ASSET PURCHASE AGREEMENT





                                     among:





                            SAGAMORE HOLDINGS, INC.,
                        a Florida corporation ("Parent"),



                             NECI Acquisition, Inc.
                      a Florida corporation ("Purchaser"),





                         NEXUS CUSTOM ELECTRONICS, INC.,
                       a Delaware corporation ("Seller"),


                                       and


                             JACO ELECTRONICS, INC.,
                     a New York corporation ("Shareholder")


                                                         `


                         Dated as of September 20, 2004





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


<TABLE>

<PAGE>



                                TABLE OF CONTENTS

<C>                                                                                                             <C>
1.       DEFINITIONS.............................................................................................1
--       -----------
         1.1.     Code...........................................................................................2
         ----     -----
         1.2.     Company Plan...................................................................................2
         ----     -------------
         1.3.     Consent........................................................................................2
         ----     --------
         1.4.     Contract.......................................................................................2
         ----     ---------
         1.5.     Contract Year..................................................................................2
         ----     --------------
         1.6.     Damages........................................................................................2
         ----     --------
         1.7.     Disclosure Schedules...........................................................................2
         ----     ---------------------
         1.8.     Encumbrance....................................................................................2
         ----     ------------
         1.9.     Entity.........................................................................................2
         ----     -------
         1.10. GAAP. 2
         1.11.    Governmental Authorization.....................................................................2
         -----    ---------------------------
         1.12.    Governmental Body..............................................................................3
         -----    ------------------
         1.13.    Hazardous Material.............................................................................3
         -----    -------------------
         1.14.    Knowledge......................................................................................4
         -----    ----------
         1.15.    Legal Requirement..............................................................................4
         -----    ------------------
         1.16.    Liability......................................................................................4
         -----    ----------
         1.17.    Material.......................................................................................4
         -----    ---------
         1.18.    Material Seller Contracts......................................................................4
         -----    --------------------------
         1.19.    Net Working Capital............................................................................4
         -----    --------------------
         1.20. Order. 4
         1.21.    Ordinary Course of Business....................................................................5
         -----    ----------------------------
         1.22.    Permitted Distribution.........................................................................6
         -----    -----------------------
         1.23. Person. 6
         1.24.    Proceeding.....................................................................................6
         -----    -----------
         1.25.    Proprietary Asset..............................................................................6
         -----    ------------------
         1.26.    Purchaser Group................................................................................6
         -----    ----------------
         1.27.    Seller Contracts...............................................................................6
         -----    -----------------
         1.28.    Supply Agreement...............................................................................6
         -----    -----------------
         1.29. Tax. 6
         1.30.    Tax Return.....................................................................................7
         -----    -----------
         1.31.    Transaction Documents..........................................................................7
         -----    ----------------------
         1.32.    Transactions...................................................................................7
         -----    -------------
2.       SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED LIABILITIES..........................................8
--       --------------------------------------------------------------
         2.1.     Sale and Purchase of Assets....................................................................8
         ----     ----------------------------
         2.2.     Excluded Assets................................................................................9
         ----     ----------------
         2.3.     No Encumbrances...............................................................................10
         ----     ----------------
         2.4.     Passage of Title..............................................................................10
         ----     -----------------
         2.5.     Transfer Taxes................................................................................10
         ----     ---------------
         2.6.     Assumed Liabilities...........................................................................10
         ----     --------------------
         2.7.     Excluded Liabilities..........................................................................10
         ----     ---------------------
         2.8.     Employees.....................................................................................11
         ----     ----------


<PAGE>


         2.9.     Consideration Paid by Purchaser...............................................................11
         ----     --------------------------------
         2.10. Closing. 14
3.       REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDER...........................................16
--       ------------------------------------------------------------
         3.1.     Due Organization; No Subsidiaries; Etc........................................................16
         ----     ---------------------------------------
         3.2.     Certificate of Incorporation and Bylaws; Records..............................................16
         ----     -------------------------------------------------
         3.3.     Capitalization, Etc...........................................................................17
         ----     --------------------
         3.4.     Financial Statements..........................................................................17
         ----     ---------------------
         3.5.     Absence of Material Changes...................................................................18
         ----     ----------------------------
         3.6.     Title to Assets...............................................................................18
         ----     ----------------
         3.7.     Inventories...................................................................................19
         ----     ------------
         3.8.     Receivables...................................................................................19
         ----     ------------
         3.9.     Fixed Assets..................................................................................19
         ----     -------------
         3.10.    Real Property.................................................................................19
         -----    --------------
         3.11.    Proprietary Assets............................................................................19
         -----    -------------------
         3.12.    Contracts.....................................................................................20
         -----    ----------
         3.13.    Liabilities...................................................................................21
         -----    ------------
         3.14.    Compliance With Legal Requirements............................................................22
         -----    -----------------------------------
         3.15.    Governmental Authorizations...................................................................22
         -----    ----------------------------
         3.16.    Tax Matters...................................................................................23
         -----    ------------
         3.17.    Employee and Labor Matters....................................................................23
         -----    ---------------------------
         3.18.    Company Plans.................................................................................25
         -----    --------------
         3.19.    Environmental Matters.........................................................................25
         -----    ----------------------
         3.20.    Proceedings; Orders...........................................................................25
         -----    --------------------
         3.21.    Authority; Binding Nature of Agreements.......................................................26
         -----    ----------------------------------------
         3.22.    Non-Contravention Consents....................................................................26
         -----    ---------------------------
         3.23. Brokers. 27
4.       REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.................................................27
--       ------------------------------------------------------
         4.1.     Due Organization..............................................................................27
         ----     -----------------
         4.2.     Authority; Binding Nature of Agreement........................................................27
         ----     ---------------------------------------
         4.3.     Employees.....................................................................................28
         ----     ----------
         4.4.     Brokers.......................................................................................28
         ----     --------
5.       CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE................................................28
--       --------------------------------------------------------
         5.1.     Accuracy of Representations...................................................................28
         ----     ----------------------------
         5.2.     Performance of Obligations....................................................................28
         ----     ---------------------------
         5.3.     Consents......................................................................................28
         ----     ---------
         5.4.     No Material Adverse Change....................................................................28
         ----     ---------------------------
         5.5.     Additional Documents..........................................................................28
         ----     ---------------------
         5.6.     No Claim Regarding the Purchased Assets or Sale Proceeds......................................29
         ----     ---------------------------------------------------------
         5.7.     No Prohibition................................................................................29
         ----     ---------------
         5.8.     No Actions Outside of the Ordinary Course of Business.........................................29
         ----     ------------------------------------------------------
         5.9.     Compliance with Legal Requirements............................................................29
         ----     -----------------------------------
         5.10.    2004 EBITDA Target............................................................................29
         -----    -------------------
         5.11.    No Injunction.................................................................................29
         -----    --------------
6.       CONDITIONS PRECEDENT TO THE SELLER AND SHAREHOLDER'S OBLIGATION TO CLOSE...............................29
--       ------------------------------------------------------------------------

<PAGE>

         6.1.     Accuracy of Representations...................................................................30
         ----     ----------------------------
         6.2.     Purchaser's Performance.......................................................................30
         ----     ------------------------
         6.3.     No Injunction.................................................................................30
         ----     --------------
         6.4.     No Prohibition................................................................................30
         ----     ---------------
7.       INDEMNIFICATION, ETC...................................................................................30
--       ---------------------
         7.1.     Survival of Representations and Covenants.....................................................30
         ----     ------------------------------------------
         7.2.     Indemnification by the Seller and Shareholder.................................................31
         ----     ----------------------------------------------
         7.3.     Remediation Obligation........................................................................32
         ----     -----------------------
         7.4.     Setoff........................................................................................32
         ----     -------
         7.5.     Defense of Third Party Claims.................................................................32
         ----     ------------------------------
         7.6.     Exercise of Remedies by Purchaser Indemnitees Other Than Purchaser............................33
         ----     -------------------------------------------------------------------
         7.7.     Indemnification by Parent and Purchaser.......................................................33
         ----     ----------------------------------------
         7.8.     Threshold for Indemnification by the Seller and Shareholder...................................33
         ----     ------------------------------------------------------------
         7.9.     Threshold for Indemnification by Parent and Purchaser.........................................34
         ----     ------------------------------------------------------
         7.10.    Limitation on Indemnification.................................................................34
         -----    ------------------------------
         7.11.    Exclusivity of Indemnification Remedies.......................................................34
         -----    ----------------------------------------
8.       OTHER AGREEMENTS.......................................................................................34
--       ----------------
         8.1.     Non-Compete...................................................................................34
         ----     ------------
         8.2.     Nonsolicitation...............................................................................35
         ----     ----------------
         8.3.     Confidentiality...............................................................................35
         ----     ---------------
         8.4.     Severability..................................................................................36
         ----     -------------
         8.5.     Judicial Modification.........................................................................36
         ----     ----------------------
         8.6.     Specific Enforcement..........................................................................36
         ----     ---------------------
         8.7.     Tolling of Time Periods.......................................................................37
         ----     ------------------------
         8.8.     Confirmation as to Scope......................................................................37
         ----     -------------------------
         8.9.     Access to Records.............................................................................37
         ----     ------------------
         8.10.    No Resale of Purchased Assets.................................................................37
         -----    ------------------------------
         8.11.    Post-Audit Closing Cooperation................................................................38
         -----    -------------------------------
         8.12.    Transitional Services.........................................................................38
         -----    ----------------------
9.       MISCELLANEOUS..........................................................................................38
--       -------------
         9.1.     Counterparts; Interpretation..................................................................38
         ----     -----------------------------
         9.2.     Governing Law.................................................................................38
         ----     --------------
         9.3.     Successors and Assigns; Assignment............................................................38
         ----     -----------------------------------
         9.4.     Partial Invalidity and Severability...........................................................38
         ----     ------------------------------------
         9.5.     Waiver........................................................................................39
         ----     -------
         9.6.     Headings......................................................................................39
         ----     ---------
         9.7.     Acceptance by Fax.............................................................................39
         ----     ------------------
         9.8.     Expenses......................................................................................39
         ----     ---------
         9.9.     Attorneys' Fees...............................................................................39
         ----     ----------------
         9.10.    Specific Performance..........................................................................39
         -----    ---------------------
         9.11.    Further Assurances............................................................................39
         -----    -------------------
         9.12. Notices. 40
         9.13.    NO JURY TRIAL.................................................................................41
         -----    --------------

</TABLE>



<PAGE>




                            ASSET PURCHASE AGREEMENT



         THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 20th day of September, 2004 by and between SAGAMORE HOLDINGS,
INC., a Florida corporation ("Parent"); NECI ACQUISITION, INC., a Florida
corporation ("Purchaser"); NEXUS CUSTOM ELECTRONICS, INC., a Delaware
corporation ("Seller"); and JACO ELECTRONICS, INC., a New York corporation
("Shareholder"). Parent Purchaser, Seller and Shareholder are each referred to,
at times, as a "Party" and collectively as the "Parties".


                                    RECITALS

     WHEREAS,  Seller  operates a printed  circuit board contract  manufacturing
business (the "Business"); --------

         WHEREAS, Seller, which is 100% owned by Shareholder, desires to sell to
Purchaser, which is 100% owned by Parent, and Purchaser desires to purchase from
Seller, substantially all of the assets of Seller upon the terms and conditions
set forth herein; and

         WHEREAS, Parent shall execute an agreement (the "Guaranty") pursuant to
which the Parent shall guarantee the obligations of the Purchaser under this
Agreement.


                                   AGREEMENT:

         NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties agree as follows:

1.       DEFINITIONS

         Set forth below are definitions, for the purposes of the Agreement, for
certain capitalized terms. Other capitalized terms are defined throughout the
Agreement.
<PAGE>

     1.1. Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

     1.2.  Company Plan.  "Company Plan" shall mean any current  benefit plan or
past benefit plan under which employees, officers or directors of the Seller has
received benefits.

     1.3.  Consent.  "Consent" shall mean any approval,  consent,  ratification,
permission, waiver or authorization (including any Governmental Authorization).

     1.4.  Contract.  "Contract" shall mean any written,  oral, implied or other
agreement,  contract,  understanding,  arrangement,  instrument, note, guaranty,
indemnity,  representation,  warranty,  deed,  assignment,  power  of  attorney,
certificate,  purchase  order,  work  order,  insurance  policy,  benefit  plan,
commitment, covenant, assurance or undertaking of any nature.

     1.5. Contract Year. "Contract Year" shall mean (i) the period commencing on
the Closing Date and ending  September 30, 2005 and thereafter  (ii) each twelve
(12) month period beginning on October 1.

     1.6. Damages.  "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity,  Liability, claim, demand, settlement, judgment, award,
fine, penalty,  Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge,  cost (including any cost of investigation) or expense of
any nature.

     1.7. Disclosure Schedules.  "Disclosure Schedules" shall mean the schedules
(dated as of the date of the  Agreement)  delivered  to the  Purchaser  by or on
behalf of the Seller and  Shareholder as set forth in the  Agreement,  copies of
which are  attached  to the  Agreement  and  incorporated  in the  Agreement  by
reference.

     1.8. Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge,  mortgage,  security interest,  encumbrance,  equity,  trust,  equitable
interest,  claim,  preference,  right of possession,  lease,  tenancy,  license,
encroachment, covenant, infringement,  interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment,  exception,  reservation,  limitation,  impairment,  imperfection of
title,  condition or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset,  any restriction on the receipt of any income derived from any asset, any
restriction  on the use of any  asset  and any  restriction  on the  possession,
exercise or transfer of any other attribute of ownership of any asset).

     1.9. Entity.  "Entity" shall mean any corporation (including any non-profit
corporation),   general  partnership,  limited  partnership,  limited  liability
partnership,  joint venture, estate, trust,  cooperative,  foundation,  society,
political party,  union,  company  (including any limited  liability  company or
joint stock company),  firm or other  enterprise,  association,  organization or
entity.

     1.10.  GAAP."GAAP"  shall mean generally  accepted  accounting  principles,
applied on a consistent basis.

     1.11. Governmental Authorization.  "Governmental  Authorization" shall mean
any permit, license,  certificate,  franchise,  concession,  approval,  Consent,
ratification, permission, clearance, confirmation, endorsement, route authority,


                                       2
<PAGE>


waiver,  certification,  designation,  rating,  registration,  qualification  or
authorization that is, has been or may in the future be issued,  granted,  given
or otherwise made available by or under the authority of any  Governmental  Body
or pursuant to any Legal Requirement or under any Contract with any Governmental
Body.

     1.12. Governmental Body."Governmental Body" shall mean any:

                    (a)  Nation,  principality,  state, commonwealth,  province,
                         territory,  county,  municipality,  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    division,
                         subdivision,   department,   agency,   bureau,  branch,
                         office,  commission,  council, boars,  instrumentality,
                         officer, official, representative,  organization, unit,
                         body or Entity and any court or other tribunal);

                    (d)  Multi-national organization or body; or

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

     1.13. Hazardous Material. "Hazardous Material" shall include:

                    (a)  Any  petroleum,  waste oil, crude oil,  asbestos,  urea
                         formaldehyde or polychlorinated biphenyl;

                    (b)  Any waste,  gas or other  substance or material that is
                         explosive or radioactive;

                    (c)  Any "hazardous substance," "pollutant,"  "contaminant,"
                         "hazardous  waste," "regulated  substance,"  "hazardous
                         chemical" or "toxic chemical" as designated,  listed or
                         defined  (whether  expressly  or by  reference)  in any
                         statute,   regulation   or  other   Legal   Requirement
                         (including CERCLA,  any other so-called  "superfund" or
                         "superlien"  law,  the Resource  Conservation  Recovery
                         Act, the Federal Water Pollution Control Act, the Toxic
                         Substances  Control  Act,  the  Emergency  Planning and
                         Community   Right-to-Know   Act  and   the   respective
                         regulations promulgated thereunder);

                    (d)  Any other substance or material (regardless of physical
                         form) or form of energy  that is  subject  to any Legal
                         Requirement which regulates or establishes standards of
                         conduct in connection with, or which otherwise  relates
                         to, the protection of human health,  plant life, animal
                         life, natural  resources,  property or the enjoyment of
                         life or property  from the presence in the  environment
                         of any  solid,  liquid,  gas,  odor,  noise  or form of
                         energy; and

                                       3
<PAGE>


                    (e)  Any  compound,  mixture,  solution,  product  or  other
                         substance or material  that  contains any  substance or
                         material referred to in clause "(a)",  "(b)",  "(c)" or
                         "(d)" above.

     1.14.  Knowledge.  An individual  shall be deemed to have  "Knowledge" of a
particular fact or other matter if:

                    (a)  Such individual is actually aware of such fact or other
                         matter; or

                    (b)  A  prudent   individual  in  the   performance  of  his
                         fiduciary  responsibilities  would  be  expected  to be
                         aware of such fact or other matter.

     A Party shall be deemed to have  "Knowledge" of a particular  fact or other
matter if any executive  officer or director of such Party has Knowledge of such
fact or other matter.

     1.15. Legal Requirement. "Legal Requirement" shall mean any federal, state,
local,  municipal,  foreign or other law,  statute,  legislation,  constitution,
principle  of  common  law,   resolution,   ordinance,   code,  edict,   decree,
proclamation,   treaty,   convention,   rule,  regulation,   ruling,  directive,
pronouncement requirement,  specification,  determination,  decision, opinion or
interpretation  that  is,  has been or may in the  future  be  issued,  enacted,
adopted, passed, approved,  promulgated, made, implemented or otherwise put into
effect by or under the authority of any Governmental Body.

     1.16.  Liability.  "Liability"  shall  mean any debt,  obligation,  duty or
liability  of  any  nature  (including  any  unknown,  undisclosed,   unmatured,
unaccrued, unasserted,  contingent,  indirect, conditional,  implied, vicarious,
derivative,  joint, several or secondary liability),  regardless of whether such
debt,  obligation,  duty or  liability  would be required to be  disclosed  on a
balance sheet prepared in accordance  generally accepted  accounting  principles
and  regardless  of  whether  such  debt,  obligation,   duty  or  liability  is
immediately due and payable.

     1.17.  Material.  "Material"  shall  mean  more than de  minimis,  minor or
insignificant.

     1.18.  Material Seller Contracts.  "Material Seller Contracts" means Seller
Contracts  which required the expenditure by Seller of more than $250,000 in any
of  Seller's  last 3 fiscal  years,  or  which  accounted  for more  than 10% of
Seller's revenues in any of Seller's last 3 fiscal years.

     1.19. Net Working  Capital.  "Net Working Capital" shall mean total current
assets,  less total current  liabilities,  as computed in accordance  with GAAP,
after adjustment for any Permitted Distribution.

     1.20. Order. "Order" shall mean any,

                    (a)  Order,  judgment,  injunction,  edict, decree,  ruling,
                         pronouncement,    determination,   decision,   opinion,
                         verdict,  sentence,  subpoena, writ or award that is or
                         has been issued,  made, entered,  rendered or otherwise
                         put into effect by or under the authority of any court,
                         administrative agency or other Governmental Body or any
                         arbitrator or arbitration panel; or

                                       4
<PAGE>


                    (b)  Contract  with  any  Governmental  Body  that  has been
                         entered into in connection with any Proceeding.

     1.21.  Ordinary Course of Business.  An action taken by or on behalf of the
Seller  shall  not be  deemed  to have  been  taken in the  "Ordinary  Course of
Business" unless:

                    (a)  Such action is recurring in nature,  is consistent with
                         the  Seller's  past  practices  and  is  taken  in  the
                         ordinary  course  of  the  Seller's  normal  day-to-day
                         operations:

                    (b)  Such  action  is taken in  accordance  with  sound  and
                         prudent business practices; and

                    (c)  Such  action is not  required to be  authorized  by the
                         Seller's stockholders,  the Seller's board of directors
                         or any committee of the Seller's board of directors and
                         does  not  require   any  other   separate  or  special
                         authorization of any nature.

     Actions  outside of the Ordinary  Course of Business  include,  but are not
limited to, (i) selling any of the Purchased  Assets other than inventory  sales
in the  Ordinary  Course of  Business  and  dispositions  of assets in excess of
$50,000 individually or $100,000 collectively,  in the aggregate, during any one
(1) month period;  (ii) obtaining any loans,  incurring any Liability other than
routine  accounts  payable,  routine  accrued  expenses,  and entering  into any
Contracts;  (iii)  transactions  that  would  result in Net  Working  Capital at
Closing  which  is not  reflective  of a  continuation  of  historical  business
practices;  (iv)  payment  of  excess  salary,  bonuses  or  dividends;  and (v)
acquisitions of assets in excess of $50,000 individually.

                                       5
<PAGE>


     1.22.  Permitted  Distribution.  "Permitted  Distribution"  shall  mean any
payment or  provision  for payment of any  dividend or other amount by Seller to
Shareholder  to the  extent  that same  results  in a zero Net  Working  Capital
adjustment.

     1.23.  Person.  "Person" shall mean any individual,  Entity or Governmental
Body.

     1.24.  Proceeding.  "Proceeding" shall mean any action,  suit,  litigation,
arbitration,   proceeding  (including  any  civil,   criminal,   administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation that is,
has been or may in the future be  commenced,  brought,  conducted or heard by or
before, or that otherwise has involved or may involve,  any Governmental Body or
any arbitrator or arbitration panel.

     1.25. Proprietary Asset. "Proprietary Asset" shall mean any patent, patent,
application,  trademark  (whether  registered or unregistered and whether or not
relating to a published work),  trademark  application,  trade name,  fictitious
business name, service mark (whether  registered or unregistered),  service mark
application,   copyright   (whether   registered  or  unregistered),   copyright
application,  goodwill, maskwork, maskwork application,  trade secret, know-how,
franchise, system, computer software, invention, design, blueprint,  proprietary
product,  technology,  proprietary right or other intellectual properly right or
intangible asset including any route authority.

     1.26.  Purchaser  Group.  "Purchaser  Group"  shall  collectively  mean the
Purchaser and the Parent.

     1.27. Seller  Contracts.  "Seller  Contracts" shall  collectively mean each
Contract:

                    (a)  To which the Seller is a party;

                    (b)  By which  the  Seller or any of its  assets  are or may
                         become  bound or under  which the  Seller  has,  or may
                         become subject to, any obligation; or

                    (c)  Under  which the Seller has or may acquire any right or
                         interest.

     1.28. Supply Agreement. "Supply Agreement" shall mean an agreement executed
and delivered by Purchaser,  Parent and Shareholder at the Closing,  the form of
which is attached hereto as Exhibit A, pursuant to which Purchaser, Parent shall
purchase at least Fifteen  Percent (15%) of their annual  electronic  components
from Shareholder, subject to the terms set forth in the Supply Agreement.

     1.29.  Tax.  (a)  "Tax"  shall  mean any tax  (including  any  income  tax,
franchise  tax,  capital  gains tax, ---  estimated  tax,  gross  receipts  tax,
value-added  tax, surtax,  excise tax, ad valorem tax,  transfer tax, stamp tax,
tax, use tax,  property  tax,  business  tax,  occupation  tax,  inventory  tax,
occupancy  tax,  withholding  tax or payroll  tax),  levy,  assessment,  tariff,
impost, imposition,  toll, duty (including any customs duty), deficiency or fee,
and any related charge or amount (including any fine, penalty or interest), that
is or has been  imposed,  assessed or collected by or under the authority of any
Governmental Body.

                                       6
<PAGE>


     1.30.  Tax  Return.  "Tax  Return"  shall  mean any return  (including  any
information return), report, statement, declaration, estimate, schedule, notice,
notification,  form, election, certificate or other document or information that
is or has been  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.

     1.31. Transaction Documents. "Transaction Documents" shall mean:

                    (a)  The Agreement including the Disclosure Schedules; and

                    (b)  The Bills of Sale;

                    (c)  The Assumption Agreement;

                    (d)  The Assignment;

                    (e)  The Seller Note;

                    (f)  The Supply Agreement;

                    (g)  The Employment Agreement;

                    (h)  The Guaranty; and

                    (i)  Such  other   documents   necessary   to  complete  the
                         Transactions,  including without  limitation a contract
                         between  Purchaser  and  Seller  with  respect  to  the
                         purchase  and  sale of the  Real  Property  (the  "Real
                         Property Contract").

     1.32. Transactions. "Transactions" shall mean:

                    (a)  The   execution   and   delivery   of  the   respective
                         Transaction Documents, and

                    (b)  All of the transactions  contemplated by the respective
                         Transaction Document including:

                    (i)  the sale of the  Purchased  Assets by the Seller to the
                         Purchaser in accordance with the Agreement;

                    (ii) the assumption of the Assumed  Liabilities by Purchaser
                         in accordance with the Agreement; and

                    (iii)the  performance  by the  Seller,  Shareholder  and the
                         Purchaser  of their  respective  obligations  under the
                         Transaction  Documents  and the exercise by the Seller,
                         Shareholder  and  the  Purchaser  of  their  respective
                         rights under the Transaction Documents.

                                       7
<PAGE>


     2. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED LIABILITIES

     2.1. Sale and Purchase of Assets.  The Seller shall sell,  convey,  assign,
transfer and deliver to Purchaser at the Closing (as hereinafter  defined),  and
Purchaser  will  purchase  and accept at the  Closing,  all assets,  properties,
privileges,  rights,  interests,  business and goodwill  belonging to the Seller
(except  the  Excluded  Assets,  as  hereinafter  defined),  of  every  kind and
description,  real,  personal and mixed,  tangible and  intangible  and wherever
located (such assets, properties,  privileges,  rights, interests,  business and
goodwill being transferred hereunder are hereinafter referred to collectively as
the "Purchased Assets").  Without limiting the generality of the foregoing,  the
Purchased Assets shall include all of the Seller's right,  title and interest in
and to the  following  (except  to the extent  any of the  following  constitute
Excluded Assets):

                    (a)  Fixed  Assets.  All  machinery,  equipment,  computers,
                         vehicles,  furniture,  tools and other fixed assets and
                         goods and other  Material  items of  tangible  personal
                         property   owned  or  leased  by  the  Seller  from  an
                         independent   third  party  as  of  the  date  of  this
                         Agreement  and  used  by the  Seller,  other  than  the
                         Excluded  Assets,  as more fully set forth on  Schedule
                         3.9 (the "Fixed Assets");

                    (b)  Inventories.  All inventories of raw materials, work in
                         process,  components,  subassemblies,  finished  goods,
                         projects,  supplies,  packaging materials,  and similar
                         items  used  in  the  conduct  of the  Business  by the
                         Seller,  all as more  fully set forth on  Schedule  3.7
                         (the "Inventory");

                    (c)  Accounts  Receivable.  All notes receivables,  accounts
                         receivable and other  receivables of Seller of any kind
                         arising  out of the  Business  of the  Seller as of the
                         Closing  Date (as  defined  below),  whether  billed or
                         unbilled,  all as more fully set forth on Schedule  3.8
                         ("Accounts Receivable");

                    (d)  Real  Property  and  Real  Property  Leases.  All  real
                         property owned by the Seller and used in the conduct of
                         the Business  (the "Real  Property")  and all Lease and
                         Sublease  Agreements (the "Lease  Agreements"),  all of
                         which are listed in Schedule 3.10;

                    (e)  Seller  Contracts.   The  Seller  Contracts  listed  on
                         Schedule 3.12;

                    (f)  Proprietary  Assets.  All Proprietary  Assets listed on
                         Schedule  3.13,  which  also  contains a summary of the
                         Material Proprietary Assets;

                    (g)  Files and  Records.  All files  and  records  of Seller
                         related  to the  conduct  of the  Business,  including,
                         without  limitation,  all of Seller's  books,  records,
                         manuals,  documents, books of account,  correspondence,
                         sales and credit reports,  customer lists,  literature,
                         brochures,  advertising material and the like, provided
                         that  Purchaser  shall be provided  with only a copy of
                         Seller's  books of account and Seller  shall retain the
                         original  books of account and such other  records (the
                         "Retained  Data") as Seller requires for income tax and
                         other reporting purposes;

                                       8
<PAGE>


                    (h)  Capital Leases.  All rights of Seller under the capital
                         leases listed on Schedule  3.12 (the  "Assumed  Capital
                         Leases");

                    (i)  Goodwill.  All  of  Seller's  goodwill  related  to the
                         Seller,  and the  going  concern  value  of the  Seller
                         ("Goodwill");

                    (j)  Net Working  Capital  Cash.  Cash in the  possession of
                         Seller  to the  extent  such  cash is  included  in Net
                         Working Capital as of the Closing Date;

                    (k)  Operating  Leases.  All  rights  of  Seller  under  the
                         operating   leases  described  in  Schedule  3.12  (the
                         "Assumed Operating Leases").

     2.2. Excluded Assets. There shall be excluded from the Purchased Assets and
retained by Seller all of the following (collectively, the "Excluded Assets"):

                    (a)  Cash and  Investments.  All cash items,  securities and
                         financial  instruments  of the Seller,  not included in
                         Net Working Capital as of the Closing Date;

                    (b)  Books and Records. The minute books, seal, stock record
                         books  and  transfer  records  of the  Seller  and  the
                         Retained Data;

                    (c)  Other  Excluded  Assets.  Equipment  leased  under  any
                         capital leases other than the Assumed Capital Leases.

                                       9
<PAGE>


     2.3. No  Encumbrances.  The Purchased  Assets shall be sold and conveyed to
Purchaser  free and clear of all  Encumbrances,  except  (i) those  Encumbrances
identified on Schedule 2.3, (ii) with respect to the Real  Property,  easements,
rights  of  way,  restrictions,   encroachments,  and  other  minor  defects  or
irregularities  in title which do not interfere with the ordinary conduct of the
Business,  and (iii)  rights of the  lessors  under  the Lease  Agreements,  the
Assumed Capital Leases and the Assumed Operating Leases.

     2.4. Passage of Title. Title to all of the Purchased Assets shall pass from
Seller to Purchaser at Closing.

     2.5.  Transfer  Taxes.  The Purchaser  shall pay at Closing all  applicable
transfer,  recording and other  charges,  taxes or fees in  connection  with the
transfer of the Real  Property  hereunder.  The  Purchaser  and the Seller shall
equally  divide the  payment of any other  transfer,  sales,  use and bulk sales
taxes, ad valorem and property taxes, and similar  assessments  which arise from
the consummation of the transactions contemplated herein. The Purchaser shall be
responsible for all documentary, filing, recording and vehicle registration fees
payable as a result of the transfer of the Purchased Assets. The Purchaser shall
furnish  the Seller with such  information  and  certificates  as the Seller may
reasonably  request  to enable  the  Seller to obtain  any  available  sales tax
clearance certificates.

     2.6.  Assumed  Liabilities.  The Purchaser hereby agrees to assume from the
Seller,  and the Seller agrees to assign to the  Purchaser,  on the Closing Date
(i) the  liabilities  specifically  set forth on  Schedule  2.6,  as modified to
include all  accounts  payable and  accrued  expenses  included in the final Net
Working  Capital  Statement  Closing  Balance  Sheet  and (ii)  the  prospective
obligations of the Seller under the Lease Agreements,  Seller Contracts, Assumed
Operating Leases and Assumed Capital Leases  (collectively,  with respect to the
liabilities  and  obligations  described  in clauses (i) and (ii),  the "Assumed
Liabilities") and no other  liabilities.  From and after the Closing,  Purchaser
shall have complete  control over the payment,  settlement or other  disposition
of, or any dispute  involving,  any of the Assumed  Liabilities,  and  Purchaser
shall have the right to conduct  and control all  negotiations  and  proceedings
with respect thereto. The Seller shall notify Purchaser immediately of any claim
made with respect to any of the Assumed  Liabilities  and shall not, except with
the prior  written  consent of  Purchaser,  voluntarily  make any payment of, or
settle or offer to settle,  or consent to any compromise with respect to, any of
the Assumed Liabilities.

     2.7.  Excluded  Liabilities.   Except  for  the  Assumed  Liabilities,  the
Purchaser  is not assuming any  liability  or  obligation  of the Seller (or any
predecessor  owner  of all or part of the  Purchased  Assets)  and will not pay,
discharge,  perform or otherwise be liable for any liabilities,  indebtedness or
obligations  which relate to the Seller or the Purchased  Assets existing on the
Closing Date or arising out of any  transactions  entered  into, or any state of
facts  existing,  on or prior to the Closing Date  (collectively,  the "Excluded
Liabilities").  All such Excluded  Liabilities and obligations shall be retained
by and remain  obligations and liabilities of the Seller.  Without  limiting the
generality of the foregoing,  the Excluded Liabilities shall include, except for
the Assumed Liabilities:

                                       10
<PAGE>


                    (a)  All liabilities and obligations of Seller for costs and
                         expenses  incurred in connection with this Agreement or
                         the  consummation of the  transactions  contemplated by
                         this Agreement;

                    (b)  All  liabilities  and obligations of the Seller for any
                         Taxes  incurred,  or  attributed  to the  Seller or the
                         Purchased Assets prior to the Closing Date;

     2.8.  Employees.  Purchaser shall, as of the Closing Date,  employ Dan Shea
pursuant  to  the  terms  and  conditions  of an  employment  agreement  between
Purchaser  and Dan  Shea  (the  "Employment  Agreement",  the  form of  which is
attached hereto as Exhibit B).

     2.9. Consideration Paid by Purchaser.  Subject to any adjustments set forth
in Section 2.9(d),  Purchaser shall (i) pay to the Seller the Purchase Price (as
hereinafter defined in Section 2.9(a)); (ii) assume the Assumed Liabilities; and
(iii) pay to the Seller the Earn-Out in an amount up to a maximum of One Million
Dollars  ($1,000,000),  as more fully set forth in Section 2.9(c)  (collectively
the "Consideration").

                    (a)  Purchase  Price.  Purchaser shall pay to the Seller the
                         total amount of Twelve  Million  Dollars  ($12,000,000)
                         paid in accordance with Section 2.9(b),  subject to any
                         adjustment pursuant to Section 2.9(d).

                    (b)  Payment of Purchase Price.  The Purchase Price shall be
                         paid as follows:

                    (i)  Nine  Million  Two  Hundred  Fifty   Thousand   Dollars
                         ($9,250,000)  paid to or as  directed  by the Seller in
                         cash at Closing by wire transfer to such  account(s) as
                         Seller may designate;  subject to any  adjustments  set
                         forth in Section 2.9(d) ("Cash at Closing").

                    (ii) Two  Million  Seven  Hundred  Fifty  Thousand   Dollars
                         ($2,750,000)  in the form of a five (5) year promissory
                         note (the form of which is  attached  hereto as Exhibit
                         C) delivered to Seller at Closing (the "Seller  Note"),
                         which shall bear interest at a  fluctuating  rate equal
                         to the  prime  rate  set by the  Wall  Street  Journal,
                         capped  at  seven  percent  (7%)  per  annum,   payable
                         quarterly, with principal payable as follows:

                    (A)  Five Hundred  Thousand Dollars  ($500,000),  payable at
                         the two (2) year anniversary of the Seller Note;

                    (B)  One  Hundred  Fifty-Six   Thousand  Two  Hundred  Fifty
                         Dollars  ($156,250) on or before the end of each of the
                         next eight (8)  quarters,  beginning  with the  quarter
                         commencing  after the two (2) year  anniversary  of the
                         Seller Note; and

                    (C)  Two Hundred Fifty Thousand  ($250,000) on or before the
                         end of each of the four (4) quarters  commencing  after
                         the four (4) year anniversary of the Seller Note.

                                       11
<PAGE>


     The Seller Note is subject to offset as set forth in Section 7, and is also
subject to  acceleration  following  a default  and as further  provided  in the
Seller Note.

                    (c)  Earn-Out. The Purchaser shall pay to Shareholder (or as
                         otherwise   directed  by   Shareholder)   five  percent
                         -------- (5%) of the Purchaser Group's net sales (gross
                         sales  less  returns,  allowances  and sales  taxes) in
                         excess of $20,000,000  per Contract Year, as determined
                         in accordance  with GAAP, for each of the first six (6)
                         Contract Years after the Closing Date (the "Earn-Out").
                         The Earn-Out  payment  shall be due within  thirty (30)
                         days after the end  --------- of each Contract Year and
                         shall be accompanied by reasonable documentation of the
                         amount of such net sales for such  Contract  Year.  Net
                         sales shall include net sales from  existing  customers
                         of   Seller,   Purchaser   Group   and   any   existing
                         subsidiaries  of  Purchaser  Group,  as  well  as  from
                         customers of Purchaser Group and of their  subsidiaries
                         acquired  after the Closing Date as a result of merger,
                         acquisition or otherwise.  Notwithstanding  anything to
                         the contrary  contained herein, the total amount of all
                         Earn-Out  payments shall not exceed One Million Dollars
                         ($1,000,000).  If the Seller Note is accelerated,  then
                         provided that at least (i) $100,000 of Earn-Out payment
                         was due and payable  for the first  Contract  Year,  or
                         (ii)  $150,000 of Earn-Out  payment was due and payable
                         for the second  Contract Year,  the difference  between
                         $1,000,000  and the  aggregate  amount  paid under this
                         Section 2.9(c) shall become due and payable.

                    (d)  Adjustments to Purchase Price. The Purchase Price shall
                         be subject to the following adjustments:

     The Cash at Closing shall be adjusted on a  dollar-for-dollar  basis to the
extent the Net  Working  Capital as of the  Closing  Date,  as  determined  by a
post-closing  review (described below), is different from the target Net Working
Capital  amount  of  $7,331,000  by  more  than  Two  Hundred  Thousand  Dollars
($200,000) (the "Net Working Capital Adjustment"). The maximum amount of the Net
Working Capital Adjustment shall be Five Hundred Thousand Dollars ($500,000).

                    (e)  Net Working Capital Calculation. After the Closing, the
                         Seller  shall   prepare  a  statement  of  Net  Working
                         --------------------------------   Capital  as  of  the
                         close of business on the Closing Date (the "Net Working
                         Capital ----------------------  Statement"). The Seller
                         shall deliver the Net Working Capital  Statement to the
                         ---------  Purchaser  within thirty (30) days after the
                         Closing  Date.  The Seller shall  provide the Purchaser
                         with complete access to all relevant  information  used
                         by the  Seller in  preparing  the Net  Working  Capital
                         Statement.  The Net Working Capital Statement delivered
                         to the Purchaser shall be conclusive and binding on the
                         Parties  for  purposes of  determining  any Net Working
                         Capital  Adjustment,  unless the Purchaser notifies the
                         Seller  of the  Purchaser's  disagreement  with the Net
                         Working  Capital  Adjustment  in writing  within thirty
                         (30) days  after  the  Purchaser's  receipt  of the Net
                         Working Capital Statement.  The Purchaser's notice must
                         state with  specificity the amounts and the reasons for
                         Purchaser's disagreement.  If Purchaser notifies Seller
                         of  its  disagreement  with  the  Net  Working  Capital
                         Statement,  Purchaser  and Seller  shall use their good
                         faith efforts to agree on the amount of the Net Working
                         Capital Adjustment.

                                       12
<PAGE>


                    (f)  Arbitration.  If the  Purchaser  and the  Seller do not
                         agree  on  the  amount  of  the  Net  Working   Capital
                         -----------  Adjustment  within  forty-five  (45)  days
                         following  the  Purchaser's  receipt of the Net Working
                         Capital  Statement,  the  amount  of  the  Net  Working
                         Capital Adjustment that is undisputed, if any, shall be
                         paid at such time,  to the extent  that the  undisputed
                         amount  would not be offset by the  amount in  dispute.
                         The  Purchaser and the Seller shall  promptly  engage a
                         nationally  recognized firm of independent  accountants
                         to resolve any such  dispute.  In the absence of prompt
                         agreement   on  the   identity   of   the   independent
                         accountants,  the Parties shall cause their  respective
                         accounting  firms to jointly  designate  an  accounting
                         firm to resolve the dispute  within ninety (90) days of
                         the  engagement.  The  Seller and the  Purchaser  shall
                         furnish  or cause to be  furnished  to the  independent
                         accountants  such work papers and other  documents  and
                         information  relating  to the  disputed  issues  as the
                         independent  accountants  may request and are available
                         to that party or its agents and shall be  afforded  the
                         opportunity to present to the  independent  accountants
                         any  material  relating to the  disputed  issues and to
                         discuss  the issues with the  independent  accountants.
                         Absent fraud,  the  independent  accountants'  decision
                         shall be final, binding and conclusive upon the Parties
                         and shall be the  Parties'  sole and  exclusive  remedy
                         regarding  any  dispute   concerning  any  Net  Working
                         Capital  Adjustment and the amount so determined  shall
                         be paid by  Purchaser  or  Seller,  as the case may be,
                         within 10 days of such determination. The Purchaser and
                         the Seller shall share equally the fees and expenses of
                         the independent accountants.

                    (g)  Allocation  of  Consideration  Paid by  Purchaser.  The
                         Consideration  shall be  allocated in  accordance  with
                         ----------------------------------------------     Code
                         Section  1060  and  the   allocation   statement   (the
                         "Allocation Statement") prepared  ---------------------
                         by the Parties within One Hundred Sixty-Five (165) days
                         after the  Closing  Date.  The  Parties  each  agree to
                         prepare and file on a timely  basis any  necessary  Tax
                         forms  setting  forth an  allocation  set  forth in the
                         Allocation  Statement.  The  Parties  further  agree to
                         report  this  transaction  for income tax  purposes  in
                         accordance with the Allocation Statement and each Party
                         agrees  to  act  in  accordance  with  such  Allocation
                         Statement in the course of any Tax audit, Tax review or
                         Tax  litigation  concerning  such  Party  and  relating
                         thereto (except as otherwise  required by law). Neither
                         the  Seller  nor   Purchaser   will   assert  that  the
                         allocation  set forth in the  Allocation  Statement was
                         not  separately  bargained  for at arm's  length and in
                         good faith.  The Parties  confirm that  $450,000 of the
                         Consideration shall be allocated to the Real Property.

                                       13
<PAGE>


                    (h)  Pro-Rating  Adjustment.  The Parties  confirm that they
                         shall  pro-rate  and  adjust  for the  following  items
                         ----------------------  only: rent and security deposit
                         under  the  Lease   Agreement  and  under  the  Assumed
                         Operating Leases,  other monthly expenses,  real estate
                         taxes on the Real Property,  the health insurance costs
                         described in Section 8.12 and customer  deposits,  and,
                         the net result thereof, (the "Pro-Rating  Adjustment"),
                         shall    be    paid   to   the    Purchaser    or   the
                         ---------------------- Shareholder, as the case may be,
                         when the Net Working Capital  Adjustment is required to
                         be paid,  provided,  however,  that if any such item is
                         included in the  calculation  of Net  Working  Capital,
                         then  it  shall  be   excluded   from  the   Pro-Rating
                         Adjustment.  The Shareholder and Seller further confirm
                         that  they  have  paid,  or will  pay upon  receipt  of
                         appropriate   bills,  all  utility  costs  through  the
                         Closing Date  applicable  to the Real  Property and the
                         Lease Agreement.

     2.10. Closing.

                    (a)  The closing of the  Transactions  (the "Closing") shall
                         take place at the offices of Seller's counsel, Morrison
                         Cohen Singer & Weinstein,  LLP, 750  Lexington  Avenue,
                         New York,  New York,  at 10:00 a.m.  (Eastern  Standard
                         Time), on the date hereof, or on such other date as the
                         Parties may agree in writing (the "Closing Date").

                    (b)  At the Closing,  the Seller shall execute to the extent
                         the  execution by the Seller is  necessary  and deliver
                         to,  or  cause  to  be  delivered  to,   Purchaser  the
                         following:

                    (i)  bills of sale, deeds, certificates of title and general
                         instruments  of  assignment  and  transfer  to transfer
                         ownership  of the  Purchased  Assets from the Seller to
                         Purchaser  in  a  form  reasonably  acceptable  to  the
                         Parties and duly  executed by the Seller (the "Bills of
                         Sale");

                    (ii) an assignment and assumption agreement  transferring to
                         the Purchaser from the Seller all  Proprietary  Assets,
                         Governmental  Authorizations and warranties relating to
                         the Purchased Assets and responsibility for the Assumed
                         Liabilities  in a  form  reasonably  acceptable  to the
                         Parties   and  duly   executed   by  the  Seller   (the
                         "Assignment and Assumption Agreement");

                    (iii)the books and  records of the Seller  required  by this
                         Agreement,  the  certified  copies of the  articles  of
                         incorporation  of the  Seller as set  forth in  Section
                         3.2(a)(i),  the  certificates  of good  standing as set
                         forth in Section 3.2(a)(ii),  the Consents as set forth
                         in   Section   3.22,   copies   of   the   Governmental
                         Authorizations  as set  forth in  Section  3.15(a)  and
                         copies of the documents  relating to any Proceedings as
                         set forth in Section 3.20(b);

                                       14
<PAGE>


                    (iv) an opinion  from the  Seller's  attorney  to the effect
                         that  this  Agreement  and all  other  documents  to be
                         delivered  by the Seller at the Closing  have been duly
                         authorized,  executed and  delivered,  and,  subject to
                         customary  exceptions and limitations,  are enforceable
                         against the Seller;

                    (v)  the Supply Agreement executed by the Shareholder;

                    (vi) the Employment Agreement executed by Dan Shea; and

                    (vii)a certified  copy of  resolutions  duly  adopted by the
                         Board  of  Directors  of  Seller  and  of  Shareholder,
                         together with a copy of Seller's  By-Laws,  a certified
                         copy of Seller's  Certificate  of  Incorporation  and a
                         good standing certificate with respect to Seller.

                    (c)  At  the  Closing,  Purchaser  shall  make  the  payment
                         provided for in Section 2.9(b)(i) and shall execute and
                         deliver to the Seller,  to the extent the  execution by
                         the Purchaser is necessary, the following:

                    (i)  the Seller Note;

                    (ii) the Bills of Sale executed by Purchaser;

                    (iii)the  Assignment and  Assumption  Agreement  executed by
                         the Purchaser;

                    (iv) the Supply Agreement  executed by the Purchaser and the
                         Parent;

                    (v)  the Employment Agreement executed by the Purchaser;

                    (vi) a Guaranty executed by the Parent, the form of which is
                         attached hereto as Exhibit D;

                    (vii)an opinion from the Purchaser's  attorney to the effect
                         that  this  Agreement  and all  other  documents  to be
                         delivered  by the  Purchaser  at the Closing  have been
                         duly authorized, executed and delivered and, subject to
                         customary  exceptions and limitations,  are enforceable
                         against the Purchaser; and

                    (viii) a certified copy of  resolutions  duly adopted by the
                         Board of Directors of Purchaser and of Parent, together
                         with a copy of Purchaser's By-Laws, a certified copy of
                         Purchaser's  Certificate  of  Incorporation  and a good
                         standing certificate with respect to Purchaser.

                    (d)  At the Closing, in addition to the foregoing,  the Real
                         Property  Contract  shall be executed and delivered and
                         each  Party  shall  deliver  to the  other  such  other
                         agreements  and  documents  as  such  other  Party  may
                         reasonably request.

                                       15
<PAGE>


     3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDER

         The Seller and Shareholder jointly and severally represent and warrant,
to and for the benefit of the Purchaser and Parent, as follows:

     3.1. Due Organization; No Subsidiaries; Etc.

                    (a)  The Seller is a  corporation  duly  organized,  validly
                         existing  and in good  standing  under  the laws of the
                         State  of  Delaware  and has all  necessary  power  and
                         authority:

                    (i)  to  conduct  its  Business  in the  manner in which its
                         Business is currently being conducted;

                    (ii) to own and use its  assets  in the  manner in which its
                         assets  are  currently  owned  and  used;  and (iii) to
                         perform its obligations under the Seller Contracts.

                    (b)  The  Seller  has not  during  the past  three (3) years
                         conducted any business under or otherwise used, for any
                         purpose or in any  jurisdiction,  any fictitious  name,
                         assumed  name,  or  other  name,  other  than  the name
                         "Nexus".

                    (c)  The Seller is in good standing as a foreign corporation
                         in each of the  jurisdictions  identified  in  Schedule
                         3.1.

                    (d)  Schedule 3.1 accurately sets forth (i) the names of the
                         members of the Seller's  board of  directors,  and (ii)
                         the names and titles of the Seller's officers.

                    (e)  Neither the Seller nor  Shareholder has during the past
                         three (3) years  approved,  or commenced any proceeding
                         or made any election contemplating,  the dissolution or
                         liquidation   of  the  Seller  or  the  winding  up  or
                         cessation of the Seller's Business or affairs.

                    (f)  The Seller has no subsidiaries,  and the Seller has not
                         during the past three (3) years owned,  beneficially or
                         otherwise,  any shares or other  securities  of, or any
                         direct or indirect interest of any nature in, any other
                         Entity.

     3.2. Certificate of Incorporation and Bylaws; Records.

                    (a)  The Seller has  delivered  to  Purchaser  accurate  and
                         complete copies of:

                                       16
<PAGE>


                    (i)  the Seller's  certificate of  incorporation  (certified
                         copy) and bylaws, including all amendments thereto;

                    (ii) a certificate of good standing for the Seller;

                    (iii) stock records of the Seller; and

                    (iv) the minutes and other records of the meetings and other
                         proceedings  (including  any  actions  taken by written
                         consent  or   otherwise   without  a  meeting)  of  the
                         Shareholder,  the board of  directors of the Seller and
                         all committees of the board of directors of the Seller.

                    (b)  The books of account,  stock records,  minute books and
                         other  records of the Seller are  accurate,  up-to date
                         and complete,  in all Material respects,  and have been
                         maintained  in   accordance   with  sound  and  prudent
                         business  practices.  All of the  records of the Seller
                         are in the actual  possession and direct control of the
                         Seller or the Shareholder.

     3.3. Capitalization, Etc.

                    (a)  The  authorized  and issued capital stock of the Seller
                         consists solely of 200 shares of common stock $0.01 par
                         value per share (the "Shares").

                    (b)  All of the  Shares  are owned of  record,  legally  and
                         beneficially by  Shareholder.  All rights and powers to
                         vote the Shares are held exclusively by Shareholder.

                    (c)  All of the  Shares  (i) have been duly  authorized  and
                         validly issued, (ii) are fully paid and non-assessable,
                         and (iii) have been issued in full  compliance with all
                         applicable  securities laws and other  applicable Legal
                         Requirements.

     3.4. Financial Statements.

                    (a)  The Seller has delivered to the Purchaser the following
                         financial  statements  and  notes,  (collectively,  the
                         "Seller Financial Statements"):

                    (i)  Balance sheet,  statement of  operations,  statement of
                         cash flows and statement of  stockholder's  equity with
                         respect to the Seller for the fiscal  years  ended June
                         30, 2004, June 30, 2003 and June 30, 2002;

                    (ii) Balance  sheet  and  statement  of  operations  for the
                         two-month  period ended  September 3, 2004  attached as
                         Schedule 3.4(a); and

                    (iii)Statements  showing the accounts  receivable,  accounts
                         payable,  any other  liabilities,  and other statements
                         requested by  Purchaser  with respect to the Seller for
                         the two-month  period ended  September 3, 2004 attached
                         as Schedule 3.4(a).

                                       17
<PAGE>


                    (b)  All of the Seller Financial Statements are accurate and
                         complete in all Material respects. The Seller Financial
                         Statements in clauses (i) and (ii) above present fairly
                         the  financial   position  of  the  Seller  as  of  the
                         respective  dates thereof and the results of operations
                         for the periods covered  thereby.  The Seller Financial
                         Statements  in  clauses  (i) and (ii)  above  have been
                         prepared  in  accordance   with  GAAP,   applied  on  a
                         consistent basis throughout the periods covered, except
                         for the absence of footnotes.

     3.5. Absence of Material Changes. After June 30, 2004:

                    (a)  There has not been any Material  adverse  change in the
                         Seller's  Business,  ability to operate  the  Business,
                         condition, assets, liabilities,  operations,  financial
                         performance,  net income (or in any Material  aspect or
                         portion thereof),  and no event has occurred that might
                         have  a  Material   adverse   effect  on  the  Seller's
                         Business,  ability to operate the Business,  condition,
                         assets, liabilities, operations, financial performance,
                         net  income  (or  on any  Material  aspect  or  portion
                         thereof);

                    (b)  The  Seller  has not  forgiven  any  debt or  otherwise
                         released  or waived  any  right or claim  except in the
                         Ordinary Course of Business; and

                    (c)  The  Seller has not  entered  into any  transaction  or
                         taken any other action  outside the Ordinary  Course of
                         Business,  other than  transactions  contemplated by or
                         taken  in  connection  with  the  consummation  of this
                         Agreement and a transaction described in Schedule 3.13,
                         and except  nothing  contained  herein  shall  restrict
                         Seller   from   declaring   or  paying  any   Permitted
                         Distribution.

     3.6. Title to Assets.

                    (a)  The Seller  owns,  and has good,  valid and  marketable
                         title to, all of the following assets:

                    (i)  all  assets   reflected  on  the   Seller's   Financial
                         Statements   (except  for  inventory  and  non-Material
                         assets  sold by the Seller  since June 30,  2004 in the
                         Ordinary Course of Business);

                    (ii) all assets  acquired by the Seller  since June 30, 2004
                         (except for inventory sold by the Seller since June 30,
                         2004 in the Ordinary Course of Business):

                    (iii)all assets  referred to in Schedules  3.7, 3.8, 3.9 and
                         3.11   and   the    Real    Property    described    in
                         ------------------------------------   Schedule   3.10;
                         -------------

                    (iv) all other assets  reflected  in the Seller's  books and
                         records as being owned by the Seller; and

                                       18
<PAGE>


                    (v)  the  Purchased  Assets,  to the extent not  included in
                         clauses "(i)" through "(iv)" above.

                    (b)  Schedule  3.6.  identifies  all  assets  that are being
                         leased or licensed to the Seller. Except for the rights
                         of the lessors or  licensors of the assets set forth in
                         Schedule  3.6,  all of said  assets  are  owned  by the
                         Seller free and clear of any Encumbrances.

     3.7. Inventories.  All of the Inventory owned by the Seller as of September
3, 2004 is identified on, and located at the locations  identified on,  Schedule
3.7.  The  Inventory is valued on the books and records of the Seller and in the
Seller  Financial  Statements  at the lower of cost or market.  All inventory is
accounted  for  using the  average  cost in  accordance  with  GAAP.  All of the
finished  goods  Inventory   included  in  the  Purchased  Assets  is  in  good,
merchantable  and usable  condition  and is salable  in the  Ordinary  Course of
Business  within a  reasonable  time and at normal  profit  margins  (except  as
reserved in the Seller Financial  Statements),  except for not more than $25,000
thereof.

     3.8. Receivables.

                    (a)  Schedule   3.8   provides  an  accurate   and  complete
                         breakdown  and aging of all Accounts  Receivable of the
                         Seller as of September 3, 2004.

                    (b)  Except  as set  forth on  Schedule  3.8,  all  existing
                         Accounts  Receivable  of  the  Seller  represent  valid
                         obligations  of  customers  of the Seller  arising from
                         bona fide  transactions  entered  into in the  Ordinary
                         Course of Business.

     3.9.  Fixed Assets.  Schedule 3.9  accurately  identifies  all Fixed Assets
owned by the Seller. Schedule 3.9 also accurately identifies all tangible assets
leased to the Seller.  The Fixed Assets  identified in Schedule 3.9 are adequate
for the conduct of the Seller's Business in the manner in which such Business is
currently being conducted.

     3.10.  Real  Property.  The Seller  does not own any real  property  or any
interest in real property,  except for real property and the leaseholds  created
under the Lease  Agreements  identified  in  Schedule  3.10,  which  provides an
accurate and complete  description of the real property and the premises covered
by said Lease Agreements and the facilities located on such premises. The Seller
enjoys peaceful and undisturbed  possession of such premises.  The manufacturing
facility  located on the Real Property is a one-story  building.  The Seller has
not,  during the past three (3) years received  notice of any claim that the use
of the Real Property creates smoke,  noxious fumes,  odors or noise offensive to
the neighboring inhabitants.

     3.11. Proprietary Assets.

                    (a)  Except  as set  forth  in  Schedule  3.11,  there is no
                         Proprietary  Asset that is owned by or  licensed to the
                         Seller  or  that  is   otherwise   used  or  useful  in
                         connection with the conduct of the Seller's Business.

                                       19
<PAGE>


                    (b)  The  Seller  has taken such  measures  and  precautions
                         which  the  Seller   has   considered   necessary   and
                         appropriate to protect the confidentiality and value of
                         each  Proprietary  Asset  identified  or required to be
                         identified in Schedule 3.11.

                    (c)  To the  Knowledge  of the Seller and  Shareholder,  the
                         Seller is not infringing  and has not,  during the past
                         three (3) years,  infringed  or received  any notice or
                         other  communication  (in writing or  otherwise) of any
                         actual,   alleged,   possible  or  potential   Material
                         infringement of, any Material  Proprietary  Asset owned
                         or used by any other  Person.  To the  Knowledge of the
                         Seller and Shareholder,  no other Person is infringing,
                         and no  Proprietary  Asset  owned or used by any  other
                         Person  infringes or conflicts  with,  any  Proprietary
                         Asset owned or used by the Seller.

     3.12. Contracts.

                    (a)  Schedule 3.12  identifies  and provides an accurate and
                         complete  description  of each of the  Material  Seller
                         Contracts, Assumed Capital Leases and Assumed Operating
                         Leases.  The  Seller  has  delivered  to the  Purchaser
                         accurate  and  complete  copies of all of the  Material
                         Seller  Contracts,  the Assumed  Capital Leases and the
                         Assumed  Operating Leases  identified in Schedule 3.12,
                         including all amendments thereto.

                    (b)  Each Material  Seller  Contract,  Assumed Capital Lease
                         and Assumed  Operating Lease is valid and in full force
                         and  effect,  and  is  enforceable  by  the  Seller  in
                         accordance with their terms.

                    (c)  Except as set forth in Schedule 3.12:

                    (i)  no Person has  violated  or  breached,  or  declared or
                         committed  any  Material  default  under,  any  of  the
                         Material Seller Contracts or the Assumed Capital Leases
                         or the Assumed Operating Leases;

                    (ii) no event has occurred, and no circumstance or condition
                         exists,  that might (with or without notice or lapse of
                         time) (A) result in a violation or breach of any of the
                         provisions of any of the Material  Seller  Contracts or
                         the Assumed  Capital Leases,  or the Assumed  Operating
                         Leases  (B) give any  Person  the  right to  declare  a
                         default  or  exercise  any  remedy  under  any  of  the
                         Material Seller Contracts or the Assumed Capital Leases
                         or the Assumed  Operating  Leases,  (C) give any Person
                         the right to accelerate  the maturity or performance of
                         any of the  Material  Seller  Contracts  or the Assumed
                         Capital Leases or the Assumed  Operating Leases, or (D)
                         give any  Person  the  right to  cancel,  terminate  or
                         modify  any of the  Material  Seller  Contracts  or the
                         Assumed Capital Leases or the Assumed Operating Leases;
                         and

                                       20
<PAGE>


                    (iii)the  Seller  has  not  received  any  notice  or  other
                         communication  (in writing or otherwise)  regarding any
                         actual,  alleged,  possible or  potential  violation or
                         breach of, or default under, any of the Material Seller
                         Contracts or the Assumed  Capital Leases or the Assumed
                         Operating Leases.

                    (d)  Schedule  3.22 sets forth all of the Consents  that are
                         required  to be  obtained  resulting  from  a  transfer
                         --------------  or an assignment of the Material Seller
                         Contracts,  the Assumed  Capital Leases and the Assumed
                         Operating  Leases and Seller and Shareholder  shall use
                         reasonable   efforts  to  cause  such  Consents  to  be
                         delivered  to  Purchaser  by  the  Seller  at  Closing,
                         provided  that if any of  such  Consents  disclosed  on
                         Schedule  3.22 are not obtained  and the  -------------
                         Closing  nonetheless occurs, the failure to obtain same
                         shall be deemed to have been waived.

     3.13. Liabilities.

                    (a)  The Seller has no Liabilities, except for:

                    (i)  liabilities  identified  as such  in the  "liabilities"
                         column  of  the  Seller's   June  30,  2004   Financial
                         Statements;

                    (ii) accounts  payable  and  accrued  expenses  (of the type
                         required to be reflected as current  liabilities in the
                         "liabilities"  column of a balance  sheet  prepared  in
                         accordance  with  GAAP)  incurred  by the Seller in the
                         Ordinary Course of Business since June 30, 2004;

                    (iii)the Seller's  obligations  under the Seller  Contracts,
                         including the Material  Seller  Contracts,  the Assumed
                         Capital Leases,  the Assumed  Operating  Leases and the
                         Lease  Agreement  and  such  other  Liabilities  not in
                         excess  of  $100,000  in the  aggregate  which  are not
                         required to be included in the "liabilities"  column of
                         a balance sheet prepared in accordance with GAAP; and

                    (iv) the liabilities identified on Schedule 3.13.

                    (b)  Schedule 3.13

                    (i)  provides an accurate and complete  breakdown  and aging
                         of the  Seller's  accounts  payable as of  September 3,
                         2004; and

                    (ii) provides  an accurate  and  complete  breakdown  of all
                         customer deposits and other deposits held by the Seller
                         as of September 3, 2004.

                                       21
<PAGE>


     3.14. Compliance With Legal Requirements.

         Except as set forth in Schedule 3.14
                                -------------

                    (i)  the Seller is in  compliance  in all Material  respects
                         with each Legal Requirement that is applicable to it or
                         to the conduct of its Business or the  ownership of any
                         of its assets; and

                    (ii) the Seller  has not  received,  at any time  within the
                         past three (3) years, any notice or other communication
                         (in writing or otherwise) from any Governmental Body or
                         any other  Person  regarding  (i) any actual,  alleged,
                         possible  or  potential  violation  of, or  failure  to
                         comply with, any Legal Requirement, or (ii) any actual,
                         alleged,  possible or potential  obligation on the part
                         of the  Seller  to  undertake,  or to  bear  all or any
                         portion  of the cost of, any  cleanup or any  remedial,
                         corrective or response action of any nature.

     3.15. Governmental Authorizations.

                    (a)  Schedule 3.15 identifies:

                    (i)  each  Governmental  Authorization  that  is held by the
                         Seller; and

                    (ii) each  other  Governmental  Authorization  that,  to the
                         Knowledge of the Seller and Shareholder, is held by any
                         of the Seller's  employees  and relates to or is useful
                         in connection with the Seller's Business.

     The Seller has delivered to the Purchaser  accurate and complete  copies of
all of the Governmental  Authorizations  identified in Schedule 3.15,  including
all renewals thereof and all amendments thereto. Each Governmental Authorization
identified  or required to be  identified  in Schedule 3.15 is valid and in full
force and effect.

                    (b)  Except as set forth in Schedule 3.15:

                    (i)  the Seller and its  employees  are in compliance in all
                         Material   respects   with   all  of  the   terms   and
                         requirements   of   each   Governmental   Authorization
                         identified  or  required to be  identified  in Schedule
                         3.15; and

                    (ii) the Seller has not  received  during the past three (3)
                         years,  and,  to  the  Knowledge  of  Shareholder,   no
                         employee  of the  Seller has  received  during the past
                         three (3) years, any notice or other  communication (in
                         writing or otherwise) from any Governmental Body or any
                         other  Person   regarding  (A)  any  actual,   alleged,
                         possible or potential violation of or failure to comply
                         with  any  term  or  requirement  of  any  Governmental
                         Authorization, or (B) any actual, proposed, possible or
                         potential    revocation,     withdrawal,    suspension,
                         cancellation,   termination  or   modification  of  any
                         Governmental Authorization.

                                       22
<PAGE>


                    (c)  The Governmental  Authorizations identified in Schedule
                         3.15 constitute all of the Governmental  Authorizations
                         necessary  to enable the Seller to conduct its Business
                         in the manner in which its Business is currently  being
                         conducted.

     3.16. Tax Matters.

                    (a)  Any  Material  Tax  required  to have  been paid by the
                         Seller   (whether   pursuant   to  any  Tax  Return  or
                         otherwise)  with  respect to the  Purchased  Assets has
                         been duly paid in full.  Any  Material  Tax required to
                         have been  withheld  or  collected  by the Seller  with
                         respect to the Purchased  Assets has been duly withheld
                         and collected;  and (to the extent  required) each such
                         Tax has been paid to the appropriate Governmental Body.

                    (b)  Schedule  3.16  accurately  identifies  all Tax Returns
                         required to be filed by or on behalf of the Seller with
                         respect to the Purchased  Assets with any  Governmental
                         Body with  respect to any taxable  period  ending on or
                         before the three (3) year period  ending on the Closing
                         Date  (the  "Seller  Returns").   All  Material  Seller
                         Returns  (i) have been  filed  when due,  and (ii) have
                         been accurately and completely prepared in all Material
                         respects  in  accordance  with  all  applicable   Legal
                         Requirements.

                    (c)  Schedule 3.16 accurately identifies each examination or
                         audit  of  any  Seller   Return  with  respect  to  the
                         -------------  Purchased Assets that has been conducted
                         at any time during the past three (3) years. The Seller
                         has  delivered to the  Purchaser  accurate and complete
                         copies of all audit  reports and similar  documents (to
                         which the Seller has  access)  relating  to such Seller
                         Returns.  Except  as set  forth in  Schedule  3.16,  no
                         extension  or waiver of the  --------------  limitation
                         period  applicable  to any of the Seller  Returns  with
                         respect to the  Purchased  Assets has been  granted (by
                         the Seller or any other Person),  and no such extension
                         or waiver has been requested from the Seller.

                    (d)  Except as set forth in Schedule 3.16, no claim or other
                         Proceeding is pending or has been threatened against or
                         with   respect  to  the  Seller  with  respect  to  the
                         Purchased Assets in respect of any Tax.

     3.17. Employee and Labor Matters.

                    (a)  Schedule 3.17  accurately  sets forth,  with respect to
                         each employee of the Seller  (including any employee of
                         the  Seller  who is on a leave of  absence or on layoff
                         status):

                    (i)  the name of such employee and the date as of which such
                         employee  was  originally   hired  by  the  Seller  and
                         responsibilities;

                                       23
<PAGE>


                    (ii) such  employee's  title,  and  a  description  of  such
                         employee's duties;

                    (iii)the  dollar  amount  of  the  compensation   (including
                         wages,  salary,  commissions,  director's fees,  fringe
                         benefits,  bonuses,  profit-sharing  payments and other
                         payments  or  benefits  of any type)  received  by such
                         employee  from the  Seller  with  respect  to  services
                         performed in 2003;

                    (iv) such employee's annualized  compensation as of the date
                         of this Agreement; and

                    (v)  any  Governmental  Authorization  that  is held by such
                         employee  and that  relates to is useful in  connection
                         with the Seller's Business.

                    (b)  Except as set forth in Schedule 3.17, the Seller is not
                         a party to or bound  by,  and the  Seller  has not been
                         during the past three (3) years a party to or bound by,
                         any employment  agreement with any current  employee or
                         any union contract,  collective bargaining agreement or
                         similar Contract.

                    (c)  Except as set forth in Schedule 3.17, the employment of
                         each of the  Seller's  employees is  terminable  by the
                         Seller  at  will.  The  Seller  has  delivered  to  the
                         Purchaser  accurate and complete copies of all employee
                         manuals and  handbooks,  disclosure  materials,  policy
                         statements   and  other   materials   relating  to  the
                         employment of the current employees of the Seller.

                    (d)  The Seller agrees to pay, perform and discharge any all
                         Liabilities or obligations  owed to any employee of the
                         Seller for wages or  benefits  accruing  on or prior to
                         the Closing Date, except to the extent same is included
                         as a liability in the Net Working Capital calculation.

                                       24
<PAGE>


     3.18.  Company  Plans.  The Seller does not currently  maintain any Company
Plans, and is not currently  obligated to pay benefits to any former employee or
their family members, except for the Company Plans identified on Schedule 3.18.

     3.19.  Environmental  Matters.  Except as set forth on Schedule  3.19,  the
Seller  has not  during  the past six (6)  years  received  any  notice or other
communication  (in writing or  otherwise)  from any  Governmental  Body or other
Person regarding any actual,  alleged,  possible or potential  Liability arising
from  or  relating  to  the  presence,  generation,   manufacture,   production,
transportation,  importation, use, treatment, refinement,  processing, handling,
storage, discharge,  release, emission or disposal of any Hazardous Material. No
Person or  Governmental  Body has  during  the past six (6) years  commenced  or
threatened to commence any contribution  action or other Proceeding  against the
Seller in  connection  with any such  actual,  alleged,  possible  or  potential
Liability;  and,  except as set forth on Schedule  3.19,  no event has  occurred
during the past six (6) years, and no condition or circumstance exists, that may
directly or indirectly  give rise to, or result in the Seller  becoming  subject
to, any such Liability.

     3.20. Proceedings; Orders.

                    (a)  Except  as set  forth  in  Schedule  3.20,  there is no
                         pending Proceeding, and, to the Knowledge of Seller and
                         the  Shareholder,  no Person has threatened to commence
                         any Proceeding;

                    (i)  that involves the Seller or that  otherwise  relates to
                         or might  affect the  Seller's  Business  or any of the
                         Purchased Assets (whether or not the Seller is named as
                         a party thereto); or

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

     Except as set forth in Schedule 3.20, no event has occurred,  and no claim,
dispute or other  condition  or  circumstance  exists,  that might  directly  or
indirectly  give  rise to or serve as a basis for the  commencement  of any such
Proceeding.

                    (b)  The Seller has delivered to the Purchaser  accurate and
                         complete  copies of all pleadings,  correspondence  and
                         other written  materials to which the Seller has access
                         that relate to the  Proceedings  identified in Schedule
                         3.20.

                    (c)  There is no Order to which  the  Seller,  or any of the
                         assets  owned or used by the Seller,  is  subject;  and
                         Shareholder is not subject to any Order that relates to
                         the  Seller's  Business  or to  any  of  the  Purchased
                         Assets.

                    (d)  To the  Knowledge  of the  Seller and  Shareholder,  no
                         officer  or  employee  of the  Seller is subject to any
                         Order that  prohibits an employee  from  engaging in or
                         continuing any conduct,  activity or practice  relating
                         to the Seller's Business.

                                       25
<PAGE>


     3.21. Authority; Binding Nature of Agreements.

                    (a)  The Seller has the  absolute  and  unrestricted  right,
                         power and  authority  to enter into and to perform  its
                         obligations  under this  Agreement;  and the execution,
                         delivery  and   performance   by  the  Seller  of  this
                         Agreement  have been duly  authorized  by all necessary
                         action  on the  part  of  the  Seller.  This  Agreement
                         constitutes the legal,  valid and binding obligation of
                         the   Seller,   enforceable   against   the  Seller  in
                         accordance with its terms.

                    (b)  Shareholder  has the absolute and  unrestricted  right,
                         power  and  capacity  to  enter  into  and  to  perform
                         Shareholder's obligations under each of the Transaction
                         Documents  to  which  Shareholder  is or may  become  a
                         party. This Agreement  constitutes the legal, valid and
                         binding obligation of Shareholder,  enforceable against
                         Shareholder  in  accordance  with its  terms.  Upon the
                         execution of each of the other Transaction Documents at
                         the Closing,  each of such other Transaction  Documents
                         will constitute the legal, valid and binding obligation
                         of  Shareholder,   and  will  be  enforceable   against
                         Shareholder in accordance with its terms.

     3.22.  Non-Contravention  Consents.  Except as set forth in Schedule  3.22,
neither the execution nor delivery of any of the Transaction Documents,  nor the
consummation  or  performance  of any  of the  Transactions,  will  directly  or
indirectly (with or without notice or lapse of time):

                    (a)  Contravene,  conflict  with or result in a violation of
                         (i) any of the  provisions of the Seller's  certificate
                         of  incorporation  or  bylaws,  or (ii) any  resolution
                         adopted  by the  Shareholder,  the  Seller's  board  of
                         directors or any  committee  of the  Seller's  board of
                         directors;

                    (b)  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 or to exercise any
                         remedy  or  obtain   any   relief   under,   any  Legal
                         Requirement  or  any  Order  to  which  the  Seller  or
                         Shareholder,  or any of the assets owned or used by the
                         Seller, is subject;

                    (c)  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 Governmental
                         Authorization  that  is held  by the  Seller  or any of
                         their  employees  or  that  otherwise  relates  to  the
                         Seller's Business or to any of the Purchased Assets;

                    (d)  Contravene,  conflict  with or result in a violation or
                         breach of, or result in a default under,  any provision
                         of any of the Material Seller Contracts;

                    (e)  Give any Person  the right to (i)  declare a default or
                         exercise any remedy  under any of the  Material  Seller
                         Contracts,  (ii) accelerate the maturity or performance
                         of any of  the  Material  Seller  Contracts,  or  (iii)
                         cancel,  terminate or modify any of the Material Seller
                         Contracts;

                                       26
<PAGE>


                    (f)  Contravene,  conflict  with or result in a violation or
                         breach of or a default  under any provision of, or give
                         any Person the right to  declare a default  under,  any
                         Contract  to which  Shareholder  is a party or by which
                         Shareholder is bound; or

                    (g)  Result in the imposition or creation of any Encumbrance
                         upon or with respect to any of the Purchased Assets.

     Except as set forth in Schedule 3.22, the Seller and Shareholder are not or
will not be required to obtain any Consent from,  any Person in connection  with
the  execution  and  delivery  of  any  of  the  Transaction  Documents  or  the
consummation or performance of any of the Transactions.

     3.23. Brokers. Except as set forth in Schedule 3.23, neither the Seller nor
Shareholder has agreed or will become  obligated to pay, or has taken any action
that  might  result in any  Person  claiming  to be  entitled  to  receive,  any
brokerage  commission,  finder's fee or similar  commission or fee in connection
with any of the  Transactions.  The Shareholder shall pay or cause the Seller to
pay such amount as is payable  pursuant to  separate  agreement  with any Person
included in Schedule 3.23.

     4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER

         The Parent and Purchaser, jointly and severally, represent and warrant,
to and for the benefit of the Seller and Shareholder, as follows:

     4.1. Due  Organization.  The Parent and Purchaser are each duly  organized,
validly existing and in good standing, under the laws of the State of Florida.

     4.2. Authority; Binding Nature of Agreement.

                    (a)  The Parent and the Purchaser each have the absolute and
                         unrestricted  right,  power and authority to enter into
                         and perform its  obligations  under this  Agreement and
                         under each of the other Transaction  Documents to which
                         the, Parent or Purchaser is a party.

                    (b)  The execution,  delivery and  performance by the Parent
                         and the Purchaser of each of the Transaction  Documents
                         to which the  Parent or  Purchaser  is a party has been
                         duly authorized by all necessary  action on the part of
                         the Parent or Purchaser and their  respective  board of
                         directors.

                    (c)  This  Agreement  and  each  of  the  other  Transaction
                         Documents  to which the  Parent or the  Purchaser  is a
                         party,   constitutes  the  legal,   valid  and  binding
                         obligation  of the  Parent  or  Purchaser,  enforceable
                         against the Parent or Purchaser in accordance  with its
                         terms.

                                       27
<PAGE>


     4.3.  Employees.  Immediately after the Closing Date, the Purchaser intends
to hire all or substantially all of the Seller's  employees on substantially the
same terms as their  employment  with the Seller;  provided  however,  except as
provided  in any  employment  agreements  entered  into  by the  Purchaser,  the
Purchaser has no obligation to employ any employee for any definitive  amount of
time.

     4.4.  Brokers.  Neither  the  Purchaser  nor the  Parent has agreed or will
become obligated to pay, or has taken any action that might result in any Person
claiming to be entitled to receive,  any brokerage  commission,  finder's fee or
similar commission or fee in connection with any of the Transactions.

     5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE.

         The Purchaser's obligation to purchase the Purchased Assets, assume the
Assumed Liabilities, and to take the other actions required to be taken by the
Purchaser 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
Purchaser, in whole or in part, in accordance with Section 9.5):

     5.1. Accuracy of Representations. All of the representations and warranties
made by the Seller and Shareholder in this Agreement (considered  collectively),
and each of said representations and warranties (considered individually), shall
have been accurate in all Material respects as of the date of this Agreement and
as of the Closing Date.

     5.2. Performance of Obligations.

                    (a)  The Seller shall have  executed and  delivered  each of
                         the documents  required to be executed and delivered by
                         the Seller pursuant to Section 2.10(b).

                    (b)  All of the other  covenants  and  obligations  that the
                         Seller and  Shareholder  are required to comply with or
                         to  perform  at or  prior  to the  Closing  (considered
                         collectively),   and   each  of  said   covenants   and
                         obligations (considered individually),  shall have been
                         duly  complied  with  and  performed  in  all  Material
                         respects.

     5.3. Consents.  Each of the Consents identified in Schedule 3.22 shall have
been obtained and shall be in full force and effect.

     5.4. No Material Adverse Change.  There shall have been no Material adverse
change in the Seller's  Business,  ability to operate the  Business,  condition,
assets, liabilities,  operations,  financial performance,  net income (or in any
aspect or portion thereof) since July 31, 2004.

     5.5.  Additional  Documents.  Purchaser shall have received and reviewed to
its satisfaction the following documents:

                    (a)  Such documents as the Purchaser may reasonably  request
                         in good  faith for the  purpose of (i)  evidencing  the
                         accuracy of any  representation or warranty made by the
                         Seller or  Shareholder,  (ii) evidencing the compliance
                         by the Seller or Shareholder  with, or the  performance
                         by the  Seller  or  Shareholder  of,  any  covenant  or
                         obligation   set   forth  in  this   Agreement,   (iii)
                         evidencing the  satisfaction of any condition set forth
                         in this Section 5, or (iv) otherwise  facilitating  the
                         consummation or performance of any of the Transactions.

                                       28
<PAGE>


                    (b)  Any  document  required to be  delivered  to  Purchaser
                         pursuant to this  Agreement  that has not already  been
                         delivered to the  Purchaser  prior to the Closing Date,
                         including but not limited to the Disclosure Schedules.

     5.6. No Claim  Regarding the Purchased  Assets or Sale Proceeds.  No Person
shall have made or threatened  any claim  asserting  that such Person (a) may be
the  holder or the  beneficial  owner of, or may have the right to acquire or to
obtain  beneficial  ownership  of, any of the  Purchased  Assets;  or (b) may be
entitled to all or any portion of the Consideration.

     5.7. No Prohibition.  Neither the  consummation  nor the performance of any
the Transactions  will,  directly or indirectly (with or without notice or lapse
of time),  contravene or conflict with or result in a violation of, or cause the
Purchaser  or any Person  affiliated  with the  Purchaser  to suffer any adverse
consequence  under,  (a) any applicable  Legal  Requirement or Order, or (b) any
Legal  Requirement or Order that has been proposed by or before any Governmental
Body.

     5.8. No Actions  Outside of the  Ordinary  Course of  Business.  The Seller
shall be operated only in the Ordinary Course of Business  between  September 3,
2004 and the Closing  Date,  except as otherwise  permitted  herein,  including,
without limitation, the declaration and/or payment of any Permitted Distribution
..

     5.9. Compliance with Legal Requirements.  The Seller shall be in compliance
in all Material respects with each Legal Requirement that is applicable to it or
to the conduct of the  Business or the  ownership of any of its assets as of the
Closing Date.

     5.10. 2004 EBITDA Target.  Purchaser shall be reasonably satisfied that the
Seller's  Business  shall  have  achieved   Earnings  Before  Interest,   Taxes,
Depreciation  and  Amortization  for the fiscal  year ended June 30,  2004 of at
least Two Million Dollars ($2,000,000.00).

     5.11. No Injunction.

         There shall not be in effect any injunction that shall have been
entered by a court of competent jurisdiction since the date of this Agreement
that prohibits the purchase of the Purchased Assets by the Purchaser from the
Seller and no Person shall have threatened to obtain any such injunction.

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

         The Seller's and Shareholder's obligation to sell the Purchased Assets
and to take the other actions required to be taken by the Seller and Shareholder
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 and
Shareholder, in whole or in part, in accordance with Section 9.5):

                                       29
<PAGE>


     6.1. Accuracy of Representations. All of the representations and warranties
made by the Parent or Purchaser in this Agreement (considered collectively), and
each of said  representations and warranties  (considered  individually),  shall
have been accurate in all Material respects as of the date of this Agreement and
as of the Closing Date.

     6.2. Purchaser's Performance.

                    (a)  The Parent and  Purchaser  shall have made the payments
                         and  shall  have  executed  and  delivered  each of the
                         documents  required to be executed and delivered by the
                         Parent and Purchaser pursuant to Section 2.10(c).

                    (b)  All of the other  covenants  and  obligations  that the
                         Parent and  Purchaser are required to comply with or to
                         perform  pursuant to this  Agreement at or prior to the
                         Closing  (considered  collectively),  and  each of said
                         covenants and  obligations  (considered  individually),
                         shall  have been  complied  with and  performed  in all
                         Material respect.

     6.3. No Injunction.  There shall not be in effect any injunction that shall
have been  entered by a court of competent  jurisdiction  since the date of this
Agreement that  prohibits the sale of the Purchased  Assets by the Seller to the
Purchaser and no Person shall have threatened to obtain any such injunction.

     6.4. No Prohibition.  Neither the  consummation  nor the performance of any
the Transactions  will,  directly or indirectly (with or without notice or lapse
of time),  contravene or conflict with or result in a violation of, or cause the
Seller or the Shareholder or any Person affiliated with either of them to suffer
any adverse consequence under, (a) any applicable Legal Requirement or Order, or
(b) any Legal  Requirement  or Order  that has been  proposed  by or before  any
Governmental Body.

     7. INDEMNIFICATION, ETC.

     7.1. Survival of Representations and Covenants.

                    (a)  The   representations,    warranties,   covenants   and
                         obligations  of  each  Party  shall  survive   (without
                         limitation):

                    (i)  the  Closing and the sale of the  Purchased  Assets to,
                         and the assumption of the Assumed  Liabilities  by, the
                         Purchaser;

                    (ii) any  sale  or  other  disposition  of any or all of the
                         Purchased Assets by the Purchaser;

                    (iii)the  transfer  or  assignment  of any  of  the  Assumed
                         Liabilities by the Purchaser; and

                                       30
<PAGE>


                    (iv) any  acquisition  transaction  effected by or otherwise
                         involving the Purchaser or the Seller.

     All of said  representations  and warranties shall remain in full force and
effect and shall survive until March 31, 2006;  provided,  however,  any Damages
arising from any representation or warranty set forth in Sections 3.1, 3.3, 3.6,
3.16 or 3.17,  3.18,  3.19 shall survive for the entire period of any applicable
statutes of limitations but not in excess of six (6) years. All of the covenants
and agreements of the Parties set forth herein  including  under Sections 2.9(c)
and Article 8 hereof or in any of the Transaction Documents, including under the
Seller Note, the Supply Agreement and the Assumption  Agreement shall survive in
accordance with their terms.

                    (b)  The   representations,    warranties,   covenants   and
                         obligations  of the  Seller  and  Shareholder,  and the
                         rights and remedies that may be exercised in connection
                         therewith,  shall not be limited or otherwise  affected
                         by or as a result of any  information  furnished to, or
                         any investigation made by or Knowledge of the Parent or
                         Purchaser.

                    (c)  For purposes of this Agreement, each statement or other
                         item  of  information   set  forth  in  the  Disclosure
                         Schedules  shall be deemed to be a  representation  and
                         warranty  made by the  Seller and  Shareholder  in this
                         Agreement.

     7.2.  Indemnification  by  the  Seller  and  Shareholder.  Subject  to  the
limitations in Sections 7.1, 7.8 and 7.10, the Seller and  Shareholder,  jointly
and  severally,  shall hold  harmless  and  indemnify  each of the  Parent,  the
Purchaser, their respective directors,  officers and their respective successors
and assigns (collectively,  "Purchaser Indemnitees") from and against, and shall
compensate  and  reimburse  each of the Purchaser  Indemnitees  for, any Damages
which are directly or  indirectly  suffered or incurred by any of the  Purchaser
Indemnitees or to which any of the Purchaser  Indemnitees  may otherwise  become
subject  (regardless  of whether or not such Damages  relate to any  third-party
claim) which arise from or as a result of:

                    (a)  any breach of any  representation  or warranty  made by
                         the Seller or  Shareholder  in this Agreement or in any
                         of the other Transaction Documents;

                    (b)  any breach of any representation,  warranty, statement,
                         information  or provision  contained in the  Disclosure
                         Schedules;

                    (c)  any breach of any covenant or  obligation of the Seller
                         or  of  the  Shareholder  in  any  of  the  Transaction
                         Documents;

                    (d)  any  Liability  of the Seller  other  than the  Assumed
                         Liabilities; or

                    (e)  any Proceeding  relating  directly or indirectly to any
                         breach, alleged breach, Liability or matter of the type
                         referred  to in clause  "(a),"  "(b),  "(c)," or "(d),"
                         above  (including  any  Proceeding   commenced  by  any
                         Purchaser  Indemnitee  for the purpose of enforcing any
                         of its rights under this Section 7).

                                       31
<PAGE>


     7.3. Remediation Obligation.

         The Parties acknowledge that Schedule 3.19 and the Continuation thereof
disclose that a portion of the building on the Real Property has been treated
for a mold condition (the "Treated Portion") and the remaining portion of the
building requires such treatment (the "Remaining Portion"). The Seller and the
Shareholder shall expeditiously cause the Remaining Portion to be treated for
such condition, at their sole cost and expense, (the "Remediation Obligation").
The Purchaser and Parent shall make the premises available for such purpose
(during business hours whenever possible and during non-business hours) and
shall reasonably cooperate with Seller, Shareholder and such Persons as they
hire for such purpose. The method of treatment shall be similar to the method
employed in remedying the Treated Portion, or such other method as Shareholder
shall determine, provided in any event that the result of the treatment is
comparable to that achieved with respect to the Treated Portion.

     7.4.  Setoff.  Upon sixty (60) days' notice to Shareholder and Seller,  the
Purchaser  shall have the right to set off up to $462,500 of any amount that may
be owed to any  Purchaser  Indemnitee  under this  Section 7 against  any amount
payable by any Purchaser Indemnitee under the Seller Note, provided however that
any such notice shall specify with  particularity  the basis for any such setoff
and, no amount shall be setoff if, within such sixty (60) day period,  Seller or
Shareholder   commences  an  action  submitting  such  dispute  to  a  court  of
appropriate jurisdiction.

     7.5.  Defense  of Third  Party  Claims.  In the event of the  assertion  or
commencement  by any  Person  not a Party  hereto  of any  claim  or  Proceeding
(whether  against the  Purchaser  Indemnitees  or against any other Person) with
respect to which the Seller and Shareholder  may become  obligated to indemnify,
hold harmless, compensate or reimburse any Purchaser Indemnitee pursuant to this
Section 7, the Seller and Shareholder  shall assume the defense of such claim or
Proceeding at the sole expense of the Seller and Shareholder  and, in connection
therewith:

                    (a)  The Seller and Shareholder shall proceed to defend such
                         claim or Proceeding  in a diligent  manner with counsel
                         reasonably satisfactory the Purchaser;

                    (b)  The  Purchaser  shall make  available to the Seller and
                         Shareholder any non-privileged  documents and materials
                         in  the   possession  of  the  Purchaser  that  may  be
                         necessary to the defense of such claim or Proceeding;

                    (c)  The Seller  and  Shareholder  shall keep the  Purchaser
                         informed  of  all  Material   developments  and  events
                         relating to such claim or Proceeding;

                    (d)  The Purchaser  shall have the right to  participate  in
                         the defense of such claim or Proceeding at the cost and
                         expense of Purchaser,  provided  however,  if Seller or
                         Shareholder  fails to  comply  with  the  terms of this
                         Section  7.5,  the cost and  expense of defense of such
                         claim   expended  by  Parent  or  Purchaser   shall  be
                         reimbursed   to  Parent  or   Purchaser  by  Seller  or
                         Shareholder;

                                       32
<PAGE>


                    (e)  The Seller and Shareholder shall not settle,  adjust or
                         compromise  such claim or Proceeding if such settlement
                         would have a Material  adverse  effect on the Purchaser
                         (after taking into account this indemnity)  without the
                         prior written  consent of the Purchaser,  which consent
                         shall not be unreasonably withheld.

     7.6. Exercise of Remedies by Purchaser Indemnitees Other Than Purchaser. No
Purchaser  Indemnitee  (other than the  Purchaser  or any  successor  thereto or
assign  thereof)  shall be  permitted  to assert  any  indemnification  claim or
exercise any other  remedy under this  Agreement  unless the  Purchaser  (or any
successor  thereto or assign  thereof)  shall have consented to the assertion of
such indemnification clause or the exercise of such other remedy.

     7.7. Indemnification by Parent and Purchaser. Subject to the limitations in
Sections 7.1, 7.9 and 7.10,  the Parent and  Purchaser,  jointly and  severally,
shall hold harmless and indemnify the Seller and  Shareholder  from and against,
and  shall  compensate  and  reimburse  the  Seller  and  Shareholder  and their
respective  directors and officers and their  respective  successors and assigns
(collectively,  "Seller/Shareholder  Indemnitees")  for,  any Damages  which are
directly or  indirectly  suffered  or incurred by any of the  Seller/Shareholder
Indemnitees or to which any of the Seller/Shareholder  Indemnitees may otherwise
become  subject  (regardless  of  whether  or not  such  Damages  relate  to any
third-party  claim),  including all costs and reasonable  attorneys' fees, which
arise from or as a result of:

                    (a)  any breach of any  representation  or warranty  made by
                         the Parent or Purchaser in this Agreement;

                    (b)  any breach of any covenant or  obligation of the Parent
                         or  Purchaser  in  any  of  the  Transaction  Documents
                         including  Purchaser's  covenants  and  obligations  in
                         respect of the Assumed  Liabilities,  the Seller  Note,
                         the Earn-Out and the Supply Agreement; or

                    (c)  any Proceeding  relating  directly or indirectly to any
                         breach, alleged breach, Liability or matter of the type
                         referred to in clause "(a)," or "(b)" above  (including
                         any  Proceeding  commenced  by  any  Seller/Shareholder
                         Indemnitee  for the  purpose  of  enforcing  any of its
                         rights under this Section 7).

     7.8.  Threshold  for  Indemnification  by the Seller and  Shareholder.  The
Seller and Shareholder shall not be required to make any indemnification payment
pursuant  to  Section  7.2 for any  breach of any of their  representations  and
warranties and the setoff rights under Section 7.4 shall not be applicable until
such time as the total amount of all Damages (including the Damages arising from
such  breach  and all  other  Damages  arising  from any other  breaches  of any
representations or warranties) that have been directly or indirectly suffered or
incurred by any one or more of the Purchaser Indemnitees, or to which any one or
more of the Purchaser Indemnitees has or have otherwise become subject,  exceeds
$250,000 (the  "Basket") in the  aggregate.  At such time as the total amount of
such Damages  exceeds the Basket in the  aggregate,  the  Purchaser  Indemnitees
shall be entitled to be  indemnified  against all Damages in excess of the first
$150,000 of Damages.  The  provisions of this Section 7.8 shall not apply to the
obligations of Seller and the  Shareholder in respect of any Net Working Capital
Adjustment or any  Pro-Rating  Adjustment or the  Remediation  Obligation or the
obligations under Section 3.23.

                                       33
<PAGE>


     7.9. Threshold for Indemnification by Parent and Purchaser.  The Parent and
Purchaser shall not be required to make any indemnification  payment pursuant to
Section 7.7 for any breach of any of its  representations  and warranties  until
such time as the total amount of all Damages (including the Damages arising from
such  breach  and all  other  Damages  arising  from any other  breaches  of any
representations or warranties) that have been directly or indirectly suffered or
incurred   by   the   Seller/Shareholder    Indemnitees,   or   to   which   the
Seller/Shareholder Indemnitees have otherwise become subject, exceeds the Basket
in the aggregate.  At such time as the total amount of such Damages  exceeds the
Basket in the aggregate, the Seller/Shareholder Indemnitees shall be entitled to
be  indemnified  against all Damages in excess of the first $150,000 of Damages.
The  provisions  of this  Section  7.9  shall not  apply to the  obligations  of
Purchaser  and the Parent  under or in respect  of the Seller  Note,  the Supply
Agreement,  the  Earn-Out,  the Assumed  Obligations,  any Net  Working  Capital
Adjustment or any Pro-Rating Adjustment.

     7.10. Limitation on Indemnification. The maximum aggregate dollar amount of
the collective  indemnification  liability of the Seller and the  Shareholder to
the Purchaser  Indemnitees  shall be the Purchase  Price to the extent  actually
paid plus the sum of any  Earn-Out  payments  actually  paid to the Seller  (the
"Seller/ Shareholder  Limitation") except (i) if the Seller or Shareholder shall
have made any  representation  or warranty  herein  that,  in either  case,  was
fraudulent  or (ii) for  breaches of Section 8 hereof,  in either of which event
the  Seller/Shareholder  Limitation  shall not apply and  Section  7.8 shall not
apply. The maximum aggregate dollar amount of the  indemnification  liability of
the Parent and  Purchaser  to the  Seller/Shareholder  Indemnitees  shall be the
Purchase Price to the extent  actually paid plus the sum of any actual  Earn-Out
payments  paid to the  Seller  (the  "Purchaser  Limitation")  except (i) if the
Parent or Purchaser shall have made any  representation  or warranty herein that
was  fraudulent  or (ii) for  breaches  of Section 8 hereof,  in either of which
event the Purchaser Limitation shall not apply and Section 7.9 shall not apply.

     7.11. Exclusivity of Indemnification Remedies. The indemnification remedies
and other  remedies  provided in this Section 7 shall be deemed to be exclusive.
Accordingly,  the exercise by any Person of any of its rights under this Section
7 shall  be  deemed  to be an  election  of  remedies  and  shall be  deemed  to
prejudice, or to constitute or operate as a waiver of, any other right or remedy
that such  Person may be entitled to  exercise  (whether  under this  Agreement,
under any other Contract, under any statute, rule or other Legal Requirement, at
common  law, in equity or  otherwise),  except for the  exercise  of  subsequent
remedies  under this  Section 7 and the  exercise of  remedies  under any of the
Transaction Documents.

     8. OTHER AGREEMENTS

     8.1.   Non-Compete.   The  Seller   and   Shareholder,   collectively   and
individually,  agree that during the period  starting  on the  Closing  Date and
continuing  through two (2) years from the Closing  Date and  provided  that the
Purchaser  has not  previously  committed a Material  breach of its  obligations
under the Seller Note, the Supply Agreement, or in respect of the Earn-Out which
remains uncured after any required notice (the "Restrictive Period"), the Seller


                                       34
<PAGE>


and  Shareholder,  shall not,  directly or indirectly,  anywhere that the Seller
currently  does  Business:  (i)  participate  or  engage in any  business  which
competes  with the  Business,  whether as owner,  operator,  officer,  director,
creditor,  consultant,  partner,  agent,  employee or  otherwise or (ii) hire or
attempt to hire,  or  contract  or  attempt  to  contract  with,  any  officers,
employees,  agents,  independent  contractors  or  other  persons  that  have an
employment related relationship  (whether written or oral) with the Seller prior
to the Closing  Date,  provided  however  that the  foregoing  shall not prevent
Shareholder  from  continuing  to employ or engage any such person who currently
performs  services  for both  Seller  and  Shareholder  so long as same does not
substantially  interfere with the performance by such person of his services for
Purchaser.  Notwithstanding  the foregoing,  Shareholder may, without  violating
this Section 8.1, (i) continue its business of the  integration  and assembly of
components  utilized with flat-panel displays (commonly known in the industry as
box build) and (ii) own up to a five percent (5%) passive equity interest in any
publicly traded company. This covenant is expressly enforceable by all assignees
and/or successors of Purchaser.

     8.2. Nonsolicitation.

                    (a)  Third  Parties.  During  the  Restrictive  Period,  the
                         Seller  and   Shareholder   shall  not,   directly   or
                         indirectly,  solicit,  encourage,  facilitate or induce
                         any customer,  supplier,  agent, sales  representative,
                         employee,  consultant,  or licensee of the Seller prior
                         to  the  Closing  Date  or  Purchaser  or  any  of  its
                         affiliates to breach any agreement or discontinue  his,
                         her, or its business  relationships  with the Purchaser
                         or its affiliates.

                    (b)  Employees.  The Seller  and  Shareholder  covenant  and
                         agree that during the  Restrictive  Period,  the Seller
                         ---------  and  Shareholder   shall  not   specifically
                         solicit to be an employee, or independent contractor of
                         Seller or Shareholder, any person who is an employee of
                         Purchaser,  except  with the prior  written  consent of
                         Purchaser,  provided  however that the foregoing  shall
                         not prevent  Shareholder  from  continuing to employ or
                         engage any such person who currently  performs services
                         for both  Seller and  Shareholder  so long as same does
                         not  substantially  interfere  with the  performance by
                         such person of his services for Purchaser.

     8.3. Confidentiality

                    (a)  Purchaser  Confidential  Information.  The  Seller  and
                         Shareholder shall not, directly or indirectly, disclose
                         to anyone,  or use in  competition  with the Purchaser,
                         any Purchaser Confidential Information. For purposes of
                         this Agreement,  "Purchaser  Confidential  Information"
                         shall mean information  relating to the Purchaser,  its
                         business and  potential  business,  including,  without
                         limitation,  information  relating to the  Business and
                         the  Purchased   Assets,   trade   secrets,   financial
                         information,  marketing and business plans,  methods of
                         providing services, practices, documentation, drawings,
                         facilities,  customers,  policies,  suppliers, pricing,
                         customer  lists and leads,  and other  information  and
                         know-how that has actual or potential economic value to
                         the  Purchaser  because  it is not  generally  known to
                         others and is not readily  ascertainable  by them.  The
                         restrictions  of this  Section  8.3  shall not apply to
                         information  (i) which enters the public domain through
                         no  fault  of  the  Seller  or  Shareholder;  (ii)  the
                         disclosure  of which is  required  by final  order of a
                         court  of   competent   jurisdiction;   or  (iii)   the
                         disclosure  of  which  is  required  to be  made by the
                         Seller or Shareholder in any public filing.

                                       35
<PAGE>


                    (b)  Shareholder  Confidential  Information.  The Parent and
                         Purchaser   shall   not,    directly   or   indirectly,
                         --------------------------------------    disclose   to
                         anyone,  or use in competition  with  Shareholder,  any
                         Shareholder Confidential  Information.  For purposes of
                         this     Agreement,      "Shareholder      Confidential
                         -------------------------   Information"   shall   mean
                         information  relating to the Shareholder,  its business
                         and ----------- potential business,  including, without
                         limitation,   trade  secrets,   financial  information,
                         marketing  and  business  plans,  methods of  providing
                         services,    practices,    documentation,     drawings,
                         facilities,  customers,  policies,  suppliers, pricing,
                         customer  lists and leads,  and other  information  and
                         know-how that has actual or potential economic value to
                         the  Purchaser  because  it is not  generally  known to
                         others  and  is  not  readily   ascertainable  by  them
                         provided   however,   does  not   include   information
                         concerning  the Seller,  the Business or the  Purchased
                         Assets.  The restrictions of this Section 8.3 shall not
                         apply to information (i) which enters the public domain
                         through no fault of the Purchaser;  (ii) the disclosure
                         of  which  is  required  by  final  order of a court of
                         competent  jurisdiction;  or (iii)  the  disclosure  of
                         which is  required to be made by the  Purchaser  in any
                         public filing.

     8.4.  Severability.  The  covenants  set  forth in this  Section 8 shall be
deemed  severable,  and the  invalidity  of any  covenant  shall not  affect the
validity  or  enforceability  of any  other  covenant  or the  validity  of this
Agreement.  The  existence  of any claim or cause of action by a Party shall not
constitute a defense to the  enforcement by any other Party of these  covenants.
The failure by a Party to object to any conduct in  violation  of this Section 8
shall  not be  deemed a waiver  by such  Party,  but such  Party  may,  if it so
desires,  specifically  waive  any  part or any of these  covenants  only to the
extent that such waiver is set forth in writing.

     8.5. Judicial Modification.  In the event that any court finally holds that
the  time  or  territory  or any  other  provision  stated  in  this  Section  8
constitutes  an  unreasonable  restriction,   then  the  Parties  hereto  hereby
expressly  agree that the  provisions  of this  Agreement  shall not be rendered
void,  but shall apply as to time and  territory or to such other extent as such
court may judicially determine or indicate constitutes a reasonable  restriction
under the circumstances involved.

     8.6.  Specific  Enforcement.  The restrictive  covenants  contained in this
Section 8 are covenants independent of any other provision of this Agreement and
the  existence  of any claim that any Party may allege  against any other Party,
whether based on this Agreement or otherwise,  shall not prevent the enforcement
of these  covenants.  The Parties  acknowledge  that the  restrictions  on their
activities  as  contained  in this  Section 8 are  required  for the  reasonable
protection  of the  interests  of the  Parties as a result of the  Transactions.


                                       36
<PAGE>


Therefore,  the Parties  hereby  agree that,  in the event of a violation of any
provision of this Section 8, each Party will be  entitled,  if it so elects,  to
institute and prosecute  proceedings  at law or in equity to obtain damages with
respect to such violation or to enforce  specific  performance of this Section 8
against the other  Parties or to enjoin the other  Parties from  engaging in any
activity in violation  hereof without the posting of any bond in addition to any
other remedies which such Party may have.

     8.7.  Tolling of Time Periods.  In the event that Shareholder or the Seller
violate the provisions of Section 8.1 or 8.2 of this Agreement,  the Restrictive
Period shall toll during any period of non-compliance, and shall not continue to
elapse until  Shareholder  and the Seller is in full compliance with Section 8.1
and 8.2 of this Agreement.

     8.8.  Confirmation as to Scope. The Parties hereto  acknowledge and confirm
that:  (i) the  length  of the  term of the  restrictions  and the  geographical
restrictions contained in this Section 8 are fair and reasonable and are not the
result  of  overreaching,  duress  or  coercion  of any  kind;  (ii)  the  full,
uninhibited and faithful  observance of each of the covenants  contained in this
Section 8 shall not cause any undue hardship,  financial or otherwise; and (iii)
the Seller's and  Shareholder's  special Knowledge of the Business of the Seller
is such as would  cause  Purchaser  serious  injury  and loss if the  Seller  or
Shareholder  uses such  Knowledge  to benefit a  competitor  of  Purchaser or to
compete  with  Purchaser.  The  Parties  hereto  acknowledge  and agree that the
provisions  of this Section 8 are  essential to protect  Purchaser's  legitimate
business interest as contemplated  under New York law and are in addition to any
rights  Purchaser  may have to  enforce  its  rights  with  respect to the trade
secrets of Purchaser pursuant to New York law.

     8.9.  Access to  Records.  The  Parties  agree to furnish or to cause to be
furnished  to  each  other  upon  request  as  promptly  as  practicable,   such
information and assistance relating to the Seller as is reasonably necessary for
the filing of any Tax return,  declaration or report, the making of any election
related to Taxes, the preparation for any audit by any taxing authority,  or the
prosecution  or defense of any claim,  suit, or proceeding;  provided,  however,
that such information and assistance shall be provided in a manner that will not
unreasonably  disrupt  the  business  of  the  Party  providing  information  or
assistance, at the requesting Party's own cost and expense.

     8.10. No Resale of Purchased Assets.  The Parent and Purchaser covenant and
agree that until the Seller Note is paid in full and the Earn-Out, to the extent
earned,  has been paid in full, the Purchaser will not,  directly or indirectly,
unless  consented to in writing by Purchaser,  (i) sell,  transfer or assign any
Material  portion of the  Purchased  Assets to any  Person,  other than sales of
inventory in the Ordinary Course of Business,  (ii) grant or permit to exist any
Encumbrance  on any  Material  portion of the  Purchased  Assets in favor of any
Person other than a Person with which the Seller or the  Shareholder has entered
into a  subordination  agreement,  except for any  Encumbrance  on the Purchased
Assets  existing  immediately  prior  to the  consummation  of the  transactions
contemplated hereby, and (iii) be a party to any merger,  consolidation or other
transaction  as a result of which a Change in Control  (as defined in the Seller
Note) occurs or will occur.

                                       37
<PAGE>


     8.11.   Post-Audit  Closing  Cooperation.   Shareholder  and  Seller  shall
cooperate with Purchaser in connection with Purchaser causing to be conducted at
Purchaser's  cost  and  expense,  an  audit  by  Purchaser's   certified  public
accountants of the last two (2) fiscal years of the operation of the Business as
conducted by Seller, or of Seller with respect to its last two (2) fiscal years.

     8.12.  Transitional  Services.  The  Shareholder  shall continue to include
under its health  insurance  coverage  employees  of the  Seller  working at the
Seller's Woburn, MA premises until the earlier of such time as Purchaser is able
to include such employees  under a policy  procured by Purchaser,  or October 1,
2004,  and  the  cost  thereof  shall  be  included  in the  calculation  of the
Pro-Rating Adjustment.

9.                          MISCELLANEOUS

     9.1.  Counterparts;  Interpretation.  This Agreement may be executed in any
number of counterparts,  each of which shall be deemed an original,  and both of
which shall  constitute one and the same instrument.  This Agreement  supersedes
all prior  discussions  and  agreements  between the Parties with respect to the
subject matter hereof, and this Agreement contains the sole and entire agreement
among the Parties with respect to the matters  covered  hereby.  All  Disclosure
Schedules hereto shall be deemed a part of this Agreement.  This Agreement shall
not be altered or amended  except by an  instrument  in writing  signed by or on
behalf of all of the Parties hereto.  No ambiguity in any provision hereof shall
be construed  against a Party by reason of the fact it was drafted by such Party
or its counsel.  References to "including"  means including without limiting the
generality of any description  preceding such term. Nothing expressed or implied
in this Agreement is intended, or shall be construed, to confer upon or give any
person other than the Parties any rights or remedies  under or by reason of this
Agreement.

     9.2.  Governing  Law. The validity  and effect of this  Agreement  shall be
governed by and construed  and enforced in accordance  with the laws of New York
without  regard  to  principles  of  conflicts  of laws  thereof.  Any  dispute,
controversy or question of  interpretation  arising under, out of, in connection
with or in relation to this Agreement or any amendments hereof, or any breach or
default  hereunder,  shall be litigated  exclusively  in the courts of competent
jurisdiction  located  in  New  York,  New  York.  Each  of the  Parties  hereby
irrevocably  submits to the jurisdiction of any court of competent  jurisdiction
located in New York,  New York.  Each Party hereby  irrevocably  waives,  to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of any such action in New York, New York.

     9.3.  Successors and Assigns;  Assignment.  This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their  respective  heirs,
executors, legal representatives, and successors. Neither this Agreement nor the
rights and  obligations  hereunder  may be assigned by either  Party  absent the
express prior written consent of the other.

     9.4.  Partial  Invalidity  and  Severability.  All rights and  restrictions
contained  herein may be exercised and shall be  applicable  and binding only to
the extent that they do not violate any  applicable  laws and are intended to be
limited  to the extent  necessary  to render  this  Agreement  legal,  valid and
enforceable.  If any terms of this  Agreement  not  essential to the  commercial
purpose of this Agreement shall be held to be illegal,  invalid or unenforceable


                                       38
<PAGE>


by a court of competent  jurisdiction,  it is the  intention of the Parties that
the remaining terms hereof shall  constitute their agreement with respect to the
subject  matter hereof and all such  remaining  terms shall remain in full force
and  effect.  To  the  extent  legally  permissible,  any  illegal,  invalid  or
unenforceable provision of this Agreement shall be replaced by a valid provision
which  will  implement  the  commercial  purpose  of  the  illegal,  invalid  or
unenforceable provision.

     9.5.  Waiver.  Any term or condition of this Agreement may be waived at any
time by the Party which is entitled  to the  benefit  thereof,  but only if such
waiver is evidenced by a writing signed by such Party. No failure on the part of
a Party to  exercise,  and no delay in  exercising,  any right,  power or remedy
created  hereunder,  shall operate as a waiver thereof,  nor shall any single or
partial  exercise of any right,  power or remedy by any such Party  preclude any
other  future  exercise  thereof or the  exercise of any other  right,  power or
remedy.  No  waiver  by any Party to any  breach  of or  default  in any term or
condition  of this  Agreement  shall  constitute  a waiver  of or  assent to any
succeeding  breach  of or  default  in the same or any other  term or  condition
hereof. Upon the Closing of the transactions contemplated hereby, all conditions
to  Closing  set forth in  Sections  5 and 6 hereof  shall be  deemed  waived or
satisfied, except as otherwise provided in any agreement executed by the Parties
at the Closing.

     9.6. Headings.  The headings as to contents of particular  sections of this
Agreement are inserted for convenience only and shall not be construed as a part
of this  Agreement or as a limitation on the scope of any terms or provisions of
this Agreement.

     9.7.  Acceptance by Fax. This  Agreement  shall be accepted,  effective and
binding, for all purposes, when the Parties shall have signed and transmitted to
each other, by telecopier or otherwise, copies of the signature pages hereto.

     9.8.  Expenses.  All costs and expenses  incurred in  connection  with this
Agreement  and the  transactions  contemplated  hereby will be paid by the Party
incurring such costs and expenses.

     9.9.  Attorneys'  Fees.  In the event of any  litigation  arising under the
terms  of any of the  Transaction  Documents,  the  prevailing  Party  shall  be
entitled to recover its or their reasonable attorneys' fees and court costs from
the other Party, including trial and appellate proceedings, as well as the costs
of collecting any judgment.

     9.10.  Specific  Performance.   Each  Party  agrees  that  the  Transaction
Documents  are  intended  to be legally  binding  and  specifically  enforceable
pursuant to their terms and that the other Party would be irreparably  harmed if
any  of the  provisions  of the  Transaction  Documents  are  not  performed  in
accordance with their specific terms and that monetary damages would not provide
adequate remedy in such event.  Accordingly,  in addition to any other remedy to
which a non-breaching  party may be entitled at law, a non-breaching party shall
be  entitled  to  injunctive  relief  without the posting of any bond to prevent
breaches of the Transaction  Documents and specifically to enforce the terms and
provisions hereof.

     9.11.  Further  Assurances.  The  Parties  shall  from  time to time do and
perform such additional  acts and execute and deliver such additional  documents
and  instruments  as may be required  or  reasonably  requested  by any Party to
establish, maintain or protect its rights and remedies or to effect the purposes
of this Agreement.

                                       39
<PAGE>


     9.12. Notices. All notices and other  communications  hereunder shall be in
writing and shall be deemed to have been given: (i) when delivered by hand; (ii)
one (1) day after delivery by internationally  recognized express courier (i.e.,
Federal Express, DHL); or (iii) three (3) days after delivery by certified mail,
postage  prepaid,  to the Parties at the  following  addresses (or at such other
address for a Party as shall be specified by like notice):

    If to Shareholder:         Jaco Electronics, Inc.
                               145 Oser Avenue
                               Hauppauge, New York  11788
                               Attention:        Mr. Jeffrey Gash
                               Telephone:        (631) 273-5500
                               Facsimile:        (631) 273-3621

    With a copy to:            Morrison Cohen Singer & Weinstein, LLP
                               750 Lexington Avenue
                               New York, New York  10022
                               Attention:        Stephen I. Budow, Esq.
                               Telephone:        (212) 735-8668
                               Facsimile:        (212) 735-8708

        If to Seller:           Nexus Custom Electronics, Inc.
                                c/o Jaco Electronics, Inc.
                                145 Oser Avenue
                                Hauppauge, New York  11788
                                Attention:        Mr. Jeffrey Gash
                                Telephone:        (631) 273-5500
                                Facsimile:        (631) 273-3621

        With a copy to:         Morrison Cohen Singer & Weinstein, LLP
                                750 Lexington Avenue
                                New York, New York  10022
                                Attention:        Stephen I. Budow, Esq.
                                Telephone:        (212) 735-8668
                                Facsimile:        (212) 735-8708

        If to Purchaser         NECI Acquisition, Inc.
                                33 South Wood Avenue - Suite 600
                                Iselin, NJ 08830
                                Attention:        Robert Farrell/ Joseph Donohue
                                Telephone:        (732) 603-4967
                                Facsimile:        (732) 603-3883

        With a copy to:         Kirkpatrick & Lockhart LLP
                                201 South Biscayne Boulevard, Suite 2000
                                Miami, Florida 33131
                                Attention:        Harris C. Siskind, Esq.
                                Telephone:        (305) 539-3316
                                Facsimile:        (305) 358-7095

                                       40
<PAGE>


        If to Parent:          Sagamore Holdings, Inc.
                               33 South Wood Avenue - Suite 600
                               Iselin, NJ 08830
                               Attention:    Robert Farrell/ Joseph Donohue
                               Telephone:        (732) 603-4967
                               Facsimile:        (732) 603-3883

         With a copy to:       Kirkpatrick & Lockhart LLP
                               201 South Biscayne Boulevard, Suite 2000
                               Miami, Florida 33131
                               Attention:        Harris C. Siskind, Esq.
                               Telephone:        (305) 539-3300
                               Facsimile:        (305) 358-7095

9.13. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY OF THE TRANSACTION DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.




                                           [SIGNATURE BLOCK ON FOLLOWING PAGE]



                                       41
<PAGE>


<TABLE>


         IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement on the date first set forth above.

SELLER:                                                          PURCHASER:

NEXUS CUSTOM ELECTRONICS, INC.,                                  NECI ACQUISITION, INC.,
a Delaware corporation                                           a Florida corporation

<S>     <C>                                                        <C>
By:               /s/  Jeffrey D. Gash                           By:      /s/ Robert P. Farrell
         --------------------------------------------                     ------------------------------
Name:             Jeffrey D. Gash                                Name:       Robert P. Farrell
         -----------------------------------                              --------------------------
Its:              Vice President                                 Its:       President
         --------------------------------------------                     ------------------



SHAREHOLDER:                                                     PARENT:

JACO ELECTRONICS, INC.,                                          SAGAMORE HOLDINGS, INC.,
a New York corporation                                           A Florida corporation

By:               /s/  Jeffrey D. Gash                           By:      /s/ Robert P. Farrell
         --------------------------------------------                     ------------------------------
Name:             Jeffrey D. Gash                                Name:        Robert P. Farrell
         -----------------------------------                              --------------------------
Its:              Vice President                                 Its:         President
         --------------------------------------------                     ------------------




</TABLE>


<PAGE>                                               42