AGREEMENT OF PURCHASE AND SALE

                                     BETWEEN

                           FARREL CORPORATION, SELLER

                                       AND

                NATIONAL RE/SOURCES ACQUISITIONS, LLC, PURCHASER


<PAGE>





                                     
                                TABLE OF CONTENTS
                                                                           Page

ARTICLE I - PURCHASE AND SALE................................................1

  1.1   Agreement of Purchase and Sale.......................................1
  1.2   Property Defined.....................................................1
  1.3   Permitted Title Exceptions...........................................1
  1.4   Purchase Price.......................................................1
  1.5   Earnest Money........................................................2
  1.6   Payment of Purchase Price............................................2


ARTICLE II - REVIEW PERIOD...................................................2

  2.1   Delivery of Materials................................................2
  2.2   Due Diligence Review Period..........................................2
  2.3   Title Matters........................................................3
  2.4   Right of Termination During Due Diligence Review Period..............3
  2.5   No Reliance..........................................................3
  2.6   Indenmity............................................................4


ARTICLE III - CLOSING........................................................4

  3.1   Time and Place.......................................................4
  3.2   Seller's Obligations at Closing......................................5
  3.3   Purchaser's Obligations at Closing...................................6
  3.4   Mutual Obligations...................................................6
  3.5   Prorations...........................................................7
  3.6   Closing Costs........................................................8


ARTICLE IV - REPRESENTATIONS, WARRANTIES AND COVENANTS.......................8

  4.1   Representations and Warranties of Seller.............................8
  4.2   Covenants of Seller.................................................10
  4.3   Representations and Warranties of Purchaser.........................10
  4.4   Purchaser's Conditions to Closing...................................11


ARTICLE V - DEFAULT.........................................................11

  5.1   Default by Purchaser................................................11
  5.2   Default by Seller...................................................12


<PAGE>

ARTICLE VI - CONDEMNATION...................................................12

  6.1   Condemnation........................................................12


ARTICLE VII - BROKERS.......................................................13

  7.1   Brokers.............................................................13


ARTICLE VIII - MISCELLANEOUS................................................13

  8.1   Disclaimers.........................................................13
  8.2   Discharge of Obligations............................................13
  8.3   Assignment..........................................................14
  8.4   Notices.............................................................14
  8.5   Modification........................................................15
  8.6   Confidentiality.....................................................15
  8.7   Reporting Requirements..............................................15
  8.8   Time of Essence.....................................................15
  8.9   Successors and Assigns..............................................15
  8.10  Exhibits and Schedules..............................................16
  8.11  Entire Agreement....................................................16
  8.12  Further Assurances..................................................16
  8.13  Fees and Expenses...................................................16
  8.14  No Recording........................................................16
  8.15  Counterparts........................................................16
  8.16  Ambiguity...........................................................16
  8.17  Severability........................................................16
  8.18  Section and Exhibit Headings........................................17
  8.19  Binding Effect......................................................17
  8.20  Choice of Law.......................................................17
  8.21  No Third Party Beneficiary..........................................17

Exhibits
--------

Exhibit A - Legal Description
Exhibit B - Form of Limited Warranty Deed
Exhibit C - Form of Bill of Sale
Exhibit D - Form of FIRPTA Affidavit


<PAGE>


                         AGREEMENT OF PURCHASE AND SALE


         THIS  AGREEMENT OF PURCHASE AND SALE (this  "Agreement")  is made as of
July 17, 1998 (the  "Effective  Date"),  by and between  FARREL  CORPORATION,  a
Delaware corporation ("Seller"),  and NATIONAL RE/SOURCES  ACQUISITIONS,  LLC, a
Delaware limited liability company ("Purchaser").

                                   WITNESSETH:

                                   ARTICLE I.
                                PURCHASE AND SALE

          1.1.  AGREEMENT  OF  PURCHASE  AND  SALE.  Subject  to the  terms  and
conditions hereinafter set forth and for the consideration stated herein, Seller
agrees to sell to Purchaser  and  Purchaser  agrees to purchase  from Seller the
following:

               (a) All that certain  tract or parcel of land  situated in Derby,
Connecticut, more particularly described on Exhibit A attached hereto and made a
part hereof,  together with all improvements now or hereafter  situated thereon,
together with all rights, tenements,  hereditaments,  easements,  privileges and
appurtenances  pertaining  thereto,  including Seller's interest (if any) in (i)
roads, alleys, streets and rights-of-way bounding the real property described on
Exhibit A, (ii) all strips or gores of land, (iii) development  rights, and (iv)
water,  wastewater  and other utility  services  allocable or available  thereto
(collectively "Realty"); and

               (b) All tangible and intangible personal property owned by Seller
and situated upon and used in connection  with the  ownership,  operation,  use,
enjoyment  or  occupancy  of the  Realty,  including,  without  limitation,  all
assignable  permits,   plans,   reports,   and  surveys  if  any  (collectively,
"Personalty");

          1.2.  PROPERTY  DEFINED.  The  property  and  interests  described  in
Sections 1.1(a) and (b) above are hereinafter sometimes referred to collectively
as the "Property."

          1.3.  PERMITTED  TITLE  EXCEPTIONS.  The  Property  shall be  conveyed
subject to the following matters (collectively, "Permitted Exceptions"):

               (a) The matters  deemed to be  Permitted  Exceptions  pursuant to
Section 2.3 herein; and

               (b) real  property  taxes  for the year of  Closing  (hereinafter
defined) (if such taxes are not yet due and payable) and subsequent years.

          1.4.  PURCHASE  PRICE.  Seller agrees to sell and Purchaser  agrees to
purchase  the Property  for a total  purchase  price of One Million Nine Hundred
Thousand and 00/100 Dollars  ($1,900,000)  (the "Purchase  Price") in cash or by
wire transfer.


<PAGE>


          1.5. EARNEST MONEY. Upon execution of this Agreement,  Purchaser shall
deposit with the national  office of Commonwealth  Land Title Insurance  Company
(the  "Escrow  Agent"),  the sum of One  Hundred  Thousand  and  00/100  Dollars
($100,000) in cash or by wire  transfer (the "Earnest  Money") to be held by the
Escrow Agent as earnest  money in  accordance  with this  Agreement.  The Escrow
Agent is hereby  instructed  to hold the Earnest  Money in an  interest  bearing
account  with a federally  insured  bank or similar  institution  acceptable  to
Seller and  Purchaser,  with all  interest  accruing  thereon to be added to and
become part of the Earnest Money.  Upon  consummation of this  transaction,  the
Earnest Money shall be credited  against the Purchase  Price.  The Earnest Money
shall be non-refundable, except as specifically set forth herein.

          1.6.  PAYMENT OF PURCHASE PRICE.  The Purchase Price (less the Earnest
Money and  Purchaser's  net closing  adjustments)  shall be paid by Purchaser to
Seller at Closing in cash or by wire transfer of immediately  available funds on
the Closing Date (hereinafter defined).

                                   ARTICLE II.
                                  REVIEW PERIOD

          2.1.  DELIVERY OF MATERIALS.  Within five (5) days after the Effective
Date  Seller,  at its sole cost and  expense,  shall use  reasonable  efforts to
deliver or cause to be delivered to Purchaser copies of any documents pertaining
to the Property reasonably requested by Purchaser,  including without limitation
copies of any  existing  surveys  of the  Realty,  copies  of any  environmental
reports previously  prepared in connection with the Property,  and copies of the
two most recent tax statements on the Realty (collectively, "Submission Items"),
to the extent the same are in the  possession  or control of Seller.  Submission
Items not  available  for  delivery to Purchaser  within the time period  stated
above  shall be  delivered  to  Purchaser  as soon as  practicable  after  being
obtained by Seller.

EXCEPT AS  SPECIFICALLY  SET FORTH IN THIS  SECTION  2.1 AND  SECTION 4.1 BELOW,
SELLER  MAKES  NO  REPRESENTATION  OR  WARRANTY  AS TO THE  TRUTH,  ACCURACY  OR
COMPLETENESS OF ANY OF THE SUBMISSION  ITEMS.  SELLER MAKES NO REPRESENTATION OR
WARRANTY  CONCERNING  SUBMISSION  ITEMS WHICH WERE NOT  PREPARED BY SELLER.  THE
PHRASE "PREPARED BY SELLER"  EXPRESSLY  EXCLUDES ANY SUBMISSION ITEM PREPARED BY
ANY  THIRD  PARTY.  PURCHASER  ACKNOWLEDGES  AND  AGREES  THAT ANY  RELIANCE  BY
PURCHASER ON OR USE OF SUBMISSION  ITEMS WHICH WERE NOT PREPARED BY SELLER SHALL
BE AT THE SOLE RISK OF PURCHASER.

          2.2. DUE DILIGENCE REVIEW PERIOD. Purchaser shall have until 5:00 p.m.
September 23, 1998 (the "Due Diligence  Review Period") to review the Submission
Items,  to make  physical  inspections  of the  Property  and to examine  plans,
drawings,  reports,  books and records and other documents  maintained by Seller
relating to the Property.  Notwithstanding the foregoing, Purchaser acknowledges
that it has confirmed to Purchaser's  satisfaction  the costs of demolishing the
buildings  located on the Realty (other than the  foundations)  and Purchaser is
willing to incur the  expense of such  demolition  if it  acquires  title to the
Property and the costs of demolishing  the buildings shall not be a condition to
closing. Any inspections of the Realty shall


                                      -2-
<PAGE>

be  conducted  in the  presence of Seller or its  designated  representative  if
required by Seller.  In addition,  Purchaser may make such inquiries of federal,
state and local governmental  authorities with jurisdiction over the Property as
Purchaser deems necessary in connection  with its due diligence  efforts.  In no
event will  Seller's  inability  to obtain and provide to  Purchaser  any of the
Submission Items within the Due Diligence Review Period extend the Due Diligence
Review  Period or the time for Closing  and  delivery of the same shall not be a
condition to Closing after the expiration of the Due Diligence Review Period.

          2.3. TITLE MATTERS.  Purchaser agrees,  promptly upon the execution of
this Agreement,  at its sole cost and expense, to obtain a title commitment (the
"Title  Commitment") from a reputable title company authorized to do business in
the State of Connecticut  (the "Title  Company") and to direct the Title Company
to deliver a copy of such Title  Commitment  to Seller  simultaneously  with the
delivery of the same to Purchaser.  Purchaser shall have until the expiration of
the Due Diligence Review Period in which to notify Seller in writing (the "Title
Objection Notice") of any objections Purchaser has to the title to the Property.
If Purchaser  does not deliver a Title  Objection  Notice to Seller prior to the
expiration of the Due Diligence Review Period, all encumbrances reflected in the
Title Commitment shall thereafter  constitute "Permitted  Encumbrances".  Seller
agrees to pay  one-half the costs of an ALTA Survey of the Realty if required in
connection with obtaining title insurance.  Seller shall use reasonable  efforts
to cure all matters set forth in the Title Objection Notice prior to the Closing
unless Seller gives  Purchaser  notice within five (5) days after  receiving the
Title  Objection  Notice that it cannot or will not cure such matters,  in which
case Purchaser shall have five (5) days after receiving Seller's notice to elect
either to accept title  subject to such matters or terminate  this  Agreement in
which case the Earnest Money and all interest  earned  thereon shall be promptly
refunded  to  Purchaser  and  this  Agreement  shall  be null and void and of no
further  force  or  effect.  Notwithstanding  the  foregoing,  Seller  shall  be
obligated  on or prior to the Closing to remove all  monetary  liens  (including
without  limitation  mechanics  liens and tax  liens) and  similar  encumbrances
related to the payment of money except for environmental liens.  Purchaser shall
not be deemed to have elected to accept title subject to any  encumbrance  which
is placed on the  Property  after the  expiration  of the Due  Diligence  Review
Period and not removed prior Closing.

          2.4. RIGHT OF  TERMINATION  DURING DUE DILIGENCE  REVIEW  PERIOD.  If,
prior to the end of the Due Diligence Review Period ("Due Diligence  Deadline"),
Purchaser for any reason in its sole discretion determines that it does not wish
to purchase the  Property,  it shall notify Seller of this fact prior to the Due
Diligence  Deadline and Purchaser shall be entitled to terminate this Agreement.
If this  Agreement is terminated  pursuant to this Section 2.4, the Escrow Agent
shall deliver the Earnest Money  together  with all interest  earned  thereon to
Purchaser within five (5) business days after termination of this Agreement, and
Purchaser  shall return to Seller all  Submission  Items,  including  all copies
thereof.  If Purchaser does not terminate  this Agreement  before the end of the
Due Diligence Review Period, Purchaser shall be deemed to have waived its rights
to terminate this Agreement  pursuant to this Section 2.4 and Purchaser shall be
obligated to purchase the Property in accordance with the terms hereof.

          2.5. NO  RELIANCE.  Purchaser  acknowledges  and agrees  that  neither
Seller,  nor any agent or representative of Seller,  has made, and Seller is not
liable for or bound in any manner  by, any  express or implied  representations,
warranties or information pertaining to the Property


                                      -3-
<PAGE>

or  any  part  thereof  except  as  expressly  provided  herein,  and  Purchaser
acknowledges  that it will be relying upon its own due  diligence in  completing
the transactions contemplated herein.

          2.6. INDEMNITY.  Purchaser agrees to indemnify, defend and hold Seller
harmless from and against any loss,  liability,  cost, damage,  expense,  liens,
encumbrances,  claims  or  causes  of  action  (including,  without  limitation,
reasonable  attorneys'  fees,  accountants'  fees,  court  costs  and  interest)
resulting  from  acts  or  omissions  of  Purchaser,   its  employees,   agents,
independent  contractors and invitees conducting any inspection or investigation
of the Realty or any tests thereon; provided however, such indemnification shall
not  include  any  claims  or  liabilities  for any  diminution  in value of the
Property  based  on the  results  of  inspections  or  tests  or any  additional
remediation  required to be conducted due to information or conditions  revealed
by  Purchaser's  investigations.  Purchaser  shall not reveal the results of its
inspections to third parties prior to the Closing  without the consent of Seller
unless and to the extent  required by law,  provided that  Purchaser  shall give
Seller prior written  notice of any such  information it believes it is required
by law to disclose along with a legal opinion of its counsel to that effect. All
on-site  inspections  shall occur at reasonable  times agreed upon by Seller and
Purchaser.  Each such  inspection  shall be scheduled upon not less than two (2)
business days prior notice to Seller of the proposed inspection date and time or
as  otherwise  agreed  by  the  parties.  Any  written  reports  by  independent
contractors conducting such inspections will be furnished to Seller concurrently
with being provided to Purchaser and will be stamped "Preliminary Draft" and not
finalized  without  the  consent of Seller,  unless  and until  Purchaser's  Due
Diligence  Review  Period has expired and Purchaser has not elected to terminate
this Agreement  pursuant to its rights herein.  In the event  Purchaser does not
terminate  this Agreement at the end of its Due Diligence  Review  Period,  then
Purchaser shall continue to have access to the Property (on the same basis as it
had such access  during the Due  Diligence  Review  Period)  until the  Closing.
Purchaser  shall  restore  and  repair any  damage to the  Property  or any part
thereof caused as a result of the inspections performed by or for Purchaser.  If
Purchaser fails or refuses to do so within ten (10) days after receiving written
demand  from  Seller and  Purchaser  is  otherwise  entitled  to a refund of the
Earnest  Money,  then Seller may apply the Earnest Money to the extent needed to
pay for such  repairs or  restoration.  In no event shall the  Earnest  Money be
considered liquidated damages, if the damages and/or the repair costs exceed the
amount of the Earnest  Money.  Nothing in this  Article II shall be construed to
imply that Purchaser may seek an adjustment of the Purchase Price as a result of
any  matter  discovered  as part of any  such  inspection  or  examination.  The
provisions  of this Section 2.6  including  indemnification,  shall  survive the
Closing or any termination of this Agreement.

                                  ARTICLE III.
                                     CLOSING

          3.1.  TIME AND  PLACE.  The  closing of the  transaction  contemplated
hereby ("Closing") shall take place at the offices of Levett, Rockwood & Sanders
Professional Corporation, 33 Riverside Avenue, Westport,  Connecticut 06881 on a
date  mutually  agreeable  to Seller and  Purchaser  which is not later than the
thirtieth (30th) day after the expiration of the Due Diligence Review Period, or
on such other  date and at such time as may be agreed  upon in writing by Seller
and Purchaser ("Closing Date").


                                      -4-
<PAGE>

          3.2. SELLER'S OBLIGATIONS AT CLOSING. At Closing, Seller shall:

               (a) deliver to Purchaser a Limited Warranty Deed (the "Deed"), in
the form of Exhibit B  attached  hereto and  incorporated  herein by  reference,
executed and acknowledged by Seller and in recordable form,  conveying  Seller's
right, title and interest in the Realty to Purchaser;

               (b) execute and deliver a Bill of Sale and  Assignment  ("Bill of
Sale") in the form of  Exhibit C  attached  hereto  and  incorporated  herein by
reference,  conveying Seller's interest in the Personalty to Purchaser,  "as is,
where is" without any representations or warranties;

               (c) deliver to Purchaser a FIRPTA Affidavit ("FIRPTA  Affidavit")
in the form of Exhibit D attached hereto and incorporated herein by reference;

               (d)  deliver  to  Purchaser   possession  and  occupancy  of  the
Property, subject only to the Permitted Exceptions;

               (e) deliver to Purchaser  such  evidence as Purchaser  and/or the
Title  Company  may  reasonably  require  as to the  authority  of the person or
persons executing documents on behalf of Seller:

               (f) deliver to Purchaser  all keys and  combinations  to locks on
the Property in Seller's possession;

               (g)  deliver  to  the  Title  Company  completed  conveyance  tax
statements with checks, payable to the appropriate  authorities in the amount of
the state and local conveyance taxes;

               (h) deliver to Purchaser the  originals (to the extent  originals
exist  and are in  Seller's  possession  or  control)  of the  Submission  Items
provided  to  Purchaser  as  well  as  all  other  books,  records,  advertising
materials, and correspondence  pertaining to the Property in Seller's possession
or control (all of which may be delivered at the Realty);

               (i) deliver to Purchaser  all permits  issued by the  appropriate
governmental  authorities  and utility  companies  for the  improvements  on the
Realty, if available;

               (j) deliver to the Title  Company an affidavit  duly  executed by
Seller stating that to Seller's actual knowledge,  (i) there are no unpaid bills
or  claims  (except  for  bills or  expenses  to be  prorated  pursuant  to this
Agreement at Closing) for labor  performed or materials  furnished in connection
with the Property,  and (ii) there are no leases or parties in possession of the
Realty; and

               (k)   deliver   an   affidavit   of   Seller   that  all  of  the
representations  and  warranties  of the Seller  contained in this  Agreement or
other  documents  attached  hereto or referred to herein 



                                      -5-
<PAGE>

or delivered pursuant hereto shall be true, correct and complete in all material
respects  on and as of the  Closing  Date,  as if made on and as of the  Closing
Date.

          3.3. PURCHASER'S OBLIGATIONS AT CLOSING. At Closing, Purchaser shall:

               (a) pay to Seller the Purchase Price, net of closing  adjustments
as provided  herein,  by wire transfer in immediately  available funds, it being
agreed that the Earnest Money together with all interest earned thereon shall be
delivered to Seller at Closing and applied towards payment of such amount; and

               (b)  deliver to Seller such  evidence as Seller  and/or the Title
Company  may  reasonably  require as to the  authority  of the person or persons
executing documents on behalf of Purchaser.

          3.4.  MUTUAL   OBLIGATIONS.   Seller  and  Purchaser  each  shall  use
commercially reasonable efforts to have The Black & Decker Corporation ("Black &
Decker") prepare and submit the environmental condition assessment form required
under the Connecticut  Transfer Act (C.G.S.  Section 22a-134 et seq. (the "Act")
and to have  Black &  Decker  sign a  Connecticut  Department  of  Environmental
Protection ("CTDEP") Form III as the "Certifying Party" (as defined in the Act).
The cost of any  transfer  fees  associated  with such  filings  shall be shared
equally by Seller and Purchaser.

          Purchaser  acknowledges that it has been informed that Black & Decker,
as successor to USM Corporation,  is conducting an investigation and remediation
(the "Work") of certain  contamination  on the Property in  accordance  with the
terms and  conditions  set forth in that certain  Settlement  Agreement  between
Farrel  Corporation and The Black & Decker  Corporation  dated February 17, 1995
(the  "Settlement  Agreement"),  a true  and  complete  copy of  which  has been
delivered  to  Purchaser.   Seller   represents  that  said   investigation  and
remediation are being conducted under the direction and supervision of the CTDEP
pursuant to the Form III filing made in connection with the Property on February
17, 1995 in accordance with Conn. Gen. Stat.  22a-134a(c).  In addition,  Seller
and Black & Decker have entered into a Site Access  Agreement dated February 17,
1995  (the  "Access  Agreement"),  a true and  complete  copy of which  has been
furnished to Purchaser by Seller.


                                      -6-
<PAGE>


          At the Closing,  Seller  shall,  to the extent  permitted  thereunder,
assign to Purchaser  its rights under the  Settlement  Agreement  and the Access
Agreement  relating to the Property,  including but not limited to, the right to
enforce the Settlement Agreement and the Access Agreement in accordance with the
terms thereof on and after the Closing.  The assignment  agreement shall provide
that,  notwithstanding  the filing of a Form III by  Purchaser,  Seller shall be
responsible for incremental  investigation  and cleanup costs of any remediation
relating to "Post-May, 1986 Contamination" (as such term is defined in Paragraph
1(h)(3) of the  Settlement  Agreement) for the period up to the Closing Date and
Purchaser shall be responsible for incremental  investigation  and cleanup costs
relating to Post-May 1986 Contamination first occurring after the Closing Date.

          Purchaser  agrees to reasonably  cooperate  with Black & Decker in the
performance of the Work by Black & Decker and to permit Black & Decker access to
the Property in  accordance  with the terms of the Access  Agreement,  provided,
however,  that:  (i)  Purchaser  shall not be  required  to expend  any funds or
undertake  any action in connection  therewith  other than as set forth above in
this paragraph;  (ii) Black & Decker shall coordinate the scope of the Work with
Purchaser's  development plans, as submitted to Black & Decker in advance;  and,
(iii) Purchaser shall in no event be required to alter or modify its development
plans to  accommodate  the scope of the Work which Black & Decker has undertaken
or agrees to  undertake.  Prior to the  Closing or earlier  termination  of this
Agreement,  Seller  shall not waive any rights it may have under the  Settlement
Agreement  with respect to the Property,  modify the  Settlement  Agreement with
respect to the  Property,  or grant any land use  restrictions  on the  Property
without the express prior written consent of Purchaser,  which consent shall not
be  unreasonably  withheld or delayed if such waiver,  modification  or land use
restriction  is consistent  with  Purchaser's  development  plans.  Seller shall
promptly  provide  Purchaser  with  copies  of  all   correspondence  and  other
documentation  related  to the  Settlement  Agreement  or the Work  received  or
prepared by Seller from and after the date hereof.

          3.5. PRORATIONS.

               (a) The  following  shall  be  apportioned  with  respect  to the
Property as of 12:01 a.m. on the date of the Closing:

                    (i) real property  taxes for the current year as of the date
of Closing,  any apportionment of real estate taxes to be made with respect to a
tax year for which  either the tax rate or assessed  valuation  or both have not
yet been fixed to be upon the basis of the tax rate  and/or  assessed  valuation
last  fixed;  provided  that Seller and  Purchaser  agree that to the extent the
actual  taxes for the  current  year differ  from the amount so  apportioned  at
Closing, Seller and Purchaser will make all necessary adjustments by appropriate
payments between themselves following Closing; and

                    (ii)  gas,  electricity,  water,  trash  disposal  and other
utility charges.


                                      -7-
<PAGE>

               (b) In making such apportionments, Purchaser shall be responsible
for real property taxes and other  expenses  accrued or incurred with respect to
the  Closing  Date.  ll such  apportionments  shall be subject  to  post-Closing
adjustments as necessary to reflect later relevant  information not available at
Closing  and to  correct  any  errors  made  at  Closing  with  respect  to such
apportionments  and the party  receiving  more than it was entitled to hereunder
shall reimburse the other party hereto in the amount of such overpayment  within
thirty (30) days after receiving  written demand  therefor.  otwithstanding  the
foregoing,  such apportionments shall be deemed final and not subject to further
post-Closing adjustments if no such adjustments have been requested within sixty
(60) days after the Closing Date, except with respect to real estate taxes which
shall be settled promptly at such time as all necessary information is available
to make a  complete  and  accurate  determination  of such  apportionments.  The
provisions of this Section 3.4(b) shall survive Closing.

          3.6.  CLOSING  COSTS.  Seller  shall  pay (a) the fees of any  counsel
representing it in connection with the transaction  contemplated hereby, (b) the
applicable  conveyance  taxes,  and (c) the Broker's  commission  referred to in
Section  7.1.  Purchaser  shall  pay (a) the  fees of any  counsel  representing
Purchaser in connection with the transaction  contemplated hereby, (b) recording
fees for the Deed and the other Closing documents, (c) the premium for the Title
Insurance  Policy,  and (d) all fees,  costs  and  expenses  related  to the Due
Diligence  Review.  All other costs and  expenses  incident  to the  transaction
contemplated hereby and the Closing thereof shall be paid by the party incurring
the same.

                                   ARTICLE IV.
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

          4.1. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes the
following representations and warranties to Purchaser, which representations and
warranties  shall be deemed to be restated at Closing and shall survive  Closing
for a period of one (1) year, but no longer:

               (a) Seller is a corporation,  duly organized and in good standing
under the laws of the State of Delaware.  Seller has the power and authority and
has been authorized by all necessary  proceedings,  to enter into this Agreement
and all other  agreements to be executed and delivered by Seller pursuant to the
terms  and  provisions   hereof,  to  perform  its  obligations   hereunder  and
thereunder,  to  consummate  the  transaction  contemplated  hereby,  the person
executing this  Agreement on behalf of Seller has the requisite  authority to do
so, and this  Agreement,  when executed and delivered by Seller and by Purchaser
will constitute the valid and binding agreement of Seller,  enforceable  against
Seller  in  accordance  with its terms  except as  limited  by  bankruptcy.  The
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
transactions  contemplated  hereby  will not  result in any breach of or default
under any law,  judgment,  order or agreement by which Seller or the Property is
bound.


                                      -8-
<PAGE>

               (b) There are no written or oral agreements with any tenants, and
Seller  has no actual  notice of any  parties in  possession  of any part of the
Realty.  The Property is free and clear of any management  contract or operating
agreement. Seller has received no written notice of any condemnation proceedings
instituted against the Realty.

               (c) To Seller's actual  knowledge,  Seller has received no notice
of any fact or condition  existing which would result in the  termination of the
current access from the Realty to any presently  existing roads or thoroughfares
adjoining or situated on the Realty.

               (d) Seller has not (i) made a general  assignment for the benefit
of creditors,  (ii) filed any  voluntary  petition in bankruptcy or suffered the
filing of an  involuntary  petition of Seller's  creditors,  (iii)  suffered the
appointment of a receiver to take  possession of all, or  substantially  all, of
Seller's assets,  (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (v) admitted in writing it's inability
to pay its debts as they come due or (vi) made an offer of settlement, extension
or compromise to its creditors generally.

               (e) Except for  environmental  matters  previously  disclosed  in
writing to the Purchaser,  Seller has not received notice from any  governmental
or  quasi-governmental  agency  requiring the  correction of any condition  with
respect to the Property,  or any part  thereof,  by reason of a violation of any
applicable  federal,  state, or local laws,  codes,  rules and  regulations,  or
stating that any investigation  has been commenced or is contemplated  regarding
any of the same.

               (f) Seller has delivered or will deliver to Purchaser  within ten
(10)  business  days of written  request  by  Purchaser  complete  copies of all
surveys,  plans,  engineering  reports,  soil  studies,  environmental  reports,
approvals,  permits  and  licenses  related  to the  Property  and  in  Seller's
possession or control.

               (g)  Other  than the  litigation  which  was the  subject  of the
Settlement   Agreement  between  Farrel  Corporation  and  The  Black  &  Decker
Corporation  dated  February 17, 1995 and over which the United States  District
Court for the District of Connecticut  has retained  jurisdiction to resolve any
disputes  between the  parties,  there is no pending or, to Seller's  knowledge,
threatened private suit or governmental proceeding affecting this Agreement, the
transaction  contemplated  hereby or the  Property  or any portion  thereof.  No
portion of the Property is affected by any special  assessments,  whether or not
constituting  a lien  thereon,  and Seller has not  received  any notices of any
assessments contemplated by any governmental authority. There are no real estate
tax appeals pending with respect to the Property.

              (h)  Except for zoning  restrictions  and other  matters of public
record, to Seller's knowledge,  there are no development agreements,  reciprocal
easement  agreements,   covenants,  conditions  or  restrictions  affecting  the
development  of the Property.  To Seller's  actual  knowledge,  (i) there are no
obligations  in  connection  with  the  Property  involving  refunds  for  sewer
extension,  oversizing  utility lines,  lighting or like expenses or charges for
work or services done upon or relating to the Property which will bind Purchaser
or the Property from and after the Closing Date; (ii) there are no agreements or
undertakings  to construct or pay for any  deceleration  lane,  access or street
lighting;  (iii)  there are no linkage  agreements  obligating  



                                      -9-
<PAGE>

the owner of the  Property  to pay for  linkage  to sewer,  water,  gas or other
utilities, and (iv) there are no donations or payments to or for schools, parks,
fire  departments or any other public amenities or facilities which are required
to be made by an owner of the Property.

               (i) Other than the Settlement Agreement and Access Agreement with
Black & Decker  referred to in Section 3.4 herein,  Seller has no agreement with
Black  &  Decker   regarding   investigation  or  remediation  of  environmental
conditions at the Property.

          4.2. COVENANTS OF SELLER.  Seller hereby covenants with Purchaser that
subsequent to the Effective Date, Seller will:

               (a) advise Purchaser promptly if Seller acquires actual knowledge
of any (i)  litigation or  administrative  proceedings  instigated or threatened
against the Property; (ii) condemnation or threatened condemnation  proceedings;
or (iii) material damage to the realty or any portion thereof.

               (b) maintain the casualty and  liability  insurance now in effect
for the Realty and tangible Personalty;

               (c) not enter  into any  leases of the  Property  or any  portion
thereof;

               (d) not voluntarily create any lien on the Property that will not
be discharged prior to Closing or at Closing out of the Purchase Price; and

               (e) cooperate  fully with Purchaser in Purchaser's  efforts prior
to the Closing to obtain all necessary  federal,  state and local  approvals and
consents  regarding  environmental  matters  affecting the Property  including a
"covenant  not to sue" or its  equivalent  from the  Connecticut  Department  of
Environmental Protection.

               (f) not, without the prior written consent of Purchaser,  create,
place or  permit  to be  created  or  placed  against  the  Property  any  lien,
encumbrance,  or charge (except for Permitted  Exceptions or liens which will be
released at Closing),  and should any of the foregoing become attached hereafter
without the prior written  consent of the Purchaser,  Seller will cause the same
to be promptly discharged and released or Purchaser may terminate this Agreement
or accept title to the Property subject to such encumbrances, provided, however,
that  Seller  shall be  obligated  on or  prior to the  Closing  to  remove  all
voluntary liens or monetary liens (including without limitation  mechanics liens
and tax liens) and similar  encumbrances  related to the payment of money except
for environmental liens.

          4.3.  REPRESENTATIONS  AND WARRANTIES OF PURCHASER.  Purchaser  hereby
makes  the  following   representations   and   warranties   to  Seller,   which
representations  and  warranties  shall be deemed to be  restated at Closing and
shall survive Closing:

               (a) Purchaser is a limited  liability  company duly organized and
validly  existing  under the laws of State of Delaware.  Purchaser has the power
and authority and has been  authorized  by all necessary  proceedings,  to enter
into this  Agreement  and all other  


                                      -10-
<PAGE>


agreements to be executed and  delivered by Purchaser  pursuant to the terms and
provisions  hereof,  to perform its  obligations  hereunder and  thereunder,  to
consummate  the  transaction  contemplated  hereby,  the person  executing  this
Agreement on behalf of  Purchaser  has the  requisite  authority to execute this
Agreement, and upon execution and delivery by Purchaser,  this Agreement will be
the valid and binding obligation of Purchaser  enforceable  against Purchaser in
accordance with its terms, except as limited by bankruptcy.

          4.4. PURCHASER'S CONDITIONS TO CLOSING. It shall be a condition to the
obligation  of Purchaser to close the purchase of the Property  that each of the
following  conditions  be fully  satisfied  as of the date and time of  Closing,
failing  which  Purchaser may terminate  this  Agreement by notice  delivered to
Seller on the Closing Date and Seller will notify the Escrow  Agent  immediately
upon  receipt of such  notice to deliver  the Earnest  Money  together  with all
interest  earned  thereon to Purchaser  and neither party shall have any further
obligation  one to the  other,  except  for those  matters  which are  expressly
provided herein to survive the termination of this Agreement:

               (a)  each  of  the   representations  and  warranties  of  Seller
contained  herein shall  remain true and correct in all material  respects as of
the date and time of  Closing  to the same  extent as if made as of the date and
time of Closing;

               (b) each of the covenants and  agreements of Seller  contained in
this Agreement shall be fully performed and there shall be no material breach of
the obligations of Seller hereunder;

               (c) on the Closing Date,  the Realty  (exclusive of the buildings
thereon)  shall not have been  materially  adversely  changed from the condition
that  it is in on the  date  of  this  Agreement,  free  from  all  tenants  and
occupants;

               (d) As of the Closing Date, there shall be no: (i) written notice
to Seller from any municipal,  state, or federal  governmental  agency which was
not disclosed in writing to Purchaser before the end of the Due Diligence Review
Period indicating the existence of any violation of legal requirements  relating
to the Property; or (ii) litigation or administrative proceeding relating to the
Property  not  disclosed  in  writing to  Purchaser  prior to the end of the Due
Diligence Review Period;

                                   ARTICLE V.
                                     DEFAULT

          5.1.  DEFAULT BY  PURCHASER.  In the event  Purchaser  defaults in its
obligation  to purchase  the  Property in  accordance  with the terms hereof and
provided  that  Seller  has  performed  or  tendered  performance  of all of its
obligations  hereunder,  Seller  shall be  entitled,  as its sole and  exclusive
remedy,  to terminate this Agreement and receive the Earnest Money together with
all  interest  earned  thereon,  as  liquidated  damages  for the breach of this
Agreement,  it being agreed between Seller and Purchaser that the actual damages
to Seller in the event of such  breach  are  impractical  to  ascertain  and the
amount of the Earnest Money is a reasonable estimate thereof.


                                      -11-
<PAGE>


          5.2.  DEFAULT BY SELLER.  In the event Seller fails to consummate this
Agreement for any reason,  except Purchaser's default or the termination of this
Agreement  by either  Seller or  Purchaser  as  expressly  provided  for in this
Agreement,  Purchaser  shall be entitled,  as its sole and  exclusive  remedies,
either (a) to enforce specific performance of this Agreement; provided, however,
if specific  performance  is not  available  to  Purchaser by reason of Seller's
voluntary conveyance of title to the Property to a third party in breach of this
Agreement,  then  Purchaser  shall be  entitled  to sue  Seller to  recover  all
Purchaser's actual damages (but not consequential,  punitive or special damages)
incurred  as a result  of such  breach  by  Seller  or (b) to the  return of the
Earnest Money  together with all interest  earned thereon and  reimbursement  of
Purchaser's  out-of-pocket  expenses incurred in connection with this Agreement,
such expenses not to exceed $15,000 in any event, which return and reimbursement
shall operate to terminate  this  Agreement and release  Seller from any and all
duties,  obligations and liability hereunder.  Under no circumstance will Seller
be liable for punitive, special or consequential damages, it being understood by
Purchaser that the above described  remedies are Purchaser's  sole and exclusive
remedies.

                                   ARTICLE VI.
                                  CONDEMNATION

          6.1.  CONDEMNATION.  (a) After the  Effective  Date, in the event of a
taking or threatened taking by condemnation or similar proceedings or actions of
a material  portion of the Realty,  Purchaser shall have the option to terminate
this Agreement upon written notice to Seller prior to Closing,  and upon receipt
of such notice  Seller  shall  promptly  notify the Escrow  Agent to deliver the
Earnest Money  together with all interest  earned  thereon to Purchaser and this
Agreement  shall be null and void and of no further  force or effect  except for
those matters  which by the express terms thereof shall survive the  termination
of this  Agreement.  A material  portion of the Realty shall be deemed to be (i)
any  portion  valued in excess of 10% of the  Purchase  Price,  (ii) any portion
which  adversely  affects  access to the  Realty by a public  way,  or (iii) any
portion which would materially and adversely affect the Purchaser's  development
plans for the  Property.  If  Purchaser  does not  exercise its option under the
immediately preceding sentence of this Section to terminate this Agreement, then
the  Agreement  shall remain in full force and effect and Seller shall assign or
pay to  Purchaser  at Closing,  Seller's  entire  interest in and to any and all
condemnation  awards or proceeds  from any such  proceedings  or actions in lieu
thereof,  net of Sellers  reasonable  fees and expenses  incurred in  connection
therewith. Any termination under this Section 6.2 shall constitute a termination
of all of Purchaser's rights to acquire the Property. The Purchaser acknowledges
that a strip of land running along the westerly edge of Route 8 was condemned by
the State of  Connecticut  in 1995 which  condemnation  may not be  reflected in
existing  surveys  of the  Property  and that  such  condemnation  shall  not be
considered for purposes of this Section 6.1.


                                      -12-
<PAGE>


                                  ARTICLE VII.
                                     BROKERS

          7.1.  BROKERS.  Each party represents to the other that there has been
no broker,  finder,  real estate agent or similar agent except  Staubach  Retail
Services (the "Broker") engaged in connection with the sale of the Property from
Seller to Purchaser as contemplated  hereby, and Seller shall be responsible for
any commissions due the Broker pursuant to a separate  agreement  between Seller
and the Broker.  Each party  agrees that should any claim be made for  brokerage
commissions  or  finder's  fees by any  broker,  finder or agent  other than the
Broker by,  through or on account of any acts of the  indemnifying  party or its
agents,  employees or representatives the indemnifying party will hold the other
party free and  harmless  from and  against any and all loss,  liability,  costs
damage and expense (including,  without limitation  reasonable  attorneys' fees,
accountants'  fees,  court costs and  interest)  in  connection  therewith.  The
provisions of this Section 7.1 shall survive Closing.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

          8.1. DISCLAIMERS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, IT IS
EXPRESSLY  UNDERSTOOD  AND AGREED THAT  PURCHASER IS PURCHASING THE PROPERTY "AS
IS" AND "WHERE IS," AND WITH ALL FAULTS AND DEFECTS,  LATENT OR  OTHERWISE,  AND
THAT  SELLER IS MAKING NO  REPRESENTATIONS  OR  WARRANTIES,  EITHER  EXPRESS  OR
IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE QUALITY, PHYSICAL
CONDITION,  EXISTENCE,  LOCATION,  OR VALUE OF THE  PROPERTY,  THE  PRESENCE  OR
ABSENCE  OF  HAZARDOUS  SUBSTANCES  IN,  ON,  UNDER OR ABOUT THE  PROPERTY,  THE
SOUNDNESS  OF ANY  IMPROVEMENTS,  THE  COMPLIANCE  OF THE  PROPERTY  OR ANY PART
THEREOF WITH ANY LAWS, STATUTES, RULES, ORDINANCES, DECREES OR ORDERS APPLICABLE
THERETO  EXCEPT FOR THE LIMITED  REPRESENTATIONS,  WARRANTIES  AND COVENANTS SET
FORTH IN ARTICLE IV HEREOF.  THE  PROVISIONS  OF THIS SECTION 8.1 SHALL  SURVIVE
CLOSING.  PURCHASER  HEREBY  RELEASES  SELLER AND WAIVES  AND  RELEASES,  TO THE
FULLEST  EXTENT  PERMITTED BY LAW, ANY RIGHT TO ASSERT ANY CLAIM AGAINST  SELLER
FOR ANY  DAMAGE  OR  LIABILITY  RESULTING  FROM  ANY  MATTER  PERTAINING  TO THE
ENVIRONMENTAL  CONDITION OF THE  PROPERTY,  EXCEPT THOSE  RELATED TO THIRD PARTY
CLAIMS  AGAINST  PURCHASER  (i) ARISING OUT OF ACTIONS OF THE SELLER  DURING THE
PERIOD IN WHICH SELLER  OWNED THE  PROPERTY OR (ii)  ARISING FROM  ENVIRONMENTAL
CONDITIONS  KNOWN  TO  SELLER  AT THE  TIME  OF  CLOSING  BUT NOT  DISCLOSED  TO
PURCHASER.

          8.2. DISCHARGE OF OBLIGATIONS. The acceptance of the Deed and the Bill
of Sale by Purchaser  at Closing  shall be deemed to be a full  performance  and
discharge  of  every  agreement  and  obligation  on the  part of  Seller  to be
performed  pursuant to the provisions  hereof,  except those,  if any, which are
herein  specifically  stated to  survive  Closing or are to be  performed  after
Closing in accordance with other provisions of this Agreement. The acceptance of
the Purchase  


                                      -13-
<PAGE>


Price by Seller at Closing shall be deemed to be full  performance and discharge
of every  agreement  and  obligation  on the part of  Purchaser  to be performed
pursuant  to the  provisions  hereof,  except  those,  if any,  which are herein
specifically  stated to survive  Closing or are to be performed after Closing in
accordance with other provisions of this Agreement.

          8.3.  ASSIGNMENT.  This  Agreement  may not be assigned  by  Purchaser
without the written consent of Seller other than to a legal entity related to or
controlled by Purchaser,  provided that Purchaser's  assignee assumes all of the
obligations of Purchaser  under this  Agreement.  In the event of an assignment,
the  assignee(s)  shall assume all obligations of this Agreement and confirm all
its representations and warranties.

          8.4. NOTICES.  Any notice pursuant hereto shall be given in writing by
(a) personal delivery, or (b) expedited delivery service with proof of delivery,
or (c)  registered or certified  United  States Mail,  postage  prepaid,  return
receipt  requested,  or (d) prepaid  telegram,  telex or facsimile  transmission
(provided that such telegram,  telex or facsimile  transmission  is confirmed by
expedited delivery service or by mail in the manner previously described),  sent
to the  intended  addressee  at the  address set forth  below,  or to such other
address or to the  attention  of such other person as the  addressee  shall have
designated by written notice sent in accordance herewith, and shall be deemed to
have been  given  either at the time of  personal  delivery,  or, in the case of
expedited  delivery service or mail, as of the date of first attempted  delivery
at the address and in the manner provided  herein,  or, in the case of telegram,
telex or facsimile transmission, upon receipt. Unless changed in accordance with
the preceding sentence, the addresses for notices given pursuant hereto shall be
as follows:

          (i) If to Seller:

                      Farrel Corporation
                      c/o First Funding Corporation
                      700 Canal Street, 2nd Floor
                      Stamford, CT  06902-5921
                      Attn:  Charles Jones
                      Telephone No.: (203) 324-2626
                      Facsimile No.: (203) 965-0605

          with a copy thereof to:

                      Levett, Rockwood & Sanders Professional Corporation
                      33 Riverside Avenue
                      Westport, CT 06880
                      Attn: Suzanne B. Albani, Esq.
                      Telephone No.: (203) 222-0885
                      Facsimile No.: (203) 226-8025


                                      -14-
<PAGE>


          (ii) If to Purchaser:

                      National RE/Sources Acquisitions, LLC
                      485 West Putnam Avenue
                      Greenwich, CT  06830
                      Attn: Joseph Cotter
                      Telephone No.: (203) 661-0055
                      Facsimile No.: (203) 661-8071

          with a copy thereof to:

                      Hill & Barlow
                      One International Place
                      Boston, MA  02110
                      Attn:  William B. Forbush, III, Esq.
                      Telephone No.:  (617) 428-3000
                      Facsimile No.:  (617) 428-3500

          8.5.  MODIFICATION.  This Agreement  cannot under any  circumstance be
modified orally, and no agreement shall be effective to waive, change, modify or
discharge this Agreement in whole or in part unless such agreement is in writing
and is signed by both Seller and Purchaser.

          8.6.  CONFIDENTIALITY.  Purchaser  recognizes,  understands and agrees
that pursuant hereto it will become aware of certain  information  regarding the
ownership  and  operation  of the  Property,  including,  specifically,  without
limitation,  the information to be provided to Purchaser pursuant to Section 2.1
hereof,  and any  information  obtained  by  Purchaser  in the course of its due
diligence.  Purchaser agrees that, prior to Closing,  if Closing occurs,  and if
not, in any event unless  required  pursuant to a subpoena  properly issued by a
court of  competent  jurisdiction  (and in such case  after  notice to Seller to
provide  it with an  opportunity  to  object),  it shall not  disclose  any such
information  to any third  party or  parties,  except to  agents,  employees  or
independent  contractors  advising or assisting  Purchaser with the  transaction
contemplated hereby.

          8.7. REPORTING REQUIREMENTS.  The Title Company hereby agrees to serve
as the "real estate reporting person" as that term is defined in Section 6045(e)
of the  Internal  Revenue  Code  of  1986,  as  amended.  This  Agreement  shall
constitute a designation  agreement,  the name and address of the transferor and
transferee of the transaction  contemplated  hereby appear in Section 8.4 hereof
and  Seller,  Purchaser  and the  Title  Company  agree to retain a copy of this
Agreement for a period of four (4) years  following the end of the calendar year
in which  Closing  occurs.  The  provisions  of this  Section 8.7 shall  survive
Closing.

          8.8. TIME OF ESSENCE.  Seller and Purchaser  agree that time is of the
essence with regard to this Agreement.

          8.9.  SUCCESSORS AND ASSIGNS.  The terms and provisions  hereof are to
apply to and bind the permitted successors and assigns of the parties hereto.


                                      -15-
<PAGE>


          8.10.  EXHIBITS AND  SCHEDULES.  The  following  schedules or exhibits
attached hereto  (collectively the "Exhibits") shall be deemed to be an integral
part hereof:

               (a) Exhibit A - legal description of the Realty;

               (b) Exhibit B - form of Limited Warranty Deed;

               (c) Exhibit C - form of Bill of Sale; and

               (d) Exhibit D - form of FIRPTA Affidavit.

          8.11.  ENTIRE  AGREEMENT.  This  Agreement,  including  the  Exhibits,
contains the entire  agreement  between  Seller and Purchaser  pertaining to the
transaction  contemplated  hereby and fully  supersedes all prior agreements and
understandings between Seller and Purchaser pertaining to such.

          8.12. FURTHER ASSURANCES. Both Seller and Purchaser agree that it will
without further  consideration execute and deliver such other documents and take
such other action,  whether prior or subsequent to Closing, as may be reasonably
requested by the other party to  consummate  more  effectively  the  transaction
contemplated hereby. The provisions of this Section 8.12 shall survive Closing.

          8.13.  FEES AND EXPENSES.  In the event of any  controversy,  claim or
dispute between Seller and Purchaser affecting or relating to the subject matter
or performance of the rights,  duties and obligations under this Agreement,  the
prevailing party shall be entitled to recover from the non-prevailing  party all
of the prevailing party's reasonable  expenses,  including,  without limitation,
reasonable attorneys' fees, accountants' fees, court costs and interest.

          8.14.  NO  RECORDING.  This  Agreement  shall not be  recorded  by the
Purchaser.  Purchaser's  failure to observe  this  obligation  shall be deemed a
material breach of this Agreement.

          8.15.  COUNTERPARTS.  This  Agreement  may  be  executed  in  multiple
counterparts,  and all such  executed  counterparts  shall  constitute  the same
agreement. It shall be necessary to account for only one (1) such counterpart in
proving the existence, validity or content of this Agreement.

          8.16. AMBIGUITY. Both Seller and Purchaser were represented by counsel
in the negotiations  leading to the execution and delivery of this Agreement and
agree  that if any term or  provision  of this  Agreement  shall be deemed to be
ambiguous, such ambiguity shall not be construed against either party.

          8.17.  SEVERABILITY.  If any provision hereof is determined by a court
of competent jurisdiction to be invalid or unenforceable,  the remainder of this
Agreement shall nonetheless remain in full force and effect.


                                      -16-
<PAGE>


          8.18.  SECTION AND  EXHIBIT  HEADINGS.  Section  and exhibit  headings
contained  herein  are for  convenience  only and  shall  not be  considered  in
interpreting or construing this Agreement.

          8.19. BINDING EFFECT.  This Agreement shall not be binding upon either
Seller or Purchaser  unless and until both Seller and  Purchaser  have  executed
this Agreement.

          8.20. CHOICE OF LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Connecticut, without regard
to the conflicts of laws principles thereof.

          8.21. NO THIRD PARTY  BENEFICIARY.  The  provisions  hereof and of the
documents  to be  executed  and  delivered  at  Closing  are and will be for the
benefit of Seller and  Purchaser  only and are not for the  benefit of any third
party,  and  accordingly,  no third  party  shall have the right to enforce  the
provisions hereof or of the documents to be executed and delivered at Closing.

                                   * * * * * *


                                      -17-
<PAGE>


          IN  WITNESS  WHEREOF  the  parties  hereto  have  duly  executed  this
Agreement effective as of the date and year first written above.

Executed by Seller this                  SELLER:
  16th  day of   July   , 1998.
-------        --------
                                         FARREL CORPORATION

                                         By /s/ Peter L. Hess
                                            ----------------------------------
                                            Name:  Peter L. Hess
                                            Title: General Counsel & Secretary

Executed by Purchaser this               PURCHASER:
  17th  day of   July   , 1998.
-------        --------
                                         NATIONAL RE/SOURCES ACQUISITIONS, LLC


                                         By /s/ Joseph Cotter
                                            ----------------------------------
                                            Name:  Joseph Cotter
                                            Title: President

          The Escrow Agent hereby agrees to perform its  obligations  under this
Agreement and acknowledges receipt of Earnest Money from Purchaser in the amount
of One Hundred  Thousand and 00/100 Dollars  ($100,000) on the 20th day of July,
1998 and of a fully  executed  counterpart  of this Agreement on the 21st day of
July, 1998.


                                         ESCROW AGENT:

                                         COMMONWEALTH LAND TITLE INSURANCE 
                                         COMPANY

                                         By /s/ Terrance P. Miklas
                                            ----------------------------------
                                            Name:  Terrance P. Miklas
                                            Title: Assistant Vice President



                                      -18-
<PAGE>


                                                                                


                                    EXHIBIT A
                         TO PURCHASE AND SALE AGREEMENT

                                LEGAL DESCRIPTION


<PAGE>


                                                                      


                                    EXHIBIT B
                         TO PURCHASE AND SALE AGREEMENT

LIMITED WARRANTY DEED

           TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME. GREETING:

         KNOW YE,  that  FARREL  CORPORATION,  a  Delaware  corporation  with an
address at 25 Main Street, Ansonia,  Connecticut 06401-1601 (the "Grantor"), for
Ten  Dollars  ($10.00)  and other good and  valuable  consideration  received to
Grantor's  full  satisfaction  from  NATIONAL  RE/SOURCES  ACQUISITIONS,  LLC, a
Delaware  limited  liability  company whose  address is 485 West Putnam  Avenue,
Greenwich,  Connecticut  06830 (the  "Grantee"),  does by these  presents  give,
grant,  bargain, sell and convey to Grantee and to said Grantee's successors and
assigns   forever,   the  premises,   together  with  the  buildings  and  other
improvements  now or hereafter  situated  thereon  located in the City of Derby,
County of New Haven and State of  Connecticut,  more  particularly  described on
Schedule A attached hereto and made a part hereof by this reference.

         TO  HAVE  AND TO  HOLD  the  premises  hereby  conveyed  with  all  the
appurtenances  thereof,  unto the said Grantee and unto the Grantee's successors
and assigns forever, and to the Grantee's and its own proper use and behoof; and
the Grantor  does for itself,  its  successors  and assigns,  covenant  with the
Grantee,  its  successors  and  assigns,  that the Grantor is well seized of the
premises  as a good  indefeasible  estate in FEE  SIMPLE;  and has good right to
grant and convey the same in the manner and form as herein written.

         AND FURTHERMORE, the Grantor does by these presents bind itself and its
successors  and  assigns  forever to WARRANT  and  DEFEND  the  premises  hereby
conveyed to the  Grantee and its  successors  and assigns  forever,  against all
claims and  demands of any person or  persons  claiming  by,  from or under said
Grantor, except as herein stated.

         IN WITNESS WHEREOF,  the Grantor has caused these presents to be signed
by its duly authorized corporate officer as of this     day of           , 1998.
                                                    ---        ----------
Signed, Sealed and Delivered in the presence of
        or Attested by

-----------------------------------------          FARREL CORPORATION

-----------------------------------------          By:

                                                   Its:


State of Connecticut, County of          ) ss.


         The foregoing  instrument was  acknowledged  before me this      day of
                                                                     ----
              , 1998, by 
--------------           ------------------,  -------------------,   of   Farrel
Corporation,  a Delaware corporation,  as his free act and deed and the free act
and deed of said corporation.

     My Commission Expires:                   
                           --------------     ----------------------------------
                                                        Notary Public

Grantee's Address:    485 West Putnam Avenue
                      Greenwich, CT  06830


<PAGE>


                                    EXHIBIT C
                         TO PURCHASE AND SALE AGREEMENT

                           BILL OF SALE AND ASSIGNMENT

KNOW ALL MEN BY THESE PRESENTS:

          Concurrently  with the  execution  and  delivery  of this Bill of Sale
(this "Bill of Sale"), Farrel Corporation,  a Delaware corporation ("Assignor"),
is  conveying  to  National  RE/Sources  Acquisitions,  LLC, a Delaware  limited
liability  company  ("Assignee"),  whose  address  is 485  West  Putnam  Avenue,
Greenwich,  Connecticut  06830,  by Quit Claim Deed (the  "Deed"),  that certain
tract or parcel of real  property  situated  in Derby,  Connecticut,  being more
particularly  described on Exhibit A attached  hereto and made a part hereof for
all purposes,  together with all improvements situated thereon (collectively the
"Property").

          It is the desire of Assignor hereby to assign, transfer, and convey to
Assignee all fixtures, fittings, appliances.  apparatus,  equipment,  machinery,
warranties, guaranties, permits, licenses, approvals and other items of tangible
and intangible  personal  property owned by Assignor and affixed or attached to,
or placed or situated upon, or used in connection  with the use,  occupancy,  or
operation of the Property (all of such  properties and assets being  hereinafter
referred to collectively as the "Personal Property").

          NOW,  THEREFORE,  in  consideration  of the  receipt of Ten and No/100
Dollars  ($10.00)  and other  good and  valuable  consideration  in hand paid by
Assignee  to  Assignor,   the  receipt  and  sufficiency  of  which  are  hereby
acknowledged and confessed by Assignor,  Assignor does hereby ASSIGN,  TRANSFER,
SET OVER,  and DELIVER to  Assignee,  its  successors  and  assigns,  all of the
Personal  Property;  PROVIDED,  HOWEVER,  THAT ALL  SUCH  PERSONAL  PROPERTY  IS
DELIVERED BY ASSIGNOR  AND ACCEPTED BY ASSIGNEE  WITHOUT ANY WARRANTY OF FITNESS
OR  MERCHANTABILITY,  EITHER EXPRESS OR IMPLIED,  AND ON AN "AS IS",  "WHERE IS"
BASIS AND WITH ALL FAULTS.

          TO  HAVE  AND  TO  HOLD  the  Personal  Property  unto  Assignee,  its
successors  and assigns,  forever,  and Assignor does hereby bind itself and its
successors  to  WARRANT  AND  FOREVER  DEFEND,  all and  singular,  title to the
Personal  Property unto  Assignee,  its  successors  and assigns,  against every
person  whomsoever  lawfully  claiming or to claim the same, or any part thereof
by, through or under  Assignor,  but not  otherwise,  subject to the matters set
forth above.

          Nothing  herein  contained  shall be deemed to limit or  restrict  the
properties,  assets and rights conveyed,  assigned or transferred to or acquired
by Assignee pursuant to the Deed or other instruments of conveyance  executed in
connection therewith.

          This Bill of Sale may be executed in  multiple  counterparts,  and all
such executed  counterparts  shall  constitute the same  agreement.  It shall be
necessary  to account for only one such  counterpart  in proving the  existence,
validity or content of this Bill of Sale.


<PAGE>


          EXECUTED on the dates of the  acknowledgments  set forth below,  to be
effective for all purposes as of the day of , 1998. ---- ----------------

                                           ASSIGNOR:
Witnessed by:                              FARREL CORPORATION


-------------------------------            By:
                                              ----------------------------------
                                              Name:
                                              Title:
-------------------------------

                                           ASSIGNEE:

Witnessed by:                              NATIONAL RE/SOURCES ACQUISITIONS, LLC


-------------------------------            By:
                                              ----------------------------------
                                              Name:
                                              Title:
-------------------------------


<PAGE>


STATE OF CONNECTICUT                )
                                    )  ss:
COUNTY OF                           )


         This  instrument  was  acknowledged   before me  on   the        day of
                                                                   ------
              , 1998, by 
--------------           ------------------,  -------------------,   of   Farrel
Corporation,  on  behalf of said  corporation,  as his free act and deed for the
purposes contained therein.


                                            ------------------------------------
                                            Notary Public

                                            My commission expires: 
                                                                   -------------



STATE OF CONNECTICUT                )
                                    )  ss:
COUNTY OF FAIRFIELD                 )


         This  instrument  was  acknowledged   before me  on   the        day of
                                                                   ------
              , 1998, by 
--------------           ------------------,  -------------------,   of National
RE/Sources Acquisitions,  LLC, on  behalf of said  corporation, as his free  act
and deed for the purposes contained therein.


                                            ------------------------------------
                                            Notary Public

                                            My commission expires: 
                                                                   -------------


<PAGE>


                                    EXHIBIT D
                         TO PURCHASE AND SALE AGREEMENT

                              NON-FOREIGN AFFIDAVIT
                              ---------------------


STATE OF CONNECTICUT                )
                                    )  ss:
COUNTY OF                           )


         THE  UNDERSIGNED,                          ,  duly  elected  and acting
                           ------------------------
                    of  Farrel   Corporation,   a  Delaware   corporation   (the
------------------
"Corporation), upon being duly sworn, deposes and states as follows:


         (1) The  Corporation  is the  owner  of  certain  property  located  at
               ,  Derby,  Connecticut,  being conveyed  on            ,  1998 to
--------------                                              ----------
National RE/Sources Acquisitions, LLC, a Delaware limited liability company (the
"Purchaser").

         (2) The Corporation's United States taxpayer  identification  number is
22-2689245.

         (3) The  Corporation  is not a foreign  person as  defined in 26 U.S.C.
1445(f)(3).

         (4) The Corporation  confirms its understanding that this Affidavit may
be disclosed to the Internal Revenue Service by the Purchaser and that any false
statement made herein could be punished by fine, imprisonment, or both.


Witnessed by:                                      FARREL CORPORATION

                                                   By:
                                                      --------------------------
                                                      Name:
                                                      Its:
Subscribed and sworn to
before me this       day of
               -----
                     , 1998
---------------------


--------------------------------
Notary Public

My Commission Expires:
                      ----------
<PAGE>


FARREL CORPORATION
25 Main Street
Ansonia, Connecticut  06401-1601
USA

Tel:  (203) 736-5500



October 15, 1998

Mr. Joseph Cotter
National RE/sources, LLC
485 West Putnam Avenue
Greenwich, CT  06830

       Re:  Derby Property
            --------------
Dear Joe:

I  appreciated  the  opportunity  to meet  with you on Monday  to  discuss  your
continued interest in acquiring the Derby Property.

Farrel Corporation would be willing to "reinstate" the Agreement of Purchase and
Sale between Farrel Corporation and National RE/sources Acquisitions,  LLC dated
as of July 17, 1998 (the "Purchase and Sale Agreement")  which you terminated on
September  23, 1998 but only on the  following  terms and  conditions  set forth
below. All capitalized  terms used herein and not otherwise defined herein shall
have the meanings given in the Purchase and Sale Agreement.

(1)      The Purchase Price for the Property is increased to $2,400,000.

(2)      The  Earnest  Money  to  be  deposited  with  Commonwealth  Land  Title
         Insurance Company as Escrow Agent will be $100,000,  to be paid by wire
         transfer  to the Escrow  Agent in  accordance  with  Section 1.5 of the
         Purchase and Sale  Agreement  immediately  upon your  acceptance of the
         terms and conditions  set forth herein,  as evidenced by your signature
         below. The Earnest Money shall be  non-refundable in the event that the
         Purchaser  does not  purchase  the  Property  by the  Closing  Date (as
         amended  hereby)  for any reason  whatsoever  except  for the  Seller's
         breach of its obligations under Section 3.2.

(3)      Section  2.2 (Due  Diligence  Review  Period) and Section 2.4 (Right of
         Termination  During  Due  Diligence  Period) of the  Purchase  and Sale
         Agreement  are  deleted.  Section 2.3 (Title  Matters) is also  deleted
         except  for  Seller's  agreement  to pay  one-half  the cost of an ALTA
         Survey of the Realty if required in connection with obtaining the title
         insurance, and except for last two sentences of Section 2.3.

(4)      Section 3.1 is amended to provide that the Closing  shall take place on
         a date no later than  December  30,  1998.  Time is of the essence with
         regard to the  Purchase  and Sale  Agreement  as amended by this Letter
         Agreement.

(5)      The  Seller  shall be  named as an  additional  insured  on any and all
         environmental  insurance policies obtained by  the Purchaser related to
         the Property.


<PAGE>


Mr. Joseph Cotter
October 15, 1998
Page Two



Except as set forth above,  all the other terms and  conditions  of the Purchase
and Sale Agreement shall remain the same.

Farrel  will  undertake  to  co-operate  with  Purchaser  in  their  development
activities  with  prospective  tenants and  co-operate  with  Purchaser in their
efforts with the City of Derby.

If you wish to  reinstate  the  Purchase  and Sale  Agreement  on the  terms and
conditions set forth herein,  please indicate your acceptance of these terms and
conditions by signing this Letter  Agreement in the space provided  below.  Upon
receipt of a signed original of this Letter Agreement and confirmation  from the
Escrow  Agent that it has  received  the $100,000  Earnest  Money  Deposit,  the
Purchase  and Sale  Agreement  shall  be  deemed  reinstated  on the  terms  and
conditions set forth therein, as amended by this Letter Agreement.

                                         Very truly yours,

                                         FARREL CORPORATION



                                         By: /s/ CHARLES SNOWDEN JONES          
                                            ------------------------------------
                                            Charles Snowden Jones
                                            Chairman, Executive Committee

Agreed to and accepted on this _____
Day of October, 1998

NATIONAL RE/SOURCES ACQUISITIONS, LLC



BY: /s/ Joseph Cotter            
   ------------------------------
     Joseph Cotter
     President