and the book value
thereof.  The Fixed  Assets of the Seller are  structurally  sound,  are in good
operating  condition  and  repair,  ordinary  wear  and tear  excepted,  and are
adequate for the uses to which they are being put, and none of such Fixed Assets
are in need of maintenance or repairs except for ordinary,  routine  maintenance
and  repairs  that are not  material  in nature or cost.  The Fixed  Assets  are
sufficient for the continued  conduct of the Seller's Business after the Closing
in substantially the same manner as conducted prior to the Closing.

                  3.9      ACCOUNTS RECEIVABLE

     All  Accounts  Receivable  of Seller  that are  reflected  on the  Seller's
Closing  Date  Financial  Statements  or on the aged  list of  receivables  that
identifies as of such date had been  outstanding (i) current (ii) one to fifteen
(15) days  past due  (iii)  sixteen  (16) to sixty  (60)  days  past  due,  (iv)
sixty-one  (61) to ninety (90) days past due, and (v) over ninety (90) days past
due represent or will represent  valid  obligations  arising from sales actually
made or services actually  performed in the Ordinary Course of Business.  Unless
paid prior to the Closing Date, the Accounts Receivable are or will be as of the
Closing Date current and  collectible.  There is no contest,  claim, or right of
set-off,  other  than  returns in the  Ordinary  Course of  Business,  under any
contract or arrangement with any obligor of an Accounts  Receivable  relating to
the amount or validity of such Accounts  Receivable.  Part 3.9 of the Disclosure
Schedule contains a complete and accurate list of all Accounts  Receivable as of
the Closing Date.

                  3.10     INVENTORY

     All  Inventory  of the  Seller,  whether or not  reflected  in the  Closing
Financial  Statements,  has been  maintained in the Ordinary Course of Business,
consists  of  tangible  property  that is, of a good and  merchantable  quality,
quantity and condition,  usable and saleable in the Ordinary  Course of Business
and is valued  under the job order  cost  system in  accordance  with  Generally
Accepted  Accounting  Principles  consistent  with past practice  based upon the
Ordinary Course of Business of the Seller,  and is not subject to any write-down
or  write-off.  As of the Closing  Date,  Seller is not under any  liability  or
obligation  to any  Person  with  respect  to the  return of  Inventory  sold or
delivered prior to Closing.

                  3.11     NO UNDISCLOSED LIABILITIES

     Except as set forth in Part 3.11 of the Disclosure Schedule, the Seller has
no  liabilities  or  obligations  of  any  nature  (whether  absolute,  accrued,
contingent,  or otherwise)  except for  liabilities or obligations  reflected or
reserved  against in the Closing  Financial  Statements and current  liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.


<PAGE>



                  3.12     TAXES

     (a) The  Seller,  Andersen  or Ney has  filed or caused to be filed or will
file or  cause to be  filed  (on a timely  basis,  giving  effect  to  allowable
extensions,  since April 20, 1992) all Tax Returns that are or were  required to
be filed by or with respect to the Seller or the Seller's Business,  pursuant to
applicable Legal  Requirements.  The Seller has delivered to Buyer copies of all
such Tax Returns filed since April 20, 1992. All Tax Returns filed by the Seller
are true,  correct  and  complete  in all  material  respects as such and to the
extent that such Tax Returns may affect the  transactions  contemplated  by this
Agreement.  The Seller,  Andersen or Ney has paid or will pay, or made provision
for the payment of, all Taxes that have or may have become due pursuant to those
Tax Returns or pursuant to any  assessment  received by the Seller,  except such
Taxes,  if any, as are listed in Part 3.12 of the  Disclosure  Schedule  and are
being  contested  in good  faith  and as to which  adequate  reserves  have been
provided in the Closing Financial Statements.

     (b) Except as set forth in Part 3.12(b) of the Disclosure  Schedule,  there
are no outstanding  liabilities for Taxes payable,  collectible or remittable by
the Seller,  whether assessed or not, which may result in a material Encumbrance
on or other claim against or seizure or sale of all or any part of the Assets or
would  otherwise  adversely  affect the  Business  or would  result in the Buyer
becoming  liable  or  responsible  therefor.   There  are  no  actions,   suits,
proceedings,  or,  to the  knowledge  of the  Seller,  investigations  or claims
pending or threatened against the Seller in respect of Taxes which may result in
a material  Encumbrance  on or other claim  against or seizure or sale of any of
the Assets or  liability  or  responsibility  on the part of the Buyer for Taxes
payable,  collectible  or remittable by the Seller nor are any material  matters
under  discussion  by  Seller  or  its  representatives  with  any  governmental
authority  relating to Taxes. The Seller,  Andersen or Ney has withheld from all
remuneration (including taxable benefits) of employees of the Business all Taxes
and other deductions required to be withheld therefrom and has remitted the same
to the proper tax or other  receiving  authority  within the time required under
applicable legislation.

                  3.13     NO MATERIAL ADVERSE CHANGE

     Except as otherwise expressly permitted under this Agreement,  since August
1, 1997 there has not been any Material Adverse Change in the Seller's Business,
operations,  properties,  prospects,  assets,  or condition of the Seller or the
Seller's  Business,  and no event has occurred or  circumstance  exists that may
result in such a Material Adverse Change in the Seller or the Seller's Business.

     3.14 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

     (a) Except as set forth in Part 3.14 of the Disclosure Schedule:

                                    (i)  The  Seller  is in  compliance  in  all
                           material respects with each Legal Requirement that is
                           or  was  applicable  to  it  or  to  the  conduct  or
                           operation of the Seller's  Business or the ownership,
                           lease, or use of any of its Assets or any Facilities;
                           and

                                    (ii) The Seller has not  received any notice
                           or other communication (whether oral or written) from
                           any Governmental Body or any other Person and, to the
                           Seller's   Knowledge,   no  event  has   occurred  or
                           circumstance  exists that (with or without  notice or
                           lapse of time)  (A) may  constitute  or  result  in a
                           violation  by the Seller of, or a failure on the part
                           of the Seller to comply with, any Legal  Requirement,
                           or (B) may give rise to any obligation on the part of
                           the  Seller  to  undertake,  or to  bear  all  or any
                           portion  of the cost of, any  remedial  action of any
                           nature with respect to any Legal Requirement.

     (b) Part 3.14 of the Disclosure  Schedule  contains a complete and accurate
list of each material  Governmental  Authorization that is held by the Seller or
that  otherwise  relates to the Seller's  Business.  Each material  Governmental
Authorization  listed or  required  to be listed in Part 3.14 of the  Disclosure
Schedule is valid and in full force and effect.

                  3.15     LEGAL PROCEEDINGS

     (a) Except as set forth in Part 3.15 of the Disclosure  Schedule,  there is
no pending Proceeding:
                                    (i) that has been  commenced  by or  against
                           the Seller or that otherwise relates to or may affect
                           the   Seller's   Business  or  any   Facilities,   or
                           concerning any other property or person, who has been
                           affected by the Seller's Business; or

                                    (ii) that  challenges,  or that may have the
                           effect of preventing,  delaying,  making illegal,  or
                           otherwise  interfering  with, any of the transactions
                           contemplated hereby.

         To the Seller's Knowledge,  (1) no such Proceeding has been Threatened,
         and (2)  Seller has no reason to believe  any such  Proceeding  will be
         commenced  based upon facts  existing as of the Closing Date other than
         as set forth in Part 3.15 of the  Disclosure  Schedule.  The Seller has
         delivered to Buyer copies of all pleadings,  correspondence,  and other
         documents  relating  to each  Proceeding  listed  in  Part  3.15 of the
         Disclosure  Schedule.  The  Proceedings  listed  in  Part  3.15  of the
         Disclosure  Schedule  will not have a  material  adverse  effect on the
         Seller's Business, Assets,  operations,  condition, or prospects of the
         Seller's Business.

                           (b)   Except  as  set  forth  in  Part  3.15  of  the
Disclosure Schedule:

     (i) The Seller is not  subject to any Order that  relates in any respect to
the Seller's Business, any of the Assets or any Facility; and
<PAGE>



                                    (ii) To the Seller's Knowledge,  no employee
                           or agent of  Seller  is  subject  to any  Order  that
                           prohibits  such agent or employee from engaging in or
                           continuing any conduct, activity or practice relating
                           to the Seller's Business.

                  3.16     ABSENCE OF CERTAIN CHANGES AND EVENTS

     Except as set forth in Part 3.16 of the Disclosure Schedule or as otherwise
expressly  permitted  in this  Agreement,  since  March 1, 1997,  the Seller has
conducted  the Seller's  Business  only in the  Ordinary  Course of Business and
there has not been any:

     (a) change in the Seller's authorized or issued capital stock; grant of any
stock  option  or right to  purchase  shares  of  capital  stock of the  Seller;
issuance of any  security  convertible  into such  capital  stock;  grant of any
registration rights; purchase,  redemption,  retirement, or other acquisition by
the Seller of any shares of any such capital stock; or declaration or payment of
any  dividend or other  distribution  or payment in respect of shares of capital
stock;

     (b) amendment to the Organizational Documents of the Seller;

     (c) except in the Ordinary  Course of Business,  payment or increase by the
Seller of any  bonuses,  salaries,  or other  compensation  to any  stockholder,
director,  officer,  or employee  or entry into any  employment,  severance,  or
similar contract with any director, officer, or employee;

     (d)  adoption  of, or increase in the  payments to or benefits  under,  any
profit sharing,  bonus,  deferred  compensation,  savings,  insurance,  pension,
retirement,  or other  employee  benefit  plan for or with any  employees of the
Seller;

     (e)  damage  to or  destruction  or loss of any  asset or  property  of the
Seller, whether or not covered by insurance,  materially and adversely affecting
the  properties,  Assets,  business,  financial  condition,  or prospects of the
Seller  (including,  the  loss  or  prospective  loss of any  material  business
relationships);

     (f) entry into,  termination of, or receipt of notice of termination of (i)
any license,  exclusive  contract or  arrangement,  joint  venture,  credit,  or
similar  agreement,  or (ii)  any  contract  or  transaction  involving  a total
remaining  commitment by or to the Seller (determined on an individual basis) of
at least Ten Thousand and 00/100 Dollars ($10,000.00);

     (g) other than in the Ordinary  Course of Business,  sale,  lease, or other
disposition  of any Asset or  property  of the Seller or  mortgage,  pledge,  or
imposition of any lien or other encumbrance on any material Asset or property of
the  Seller,  including  the sale,  lease,  or other  disposition  of any of the
Intellectual Property Assets;


<PAGE>



     (h) cancellation or waiver of any claims or rights with a value (determined
individually)  to the  Seller in  excess  of Ten  Thousand  and  00/100  Dollars
($10,000.00);

     (i) change in the accounting methods used by the Seller;

     (j) capital  expenditures or commitments for capital expenditures in excess
of Ten Thousand and 00/100 Dollars  ($10,000.00)  individually or Fifty Thousand
and 00/100 Dollars ($50,000.00) in the aggregate.

     (k)  loan  to,  guaranty  of  any  indebtedness  of or  incurrence  of  any
indebtedness on behalf of any Person;

     (l) failure to pay any creditor any amount owed to such creditor when due;

     (m) sale of  Inventory  other than in the  Ordinary  Course of the Business
consistent with past practice;

     (n) material changes in the customary  methods of operations of the Seller,
including, without limitation, practices and policies relating to manufacturing,
purchasing, Inventories, marketing, selling and pricing;

     (o)  merger  with,  consolidation  with or  acquisition  of any  Person  or
acquisition of a substantial  portion of the assets or business of any Person or
any division or line of business  thereof,  or other acquisition of any material
assets  other  than in the  ordinary  course of  business  consistent  with past
practice;

     (p)  agreement,  arrangement  or  transaction  with  any of its  directors,
officers, employees or shareholders (or with any relative,  beneficiary,  spouse
or Affiliate of such Person); or

     (q)  agreement,  whether  oral or  written,  by the Seller to do any of the
foregoing;

                  3.17     CONTRACTS; NO DEFAULTS

     (a) Part  3.17(a)  of the  Disclosure  Schedule  contains  a  complete  and
accurate  list,  of each of the  Contracts  of the  Seller  which  has an amount
requiring  payment (i) to the Seller,  in the  aggregate,  or in any  individual
payment, in excess of Ten Thousand and 00/100 Dollars ($10,000.00),  (ii) by the
Seller in the aggregate,  or in any individual payment in excess of Ten Thousand
and 00/100  Dollars  ($10,000.00)  and (iii) all open purchase  orders of Seller
entered  into on the form  attached in Part 3.17(a) of the  Disclosure  Schedule
(collectively  (i), (ii) and (iii) and the  agreements set forth on Part 3.17(b)
of the  Disclosure  Schedule the "Assumed  Contracts").  Seller has delivered or
made available to Buyer,  or will deliver or make  available to Buyer,  true and
complete  copies of all of the  contracts  referred  to in 3.17(a)  (i) and (ii)
hereof.

     (b) Except as set forth in Part  3.17(b) of the  Disclosure  Schedule,  the
Seller  has no  rights  under,  and  has not or may not  become  subject  to any
obligation or liability under, any other contract that relates in any respect to
Seller's Business or the Assets.

     (c) Except as set forth in Part 3.17(c) of the  Disclosure  Schedule,  each
Assumed Contract  identified or required to be identified in Part 3.17(a) of the
Disclosure  Schedule is in full force and effect and is valid and enforceable in
accordance with its terms.

     (d)  Except  as set  forth  in  Part  3.17(d)  of the Disclosure Schedule:

                                    (i)  the  Seller  is in  compliance  in  all
                           material  respects  with  all  applicable  terms  and
                           requirements of each of the Assumed Contracts;

                                   (ii) to the  Seller's  Knowledge,  each other
                           Person  that has or  had  any obligation or liability
                           under any of the  Assumed  Contracts is in compliance
                           in  all  material respects with all applicable  terms
                           and requirements of such Assumed Contract;

                                    (iii) to the  Seller's  Knowledge,  no event
                           has occurred and no circumstance exists that (with or
                           without  notice  or lapse of  time)  may  contravene,
                           conflict  with, or result in a material  violation or
                           breach  of, or give the  Seller or other  Person  the
                           right to  declare a default  or  exercise  any remedy
                           under,  or to accelerate  the maturity or performance
                           of, or to cancel,  terminate,  or modify, any Assumed
                           Contract; and

                                    (iv) the Seller has not given to or received
                           from any other  Person,  at any time since  August 1,
                           1997, any notice or other communication (whether oral
                           or written) regarding any actual, alleged,  possible,
                           or  potential  violation  or breach  of,  or  default
                           under, any Assumed Contract.

     (e) Other than in the  Ordinary  Course of  Business,  there are no pending
renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate
any material  amounts  paid or payable to the Seller under  current or completed
contracts with any Person  included in the Assumed  Contracts and no such Person
has made an oral or written demand for such renegotiation.

                  3.18     INSURANCE

     (a) The Seller has delivered or will deliver to Buyer on the Closing Date:


<PAGE>



                                    (i) true and complete copies of all policies
                           of  insurance to which the Seller is a party or under
                           which the  Seller is or has been  covered at any time
                           within the five (5) years  preceding the date of this
                           Agreement;

                                    (ii) true and complete copies of all pending
                           applications for policies of insurance; and

                                    (iii)  there are no  claims or loss  history
                           with respect to such  policies for the five (5) years
                           preceding the date of this Agreement.

                  With respect to each current insurance policy:  (A) the policy
is legal, valid, binding, enforceable, and in full force and effect; (B) neither
Seller nor any other party to the policy is in breach or default (including with
respect to the payment of premiums or the giving of  notices),  and no event has
occurred which, with notice or the lapse of time, would constitute such a breach
or default,  or permit  termination,  modification  or  acceleration,  under the
policy;  and (C) no party to the policy has  repudiated  any provision  thereof.
Seller has been covered during the past ten (10) years by insurance in scope and
amount  customary  and  reasonable  for the  businesses  in which it has engaged
during the aforementioned period. Part 3.18 of the Disclosure Schedule describes
any self-insurance arrangements affecting the Seller.

          (b)  Part   3.18(b)   of  the   Disclosure   Schedule describes:

                                    (i) any  self-insurance  arrangement  by  or
                          affecting   the  Seller  or  the  Seller's   Business,
                          including any reserves established thereunder;

                                    (ii) any contract or arrangement, other than
                           a policy of insurance, for the transfer or sharing of
                           any risk by the Seller's Business; and

                                    (iii) all obligations of the Seller to third
                           parties  with respect to  insurance  (including  such
                           obligations under leases and service  agreements) and
                           identifies  the policy  under which such  coverage is
                           provided.

                  3.19     ENVIRONMENTAL MATTERS

     Except as set  forth in Part  3.19 of the  Disclosure Schedule:

     (a) The Seller is, and at all times has been, in compliance in all material
respects with all Environmental Laws and has no material  liability  thereunder.
The  Seller  has  obtained  all  Environmental  Permits  and is and has  been in
compliance with their requirements.  Seller has not received any order,  notice,
or other  communication from (i) any Governmental Body or private citizen acting
in the public  interest,  or (ii) the  current or prior owner or operator of any
Facilities, of any actual or potential violation, liability or failure by Seller
to comply with any Environmental Law, or of any actual or Threatened  obligation
to  undertake  or  bear  the  cost  of any  Environmental,  Health,  and  Safety
Liabilities  with respect to any of the  Facilities  or any other  properties or
assets  (whether  real,  personal,  or  mixed) in which  the  Seller  has had an
interest,  or with respect to any property or Facility at or to which  Hazardous
Materials were generated, manufactured,  disposed, stored, treated, transported,
recycled,  refined,  transferred,  imported, or processed by or on behalf of the
Seller or any other Person for whose conduct it is or may be held responsible.

     (b) There are no pending or, to the Seller's Knowledge,  Threatened claims,
Encumbrances,   or  other  restrictions  of  any  nature,   resulting  from  any
Environmental,  Health,  and Safety  Liabilities or arising under or pursuant to
any Environmental Law, with respect to or affecting any of the Facilities or any
other  properties  and assets  (whether real,  personal,  or mixed) in which the
Seller has or had an interest.

     (c) Neither the Seller or, to the Seller's Knowledge,  any other Person for
whose conduct it is or may be held responsible,  has any Environmental,  Health,
and Safety  Liabilities  with  respect  to the  Facilities  or, to the  Seller's
Knowledge  with  respect  to any other  properties  and  assets  (whether  real,
personal,  or mixed) in which the  Seller  (or any  predecessor),  has or had an
interest.

     (d) To the  Seller's  Knowledge,  there  has been no  Release  or Threat of
Release,  of any Hazardous  Materials that would constitute a material violation
of or create any material  liability under any Environmental Laws at or from the
Facilities  or at  any  other  locations  where  any  Hazardous  Materials  were
generated,  manufactured,  disposed,  stored,  treated,  transported,  recycled,
refined,  transferred,  produced,  imported,  used, or processed  from or by the
Facilities,  or  from or by any  other  properties  and  assets  (whether  real,
personal, or mixed) in which the Seller has or had an interest.

     (e)  Attached to the  Disclosure  Schedule in Part are true,  complete  and
accurate copies of all Environmental Permits,  environmental  reports,  studies,
notices, disclosures and documentation pertaining to the Facilities,  including,
without limitation any and all notices,  reports or other documents submitted to
or received  from any  Governmental  Body or any private  citizen  acting in the
public interest.

                  3.20     EMPLOYEES

     (a) Part 3.20 of the Disclosure  Schedule  contains a complete and accurate
list of the following  information  for each  employee of the Seller,  including
each employee on leave of absence or layoff  status:  employee  name; job title;
current  compensation  paid or  payable  and any  change in  compensation  since
February  28,  1997;  vacation  accrued;  and service  credited  for purposes of
vesting and eligibility to participate under the Seller's fringe benefit plans.

     (b) To the  Seller's  Knowledge,  except  as set  forth in Part 3.20 of the
Disclosure Schedule, no Seller employee is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality,  noncompetition, or
proprietary  rights  agreement,  between  such  employee  and any  other  Person
("Proprietary  Rights  Agreement")  that in any way  adversely  affects  or will
affect  (i)  the  performance  of his  duties  as an  employee  in the  Seller's
Business, or (ii) the ability of the Buyer to conduct the Seller's Business.

     (c)  Except  as set  forth in Part  3.20 of the  Disclosure  Schedule,  all
officers, management,  employees, technical employees and all other employees of
the Seller are under written  obligation to the Seller to maintain in confidence
all confidential  information acquired by them in the course of their employment
and to assign to the  Seller  all  inventions  made by them  within the scope of
their employment during such employment and for a reasonable period thereafter.

                  3.21     LABOR RELATIONS; COMPLIANCE

     Since  February 28, 1997,  the Seller has not been or is not a party to any
collective  bargaining or other labor Contract.  Since February 28, 1997,  there
has not been,  there is not presently  pending or existing,  and there is not to
the Seller's Knowledge,  Threatened,  (a) any strike, slowdown,  picketing, work
stoppage, or employee grievance process, (b) any Proceeding against or affecting
the Seller's Business relating to the alleged violation of any Legal Requirement
pertaining  to labor  relations or employment  matters,  including any charge or
complaint filed by an employee or union with Governmental  Body,  organizational
activity,  or other labor or employment  dispute against or affecting the Seller
or its  Business,  or (c) any  application  for  certification  of a  collective
bargaining  agent.  To  the  Seller's  Knowledge,   no  event  has  occurred  or
circumstance  exists that could provide the basis for any work stoppage or other
labor dispute.  There is no lockout of any employees by the Seller,  and no such
action is contemplated by the Seller. To the Seller's Knowledge,  the Seller has
complied  in all  material  respects  with all Legal  Requirements  relating  to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours,  benefits,  collective  bargaining,  the payment of social  security  and
similar taxes,  occupational safety and health, and plant closing. The Seller is
not  liable  for  the  payment  of  any  compensation,  damages,  taxes,  fines,
penalties, or other amounts, however designated,  for failure to comply with any
of the foregoing Legal Requirements.

                  3.22     INTELLECTUAL PROPERTY

     (a)  Intellectual  Property  Assets--For the purposes of this Agreement the
term "Intellectual Property Assets" includes:

                                    (i)  the  name  "Ney  Ultrasonics"  and  all
                           fictional business names,  trading names,  registered
                           and  unregistered  trademarks,   service  marks,  and
                           applications  used in the Business and owned, used or
                           licensed  by Ney or the  Seller  and  listed  on Part
                           3.22(c) (collectively, "Marks");

                                    (ii) all copyrights in both published  works
                           and unpublished works used in the Business and owned,
                           used or  licensed by Ney or Seller and listed on Part
                           3.22(a) (collectively, "Copy rights");


<PAGE>



                                    (iii) the computer  software and all related
                           software code documentation,  and commentaries, owned
                           or  licensed  by the Seller or Ney in the  conduct of
                           the  Business  and  listed  at  Part  3.22(c)  of the
                           Disclosure Schedule (the "Software").

     (b)  Agreements  -- Part  3.22(b)  of the  Disclosure  Schedule  contains a
complete and accurate list and summary description, including any royalties paid
or  received  by the  Seller,  of all  Contracts  relating  to the  Intellectual
Property  Assets to which the Seller is a party or by which the Seller is bound,
except for any license  implied by the sale of a product and perpetual,  paid-up
licenses  for commonly  available  software  programs  with a value of less than
$2,000 under which the Seller is the licensee.  There are no outstanding and, to
the Seller's Knowledge,  no Threatened disputes or disagreements with respect to
any such agreement.

      (c)      Trademarks.

                                    (i) Part 3.22(c) of the Disclosure  Schedule
                           contains a complete  and  accurate  list and  summary
                           description of all Marks.

                                    (ii) Except as set forth on Part  3.22(c) of
                           the  Disclosure  Schedule,  all Marks  that have been
                           registered with the applicable  Trademark  Office are
                           currently  in   compliance   with  all  formal  legal
                           requirements (including the timely  post-registration
                           filing of affidavits of use and  incontestability and
                           renewal applications), are valid and enforceable, and
                           are not subject to any  maintenance  fees or taxes or
                           actions falling due within ninety (90) days after the
                           Closing Date.

                                    (iii) Except as set forth on Part 3.22(c) of
                           the Disclosure  Schedule,  no Mark has been or is now
                           involved   in  any   opposition,   invalidation,   or
                           cancellation and, to the Seller's Knowledge,  no such
                           action is  Threatened  with the respect to any of the
                           Marks.

                                    (iv) Except as set forth on Part  3.22(c) of
                           the Disclosure  Schedule,  to the Seller's Knowledge,
                           there  is no  potentially  interfering  trademark  or
                           trademark application of any third party.

      (d)      Non-Infringement.

                                    (i) Except as listed on Part  3.22(d) of the
                           Disclosure Schedule,  no action is pending or, to the
                           Seller's  Knowledge  Threatened  with  respect to the
                           Seller's ownership of, or potential  infringements of
                           or any other claims as to the  Intellectual  Property
                           Assets or current  products  of  Seller.  None of the
                           Intellectual  Property Assets including,  the current
                           products manufactured by the Seller infringe, violate
                           or  constitute  a  misappropriation  (or to  Seller's
                           Knowledge   in  the  past   infringed,   violated  or
                           constituted a  misappropriation)  of any intellectual
                           property  rights  of  any  other  person  or  entity.
                           Neither  Seller,  Ney or Andersen  has  received  any
                           complaint,   claim  or  notice   alleging   any  such
                           infringement,  violation or misappropriation,  and to
                           the  Seller's  Knowledge,   there  is  no  threatened
                           complaint, claim or notice.

                                    (ii)   Seller   has  taken  all   reasonable
                           measures to protect the proprietary  nature and value
                           of each of the Intellectual Property Assets. No other
                           person  or  entity  has  any  rights  to  any  of the
                           Intellectual  Property Assets owned or used by Seller
                           and to the  Seller's  Knowledge,  no other  person or
                           entity is infringing,  violating or  misappropriating
                           any of the Intellectual Property Assets.

      (e)      Software.

                                    (i) The  Software of the Seller  included in
                           the  Intellectual  Property  Assets as defined  above
                           performs    materially   in   accordance   with   the
                           documentation and other written  descriptions used in
                           connection  with the Software and is free of material
                           defects  in   programming   and   operation,   is  in
                           machine-readable  form,  and contains  all  currently
                           available   computer  programs,   materials,   tapes,
                           know-how,  object and  source  codes,  other  written
                           materials,  know-how  and  processes  related  to the
                           Software.  Seller has delivered to the Buyer complete
                           and  correct   copies  of  all  user  and   technical
                           documentation  currently  available  related  to  the
                           Software.

     (f) Ownership of Intellectual  Property Assets -- Except as contemplated by
the  Technology  Agreements,  Seller  owns  and has the  right to use and on the
Closing  Date  shall  own and  have  the  right  to use and  sell  the  products
incorporating  all of the Intellectual  Property Assets used in the operation of
the Seller's Business or necessary for the operation of the Seller's Business as
presently conducted.

                  3.23     EMPLOYEE BENEFIT MATTERS

     (a)  Part  3.23(a)  of the  Disclosure  Schedule  contains  a list  of each
employee  pension  benefit plan (within the meaning of section 3(2) of ERISA) to
which  Seller  contributes  or is  required  to  contribute  on  behalf  of  its
employees. Also attached to the Disclosure Schedule with respect to each of such
plans are the most recent summary plan descriptions.

           With respect to each of the plans listed  in the Disclosure Schedule:

                                    (i) A determination letter has been received
                           to  the  effect  that  any  such  qualified  plan  is
                           qualified  under  Section  401 of the  Code  and  the
                           trusts  maintained  pursuant  thereto are exempt from
                           the Federal income  taxation under Section 501 of the
                           Code.


<PAGE>



                                    (ii) No  reportable  event,  as such term is
                           defined in Section 4043(b) of ERISA, has occurred and
                           is continuing with respect to any of such plans which
                           are subject to Section  4043(b) of ERISA,  other than
                           those   which   might   arise  as  a  result  of  the
                           transactions contemplated by this Agreement.

                                    (iii) Neither Seller nor any ERISA Affiliate
                           has incurred any outstanding liability to the Pension
                           Benefit  Guaranty  Corporation  (other  than  for the
                           payment of premiums) and will not incur any liability
                           to the  Pension  Benefit  Guaranty  Corporation  as a
                           result  of  the  transactions  contemplated  by  this
                           Agreement which would have a Material Adverse Effect.

                                    (iv)  No  "prohibited  transaction"  as such
                           term is  defined  in  Section  4975 of the  Code  and
                           Section 406 of ERISA,  has  occurred  with respect to
                           such  plans  which  could  subject  Buyer to a tax or
                           penalty for such prohibited  transactions  imposed by
                           either  Section  502 of ERISA or Section  4975 of the
                           Code.

                                    (v) With respect to any plan that is subject
                           to Title IV of ERISA, no such plan has an accumulated
                           funding deficiency.

                                    (vi) Neither Seller nor any ERISA  Affiliate
                           has incurred any withdrawal liability with respect to
                           any  multi-employer  plan under Section 4201 of ERISA
                           nor  has   received   any   notification   that   any
                           multi-employer  plan  is  in  reorganization  or  has
                           terminated.

                                    (vii) All  employees  of Seller  who  accept
                           employment  by Buyer will, as of the Closing Date, be
                           fully  vested  in  benefits  accrued  under  any plan
                           qualified   under   Section   401  of  the  Code  and
                           maintained  by  Seller  or  any  ERISA  Affiliate  of
                           Seller.

     (b)  Seller  shall  comply  with  the  health  care  continuation  coverage
requirements  of Section  162(k) and 4980B of the Code and  Sections 601 through
608 of ERISA,  for all  Employees  of Seller  who have a  qualifying  event as a
result of this Agreement.

     (c) Entry into this Agreement and performing the obligations hereunder will
not violate any law,  regulation,  or contract  relating to any employee benefit
plan  (within  the  meaning of Section  3(3) of ERISA)  maintained  by Seller or
subject or expose Buyer to any excise tax or recapture of investment tax credit.
Buyer will have no  responsibility  with  respect to any  employee  benefit plan
(within the meaning of Section 3(3) of ERISA)  maintained by Seller or any ERISA
Affiliate of the Seller.


<PAGE>



                  3.24     CUSTOMERS

     Listed in Part 3.24 of the Disclosure  Schedule are the names and addresses
of the  customers  (by  revenue)  of the  Seller  for each of the last three (3)
fiscal years and the eleven (11) months ended  January 31, 1998,  and the amount
for which each such  customer  was invoiced  during each such period.  Except as
disclosed in Part 3.24 of the Disclosure  Schedule,  the Seller has not received
any notice or has any  Knowledge  that any customer of the Seller,  as listed in
Part 3.24 of the  Disclosure  Schedule,  for the year ended February 28, 1997 or
the eleven (11) months ended January 31, 1998, has ceased, or will cease, to use
the products,  equipment,  goods or services of the Seller, or has substantially
reduced,  or will  substantially  reduce,  the use of such products,  equipment,
goods or services at any time.

                  3.25     SUPPLIERS

     Listed in Part 3.25 of the Disclosure  Schedule are the names and addresses
of the  suppliers  of Seller for each of the last three (3) fiscal years and the
eleven  (11)  months  ended  Januaryy31,  1998 and the amount of raw  materials,
suppliers,  merchandise or other goods purchased by Seller.  Except as disclosed
in Part 3.25 of the Disclosure Schedule,  the Seller has not received any notice
and does not have any Knowledge that any significant  supplier will not sell raw
materials,  supplies, merchandise or other goods to the Seller at any time after
the Closing Date on terms and conditions  substantially similar to those used in
its  current  sales to the  Seller.  Except  as  disclosed  in Part  3.25 of the
Disclosure  Schedule,  each of the Seller's  outstanding  blanket orders for raw
materials,  supplies,  merchandise and other goods can be terminated at any time
by the Seller without incurring any penalty or payment.

                  3.26     DISCLOSURE

     (a) No  representation  or warranty of the Seller in this  Agreement and no
statement in the Disclosure  Schedule omits to state a material fact required to
be made in such  representation  or warranty or in the  Disclosure  Schedule and
necessary  to  make  the  statements   herein  or  therein,   in  light  of  the
circumstances in which they were made, not misleading.

     (b) There is no fact known to the Seller that has specific  application  to
the Seller's  Business (other than general economic or industry  conditions) and
that could have a Material  Adverse  Effect on Seller or Seller's  Business that
has not been set forth in this Agreement or the Disclosure Schedule.

                  3.27     TRANSACTIONS WITH AFFILIATES

     Except  as  disclosed  in  Part  3.27  of  the  Disclosure   Schedule,   no
stockholder,  director,  officer or employee of Seller,  or any member of his or
her immediate family or any other of its, his or her affiliates, owns or has any
ownership  interest in any  corporation or other entity,  or any Related Person,
that is or was during the last three years a party to, or in any property  which
is or was during the last three  years the subject  of, any  material  contract,
agreement or understanding, business arrangement or relationship with Seller.


<PAGE>



                  3.28     BROKERS OR FINDERS

     The  Seller  and its agents  have  incurred  no  obligation  or  liability,
contingent or otherwise,  for brokerage or finders' fees or agents'  commissions
or other similar payment in connection with this Agreement.

         4.       REPRESENTATIONS AND WARRANTIES OF BUYER

                  Buyer represents and warrants to Seller as follows:

                  4.1      ORGANIZATION AND GOOD STANDING

     Buyer  is a  corporation  duly  organized,  validly  existing,  and in good
standing under Delaware law, with full corporate  power and authority to conduct
its business as it is now being  conducted and to own or use the  properties and
assets that it purports to own or use except where its failure to qualify  would
not have a Material  Adverse Effect on Buyer.  Buyer has delivered to the Seller
copies of its Organizational Documents, as currently in effect.

                  4.2      AUTHORITY; NO CONFLICT

     (a) This Agreement  constitutes the legal, valid, and binding obligation of
Buyer,  enforceable  against Buyer in accordance  with its terms.  Buyer has the
full corporate power and authority to execute and deliver this Agreement and the
other  documents  contemplated  to be executed  and  delivered at the Closing by
Buyer and to  perform  its  obligations  under  this  Agreement  and such  other
documents.

     (b) Except as set forth in Part 4.2 of the Disclosure Schedule, neither the
execution and delivery of this Agreement nor the  consummation or performance of
any of the  transactions  contemplated  hereby will give any Person the right to
prevent, delay, or otherwise interfere with any of the transactions contemplated
hereby pursuant to:

                                    (i) any provision of  Buyer's Organizational
                              Documents;

                                    (ii) any resolution  adopted by the board of
                              directors of the Buyer;

                                    (iii)  any  Legal  Requirement  or  Order to
                              which Buyer may be subject; or

                                    (iv) any material contract to which Buyer is
                              a party or by which Buyer may be bound.


<PAGE>



Except as set  forth in Part 4.2 of the  Disclosure  Schedule,  Buyer is not and
will not be required to obtain any Consent  from any Person in  connection  with
the execution and delivery of this Agreement or the  consummation or performance
of any of the transactions contemplated hereby.

                  4.3      CERTAIN PROCEEDINGS

     There is no pending  Proceeding  that has been commenced  against Buyer and
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise  interfering with, any of the transactions  contemplated hereby. To
Buyer's Knowledge, no such Proceeding has been Threatened.

         5.       CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

                  Buyer's  obligation  to  purchase  the  Assets and to take the
other  actions  required  to be taken by Buyer at the  Closing is subject to the
satisfaction,  at or prior to the Closing,  of each of the following  conditions
(any of which may be waived by Buyer, in whole or in part):

                  5.1      ACCURACY OF REPRESENTATIONS

     After giving effect to the matters set forth in the  Disclosure  Schedules,
all of the  representations  and  warranties  of the Seller and Andersen in this
Agreement  (considered  collectively),  and  each of these  representations  and
warranties  (considered  individually),  must have been accurate in all material
respects  (other  than   representations   and  warranties  having   materiality
qualifiers,  which  shall be accurate  in all  respects)  as of the date of this
Agreement,   and  must  be  accurate  in  all  material   respects  (other  than
representations  and warranties having  materiality  qualifiers,  which shall be
accurate in all respects) as of the Closing Date as if made on the Closing Date,
after giving effect to any supplement to the Disclosure Schedules.

                  5.2      SELLER'S PERFORMANCE

     (a) All of the  covenants  and  obligations  that the Seller is required to
perform or to comply with pursuant to this  Agreement at or prior to the Closing
(considered   collectively),   and  each  of  these  covenants  and  obligations
(considered  individually),  must have been duly  performed and complied with in
all material respects.

     (b) Each  document  required to be  delivered  pursuant to Section 2.9 must
have been delivered.

                  5.3      CONSENTS

      Except as set forth in Section 7.1(b),  each of the Consents identified in
Part 3.2 of the Disclosure Schedule, must have been obtained and must be in full
force and effect.


<PAGE>

                  5.4      ADDITIONAL DOCUMENTS

                           Each  of  the  following  documents  must  have  been
delivered to Buyer by the Seller:

      (a) an opinion of Edwards & Angell, dated the Closing Date, in the form of
Exhibit 5.4(a);

     (b) such other documents as Buyer may reasonably request for the purpose of
(i) enabling its counsel to provide the opinion  referred to in Section  6.4(a),
(ii)  evidencing  the  accuracy  of  any  of the  Seller's  representations  and
warranties, (iii)yevidencing the performance by the Seller of, or the compliance
by the Seller  with,  any  covenant or  obligation  required to be  performed or
complied  with  by the  Seller,  and  (iv)yevidencing  the  satisfaction  of any
condition referred to in this Section 5;

     (c) a certified copy of the corporate  proceedings  required on the part of
Seller to authorize and carry out this Agreement and to convey, assign, transfer
and deliver the Assets to Buyer;

     (d) within fifteen (15) days after Closing Date, unless otherwise provided,
an  update  of the  following  Disclosure  Schedules  with a true,  correct  and
complete list and amount, as of February 28, 1998:

                                    (i)  the Fixed Assets;

                                    (ii) the Accounts  Receivable,  including an
                           Aging thereof;

                                    (iii) the  trade  accounts  payable  assumed
                           under this Agreement;

                                    (iv) the accrued expenses assumed under this
                           Agreement,   upon   delivery  of  Closing   Financial
                           Statements;

                                    (v)  all unfilled customers orders; and

                                    (vi) all  shipments  made  during the period
                           from August 1, 1997  through  February 28, 1998;  the
                           nature of which  information  shall not be materially
                           different  from the information supplied by Seller as
                           of the date hereof.

                  5.5      NO PROCEEDINGS

     Since the date of this  Agreement,  there must not have been  commenced  or
Threatened  against  Buyer,  or against any Person  affiliated  with Buyer,  any
Proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions  contemplated  hereby,  or (b) that may
reasonably have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the transactions contemplated hereby.

                  5.6      NO CLAIM REGARDING ASSETS OR SALE PROCEEDS

     There  must not have  been  made or  Threatened  by any  Person  any  claim
asserting that such Person (a) is the holder or the beneficial  owner of, or has
the right to acquire or to obtain beneficial ownership of, the Assets, or (b) is
entitled to all or any portion of the Purchase Price payable for the Assets.

                  5.7      NO PROHIBITION

     Neither the  consummation  nor the  performance of any of the  transactions
contemplated  hereby will,  directly or  indirectly  (with or without  notice or
lapse of time), materially contravene, or conflict with, or result in a material
violation of, or cause Buyer or any Person  affiliated  with Buyer to suffer any
material adverse  consequence  under,  (a) any applicable  Legal  Requirement or
Order,  or  (b)  any  Legal  Requirement  or  Order  that  has  been  published,
introduced, or otherwise proposed by or before any Governmental Body.

                  5.8      OTHER AGREEMENTS

     (a) Seller shall have  negotiated  and delivered a New Lease  acceptable to
Buyer  with  respect  to  the  property  located  at  1280  Blue  Hills  Avenue,
Bloomfield,  Connecticut  06002 (the "New Lease") that provides for the lease of
the premises to Buyer and the termination of the existing lease on or before the
Closing Date.

     (b) Buyer shall have negotiated employment agreements with key employees of
the Seller which are set forth in Part 5.8(b) of the Disclosure Schedule.

         6.       CONDITIONS PRECEDENT TO THE SELLER'S  OBLIGATION TO CLOSE

     The Seller's  obligation  to sell the Assets and to take the other  actions
required  to  be  taken  by  the  Seller  at  the  Closing  is  subject  to  the
satisfaction,  at or prior to the Closing,  of each of the following  conditions
(any of which may be waived by the Seller, in whole or in part):

                  6.1      ACCURACY OF REPRESENTATIONS

     All of Buyer's representations and warranties in this Agreement (considered
collectively),  and each of these  representations  and  warranties  (considered
individually),  must have been  accurate in all  material  respects  (other than
representations  and warranties having  materiality  qualifiers,  which shall be
accurate in all respects) as of the date of this  Agreement and must be accurate
in all material  respects  (other than  representations  and  warranties  having
materiality  qualifiers,  which  shall be accurate  in all  respects)  as of the
Closing  Date  as if  made on the  Closing  Date,  after  giving  effect  to any
supplement to the Disclosure Schedules.


<PAGE>



                  6.2      BUYER'S PERFORMANCE

     (a) All of the covenants and obligations  that Buyer is required to perform
or to  comply  with  pursuant  to this  Agreement  at or  prior  to the  Closing
(considered   collectively),   and  each  of  these  covenants  and  obligations
(considered  individually),  must have been  performed  and complied with in all
material respects.

     (b)  Buyer  must  have  delivered  each  of the  documents  required  to be
delivered  by Buyer  pursuant  to  Section  2.9 and must have paid the  Purchase
Price.

                  6.3      CONSENTS

     Each of the Consents identified in Part 4.2 of the Disclosure Schedule must
have been obtained and must be in full force and effect.

                  6.4      ADDITIONAL DOCUMENTS

     Buyer must have caused the following documents to be delivered to Seller:

     (a) an opinion of Keating,  Muething & Klekamp,  dated the Closing Date, in
the form of Exhibit 6.4(a); and

     (b) such  other  documents  as the Seller may  reasonably  request  for the
purpose of (i)  enabling  its  counsel to provide  the  opinion  referred  to in
Section 5.4(a),  (ii) evidencing the accuracy of any  representation or warranty
of Buyer,  (iii)  evidencing  the  performance by Buyer of, or the compliance by
Buyer with, any covenant or obligation required to be performed or complied with
by Buyer,  or (iv) evidencing the  satisfaction of any condition  referred to in
this Section 6.

                  6.5      NO INJUNCTION

     There  must not be in effect any Legal  Requirement  or any  injunction  or
other  Order that (a)  prohibits  the sale of the Assets by the Seller to Buyer,
and (b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.


<PAGE>



7        ADDITIONAL AGREEMENTS

                  7.1      PRE-CLOSING CONDITIONS

     The  Parties  agree as  follows  with  respect to the  period  between  the
execution of this Agreement and the Closing, except as otherwise indicated.

     (a) Each of the Parties  will use its  reasonable  best efforts to take all
action and to do all things  necessary in order to consummate and make effective
the transactions contemplated by this Agreement.

     (b) Seller will give any  notices to third  parties,  and shall  obtain any
third party consents that are required or that the Buyer may reasonably  request
in  connection  with the  matters  referred  to in this  Agreement.  Each of the
Parties  will give any  notices  to,  make any  filings  with,  and use its best
efforts to obtain any authorizations, consents, and approvals of governments and
governmental  agencies  in  connection  with  the  matters  referred  to in this
Agreement  and the  Disclosure  Schedules.  If any such  consents  or  approvals
relating to an Assumed Contract have not been obtained prior to the Closing Date
and the  assignment  of any such  Assumed  Contract  would  constitute  a breach
thereof,  then Seller shall hold such Assumed  Contract and all benefits derived
therefrom  (economic or otherwise) in trust for the Buyer. Seller shall continue
to use its best  efforts to obtain any such  consents or  approvals  relating to
Assumed  Contracts  after the Closing  Date.  Until such consent or approval has
been  obtained,  or if it cannot be obtained,  Seller shall continue to maintain
the  existence  of such  Assumed  Contract,  as agent and trustee for Buyer,  at
Seller's  expense (net of expenses  Buyer would have incurred had the applicable
Assumed Contract been assigned or transferred), and for the benefit of Buyer.

     (c) The Seller will not engage in any practice,  take any action,  or enter
into any transaction outside the Ordinary Course of Business.

     (d) Except as set forth  herein,  the  Seller  will keep its  business  and
properties  substantially  intact,  including its present  operations,  physical
facilities,  working  conditions,  and  relationships  with lessors,  licensors,
suppliers, customers and employees.

     (e) The  Seller  will  permit  representatives  of the  Buyer to have  full
access, at all reasonable times, and in a manner so as not to interfere with the
normal  business  operations  of  the  Seller,  to  all  premises,   properties,
personnel,  books,  records  (including  Tax  records or the  relevant  portions
thereof), contracts, and documents of or pertaining to the Seller.

     (f) The Seller will give prompt written notice to the Buyer of any material
adverse  development  causing  a  breach  of  any  of  the  representations  and
warranties in Section 3 above. Each Party will give prompt written notice to the
others of any material  adverse  development  causing a breach of any of its own
representations  and warranties in this  Agreement.  No disclosures by any Party
pursuant  to  this  Section  7.1(f),  however,  shall  be  deemed  to  amend  or
supplement,   the   Disclosure   Schedules   or   to   prevent   or   cure   any
misrepresentation, breach of warranty, or breach of covenant.

     (g) Prior to the  Closing  Date,  Ney,  Andersen  and  Seller  will not (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person  relating  to the  acquisition  of any  capital  stock  or  other  voting
securities,  or any substantial  portion of the Assets, of the Seller (including
any  acquisition  structured as a merger,  consolidation,  or share exchange) or
(ii)  participate in any  discussions  or  negotiations  regarding,  furnish any
information  with respect to,  assist or  participate  in, or  facilitate in any
other  manner  any  effort  or  attempt  by any  Person to do or seek any of the
foregoing.  The Seller will notify the Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.

7.2               POST-CLOSING COVENANTS

     The  Parties  agree as follows  with  respect to the period  following  the
Closing.

     (a) In case at any time after the Closing any further  action is  necessary
to carry out the purposes of this Agreement,  each of the Parties will take such
further action (including the execution and delivery of such further instruments
and documents) as any other Party may request,  all at the sole cost and expense
of the requesting Party. The Seller  acknowledges and agrees that from and after
the  Closing,  the Buyer will be  entitled  to copies of all  documents,  books,
records  (including  the  relevant  portions of Tax  records),  agreements,  and
financial data of any sort relating to the Seller's Business.

     (b) In the event and for so long as any Party  actively  is  contesting  or
defending against any action, suit, proceeding, hearing, investigation,  charge,
complaint,  claim or demand in connection with (i) any transaction  contemplated
under  this  Agreement  or  (ii)  any  fact,  situation,  circumstance,  status,
condition,  activity,  practice,  plan,  occurrence,  event,  incident,  action,
failure to act,  or  transaction  or prior to the  Closing  Date  involving  the
Seller,  each of the other  Parties  will  cooperate  with it and  provide  such
testimony  and  access  to their  books and  records  as shall be  necessary  in
connection with the contest or defense,  all at the sole cost and expense of the
contesting or defending Party.

     (c) Seller  will not take any action  that is  designed or intended to have
the effect of discouraging  any lessor,  licensor,  customer,  supplier or other
business   associate  of  the  Seller  from   maintaining   the  same   business
relationships  with the Buyer after the Closing as it maintained with the Seller
prior to the Closing.  The Seller will refer all customer  inquiries relating to
the business of the Seller to the Buyer from and after the Closing.

     (d)  The  Seller  will  treat  and  hold as  such  all of the  Confidential
Information,  refrain from using any of the Confidential Information,  except in
connection with this Agreement, and deliver promptly to the Buyer or destroy, at
the request and option of the Buyer,  all tangible  embodiments (and all copies)
of the Confidential  Information which are in its possession.  In the event that
Seller is requested or required (by oral question or request for  information or
documents in any legal proceeding, interrogatory,  subpoena, civil investigative
demand,  or similar  process) to disclose  any  Confidential  Information,  that
Seller will notify the Buyer  promptly of the request or requirement so that the
Buyer may seek an  appropriate  protective  order or waive  compliance  with the
provisions of this Section 7.2(d).  If, in the absence of a protective  order or
the  receipt of a waiver  hereunder,  the  Seller is, on the advice of  counsel,
compelled to disclose any Confidential Information to any tribunal or else stand
liable for contempt,  that Seller may disclose the  Confidential  Information to
the  tribunal;  provided,  however,  that  Seller  shall  use its order or other
assurance  that  confidential  treatment will be accorded to such portion of the
Confidential  Information required to be disclosed as the Buyer shall designate.
The foregoing  provisions shall not apply to any Confidential  Information which
is  generally  available  to  the  public  immediately  prior  to  the  time  of
disclosure.

                           (e) With  respect to the  collection  of the Accounts
Receivable:

                                    (i) After the Closing Date,  Buyer shall use
                           reasonable  efforts to attempt to collect  all of the
                           Accounts   Receivable   with   reasonable   diligence
                           consistent with Buyer's general business practice for
                           a period of ninety  (90) days  following  the Closing
                           Date  (the  "Collection  Period"),  but  shall not be
                           required to institute any legal  proceedings or use a
                           collection  agency to enforce the  collection  of any
                           such Accounts Receivable.  Upon the expiration of the
                           Collection Period,  Buyer shall furnish Seller with a
                           collection   report   setting   forth  the   Accounts
                           Receivables which remain uncollected. Within ten (10)
                           days after receipt of such collection report,  Seller
                           shall  pay to Buyer  an  amount  equal  to the  Gross
                           Accounts Receivable (as defined below) which have not
                           been collected.  Upon receipt of such payment,  Buyer
                           shall  deliver to the  Seller  all  right,  title and
                           interest  in  and  any   tangible   evidence  of  the
                           uncollected   Accounts   Receivable   then   in   the
                           possession  of Buyer and Seller  shall be entitled to
                           use such customary and reasonable actions as it deems
                           necessary  or  desirable  in  order to  collect  such
                           unpaid  accounts;  provided that Seller shall consult
                           with  Buyer  prior to taking  any  collection  action
                           which might  reasonably be expected to jeopardize the
                           Buyer's relationship with such customer. For purposes
                           of this Section, Gross Accounts Receivable means, the
                           gross Accounts Receivable as of the Closing Date less
                           any  reserve  for  Accounts  Receivable  shown on the
                           Closing Financial Statements.

                                    (ii) The Seller will, if requested by Buyer,
                           cooperate  with  Buyer  in  collecting  any  Accounts
                           Receivable.  The Buyer will,  if requested by Seller,
                           cooperate  with  Seller in  collecting  any  Accounts
                           Receivable.

                                    (iii) The Seller hereby  authorizes Buyer to
                           open any and all mail addressed to Seller if received
                           on or after the Closing Date and hereby grants to the
                           Buyer a power of  attorney  to  endorse  and cash any
                           checks or  instruments  made  payable or  endorsed to
                           Seller or its order and received by Buyer.


<PAGE>



                                    (iv) The Seller  agrees that it will forward
                           promptly to Buyer any monies,  checks or  instruments
                           received  by  Seller  after  the  Closing  Date  with
                           respect to the Accounts Receivable.

                                    (v)  Any  sums  received  by  the  Buyer  in
                           respect of Accounts Receivable after payment for such
                           receivable   by  the   Seller   shall   be   promptly
                           transmitted by the Buyer to the Seller.

     (f) Buyer shall  operate the  Business in the  Ordinary  Course of Business
consistent  with  Seller's  past  practices for the period from the date of this
Agreement until the Closing Date.

     (g) Within thirty (30) days after the Closing Date, Seller shall remove all
containerized  Hazardous  Waste (as that term is  defined  by the  Environmental
Laws) generated by Seller prior to the Closing Date.

     (h) Within ten (10) days after the  Closing  Date,  Seller and Buyer  shall
execute any and all documents  required to comply with the Connecticut  Property
Transfer Law.

                  7.3      TAX MATTERS

     The following  provisions shall govern the allocation of  responsibility as
between Buyer and Seller for certain tax matters following the Closing Date:

     (a) Buyer and Seller shall cooperate fully, as and to the extent reasonably
requested  by the other  party,  in  connection  with the filing of Tax  Returns
pursuant to this  Section and any audit,  litigation  or other  proceeding  with
respect to Taxes.  Such  cooperation  shall  include the retention and (upon the
other  party's  request)  the  provision  of records and  information  which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees  available  on a  mutually  convenient  basis  to  provide  additional
information  and  explanation  of any material  provided  hereunder.  The Seller
agrees (A) to retain all books and records with respect to Tax matters pertinent
to the Seller relating to any taxable period  beginning  before the Closing Date
until the expiration of the statute of limitations  (and, to the extent notified
by Buyer,  any extensions  thereof) of the respective  taxable  periods,  and to
abide by all record retention agreements entered into with any taxing authority,
and (B) to give the other party reasonable written notice prior to transferring,
destroying  or discarding  any such books and records and, if the  transferring,
destroying or  discarding  any such books and records and, if the other party so
requests,  the Seller  shall  allow the other party to take  possession  of such
books and records.

     (b) Buyer and Seller further agree, upon request, to use their best efforts
to obtain any certificate or other document from any  governmental  authority or
any other Person as may be necessary  to mitigate,  reduce or eliminate  any Tax
that  could be imposed  (including,  but not  limited  to,  with  respect to the
transactions contemplated hereby).


<PAGE>

     (c) Buyer and Seller  further  agree,  upon  request,  to provide the other
party with all information that either party may be required to report.

     (d) All tax sharing  agreements  or similar  agreements  with respect to or
involving the Seller shall not be assumed by Buyer after the Closing  Date,  the
Buyer shall not be bound thereby or have any liability thereunder.

     (e) All transfer,  documentary,  sales, use, stamp,  registration and other
such  Taxes  and  fees  (including  any  penalties  and  interest)  incurred  in
connection  with this  Agreement  shall be paid by Seller  when due,  and Seller
will,  at  their  own  expense,   file  all  necessary  Tax  Returns  and  other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law, Buyer
will,  and will cause its  affiliates  to, join in the execution of any such Tax
Returns and other documentation.

                  7.4      SEVERANCE MATTERS

     Seller shall pay all severance,  termination and other payments (whether in
the form of cash or  otherwise)  pursuant to any written or oral  agreements  of
Seller or its  Affiliates  and expenses  applicable  to the employees of Seller,
including,  but not limited to, any other  compensation  payable to employees of
Seller under  applicable plant closing or similar laws with respect to employees
of Seller who are not offered employment by the Buyer.

                  7.5      NONCOMPETITION BY SELLER AND STOCKHOLDERS

     (a) For a period of five years after the Closing (the "Restricted  Period")
neither  the  Seller,  Andersen,  Ney or any  Affiliate  thereof  shall  engage,
directly or  indirectly,  in any  business  anywhere  in the United  States that
develops,  designs,  manufactures,  sells or markets products or services of the
kind developed, designed, manufactured, sold and marketed by the Business or the
Seller as of the  Closing  Date or,  without  the prior  written  consent of the
Buyer,  directly or  indirectly,  own an interest  in,  manage,  operate,  join,
control, lend money or render financial or other assistance to or participate in
or be connected with, as an officer, employee, partner, stockholder,  consultant
or  otherwise,  any Person that  competes  with the Buyer,  the  Business or the
Seller in developing, designing, manufacturing, selling or marketing products or
services of the kind developed, designed,  manufactured, sold or marketed by the
Business  or the Seller as of the  Closing;  provided,  however,  that,  for the
purposes  of this  section  ownership  of  securities  having  no more than five
percent (5%) of the outstanding  voting power of any competitor which are listed
on  any  national  securities  exchange  or  traded  actively  in  the  national
over-the-counter  market  shall not be deemed to be in violation of this section
so  long as the  Person  owning  such  securities  has no  other  connection  or
relationship with such competitor.

     (b) As a separate  and  independent  covenant,  the Seller  agrees with the
Buyer  that,  for a period of five years  following  the  Closing,  neither  the
Seller,  Andersen,  Ney or any Affiliate  thereof shall, in any way, directly or
indirectly,  for the purpose of  conducting  or engaging  in any  business  that
develops,  designs,  manufactures,  sells or markets products or services of the
kind developed, designed,  manufactured, sold or marketed by the Business or the
Seller as of the Closing, call upon, solicit, advise or otherwise do, or attempt
to do,  business  with any  customers  of the Business or the Seller in order to
take away or interfere or attempt to interfere with any custom,  trade, business
or  patronage of the  Business or the Seller,  or  interfere  with or attempt to
interfere  with  any  officers,  employees,  representatives  or  agents  of the
Business or the Seller,  or induce or attempt to induce any of them to leave the
employ of the Seller or violate the terms of their contracts,  or any employment
arrangements, with the Company.

     (c) The  Restricted  Period  shall be  extended by the length of any period
during which the Seller is in breach of the terms of this Section 7.5.

         8.       TERMINATION

                  8.1      TERMINATION EVENTS

                           This  Agreement  may, by notice  given prior to or at
the Closing, be terminated:

     (a) by either Buyer or the Seller if a material  Breach of any provision of
this  Agreement  has been  committed  by the other party and such Breach has not
been waived or cured within 10 days after notice of such breach;

     (b) (i) by  Buyer  if any of the  conditions  in  Section  5 has  not  been
satisfied  as of the Closing Date or if  satisfaction  of such a condition is or
becomes  impossible  (other than through the failure of Buyer to comply with its
obligations  under this Agreement) and Buyer has not waived such condition on or
before the Closing  Date;  or (ii) by the Seller,  if any of the  conditions  in
Section has not been satisfied as of the Closing Date or if satisfaction of such
a condition  is or becomes  impossible  (other  than  through the failure of the
Seller to comply with its  obligations  under this Agreement) and Seller has not
waived such condition on or before the Closing Date;

      (c) by mutual consent of Buyer and the Seller; or

     (d) by either  Buyer or the Seller if the Closing has not  occurred  (other
than  through the failure of any party  seeking to terminate  this  Agreement to
comply fully with its  obligations  under this  Agreement) on or before March 4,
1998 or such later date as the parties may agree upon.

8.2               EFFECT OF TERMINATION

     Each party's right of  termination  under Section 8.1 is in addition to any
other rights it may have under this Agreement or otherwise,  and the exercise of
a right of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 8.1, all further obligations of the parties under
this Agreement will terminate,  except that the obligations in Section 10.1 will
survive;  provided,  however,  that if this  Agreement is  terminated by a party
because of the Breach of the Agreement by the other party or because one or more
of the conditions to the terminating party's obligations under this Agreement is
not  satisfied  as a result  of the other  party's  failure  to comply  with its
obligations  under this Agreement,  the terminating  party's right to pursue all
legal remedies will survive such termination unimpaired.

         9.       INDEMNIFICATION; REMEDIES

                  9.1      SURVIVAL

     All  representations,   warranties,  covenants,  and  obligations  in  this
Agreement,  the Disclosure Schedule, the supplements to the Disclosure Schedule,
the certificate  delivered pursuant to Section 2.9(a)(iv) and Section 2.9(b)(ii)
and any other certificate or document  delivered pursuant to this Agreement will
survive the Closing.  However,  the written waiver of any condition based on the
accuracy  of  any  representation  or  warranty  in  this  Agreement,  or on the
performance of or compliance  with any covenant or obligation in this Agreement,
will eliminate the right to indemnification, payment of Damages, or other remedy
based on such representations, warranties, covenants and obligations.

                  9.2      INDEMNIFICATION AND PAYMENT OF DAMAGES BY
                           THE SELLER AND ANDERSEN

     The Seller and Andersen,  jointly and severally,  hereby indemnify and hold
harmless Buyer and its Representatives,  stockholders,  controlling persons, and
affiliates  (collectively,  the "Indemnified  Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage (including
incidental and consequential damages), expense (including costs of investigation
and defense and reasonable  attorneys' fees) or diminution of value,  whether or
not involving a third-party claim (collectively,  "Damages"),  arising, directly
or indirectly, from or in connection with:

     (a) any  Breach of any  representation  or  warranty  made by the Seller or
Andersen in this Agreement or any other certificate or document delivered by the
Seller or Andersen pursuant to this Agreement;

     (b) any  Breach of any  representation  or  warranty  made by the Seller or
Andersen in this  Agreement as if such  representation  or warranty were made on
and as of the Closing Date;

     (c) any Breach by the Seller or Andersen of any covenant or  obligation  in
this Agreement;

     (d) any product  shipped or manufactured  by, or any services  provided by,
the Seller on or prior to the Closing Date, including,  without limitation,  any
damages  arising out of allegations of personal  injury or property  suffered by
any third party,  or  activities  or omissions of the Seller that occurred on or
prior to the Closing Date;

<PAGE>


     (e) any claim by any Person for brokerage or finder's  fees or  commissions
or similar  payments based upon any agreement or  understanding  alleged to have
been made by any such  Person  with the Seller  (or any  Person  acting on their
behalf) in connection with any of the transactions contemplated hereby;

     (f) any  Environmental,  Health and Safety  Liabilities  that relate to the
business or operation of the Seller, the Assets or the Facilities on or prior to
the Closing Date, whether or not the facts underlying such Environmental, Health
and Safety  Liabilities  are  disclosed  in the  Disclosure  Schedule,  known or
unknown to the Seller; or

     (g) any Tax liabilities or obligations of the Seller.

                  9.3      TIME LIMITATIONS

     If the Closing occurs,  the Seller and Andersen will have no liability (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or  obligation  to be performed  and complied with prior to the Closing
Date,  other than those in Sections 2.3(b),  3.6 (title only),  3.10, 3.12, 3.15
and 3.19, unless on or before the second  anniversary of the Closing Date, Buyer
notifies the Seller and Andersen of a claim specifying the factual basis of that
claim in  reasonable  detail to the  extent  then  known by Buyer,  a claim with
respect  to  Section  3.6  (title   only),   3.12  or  3.15,   or  a  claim  for
indemnification  or reimbursement not based upon any  representation or warranty
or any covenant or  obligation  to be performed  and complied  with prior to the
Closing  Date,  may be  made  at any  time  within  the  applicable  statute  of
limitations; a claim with respect to Section 3.19, which must be made within the
seventh  anniversary date from the Closing Date; a claim with respect to Section
3.10 which must be made within  ninety (90) days from the  Closing  Date;  and a
claim with  respect to Section  2.3(b) which must be made within the time period
provided by Seller's warranty with respect to such product.

                  9.4      LIMITATIONS ON AMOUNT -- SELLER

     The Seller and Andersen  will have no  liability  (for  indemnification  or
otherwise) with respect to the matters  described in Section 9.2 until the total
of all Damages  actually  paid or incurred by Buyer with respect to such matters
(excluding,  however,  any  individual  matter in the amount of Five Hundred and
00/100  Dollars  ($500.00) or less) exceeds  Twenty  Thousand and 00/100 Dollars
($20,000.00) and then for the full amount of such Damages  (excluding,  however,
any individual matter in the amount of Five Hundred and 00/100 Dollars ($500.00)
or less).  However, this Section 9.4 will not apply to any intentional Breach by
the  Seller or  Andersen  of any  covenant  or  obligation,  and the  Seller and
Andersen  will be liable for all  Damages  with  respect to such  Breaches in an
amount not to exceed the  Purchase  Price,  as  adjusted,  plus the total of all
payments made under the Technology Assignment Agreement as of the date the claim
is  asserted  nor shall this  section  apply to claims by Buyer with  respect to
Sections  2.3(b),  3.6 (title  only),  3.9,  3.10,  3.12,  3.15 and 3.19 of this
Agreement  for which Seller and Andersen  shall be liable for the full amount of
such Damages.


<PAGE>



                  9.5      PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS

     (a) Promptly after receipt by the Indemnified  Persons under Section 9.2 of
notice of the  commencement  of any  Proceeding  against  it,  such  Indemnified
Persons will, if a claim is to be made against an indemnifying  party under such
Section,  give  notice to the  indemnifying  party of the  commencement  of such
claim,  but the  failure to notify the  indemnifying  party will not relieve the
indemnifying party of any liability that it may have to any Indemnified Persons,
except to the extent that the indemnifying  party  demonstrates that the defense
of such action is prejudiced by the  indemnifying  party's  failure to give such
notice.

     (b) If any Proceeding  referred to in Section 9.5(a) is brought against the
Indemnified  Persons  and it  gives  notice  to the  indemnifying  party  of the
commencement of such Proceeding,  the indemnifying  party will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it  wishes  (unless  (i) the  indemnifying  party  is also a party  to such
Proceeding  and the  Indemnified  Persons  determine  in good  faith  that joint
representation  would be inappropriate,  or (ii) the indemnifying party fails to
provide reasonable  assurance to the Indemnified Party of its financial capacity
to defend such  Proceeding  and  provide  indemnification  with  respect to such
Proceeding),  to assume the defense of such Proceeding with counsel satisfactory
to the indemnified  Persons and, after notice from the indemnifying party to the
Indemnified  Persons of its  election to assume the defense of such  Proceeding,
the indemnifying party will not, as long as it diligently conducts such defense,
be liable to the  Indemnified  Persons  under this  Section  9.5 for any fees of
other  counsel  or any  other  expenses  with  respect  to the  defense  of such
Proceeding,  in each case  subsequently  incurred by the Indemnified  Persons in
connection with the defense of such  Proceeding,  other than reasonable costs of
investigation.  If the  indemnifying  party assumes the defense of a Proceeding,
(i) it will be conclusively  established for purposes of this Agreement that the
claims  made  in  that  Proceeding  are  within  the  scope  of and  subject  to
indemnification; (ii) no compromise or settlement of such claims may be effected
by the  indemnifying  party without the Indemnified  Persons' consent unless (A)
there is no finding or admission of any violation of Legal  Requirements  or any
violation of the rights of any Person and no effect on any other claims that may
be made against the  Indemnified  Persons,  and (B) the sole relief  provided is
monetary damages that are paid in full by the indemnifying  party; and (iii) the
Indemnified  Persons will have no liability  with respect to any  compromise  or
settlement of such claims effected without its consent. If notice is given to an
indemnifying  party of the  commencement of any Proceeding and the  indemnifying
party does not,  within ten (10) days after the  Indemnified  Persons' notice is
given,  give  notice to the  indemnified  party of its  election  to assume  the
defense  of  such  Proceeding,  the  indemnifying  party  will be  bound  by any
determination  made in such Proceeding or any compromise or settlement  effected
by the Indemnified Persons.

     (c) Notwithstanding  the foregoing,  if an Indemnified Person determines in
good  faith  that  there  is a  reasonable  probability  that a  Proceeding  may
adversely affect it or its Affiliates other than as a result of monetary damages
for which it would be  entitled to  indemnification  under this  Agreement,  the
Indemnified  Persons  may,  by  notice to the  indemnifying  party,  assume  the
exclusive  right to  defend,  compromise,  or settle  such  Proceeding,  but the
indemnifying  party will not be bound by any  determination  of a Proceeding  so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).

                  9.6      PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS

     A claim for  indemnification  for any matter not  involving  a  third-party
claim  may  be  asserted  by  notice  to  the  Seller  and  Andersen  from  whom
indemnification is sought.
                  9.7      EXCLUSIVE REMEDIES

     Nothing in this Section 9.7 is intended to restrict any remedies  which may
be available to Buyer with respect to any breach of or other  default  under any
separate  agreement  executed in  connection  with any matter  described in this
Agreement,  including  (without  limitation)  breaches of or defaults  under the
Technology Assignment Agreement.

                  9.8      RIGHT TO SET OFF; EFFECT OF INDEMNIFICATION PAYMENT

     In the event that amounts are owed for indemnification  pursuant to Section
9 of this Agreement by the Seller and Andersen and such amounts remain unpaid at
the date upon which the Buyer must pay  consideration  to the Seller pursuant to
the Technology Assignment Agreement,  the Buyer may set off such amounts against
the payments owed to the Seller at such date.
         10.      GENERAL PROVISIONS

                  10.1     EXPENSES

     Except as otherwise  expressly  provided in this  Agreement,  each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation,  execution,  and performance of this Agreement and the transactions
contemplated hereby, including all fees and expenses of agents, representatives,
counsel and  accountants.  In the event of  termination of this  Agreement,  the
obligation  of each party to pay its own expenses  will be subject to any rights
of such party arising from a breach of this Agreement by another party.

                  10.2     PUBLIC ANNOUNCEMENTS

     Any public announcement or similar publicity with respect to this Agreement
or the transactions  contemplated hereby will be issued at such time as required
by applicable law and as agreed upon by the parties hereto. The Seller and Buyer
will  consult  with each other in good faith  concerning  the means by which the
Seller's employees, customers, and suppliers and others having dealings with the
Seller's Business will be informed of the transactions  contemplated hereby, and
Buyer  and  the  Seller  will  have  the  right  to  be  present  for  any  such
communication.


<PAGE>



                  10.3     NOTICES

     All  notices,  consents,  waivers,  and  other  communications  under  this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written  confirmation of receipt),  or (c) when received by the addressee,
if sent by a nationally  recognized  overnight delivery service, in each case to
the  appropriate  addresses and  telecopier  numbers set forth below (or to such
other addresses and telecopier numbers as a party may designate by notice to the
other parties):

           The Seller:              Ney Ultrasonics Inc.
                                    1280 Blue Hills Avenue
                                    Bloomfield, Connecticut  06002
                                    Attention:  Mr. Francis E. Baker
                                    Facsimile No.:  860/242-8388

         with a copy to:            Bernard F. Travers III, Esq.
                                    Andersen Group, Inc.
                                    1280 Blue Hills Avenue
                                    Bloomfield, Connecticut  06002
                                    Facsimile No.:  860/242-8388

         with a copy to:            Edwards & Angell
                                    101 Federal Street
                                    Boston, Massachusetts  02110-1800
                                    Attention:  Robert W. Curry, Esq.
                                    Facsimile No.:  617/439-4170

         Buyer:                     CAE U.S. Inc.
                                    4933 Provident Drive
                                    Cincinnati, Ohio  45246
                                    Attention: John J. Hartig, Vice President
                                    Facsimile No.: 513/870-1778

         with a copy to:            CAE Blackstone
                                    9 North Main Street
                                    Jamestown, New York  14702
                                    Attention:  Geoff Bond
                                    Facsimile No.:  716/665-2480

         with a copy to:            Keating, Muething & Klekamp, P.L.L.
                                    1800 Provident Tower
                                    One East Fourth Street
                                    Cincinnati, Ohio  45202
                                    Attention: James M. Jansing, Esq.
                                    Facsimile No.:  513/579-6956

                  10.4     FURTHER ASSURANCES; RECORDS RETENTION

     The parties  agree:  (a) to furnish upon request to each other such further
information;  (b) to execute and deliver to each other such other documents; and
(c) to do such  other acts and  things,  all as the other  party or parties  may
reasonably  request for the purpose of carrying out the intent of this Agreement
and the documents  referred to in this Agreement.  Buyer shall retain all files,
books and other records relating to the operation of the Seller's Business after
the  Closing  in a  manner  that is  consistent  with  Buyer's  general  records
retention policy (under which Buyer currently retains most records for seven (7)
years)  and  shall,  after  the  Closing,  give the  Seller  and its  respective
representative(s)  access thereto  during  regular  business hours on reasonable
prior notice.

                  10.5     WAIVER

     Except as otherwise provided in Section 9.2, the rights and remedies of the
parties to this  Agreement  are  cumulative  and not  alternative.  Neither  the
failure nor any delay by any party in exercising  any right,  power or privilege
under this Agreement or the documents referred to in this Agreement will operate
as a waiver of such right, power or privilege, and no single or partial exercise
of any such  right,  power,  or  privilege  will  preclude  any other or further
exercise of such right,  power, or privilege or the exercise of any other right,
power, or privilege.  To the maximum extent  permitted by applicable law, (a) no
claim or right  arising out of this  Agreement or the  documents  referred to in
this Agreement can be discharged by one party,  in whole or in part, by a waiver
or  renunciation  of the claim or right  unless in  writing  signed by the other
party;  (b) no waiver that may be given by a party will be applicable  except in
the specific  instance for which it is given;  and (c) no notice to or demand on
one party  will be deemed to be a waiver of any  obligation  of such party or of
the right of the party  giving  such  notice  or demand to take  further  action
without notice or demand as provided in this Agreement or the documents referred
to in this Agreement.

                  10.6     ENTIRE AGREEMENT AND MODIFICATION

     This  Agreement   supersedes   all  prior   agreements,   arrangements   or
understandings  between  the  parties  with  respect to its  subject  matter and
constitutes  (along with the documents referred to in this Agreement) a complete
and exclusive  statement of the terms of the agreement  between the parties with
respect to its subject  matter.  This  Agreement may not be amended  except by a
written agreement executed by all the parties hereto.

                  10.7     ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

     Neither  Buyer nor the  Seller  may  assign  any of its  rights  under this
Agreement  without  the prior  consent of the other  parties,  which will not be
unreasonably withheld, except that Buyer may assign any of its rights under this
Agreement to any Subsidiary of Buyer.  Subject to the preceding  sentence,  this
Agreement  will  apply to, be  binding in all  respects  upon,  and inure to the
benefit  of  the  successors  and  permitted  assigns  of the  parties.  Nothing
expressed or referred to in this  Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy or
claim  under  or  with  respect  to  this  Agreement  or any  provision  of this
Agreement.  This  Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.

10.8              SEVERABILITY

     If any provision of this Agreement is held invalid or  unenforceable by any
court of competent  jurisdiction,  the other  provisions of this  Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

                  10.9     SECTION HEADINGS, CONSTRUCTION

     The headings of Sections in this  Agreement  are  provided for  convenience
only and will not affect its construction or  interpretation.  All references to
"Section" or "Sections" refer to the  corresponding  Section or Sections of this
Agreement.  All words used in this  Agreement  will be  construed  to be of such
gender  or number  as the  circumstances  require.  Unless  otherwise  expressly
provided, the word "including" does not limit the preceding words or terms.

                  10.10    TIME OF ESSENCE

     With regard to all dates and time  periods set forth or referred to in this
Agreement, time is of the essence.

                  10.11    GOVERNING LAW

     This  Agreement  will  be  governed  by and  construed  under  the  laws of
Connecticut without regard to conflicts of laws principles.

                  10.12    COUNTERPARTS

     This Agreement may be executed in one or more  counterparts,  each of which
will be deemed to be an original copy of this  Agreement and all of which,  when
taken together, will be deemed to constitute one and the same agreement.


         [The Remainder of this Page Intentionally Left Blank]


<PAGE>






     IN WITNESS WHEREOF,  the parties have executed and delivered this Agreement
as of the date first written above.

                                     BUYER:

                                  CAE U.S. INC.

                                       By: /s/ Paul G. Renaud
                                           -------------------

                                    Title: Vice President-Finance and Secretary

                                     SELLER:

                                                     NEY ULTRASONICS INC.


                                        By: /s/ Bernard F. Travers, III
                                            ---------------------------

                                     Title: Assistant Secretary

                                    ANDERSEN:

                                                     ANDERSEN GROUP, INC.


                                        By: /s/ Francis E. Baker
                                            ---------------------
                                     Title: Secretary

Solely  for   purposes  for Section of the Agreement.


                                      NEY:

                                                     THE J. M. NEY COMPANY


                                        By: /s/ Andrew M. O'Shea
                                            ---------------------

                                     Title: Chief Financial Officer




<PAGE>


GLOSSARY

"Accounts Receivable" -- as defined in Section 2.1(a).

"Affiliate"  -- with  respect to any  specified  Person,  any other  Person that
directly,  or  indirectly  through  one or  more  intermediaries,  controls,  is
controlled by, or is under common control with, such specified Person.

"Affiliated  Group" -- means an  affiliated  group as defined in Section 1504 of
the Code (or any analogous combined, consolidated or unitary group defined under
state,  local or  foreign  income  Tax law) of which the Seller is or has been a
member.

"Agreement" -- as defined in the first paragraph of this Agreement.

"Assets" -- as defined in Section 2.1 hereof.

"Assumed Contracts" -- as defined in Section 3.17(a).

"Assumed Liabilities" -- as defined in Section 2.2(a).

"Auditors" -- as defined in Section 2.11(a).

"August 1, 1997 Balance  Sheet" -- means the balance  sheet dated August 1, 1997
delivered by Seller to Buyer which reflects the financial condition of Seller at
July 31, 1997.

"Breach" -- a "Breach" of a representation,  warranty,  covenant,  obligation or
other provision of this Agreement or any instrument  delivered  pursuant to this
Agreement  will be deemed  to have  occurred  if there is or has  been:  (a) any
inaccuracy  in or breach of, or any  failure to  perform  or comply  with,  such
representation,  warranty,  covenant,  obligation or other provision; or (b) any
claim  (by any  Person)  or  other  occurrence  or  circumstance  that is or was
inconsistent with such representation,  warranty, covenant, obligation, or other
provision,  and the term "Breach" means any such  inaccuracy,  breach,  failure,
claim, occurrence, or circumstance.

"Business" -- as defined in the Recitals.

"Buyer" -- as defined in the first paragraph of this Agreement.

"Capital  Employed"  -- assets less  current  liabilities  as  reflected  on the
Balance  Sheet of Seller at February  28, 1998  determined  in  accordance  with
Generally Accepted Accounting  Principles  consistently  applied as presented on
the August 1, 1997 Balance Sheet.

"Closing" -- as defined in Section 2.7.

"Closing  Date" -- the date and time as of  which  the  Closing  actually  takes
place.

"Closing Financial  Statements" -- the Balance Sheet and statement of Net Assets
of the Seller as of February 28, 1998 and the Operating  Income Statement of the
Seller for the fiscal year ending February 28, 1998.
"Code" -- the Internal Revenue Code of 1986, as amended from time to time.

"Consent" -- any approval, consent, ratification,  waiver or other authorization
(including any Governmental Authorization).

"Contracts" -- all contracts,  commitments  or other  arrangements  to which the
Seller is a party and related to the Seller's Business.

"Copyrights" -- as defined in Section 3.22(a)(ii).

"Damages" -- as defined in Section 9.2.

"Disclosure  Schedule"  -- the  disclosure  schedule  delivered by the Seller to
Buyer concurrently with the execution and delivery of this Agreement.

"Encumbrance" -- any charge,  claim,  community  property  interest,  condition,
equitable  interest,  lien, option,  pledge,  security interest,  right of first
refusal,  or restriction of any kind,  including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

"Environment"  -- soil,  land  surface  or  subsurface  strata,  surface  waters
(including navigable waters, ocean waters,  streams,  ponds, drainage basins and
wetlands),  ground waters, drinking water supply, stream sediments,  ambient air
(including  indoor  air),  plant and animal  life,  and any other  environmental
medium or natural resource.

"Environmental,  Health, and Safety Liabilities" -- any cost, damages,  expense,
liability,   obligation,   or  other   responsibility   arising  from  or  under
Environmental  Law or  Occupational  Safety and Health Law and  consisting of or
relating to:

                  (a)      any  environmental,  health,  or  safety  matters  or
                           conditions    (including    on-site    or    off-site
                           contamination,  occupational safety and health, toxic
                           exposure,  and  regulation of chemical  substances or
                           products);

                  (b)      fines,  penalties,  judgments,  awards,  settlements,
                           legal or administrative proceedings, damages, losses,
                           claims,   demands   and   response,    investigative,
                           oversight,  remedial or inspection costs and expenses
                           arising  under   Environmental  Law  or  Occupational
                           Safety and Health Law;

                  (c)      financial  responsibility  under Environmental Law or
                           Occupational  Safety and Health Law for cleanup costs
                           or corrective  action,  including any  investigation,
                           cleanup, removal,  containment,  or other remediation
                           or   response   actions   ("Cleanup")   required   by
                           applicable  Environmental Law or Occupational  Safety
                           and Health Law  (whether or not such Cleanup has been
                           required or requested by any Governmental Body or any
                           other Person) and for any natural  resource  damages;
                           or

                  (d)      any other  compliance,  corrective,  investigative or
                           remedial measures required under Environmental Law or
                           Occupational Safety and Health Law.

     "Environmental  Laws" -- any  Legal  Requirement,  now in  effect,  and any
judicial or  administrative  interpretation  thereof,  including  any  judicial,
administrative  order, consent decree or judgment,  relating to the environment,
health,  safety or  Hazardous  Materials,  including,  without  limitation,  the
Comprehensive  Environmental  Response,  Compensation,  and Liability  Act, 4288
U.S.C.  9601 et seq.;  the Resource  Conservation  and  Recovery  Act, 42 U.S.C.
ss.ss.6901  et seq.;  the  Hazardous  Materials  Transportation  Act,  49 U.S.C.
ss.ss.6901 et seq.; the Clean Water Act, 33 U.S.C. ss.ss.1251 et seq.; the Toxic
Substances  Control  Act, 15 U.S.C.  ss.ss.2601  et seq.;  the Clean Air Act, 42
U.S.C. ss.ss.7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.ss. 300f et
seq.;  the  Atomic  Energy  Act,  42  U.S.C.  ss.ss.2011  et seq.;  the  Federal
Insecticide,  Fungicide and Rodenticide Act 7 U.S.C.  ss.ss.136 et seq.; and the
Federal Food, Drug and Cosmetic Act, 21 U.S.C. ss.ss.301 et seq.

"Environmental  Permits"  -- all  permits,  approvals,  identification  numbers,
licenses and other  authorizations  required under any applicable  Environmental
Law.

"ERISA" -- the Employee  Retirement Income Security Act of 1974, as amended from
time to time.

"ERISA  Affiliates" -- in relation to any Person, any trade or business (whether
or not  incorporated)  which is a member  of a group of which  that  Person is a
member and which is under  common  control  within the meaning of Section 414 of
the Code.

"Excluded Assets" -- as defined in Section 2.1(b).

"Excluded Liabilities" -- as defined in Section 2.2(d).

"Facilities"  -- any real property,  leaseholds,  or other  interests  currently
owned or  operated  by Seller in the conduct of the  Seller's  Business  and any
buildings, plants, structures, or equipment (including motor vehicles) currently
owned or operated by Seller in the conduct of the Seller's Business.

"Financial Statements" -- as defined in Section 3.4.

"Governmental  Authorization" -- any approval, consent, license, permit, waiver,
or other authorization issued,  granted, given or otherwise made available by or
under  the  authority  of  any  Governmental  Body  or  pursuant  to  any  Legal
Requirement, other than Environmental Permits.

"Governmental Body" -- any:

     (a)  nation,  state,  county,  city,  town,  village,   district  or  other
jurisdiction of any nature;

     (b) federal, state, local, municipal, foreign or other government;

     (c) governmental or  quasi-governmental  authority of any nature (including
any governmental agency, branch, department, official or entity and any court or
other tribunal);

     (d)      multi-national organization or body; or

     (e)  body  exercising,   or  entitled  to  exercise,   any  administrative,
executive,  judicial,  legislative,  police,  regulatory or taxing  authority or
power of any nature.

"Hazardous  Materials"  -- (a)  petroleum  or  petroleum  products,  radioactive
materials,  asbestos  in  any  form  that  is  or  could  become  friable,  urea
formaldehyde  foam  insulation,  transformers  or other  equipment  that contain
polychlorinated biphenyls, and radon gas, (b) any other chemicals,  materials or
substances  defined as or included in the definition of "hazardous  substances",
"hazardous  wastes",   "hazardous  materials",   "extremely  hazardous  wastes",
"restricted   hazardous  wastes",   "toxic   substances",   "toxic  pollutants",
"contaminants" or "pollutants", or words of similar import, under any applicable
Environmental Law, and (c) any other chemical, material or substance exposure to
which is regulated by any Governmental Authority.

"Indemnified Persons"  -- as defined in Section 9.2.

"Intellectual Property Assets" -- as defined in Section 3.22.

"Knowledge" or "Seller's Knowledge" -- Seller will be deemed to have "Knowledge"
of a particular  fact or other matter if an  individual  set forth on Schedule I
attached hereto,  which lists certain employees of Seller, Ney and Andersen,  is
actually  aware of such fact or other matter or would  reasonably be expected to
discover or otherwise  become aware of such fact or other matter in the ordinary
course of conducting his or her duties in the absence of gross negligence.

"Leases" -- as defined in Section 3.7(b)(i).

"Legal  Requirement"  --  any  federal,   state,  local,   municipal,   foreign,
international,  multinational or other administrative order, constitution,  law,
ordinance, principle of common law, regulation, statute, or treaty.

"Liability" -- any and all debts,  liabilities and obligations,  whether accrued
or fixed,  absolute  or  contingent,  matured  or  unmatured  or  determined  or
determinable,  including,  without  limitation,  those  arising  under any Legal
Requirement (including, without limitation, any Environmental Laws) Governmental
Body and those arising under any contract, agreement, arrangement, commitment or
undertaking.

"Loaded Labor Cost" -- means Buyer's direct labor cost,  plus 35% of such direct
labor cost to cover all benefit costs with respect to the employees of Buyer.

"March 1997 Forecast" -- means the financial forecast dated March 1997 delivered
by Seller to Buyer.

"Marks" -- as defined in Section 3.22(a)(i).
"Material  Adverse  Change" or "Material  Adverse  Effect" -- means any event or
change which either  individually or in combination with other events or changes
had or is likely to have a  material  adverse  effect on the  assets,  business,
prospects, financial condition, or results of operations of the Person.

"Net  Assets" -- assets less current  liabilities  of Seller as reflected on the
Seller's  Balance  Sheets  determined  in  accordance  with  Generally  Accepted
Accounting Principles consistently applied.

"New Lease" -- as defined in Section 5.8(a).

"Ney" -- means The J.M. Ney Company, a Delaware corporation.

"Occupational  Safety  and  Health  Law" -- any Legal  Requirement  designed  to
provide safe and healthful working conditions and to reduce  occupational safety
and health hazards and any program,  whether  governmental or private (including
those   promulgated  or  sponsored  by  industry   associations   and  insurance
companies), designed to provide safe and healthful working conditions.

"Operating  Income" -- revenue less the cost of goods sold and related operating
expenses  incurred  in the  ordinary  course of business  and before  income tax
deductions   determined  in  accordance  with  Generally   Accepted   Accounting
Principles  consistently  applied  and  consistent  with  the  Operating  Income
Statements of Seller as of July 31, 1997 dated Augusty1, 1997.

"Order" -- any award, decision,  injunction,  judgment, order, ruling, subpoena,
or verdict  entered,  issued,  made or  rendered  by any  court,  administrative
agency, or other Governmental Body or by any arbitrator.

"Ordinary  Course of Business" -- an action taken by a  Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:

         (a)      such  action is  consistent  with the past  practices  of such
                  Person  and is  taken in the  ordinary  course  of the  normal
                  day-to-day operations of such Person;

         (b)      such action is not required to be  specifically  authorized by
                  the board of  directors  of such  Person  (or by any Person or
                  group of Persons exercising similar authority); and

         (c)      such  action is  similar in nature  and  magnitude  to actions
                  customarily taken,  without any specific  authorization by the
                  board of  directors  (or by any  Person  or  group of  Persons
                  exercising similar  authority),  in the ordinary course of the
                  normal day-to-day  operations of other Persons that are in the
                  same line of business as such Person.

"Organizational  Documents" -- (a) the  Certificate of Incorporation and By-laws
of a corporation; and (b) any amendment to any of the foregoing.

"Percentage-of-Completion  Method of  Accounting"  -- the  method of  accounting
relating to  percentage of completion  determined in accordance  with  Generally
Accepted Accounting Principles.

"Permitted Encumbrances" -- means liens for Taxes not yet due and payable.

"Person" -- any individual,  corporation (including any non-profit corporation),
general  or limited  partnership,  limited  liability  company,  joint  venture,
estate,  trust,  association,  organization,  labor  union,  or other  entity or
Governmental Body.

"Proceeding"  --  any  action,  arbitration,   audit,  hearing,   investigation,
litigation, or suit (whether civil, criminal, administrative,  investigative, or
informal)  commenced,  brought,  conducted  or heard by or before,  or otherwise
involving, any Governmental Body or arbitrator.

"Purchase Price" -- as defined in Section 2.5.

"Real Property" -- as defined in Section 3.7(a).

"Related Person" -- with respect to a particular individual:

         (a)      each other member of such individual's family;

         (b)      any Person that is directly or indirectly  controlled  by such
                  individual or one or more members of such individual's family;

         (c)      any  Person  in  which  such  individual  or  members  of such
                  individual's  family hold (individually or in the aggregate) a
                  material interest; and

         (d)      any Person  with  respect to which such  individual  or one or
                  more members of such individual's family serves as a director,
                  officer,  partner,  executor  or  trustee  (or  in  a  similar
                  capacity).

         With respect to a specified Person other than an individual:

         (a)      any Person that directly or indirectly  controls,  is directly
                  or  indirectly  controlled  by, or is directly  or  indirectly
                  under common control with such specified Person;

         (b)      any  Person  that holds a  material interest in such specified
                  Person;

         (c)      each  Person  that  serves as a  director,  officer,  partner,
                  executor, or trustee of such specified Person (or in a similar
                  capacity);

         (d)      any  Person in  which  such specified Person holds a  material
                  interest;

         (e)      any Person with respect to which such specified  Person serves
                  as a general partner or a trustee (or in a similar  capacity);
                  and

         (f)      any  Related  Person of any individual described in clause (b)
                  or (c).

         For  purposes of this  definition,  (a) the  "Family" of an  individual
includes  (i) the  individual,  (ii) the  individual's  spouse,  (iii) any other
natural  person who is  related to the  individual  or the  individual's  spouse
within the second  degree,  and (iv) any other  natural  person who resides with
such individual, and (b) "material interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the  Securities  Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent
(10%) of the outstanding  voting power of a Person or equity securities or other
equity  interests  representing  at least ten percent  (10%) of the  outstanding
equity securities or equity interests in a Person.

"Release"  --  any   disposal,   abandonment,   spilling,   leaking,   emitting,
discharging,  depositing,  escaping,  leaching, dumping, or other releasing into
the Environment, whether intentional or unintentional.

"Representative" -- with respect to a particular Person, any director,  officer,
employee,  agent,  consultant,  advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.

"Seller" -- as defined in the first paragraph of this Agreement.

"Software" -- as defined in Section 3.22(a)(iii).

"Subsidiary"  -- with respect to any Person (the  "Owner"),  any  corporation or
other Person of which  securities or other interests having the power to elect a
majority of that  corporation's  or other Person's board of directors or similar
governing  body,  or  otherwise  having  the power to direct  the  business  and
policies of that  corporation  or other Person  (other than  securities or other
interests  having such power only upon the happening of a  contingency  that has
not  occurred)  are held by the Owner or one or more of its  Subsidiaries;  when
used without reference to a particular  Person,  "Subsidiary" means a Subsidiary
of the Seller.

"Tax  Returns"  --  any  return  (including  any  information  return),  report,
statement,  schedule,  notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any  Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax. "Taxes" --means
any (A) federal,  state,  local or foreign income,  gross  receipts,  franchise,
estimated,   alternative   minimum,   add-on  minimum,   sales,  use,  transfer,
registration,   value  added,  excise,  natural  resources,   severance,  stamp,
occupation,  premium,  windfall profit,  environmental,  customs,  duties,  real
property,  capital stock, social security,  unemployment,  disability,  payroll,
license,  employee or other  withholding,  or other tax, of any kind whatsoever,
whether disputed or not,  including any interest,  penalties or additions to tax
or additional  amounts in respect of the  foregoing;  (B) liability of Seller or
Ney for the payment of any amounts of the type  described  in clause (A) arising
as a result of being (or  ceasing  to be) a member of any  Affiliated  Group (or
being included (or required to be included) in any Tax Return  relating  thereto
or as a party  to any Tax  allocation  or Tax  sharing  agreement  or any  other
contractual obligation to indemnify any other person with respect to Taxes); and
(C)  liability  of  Seller or Ney for the  payment  of any  amounts  of the type
described in clause (A) as a transferee or successor,  by contract (including as
result of any express or implied  obligation to indemnify or otherwise assume or
succeed to the liability of any other person), or otherwise.

"Technology  Agreements" -- means the (i)  Microsonic  License  Agreement  dated
September 1, 1996 between  Electronic Power Components,  Inc., William L. Puskas
and The J.M. Ney Company, (ii) Ultrasonic License Agreement dated March 1, 1993,
as amended, between Electronic Power Components, Inc., William L. Puskas and The
J.M. Ney Company,  and (iii) the Commercial  Ultrasonic Cleaners Agreement dated
June 1, 1996.

"Threat of Release" -- a  substantial  likelihood  of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.

"Threatened" -- a claim,  Proceeding,  dispute,  action, or other matter will be
deemed to have  been  "Threatened"  if any  demand  or  statement  has been made
(orally or in writing) or any notice has been given  (orally or in writing),  or
if any other event has  occurred or any other  circumstances  exist,  that would
lead a  prudent  Person to  conclude  that  such a claim,  Proceeding,  dispute,
action, or other matter is likely to be asserted,  commenced, taken or otherwise
pursued in the future.

"Warranty Provision" -- as defined in Section 2.3.