Document:

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                                                                    EXHIBIT 10.7

                               INDEMNITY AGREEMENT

         This Indemnity Agreement is made as of the 19th day of May, 2000, by
CONNECTIVITY TECHNOLOGIES INC. ("CTI"), a Delaware corporation, for the benefit
of ROME GROUP, INC. ("RGI"), a Delaware corporation, and CONNECTIVITY PRODUCTS
INCORPORATED ("CPI" and together with RGI, the "Indemnified Parties"), a
Delaware corporation and a wholly-owned subsidiary of RGI and the surviving
corporation of a merger of RGCP ACQUISITION CORP. ("RGCP"), a Delaware
corporation and a wholly-owned subsidiary of RGI, with and into CTI pursuant to
the terms and conditions of an Agreement and Plan of Merger, dated as of May 19,
2000 among CTI, CPI, RGI and RGCP (the "Merger Agreement").

                              W I T N E S S E T H :

         WHEREAS, it is a condition to the Closing (such terms and other
capitalized terms used and not otherwise defined herein having, as used herein,
the respective meanings provided for in the Merger Agreement) under the Merger
Agreement and the consummation of the transactions contemplated thereby that CTI
provide certain indemnities to CPI and RGI concerning certain claims and causes
of action asserted in an action entitled Xerotex Technologies Corporation v.
Connectivity Products, Inc. and BSCC, Corp., Court File No. CT-98-016419,
District Court, Fourth Judicial District, County of Hennepin, Minnesota; and

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         WHEREAS, to induce RGI and RGCP to consummate transactions contemplated
by the Merger Agreement, CTI has agreed to enter into this Agreement;

         NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and further acknowledging that the Indemnified Parties intend to
rely on the indemnification of CTI hereunder, the parties covenant and agreed as
follows:

         1.    Indemnification.

         (a)   As used in this Agreement:

               (i)    "Judgment Amount" means any amount awarded, adjudged or
     decreed to be payable by "Connectivity Products, Inc." or "BSCC, Corp." (or
     any successor or substitute therefor, whether jointly or severally), as
     defendants, to Xerotex Technologies Corporation (or any successor or
     assignee thereof), as plaintiff, whether pre- or post-trial and whether as
     damages (including, without limitation, compensatory, consequential and
     punitive damages), interest (including pre- and post-judgment interest),
     costs, or attorney's fees, in an action entitled Xerotex Technologies
     Corporation v. Connectivity Products, Inc. and BSCC, Corp., Court File No.
     CT-98-016419, District Court, Fourth Judicial District, County of Hennepin,
     Minnesota (the "Pending Action") or any other action involving claims which
     are (or are, under applicable principles of compulsory joinder, required to

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     be) asserted in the Pending Action (a "Subsequent Action"), and without
     regard to whether such award, judgment or decree is subject to appeal by
     defendants as a matter of right or by permission, excluding, however, any
     such amounts resulting from a judgment upon default.

               (ii)   "Settlement Amount" means any amount payable in good faith
     by "Connectivity Products, Inc." or "BSCC, Corp." (or any successor or
     substitute therefor, whether jointly or severally), as defendants, to
     Xerotex Technologies Corporation (or any successor or assignee thereof), as
     plaintiff, in connection with a settlement of the Pending Action or any
     Subsequent Action and upon receipt of a release from all liability with
     respect to all claims which are (or are, under applicable principles of
     compulsory joinder, required to be) asserted therein.

               (iii)  "Covered Costs Amount" means amount, including attorney's
     fees, disbursements and court costs reasonably incurred by the Indemnified
     Parties (A) in connection with the prosecution of any appeal from any
     order, judgment or decree in the Pending Action or any Subsequent Action
     taken at the direction of CTI pursuant to Section 1(g), or (B) in
     connection with the defense of the Pending Action or any Subsequent Action
     after the rejection of any settlement proposal by CTI pursuant to Section
     1(g) if such amounts added to any Judgment Amount exceed the relevant
     Settlement Amount.

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         (b)   CTI hereby covenants and agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all Judgment Amounts,
Settlement Amounts and Covered Costs Amounts, in each case if and to the extent
such Amounts exceed in the aggregate $25,000.

         (c)   In the event any right of indemnification hereunder shall be
asserted in respect of any Judgment Amount, the Indemnified Parties shall
promptly provide CTI with a statement of the amount due and a copy of the
judgment or other court record reflecting such Judgment Amount and evidence of
payment of such Judgment Amount, and upon such statement, documentation and
evidence being presented CTI's liability in respect of such indemnification
shall be discharged by (and solely by) set-off against amounts next becoming due
from RGI to CTI under the Merger Note or any Tax Refund Note. Such set-off shall
be automatic.

         (d)   In the event any right of indemnification hereunder shall be
asserted in respect of any Settlement Amount, the Indemnified Parties shall
promptly provide CTI with a statement of the amount due and a copy of the
agreement, stipulation or other document effecting the settlement in respect of
which indemnification in respect of a Settlement Amount is claimed, including, a
copy of the related release of claims, and evidence of payment of such
Settlement Amount and upon such statement, documentation and evidence being
presented CTI's liability in respect of such indemnification shall be discharged
by (and solely by) set-off against amounts

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next become due from RGI to CTI under the Merger Note or any Tax Refund Note.
Such set-off shall be automatic.

         (e)   In the event any right of indemnification hereunder shall be
asserted in respect of any Covered Cost Amount, the Indemnified Parties shall
promptly provide CTI with a statement of the amount due, copies of the invoices
or other documentation reflecting such Covered Cost Amount and evidence of
payment of such Covered Cost Amount, and upon such statement, documentation and
evidence being presented CTI's liability in respect of such indemnification
shall be discharged by (and solely by) set-off against amounts next becoming due
from RGI to CTI under the Merger Note or any Tax Refund Note. Such set-off shall
be automatic

         (f)   Any provision hereof to the contrary notwithstanding, upon
satisfaction in full of the Merger Note (whether by payment, off-set or
otherwise) all liability of indemnification of CTI pursuant to this Agreement
shall be deemed discharged and this Agreement shall be of no further force or
effect.

         (g)   CPI shall continue to retain Leonard, O'Brien. Wilford, Spencer &
Gale (the "Leonard Firm") for the defense of the Pending Action and shall
undertake (and cause the Leonard Firm to undertake) all necessary and
appropriate actions for diligent defense thereof. CPI shall consult with CTI and
obtain CTI's approval (which approval shall not be unreasonably withheld or
delayed) concerning all material matters affecting the Pending Action and any
Subsequent Action, including the retention of any legal counsel in lieu of the

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Leonard Firm and any settlement proposal. In the event any judgment is entered
against CPI in the Pending Action or any Subsequent Action which would give rise
to any right of indemnification in respect of a Judgment Amount hereunder, CPI
shall promptly notify CTI of the entry of such judgment and the last date for
the filing of any appeal therefrom. If requested by CTI, CPI shall file and
prosecute to completion an appeal from any judgment described in the proceeding
sentence. CPI shall from time to time provide CTI with such information as CTI
shall reasonable request concerning the Pending Action and any Subsequent
Action, provided, however, that the foregoing shall not be deemed to require any
waiver of any attorney-client privilege by CPI.

         2.    Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all of the terms of the arrangements between the parties
with respect to the matters provided for, supersedes any previous agreements and
understandings between the parties with respect to those matters, and cannot be
changed or terminated orally.

         3.    Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in New York without regard to the principles thereof
regarding the choice of law. Each of the parties hereto hereby irrevocably
submits to the jurisdiction of the courts of the State of New York and the
Federal courts of the United States of America located in the State, City and
County of New York in respect of the interpretation and enforcement of the

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provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waives, and agrees not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any such document may not be
enforced in or by said courts. Each of the parties hereto hereby consents to and
grants any such court jurisdiction over the person of such party and over the
subject matter of any such dispute and agrees that mailing of process or other
papers in connection with any such action or proceeding in the manner provided
in Section 4, or in such other manner as may be permitted by law, shall be valid
and sufficient service thereof.

         4.    Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (c) sent by next-day or overnight mail or
delivery, or (d) sent by telecopy:

         (i)   if to CTI

               Connectivity Technologies Inc.
               c/o Highgate Capital LLC
               1311 Mamaroneck Avenue, Suite 170
               White Plains, New York  10605
               Att'n:  Clarke Bailey
               Fax No.:  (914) 610-1114

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         (ii)  if to RGI, RGCP or CTI to:

               Rome Group, Inc.
               421 Ridge Street
               Post Office Box 71
               Rome, New York  13442-0071
               Att'n:  David E. Harvey
                       Chairman and Chief Executive Officer
               Fax No.:  (315) 338-6709

               with a copy to:

               Scott M. Shepard
               Jacobs Persinger & Parker
               77 Water Street, 17th Floor
               New York, New York  l0005
               Fax No.:  (212) 742-0938

or, in each case, at such other address as may be specified in writing to the
other parties hereto.

         All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (A) if by personal delivery on the date of
such delivery, (B) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (C) if by next-day or overnight mail or delivery,
on the day delivered, (D) if by telecopy, on the next day following the day on
which such telecopy was sent.

         5.    Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.

         6.    Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when

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one or more counterparts have been signed by each of the parties hereto and
delivered to each of the other parties hereto.

               [The balance of this page intentionally left blank]

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         IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
of the date first written above.

                                          CONNECTIVITY TECHNOLOGIES INC.

                                          By:  /s/ James M. Hopkins
                                              ----------------------------
                                            Name:  James M. Hopkins
                                            Title: President and Chief
                                                      Executive Officer

                                          ROME GROUP, INC.

                                          By:  /s/ Mary Wuest
                                              ----------------------------
                                            Name:  Mary Wuest
                                            Title: Vice President
                                                      Executive Officer

                                          CONNECTIVITY PRODUCTS INCORPORATED

                                          By:  /s/ James M. Hopkins
                                              ----------------------------
                                            Name:
                                           Title:

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                                                                    EXHIBIT 10.8

                                                       Execution Copy ___ of____

                              REMEDIATION AGREEMENT
                                      AMONG
                                ROME GROUP, INC.,
                         CONNECTIVITY TECHNOLOGIES INC.
                                       AND
                       CONNECTIVITY PRODUCTS INCORPORATED

       Remediation Agreement dated as of May 19, 2000 among ROME GROUP, INC., a
Delaware corporation ("Parent"), CONNECTIVITY TECHNOLOGIES INC., a Delaware
corporation ("CTI"), and CONNECTIVITY PRODUCTS INCORPORATED, a Delaware
corporation and approximately 98% owned subsidiary of CTI ("Company").

                                   WITNESSETH:

       WHEREAS, pursuant to an Agreement and Plan of Merger Among Parent, RGCP
Acquisition Corp. ("Sub"), CTI and Company dated of even date herewith ("Merger
Agreement"), Sub shall be merged with the Company and the Common Stock, par
value $.01 per share of the Company ("Company Stock") owned by CTI shall be
converted into the right to receive cash and a promissory note payable by Parent
to CTI ("Merger Note");

       WHEREAS, the Company and its divisions, BSCC and Energy Electric
Assembly, and its former division, Energy Electric Cable, and their predecessors
(collectively, the "CTI Group"), maintains or has maintained various benefit
plans and programs for its employees that are subject to the requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the
Internal Revenue Code of 1986, as amended ("Code");

       WHEREAS, the Merger Agreement requires that CTI and the Parent enter into
an agreement whereby CTI will ensure that each of the CTI Group benefit plans
for employees complies in all material respects with its terms and the
requirements of all applicable laws;

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       WHEREAS, the representations, warranties, covenants, obligations, and
agreements set forth herein are being made immediately following and will be
performed from and after the Effective Time (as defined in the Merger
Agreement);

       NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto agree as follows
(with capitalized terms used herein without textual definitions having the
meaning set forth in the Merger Agreement):

                                    SECTION 1

                         REPRESENTATIONS AND WARRANTIES

       1.1     CTI represents and warrants that Schedule 3.5 of the Merger
Agreement contains a complete and accurate list of each Benefit Plan sponsored,
maintained or contributed to or required to be contributed to by the CTI Group
or any member thereof immediately prior to the Effective Time and at any time
within the five year period preceding the Effective Time (individually, a "Plan"
and collectively, the "Plans"). Neither CTI nor any member of the CTI Group has
any commitment or formal plan, whether legally binding or not, to create any
additional Benefit Plan or to modify or change any existing Benefit Plan that
would affect any employee or former employee of the Company, except as
contemplated herein.

                                    SECTION 2

                                   REMEDIATION

       2.1     CTI shall expeditiously commence and diligently conduct an audit
of each of the Plans for the purpose of identifying any administrative,
operational, reporting and

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disclosure, form and/or other defects, errors and omissions with respect to the
establishment, maintenance, administration and termination of the Plans in
accordance with applicable requirements of ERISA, the Code and the implementing
rules and regulations of either (individually, an "Identified Error" and
collectively, the "Identified Errors"). Schedule 1 lists issues that have been
identified by the Parent as needing to be addressed with respect to the Plans,
and CTI agrees to review such issues as part of its audit of the Plans and to
take such action with respect to such issues as may be required by the other
provisions of this Agreement.

       2.2     CTI shall take such reasonable actions as are required to ensure
that the Plans comply in all material respects with the applicable requirements
of ERISA and the Code ("Corrective Actions"). To the extent an Identified Error
is described in Revenue Procedure 2000-16 issued by the Department of Treasury
or the Delinquent Filer Voluntary Compliance Program or the Voluntary Fiduciary
Correction Program maintained by the Pension and Welfare Benefits Administration
of the United States Department of Labor (individually, a "Voluntary Correction
Program" and, collectively, "Voluntary Correction Programs"), Corrective Action
of the Identified Error shall be made in accordance with such Voluntary
Correction Programs. In the event that the Identified Errors are not described
in such Voluntary Correction Programs, Corrective Action of the Identified Error
shall be made in accordance with applicable rules, regulations and guidance
issued by the United States Department of Labor ("DOL") or the Internal Revenue
Service ("IRS"), as appropriate.

       2.3     Violations of the qualification requirements under Section 401(a)
of the Code have been identified by the Parent with respect to the CPI 401(k)
Plan and the CPI Incorporated 401k Plan - EEA Division ("EEA 401(k) Plan"). Upon
confirmation by CTI upon

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audit that such violations have occurred, CTI shall, as the Corrective Action
for these Identified Errors, submit the CPI 401(k) Plan and the EEA 401(k) Plan
to the IRS in accordance with the procedures of the IRS's Walk-in Closing
Agreement Program ("Walk-in CAP") and shall execute and effectuate a closing
agreement with the IRS regarding the Corrective Actions to be taken with respect
to such Identified Errors. Prior to making the Walk-in CAP submission for the
CPI 401(k) Plan and the EEA 401(k) Plan, CTI shall first do the audit for the
CPI 401(k) Plan and the EEA 401(k) Plan specified in Section 2.1 of this
Agreement in order to identify all Defects under the Code with respect to the
CPI 401(k) Plan and the EEA 401(k) Plan. As part of its Walk-in CAP submission,
CTI shall notify the IRS about those Defects described in the preceding sentence
which are "Qualification Failures," as such term is defined in Revenue Procedure
2000-16.

       2.4.    CTI shall promptly prepare or update, or cause to be prepared or
updated, as appropriate, written plan documents and summary plan descriptions
describing the terms of the Plans as in effect on the date of this Agreement, in
a manner that reasonably satisfies the applicable plan and summary plan
description requirements of ERISA. Each such document shall include all
necessary provisions reasonably satisfying the statutory requirements applicable
to such Plan, and reasonably required to be included in the respective Plan and
summary plan description documents, on the date of this Agreement including,
without limitation, the following (to the extent applicable): (a) ERISA; (b) the
Code; (c) the General Agreement on Tariffs and Trade; (d) the Uniformed Services
Employment and Reemployment Rights Act of 1994, as amended; (e) the Small
Business Job Protection Act of 1996, as amended; (f) the Taxpayer Relief Act of
1997, as amended; (g) the health continuation coverage requirements in the

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Consolidated Omnibus Budget Reconciliation Act of 1985, as amended; (h) the
Health Insurance Portability and Accountability Act of 1996, as amended; (i) the
Newborns' and Mothers' Health Protection Act of 1996, as amended; and (j) the
Women's Health and Cancer Rights Act of 1998, as amended. The CPI 401(k) Plan
and the EEA 401(k) Plan shall be submitted to the IRS, by December 31, 2000, for
an advance determination of its tax qualified status, as so amended, provided,
however, that such a submission shall not be necessary with respect to any Plan
that has received an individual determination letter from the IRS approving its
accredited status in the past three years as long as the information submitted
in the application for such determination letter was accurate at the time of
such application.

       2.5     CTI shall assume all costs of taking Corrective Actions
including, without limitation, any taxes, interest, penalties or compliance
correction fees assessed by the IRS, the DOL or other regulatory agency, the
costs of restoring any benefits or income thereon, and any costs arising out of
any claim or action by an employee or a beneficiary of an employee that is
directly or indirectly related to such Corrective Actions or the Identified
Errors; provided, however, that such costs shall not include the Parent's
internal employee or overhead charges, or the legal costs and expenses of
outside consultants or professionals retained by the Parent, in performing the
Parent's obligations under this Agreement. Upon the request of the Parent, CTI
shall supply such evidence of the payment of such costs as is reasonably
acceptable to the Parent.

       2.6     CTI shall take any reasonable actions necessary to complete the
termination of and make a final distribution of all assets of the Energy
Electric Cable, Inc. Profit Sharing Plan, including the filing of the final Form
5500 series-report for such plan. CTI agrees that such actions shall be approved
in advance by the IRS in a manner that is reasonably

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acceptable under the applicable facts and circumstances (as evidenced by a
writing issued by the IRS, or by a letter prepared by William M. Mercer,
Incorporated describing such IRS approval). CTI shall take no action to
terminate or amend any Plan without the consent of the Parent. If the Parent
does not consent to a Plan termination or amendment that William M. Mercer,
Incorporated has approved as being its recommended way to accomplish a necessary
Corrective Action for such Plan (a "Mercer Corrective Action"), CTI shall be
relieved from all responsibility for taking further Corrective Actions with
respect to the Identified Errors that would have been corrected had the Mercer
Corrective Action been taken..

       2.7     CTI shall provide to the Parent, not less frequently than
monthly, a written report detailing the status of the Corrective Actions to be
taken by CTI pursuant to this Agreement. CTI shall provide to the Parent copies
of (a) all documents, reports, filings and submissions produced to satisfy the
requirements of this Agreement, and (b) all audit reports, letter rulings,
technical advice memoranda and similar documents issued by any Governmental
Authority relating to the Plans and any closing agreements entered into by CTI
with respect to the Plans.

       2.8     Any filing with a governmental agency required in order to apply
for governmental approval of a Corrective Action shall be completed by CTI by
December 31, 2000 (the "Initial Deadline"), unless CTI has made a written
request to the Parent for an extension of the time to complete one or more
required actions on or before the Initial Deadline and Parent has granted such
request. CTI shall use all reasonable efforts to complete all other Corrective
Actions by the Initial Deadline, provided , however, that CTI shall complete all
such other Corrective Actions in all events not later than June 30, 2001 (the
"Final Deadline), provided

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further, however, that CTI Deadline") shall not be deemed to be in breach of
such Final Deadline completion obligation with respect to a Corrective Action if
all that remains to complete such Corrective Action is to receive and act upon a
response, request, or demand, from a governmental agency with respect to a
filing made by CTI prior to the Final Deadline. In the event that the Corrective
Actions have not been completed by the Initial Deadline or the Final Deadline
(as applicable with respect to each Corrective Action), the Parent may, at its
option, complete the Corrective Actions. The costs and expenses incurred or
associated with the Parent's completion of any Corrective Action, and
constituting Indemnification Costs, as such term is hereafter defined, shall be
losses subject to indemnification under Section 3 or set off under Section 4 of
this Agreement. If any Plan becomes the subject of an audit, examination or
inquiry by the DOL, the IRS or other regulatory agency (collectively,
"Government Audit") prior to the date that Corrective Actions are completed for
that Plan, CTI and the Parent shall consult regarding the Government Audit and
shall use their best efforts to reach an agreement on how to handle the
Government Audit. If CTI and the Parent are unable to reach such an agreement,
the Government Audit shall be handled in the manner that William M. Mercer,
Incorporated recommends for best resolving the issues raised in the Government
Audit.

       For purposes of this Agreement, "completed" means that: (a) correction
has been made with respect to all Plans and all Identified Errors so that the
Plans comply in all material respects with the applicable requirements of ERISA
and the Code; and (b) where applicable, the IRS and/or the DOL has issued a
final determination with respect to the Corrective Actions in the form of one or
more compliance statement(s), no-action letter(s) or favorable determination
letter(s) or has entered into a closing agreement with the Parent, Company or
the Surviving

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Corporation and all conditions of such compliance statement(s), no action
letter(s), favorable determination letter(s) or closing agreement(s) have been
satisfied.

       2.9.    CTI may retain William M. Mercer, Incorporated to assist CTI in
fulfilling its responsibilities under the Agreement; however, such retention
shall not relieve CTI from any of its obligations hereunder. CTI may also deal
with current and/or previous Plan sponsors, insurance companies, benefit
providers and/or consultants which provided services to CTI in connection with
CTI's establishment, maintenance and/or governmental compliance activities with
respect to any of the Plans (collectively, "Prior Service Providers"); provided,
however, that any Corrective Actions by a Prior Service Provider must be
approved in writing by William M. Mercer Incorporated. No other entity shall be
retained by CTI to do or approve Corrective Actions without the prior written
consent of the Parent. Before having William M. Mercer, Incorporated commence
its duties in accordance with this Agreement, CTI shall prepare a "scope of
work" letter for the duties to be performed by William M. Mercer, Incorporated
and shall submit such letter to the Parent for its approval (which approval
shall not be unreasonably withheld or delayed.)

       2.10    At the Parent's sole cost and expense, the Parent shall promptly
make or cause to be made such records and personnel available to CTI as may be
reasonably requested pursuant to CTI's remediation activities hereunder. The
Parent shall identify one or more persons to have primary responsibility for
assisting and cooperating with CTI in connection therewith. Any records or other
information provided by the Parent pursuant to this Section 2.10 shall only be
disclosed to such persons or entities who reasonably need such records or
information in order for CTI to be able to fulfill its obligations under this
Agreement. CTI

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agrees that it will treat such records and information as confidential, and that
it will require any person or entity described in the preceding sentence to
treat such records and information as confidential.

                                    SECTION 3

                                    INDEMNITY

       3.1     CTI, and any successor thereto, shall indemnify, defend and hold
harmless the Parent, the Sub, the Company and the Surviving Corporation and in
each case its directors, officers, employees and agents (individually and
collectively, the "Indemnified Party"), and its successors and assigns from and
against any loss, cost, liability or expense imposed on, incurred or suffered by
or asserted against an Indemnified Party, directly or indirectly, to the extent
resulting from, arising out of or incurred with respect to a breach of
representation, warranty or covenant or obligations herein or with respect to
any Plan for such periods prior to the date that Corrective Action for such Plan
has been completed, and any actual or threatened action or proceeding in
connection therewith (the "Indemnified Costs"). The Indemnified Party shall give
written notice (the "Indemnification Notice") to CTI within 10 days after
discovery by the Indemnified Party of any matters giving rise to a claim for
indemnification or setoff under this Agreement, provided, however, that if no
prejudice results from the failure to deliver prompt notice of a claim, no
penalty shall be exacted therefor and the Indemnified Party shall continue to be
entitled to indemnification. In the event that CTI advises the Indemnified Party
that CTI will contest a claim for indemnification hereunder, or fails, within 30
days of receipt of any Indemnification Notice to notify, in writing, the
Indemnified Party of its election to defend, settle or compromise, at its sole
cost and expense, any action or claim (or discontinues its defense at

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any time after it commences such defense), then the Indemnified Party may, at
its option, defend, settle or otherwise compromise or pay such action or claim.
In any event, unless and until CTI elects in writing to assume and does assume
the defense of any such claim or action, the Indemnified Party's reasonable
costs and expenses arising out of the defense, settlement or compromise of any
such action or claim shall be losses subject to indemnification hereunder.
Notwithstanding the foregoing or any other provision of this Agreement, the sole
recourse of an Indemnified Party to enforce its rights to such indemnification
hereunder is the right to set off the amounts to be indemnified against the
unpaid balances of the Merger Note or any Tax Refund Note as described in
Section 4 hereof.

                                    SECTION 4

                            PARENT'S RIGHT OF SET-OFF

       4.1     Any costs or expenses including reasonable counsel fees incurred
by the Parent for Corrective Action(s) or other remediation under this
Agreement, and any payments to which Parent or another Indemnified Party is
entitled by reason of its rights to indemnity under Section 3.1 hereof, shall be
set off against any payments due to or to become due to CTI, or its successors
or assigns, of the unpaid balance under the Merger Note or any Tax Refund Note.
Such right of set off shall be the sole recourse of Parent or any Indemnified
Party against CTI under this Agreement.

                                    SECTION 5

                                  MISCELLANEOUS

       5.1     Only a writing executed by all of the parties hereto may amend
this Agreement.

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       5.2     This Agreement sets forth the entire understanding of the parties
with respect to the matters set forth herein, and supersedes all prior
contracts, agreements, arrangements, communications, discussions,
representations and warranties, oral or written, between the parties with
respect to such matters.

       5.3     All of the representations, warranties, obligations, covenants,
and agreements contained in this Agreement shall survive the Effective Time of
the Merger, none of which shall be considered expired, extinguished or
terminated by the first sentence of Section 9.1 of the Merger Agreement, or by
the Cross-Release executed in connection with the Merger Agreement, and shall
continue until terminated by the completion of all Corrective Actions as
contemplated in this Agreement. CTI shall have the right to issue a Certificate
of Completion with respect to all Corrective Actions it has completed, other
than (a) Corrective Actions described in Sections 2.3 and 2.6 of this Agreement,
and (b) any Corrective Actions needed with respect to required Form 5500-series
reports for the Plans. If the Parent disagrees with CTI's determination of
completion as described in the Certificate of Completion, then William M.
Mercer, Incorporated shall be retained to determine if the Corrective Actions
described in the Certificate of Completion have been completed in accordance
with the terms of this Agreement ("Mercer Determination"). If William M. Mercer,
Incorporated determines that the Corrective Actions described in the Certificate
of Completion have been completed in accordance with the terms of this
Agreement, the Parent shall pay the costs of the Mercer Determination (such
costs shall be limited to the time William M. Mercer, Incorporated spent making
the Mercer Determination, and shall not include any costs charged by William M.
Mercer, Incorporated for prior services rendered with respect to any Corrective
Actions); if William M. Mercer,

                                      -11-

<PAGE>   12

Incorporated does not make such a determination, CTI shall pay the costs of the
Mercer Determination. A Certificate of Completion that has been approved by the
Parent or William M. Mercer, Incorporated in accordance with this Section 5.3
shall relieve CTI of any further responsibility with respect to the Corrective
Actions covered by such Certificate of Completion, provided, however, that the
Parent's right to indemnification (by way of set off against the unpaid balance
under the Merger Note or Tax Refund Notes) under Sections 3.1 and 4.1 of this
Agreement shall survive such approval with respect to any third-party claims
related to Identified Errors covered by such Certificate of Completion..

       5.4     This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in New York without regard to the principles thereof regarding the
choice of law. Each of the parties hereto hereby irrevocably submits to the
jurisdiction of the courts of the State of New York and the Federal courts of
the United States of America located in the State, City and County of New York
in respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waives, and agrees not to assert, as a defense in any
action, suit or proceeding for the interpretation or enforcement hereof, that it
is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may not
be appropriate or that this Agreement may not be enforced in or by said courts.
Each of the parties hereto hereby consents to and grants any such court
jurisdiction over the person of such party and over the subject matter of any
such dispute and agrees that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section

                                      -12-

<PAGE>   13

5.6, or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.

       5.5     The Parties hereby acknowledge that Craig and Macauley
Professional Corporation has been retained by CTI in connection with the
performance of CTI's obligation under this Agreement, and shall in no way be
deemed to represent the Parent, the Company, the Sub or any other party
affiliated with the Parent (the "Rome Parties"). To the extent that a dispute
arises between CTI and any one or more of the Rome Parties, Craig and Macauley
Professional Corporation shall be entitled to represent CTI. Each of the Rome
Parties hereby consents to such representation to the extent that such consent
is required, and waives any right to assert that such representation constitutes
a conflict of interest.

       5.6     All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, (c) sent by next-day or overnight mail or delivery, or (d) sent by
telecopy:

         (i) if to CTI to:

         Connectivity Technologies Inc.
         c/o Highgate Capital LLC
         1311 Mamaroneck Avenue, Suite 170
         White Plains, New York  10605
         Att'n:  Clarke H. Bailey
         Fax No.:  (914) 610-1114

         with a copy to:

         William F. Macauley, Esq.

                                      -13-

<PAGE>   14

         Craig and Macauley Professional Corporation
         Federal Reserve Plaza
         600 Atlantic Avenue
         Boston, Massachusetts  02210
         Fax No.:  (617) 742-1788

         (ii)  if to Parent, Sub, Company or the
               Surviving Corporation to:

         Rome Group, Inc.
         421 Ridge Street
         Post Office Box 71
         Rome, New York  13442-0071
         Att'n:   Mary L. Wuest
                  Vice President of Finance
         Fax No.:  (315) 338-6709

         with a copy to:

         Scott M. Shepard, Esq.
         Jacobs Persinger & Parker
         77 Water Street, 17th Floor
         New York, New York  10005
         Fax No.: (212) 742-0938

         Thaddeus J. Lewkowicz, Esq.
         Bond, Schoeneck & King, LLP
         One Lincoln Center
         Syracuse, New York  13202
         Fax No.: (315) 422-3598

or, in each case, at such other address as may be specified in writing to the
other parties hereto. All such notices, requests, demands, waivers and other
communications shall be deemed to have been received (A) if by personal delivery
on the date of such delivery, (B) if by certified or registered mail, on the
seventh business day after the mailing thereof, (C) if by next day or overnight
mail or delivery, on the day delivered, or (D) if by telecopy, on the next day
following the day on which telecopy was sent.

                                      -14-

<PAGE>   15

       5.7     If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon, and shall not impair the enforceability of, any other provision of this
Agreement.

       5.8     This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns. No assignment
of this Agreement or of any rights or obligations hereunder may be made by any
party (by operation of law or otherwise) without the prior written consent of
the other parties and any attempted assignment without the required consent
shall be void.

       5.9     Nothing in this Agreement shall confer any rights on any Person
other than the parties hereto and their respective successors and permitted
assigns.

       5.10    No waiver of any provision of this Agreement shall be effective
unless in writing and signed by the party entitled to enforce such provision.
Any waiver by a party of any violation of, or breach or default under any
provision of this Agreement shall not be construed as, or constitute, a
continuing waiver of such provision, or waiver of any other violation of, breach
of or default under any other provision of this Agreement.

       5.11    This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
hereto and delivered to each of the other parties hereto.

                                      -15-

<PAGE>   16

       IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
of the date first written above.

                                          PARENT:ROME GROUP, INC.
                                          By: /s/ Mary Wuest
                                              ---------------------------
                                               Name:  Mary Wuest
                                               Title: Vice President

                                          CTI:
                                          CONNECTIVITY TECHNOLOGIES INC.

                                          By: /s/ James M. Hopkins
                                              ----------------------------
                                                Name:  James M. Hopkins
                                                Title: President and Chief
                                                       Executive Officer

                                          COMPANY:
                                          CONNECTIVITY PRODUCTS
                                          INCORPORATED

                                          By: /s/ Mary Wuest
                                              ---------------------------
                                              Name:  Mary Wuest
                                              Title: Vice President

                                      -16-

<PAGE>   17

                                   SCHEDULE 1

                      PLAN ISSUES IDENTIFIED BY THE PARENT

I.   Violations Of the Qualification Requirements Under Section 401(a) Of the
     Code
     A.     CPI 401(k) Plan
     B.     CPI Incorporated 401k Plan - EEA Division ("EEA 401(k) Plan")

II.  Form 5500-Series Report Violations
     A.     CPI 401(k) Plan and EEA 401(k) Plan
            1.     A 1998 Form 5500 apparently was filed that covered both the
                   CPI 401(k) Plan and the EEA 401(k) Plan
            2.     A separate Form 5500-series report should have been filed
                   for each 401(k) plan
     B.     BSCC's Group Life, Accidental Death and Dismemberment, and
            Long-Term Disability Benefits
            1.     At least one annual Form 5500 is required with respect to
                   these benefits, and the filing may be required for more
                   than one year
     C.     BSCC Health Insurance Plan
            1.     To the extent BSCC's health benefits have been treated as a
                   single health plan (which appears to be the case in Section
                   2.04 of the BSCC Employee Handbook & Policy Manual and
                   Schedule 3.5 of the Merger Agreement), a Form 5500 is
                   required for each year the plan had 100 or more
                   participants at the beginning of the plan year

III. Prohibited Transaction(s)
     A.     EEA Dental Benefits
            1.     The EEA dental benefits are self-funded, and it does not
                   appear that participant contributions for these benefits
                   are being handled in a manner that complies with ERISA's
                   trust requirements
            2.     Violation of the ERISA trust requirements is a prohibited
                   transaction under ERISA

IV.  Violations Of ERISA's Summary Plan Description Requirements
     A.     CPI 401(k) Plan
     B.     BSCC's Group Life, Accidental Death and Dismemberment, and
            Long-Term Disability Benefits 1. It appears there may be a
            violation of ERISA's summary plan description ("SPD") requirements
            with respect to these benefits, but more information is needed to
            verify this
     C.     BSCC Health Insurance Plan
            1.     There does not appear to be a complete SPD

<PAGE>   18

     D.     BSCC Voluntary Dental Program
            1.     The SPD requirements do not appear to be satisfied

     E.     EEA Health Insurance Benefits

     F.     EEA Life Insurance Benefits

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