Document:

Exhibit 10.2.9.4

                  NINTH AMENDMENT TO CREDIT AGREEMENT & WAIVER

      THIS NINTH AMENDMENT TO CREDIT AGREEMENT & WAIVER (this "Amendment"),
dated as of November 13, 2002, is by and among Cluett American Corp. (the
"Borrower"), Cluett American Investment Corp. (the "Parent"), Cluett American
Group, Inc. ("Interco") and the certain subsidiaries of the Parent identified on
the signature pages hereto (together with the Parent and Interco, the
"Guarantors"), the lenders identified on the signature pages hereto (the
"Lenders"), Bank of America, N.A. (formerly known as NationsBank, N.A.), as
agent for the Lenders (in such capacity, the "Agent"), and Gleacher NatWest
Inc., as documentation agent (the "Documentation Agent").

                               W I T N E S S E T H

      WHEREAS, the Borrower, the Guarantors, the Lenders, the Agent and the
Documentation Agent have entered into that certain Credit Agreement dated as of
May 18, 1998, as amended as of May 27, 1998, December 18, 1998, March 19, 1999,
September 30, 1999, March 29, 2000, May 2, 2000, June 30, 2000, March 23, 2001
and April 12, 2002 (as so previously amended the "Existing Credit Agreement");
and

      WHEREAS, the parties to the Existing Credit Agreement have agreed to amend
the Existing Credit Agreement and waive certain provisions thereof as provided
herein.

      NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:

                                     PART 1
                                   DEFINITIONS

      SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:

      "Amended Credit Agreement" means the Existing Credit Agreement as amended
hereby.

      "Amendment No. 9 Effective Date" is defined in Subpart 3.1.

      SUBPART 1.2 Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.

                                     PART 2
                     AMENDMENTS TO EXISTING CREDIT AGREEMENT

      Effective on (and subject to the occurrence of) the Amendment No. 9
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part 2. Except as so amended, the Existing Credit Agreement and all
other Credit Documents shall continue in full force and effect.

      SUBPART 2.1 Amendments to Section 1.1.

      (a) The pricing grid in the definition of "Applicable Percentage"
appearing in Section 1.1 of the Existing Credit Agreement is amended and
restated in its entirety to read as follows:

<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                    Applicable Percentage For
                                    Revolving Loans and            Applicable Percentage For
                                    Tranche A Term Loan            Tranche B Term Loan
                                    --------------------------------------------------------
                       Applicable                                                              Applicable           Applicable
           Senior      Percentage                                                              Percentage For       Percentage for
Pricing    Leverage    For Unused   Eurodollar     Base Rate       Eurodollar      Base Rate   Standby Letter of    Trade Letter of
Level      Ratio       Fee          Loans          Loans           Loans           Loans       Credit Fee           Credit Fee
------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>         <C>          <C>            <C>             <C>             <C>         <C>                  <C>
I          > 2.00 to   0.50%        4.00%          3.00%           4.00%           3.00%       4.00%                2.00%
           1.00
------------------------------------------------------------------------------------------------------------------------------------
II         < 2.00 to   0.50%        3.00%          2.00%           3.50%           2.50%       3.00%                1.50%
           -
           1.00
====================================================================================================================================
</TABLE>

      (b) The following definition appearing in Section 1.1 of the Existing
Credit Agreement is amended and restated in its entirety to read as follows:

      "Interest Period" means, (i) as to Eurodollar Loans, a period of one
months' duration commencing, in each case, on the date of the borrowing
(including continuations and conversions thereof) and (ii) as to any Swingline
Loan, a period commencing in each case on the date of the borrowing and ending
on the date agreed to by the Borrower and the Swingline Lender in accordance
with the provisions of Section 2.3(b)(i) (such ending date in any event to be
not more than thirty (30) Business Days from the date of borrowing); provided,
however, (a) if any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (b) no Interest Period
shall extend beyond April 30, 2003, (c) with regard to the Tranche A Term Loans,
no Interest Period shall extend beyond any Principal Amortization Payment Date
unless the portion of Tranche A Term Loans comprised of Base Rate Loans together
with the portion of Tranche A Term Loans comprised of Eurodollar Loans with
Interest Periods expiring prior to the date such Principal Amortization Payment
is due, is at least equal to the amount of such Principal Amortization Payment
due on such date, (d) with regard to the Tranche B Term Loans, no Interest
Period shall extend beyond any Principal Amortization Payment Date unless the
portion of Tranche B Term Loans comprised of Base Rate Loans together with the
portion of Tranche B Term Loans comprised of Eurodollar Loans with Interest
Periods expiring prior to the date such Principal Amortization Payment is due,
is at least equal to the amount of such Principal Amortization Payment due on
such date and (e) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.

      (c) The following new definitions are hereby added to Section 1.1 of the
Existing Credit Agreement in the appropriate alphabetical order to read as
follows:

      "Amendment No. 9" means that certain Ninth Amendment to Credit Agreement
and Waiver dated as of November 13, 2002 among the Credit Parties, the Agent and
the Lenders party thereto.

      "Amendment No. 9 Effective Date" means November 13, 2002.

      "Licensing Transaction" the sale or securitization of the intellectual
property of the Shirt Group or the royalty payments related thereto.

      SUBPART 2.2 Amendments to Section 3.5. New clauses (e), (f), (g), (h) and
(i) are hereby added to Section 3.5 of the Existing Credit Agreement to read as
follows:

            (e) Incentive Fee. On the Amendment No. 9 Effective Date, each
      Lender (other than the Tranche C Lender in such capacity) shall earn a fee
      equal to 0.50% of the Commitment of such Lender on such date
      (collectively, the "Incentive Fee"). The Borrower agrees to pay the
      Incentive Fee to the Agent for the benefit of each Lender in immediately
      available funds on the earliest of (i) February 28, 2003, (ii) the
      acceleration of the Loans, and (iii) payment in full of the Loans;
      provided, however, if a Licensing Transaction has occurred on or prior to
      February 28, 2003, the entire Incentive Fee shall be automatically waived.
      All or any portion of the Incentive Fee may be postponed, waived or
      reduced by the Required Lenders.

<PAGE>

            (f) Support Fee. On the Amendment No. 9 Effective Date, each Lender
      (other than the Tranche C Lender in such capacity) shall earn a fee equal
      to 0.50% of the Commitment of such Lender (collectively, the "Support
      Fee"). The Borrower agrees to pay the Support Fee to the Agent for the
      benefit of each Lender in immediately available funds on the earliest of
      (i) December 31, 2002, (ii) the date the Loans are paid in full and (iii)
      the date the Loans are accelerated. All or any portion of the Support Fee
      may be postponed, waived or reduced by the Required Lenders.

            (g) Second Support Fee. On February 28, 2003, each Lender (other
      than the Tranche C Lender in such capacity) shall earn a fee equal to
      0.375% of the Commitment of such Lender on such date (collectively, the
      "Second Support Fee"). The Borrower agrees to pay the Support Fee to the
      Agent for the benefit of each Lender in immediately available funds on
      February 28, 2003. All or any portion of the Second Support Fee may be
      postponed, waived or reduced by the Required Lenders.

            (h) Third Support Fee. On April 30, 2003, each Lender (other than
      the Tranche C Lender in such capacity) shall earn a fee equal to 0.375% of
      the Commitment of such Lender on such date (collectively, the "Third
      Support Fee"). The Borrower agrees to pay the Support Fee to the Agent for
      the benefit of each Lender in immediately available funds on the earliest
      of (i) May 31, 2003, (ii) the date the Loans are paid in full and (iii)
      the date the Loans are accelerated. All or any portion of the Third
      Support Fee may be postponed, waived or reduced by the Required Lenders.

            (i) Amendment Fee. On the Amendment No. 9 Effective Date, each
      Lender (other than the Tranche C Lender in such capacity) approving
      Amendment No. 9 and returning its executed signature page thereto to the
      Agent on before 6:00 PM (EST) on November 13, 2002 shall earn a fee equal
      to 0.50% of the Commitment of such Lender (collectively, the "Amendment
      Fee"). The Borrower agrees to pay the Amendment Fee to the Agent for the
      benefit of each Lender in immediately available on or before the earliest
      of (i) December 16, 2002, (ii) the date the Loans are paid in full and
      (iii) the date the Loans are accelerated. All or any portion of the
      Amendment Fee may be postponed, waived or reduced by the Required Lenders.

      SUBPART 2.3 Amendments to Section 7.1.

      (a) All references to "45 days" appearing in Sections 7.1(b)(i) and
7.1(b)(ii) of the Existing Credit Agreement are hereby deleted and replaced with
references to "30 days".

      (b) A new Section 7.1(n) is hereby added to the Existing Credit Agreement
to read as follows:

            (n) Borrower Presentations. Semi-monthly reports and, if requested
      by the Agent, conference calls with the Lenders, describing (i) the status
      of the consummation of any Licensing Transaction, (ii) the financial
      performance of the Consolidated Parties and (iii) the status of the
      Borrower's efforts to refinance the Credit Agreement (such reports may be
      in the form of a conference call with the Lenders).

      SUBPART 2.4 Amendments to Section 7.11(e). Section 7.11(e) of the Existing
Credit Agreement is amended to modify the grid appearing therein to reflect that
(i) Consolidated EBITDA attributable to the Sock Group for the twelve-month
period ending December 31, 2002 shall be greater than or equal to $16,250,000
and (ii) Consolidated EBITDA attributable to the Sock Group for the twelve-month
period ending March 31, 2003 shall be greater than or equal to $14,200,000.

      SUBPART 2.5 Additional Amendments to Section 7.11. The asterisks appearing
in, and the asterisked text appearing below, the financial covenant grids in
Section 7.11(c) and 7.11 (d) of the Existing Credit Agreement are deleted. A new
Section 7.11(g) is hereby added to the Existing Credit Agreement to read as
follows:

            (g) Maximum Senior Funded Indebtedness. On March 31, 2003, (i)
      outstanding Senior Funded Indebtedness shall not exceed $48,000,000 and
      (ii) the sum of the Revolving Committed Amount plus the outstanding
      principal amount of the Tranche A Term Loans plus the outstanding
      principal amount of the Tranche B Term Loans shall not exceed $58,700,000.

<PAGE>

      SUBPART 2.6 New Section 7.15. A new Section 7.15 is hereby added to the
Existing Credit Agreement to read as follows:

            7.15 Deposit Accounts.

            On or before December 1, 2002, the Credit Parties shall maintain all
            of their deposit accounts with one or more of the Lenders; provided,
            however, the Credit Parties may maintain deposit accounts with
            Persons that are not Lenders so long as the aggregate balance of all
            such accounts does not exceed, at any time, $1,500,000.

      SUBPART 2.7 New Section 7.16. A new Section 7.16 is hereby added to the
Existing Credit Agreement to read as follows:

            7.16 Maximum Cash On-Hand.

            The aggregate amount of cash on-hand and Cash Equivalents of the
            Credit Parties and their Subsidiaries shall not exceed $5,500,000
            for any period of three consecutive Business Days.

      SUBPART 2.8 New Section 7.17. A new Section 7.17 is hereby added to the
Existing Credit Agreement to read as follows:

            7.17 Financial Advisor.

            In addition to and not in substitution of the rights of the Agent
            and the Lenders under Section 11.5, on or after February 28, 2003,
            the Credit Parties agree that the Agent shall have the right to
            retain, at the direction of the Required Lenders, a financial
            advisor with the reasonable fees and expenses of such financial
            advisor to be paid by the Borrower.

      SUBPART 2.9 Amendments to Section 8.5. The first paragraph of Section 8.5
of the Existing Credit Agreement is amended and restated in its entirety to read
as follows:

            8.5 Asset Dispositions.

            The Credit Parties will not permit the Parent or any Consolidated
            Party to make any Asset Disposition (including, without limitation,
            any Sale and Leaseback Transaction) other than Excluded Asset
            Dispositions and a Permitted Austell Property Sale, unless (a)
            except in connection with the licensing of any of the intellectual
            property of the Shirt Group on terms providing for the reversion to
            the applicable Consolidated Parties of all rights to such
            intellectual property at the end of the license term and upon
            default in the payment of licensing fees by the applicable licensee
            thereof, the consideration paid in connection therewith is at least
            75% cash or Cash Equivalents, (b) if such transaction is a Sale and
            Leaseback Transaction, such transaction is permitted by the terms of
            Section 8.13 and (c) the Credit Parties shall, immediately following
            the consummation of such Asset Disposition apply (or cause to be
            applied) an amount equal to the Net Cash Proceeds of such Asset
            Disposition to prepay the Credit Party Obligations in accordance
            with the terms of Section 3.3(b)(iii). Notwithstanding any provision
            of this Credit Agreement to the contrary, (i) no Asset Disposition
            involving any portion of the Sock Group (other than an Asset
            Disposition of Property no longer used or useful in the conduct of
            such Person's business) shall be permitted unless simultaneously all
            of the Credit Party Obligations are repaid and this Credit Agreement
            is terminated in accordance with the terms of Section 11.13(b)
            except pursuant to a transaction permitted under the following
            clause (ii), (ii) none of the Consolidated Parties may sell, lease,
            transfer or otherwise dispose of accounts receivable except pursuant
            to a transaction constituting an Excluded Asset Disposition and
            (iii) the Net Cash Proceeds received from any securitization of any
            of the intellectual property of the Shirt Group or the royalty
            payments related thereto shall be at least $30,000,000 and the other
            terms of such transaction shall be reasonably satisfactory to the
            Agent.

<PAGE>

                                     PART 3
                                  EFFECTIVENESS

      SUBPART 3.1 Amendment No. 9 Effective Date. This Amendment shall be and
become effective as of the date hereof (the "Amendment No. 9 Effective Date")
when all of the conditions set forth in this Part 3 shall have been satisfied,
and thereafter this Amendment shall be known, and may be referred to, as
"Amendment No. 9."

            SUBPART 3.1.1 Execution of Counterparts of Amendment. The Agent
      shall have received counterparts of this Amendment which collectively
      shall have been duly executed on behalf of each of the Borrower, the
      Guarantors and the requisite Lenders in accordance with Section 11.6 of
      the Existing Credit Agreement on or before 6:00 PM (EST) on November 13,
      2002.

                                     PART 4
                                  MISCELLANEOUS

      SUBPART 4.1. Cross-References. References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.

      SUBPART 4.2 Waiver. Subject to the occurrence of the Amendment No. 9
Effective Date, the Required Lenders hereby (i) waive the requirements that the
Credit Parties comply with Sections 7.11(a), 7.11(b), 7.11(c), 7.11(d) and
7.11(e) of the Existing Credit Agreement for the fiscal quarter ended September
30, 2002; (ii) waive the requirements that the Credit Parties comply with
Sections 7.11(a), 7.11(b), 7.11(c) and 7.11(d) of the Amended Credit Agreement
for the fiscal quarter ended December 31, 2002 and (iii) waive the requirements
that the Credit Parties comply with Sections 7.11(a), 7.11(b), 7.11(c) and
7.11(d) of the Amended Credit Agreement for the fiscal quarter ended March 31,
2003 so long as no other Default or Event of Default then exists. This is a
one-time waiver and is granted only for the limited purposes set forth herein
and shall be effective only in the specific circumstances provided for above and
only for the purpose for which given.

      SUBPART 4.3 Waiver of Consent Rights. The Borrower hereby waives its
rights contained in the definition of "Eligible Assignee" to approve any Person
as an assignee of any Credit Party Obligations or otherwise object to the
assignment of any Credit Party Obligations to any Person.

      SUBPART 4.4 Limitation on Eurodollar Loans. Notwithstanding anything to
the contrary contained any of the Credit Documents, on or after April 30, 2003,
the Borrower shall not be entitled to request additional Eurodollar Loans,
continue Eurodollar Loans or convert Base Rate Loans to Eurodollar Loans. This
restriction may be revoked by the Required Lenders.

      SUBPART 4.5 Perfection Certificate. On or before December 6, 2002, the
Borrower shall deliver a perfection certificate to the Agent. Such perfection
certificate shall be in form and substance satisfactory to the Agent.

      SUBPART 4.6 Instrument Pursuant to Existing Credit Agreement. This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.

      SUBPART 4.7 References in Other Credit Documents. At such time as this
Amendment shall become effective pursuant to the terms of Subpart 3.1, all
references in the Credit Documents to the "Credit Agreement" shall be deemed to
refer to the Amended Credit Agreement.

      SUBPART 4.8 Authority/Enforceability. Each of the Credit Parties
represents and warrants as follows:

            (a)   It has taken all necessary action to authorize the execution,
                  delivery and performance of this Amendment.

<PAGE>

            (b)   This Amendment has been duly executed and delivered by such
                  Person and constitutes such Person's legal, valid, and binding
                  obligations, enforceable in accordance with its terms except
                  as such enforceability may be subject to (i) bankruptcy,
                  insolvency, reorganization, fraudulent conveyance or transfer,
                  moratorium or similar laws affecting creditors' rights
                  generally and (ii) general principles of equity (regardless of
                  whether such enforceability is considered in a proceeding at
                  law or in equity).

            (c)   No consent, approval, authorization or order of, or filing,
                  registration or qualification with, any court or governmental
                  authority or third party is required in connection with the
                  execution, delivery or performance by such Person of this
                  Amendment except those which have been obtained.

            (d)   The execution and delivery of this Amendment does not (i)
                  violate, contravene or conflict with any provision of its, or
                  its Subsidiaries' organizational documents, (ii) materially
                  violate, contravene or conflict with any Requirement of Law or
                  any other law, regulation (including, without limitation,
                  Regulation U or Regulation X), order, writ, judgment,
                  injunction, decree or permit applicable to it or any of its
                  Subsidiaries or (iii) violate, contravene or conflict with
                  contractual provisions of, or cause an event of default under
                  any other indenture, loan agreement, mortgage, deed of trust,
                  contract or other agreement or instrument to which it, or to
                  which any of its Subsidiaries, is a party or by which it, or
                  by which any of its Subsidiaries, may be bound, the violation
                  of which any agreement in this sub-clause (iii) would be
                  reasonably expected to have a Material Adverse Effect.

      SUBPART 4.9 Release. The Credit Parties and the Sponsor further
acknowledge and agree that the Credit Parties and the Sponsor have no claims,
counterclaims, offsets, or defenses to the Credit Documents, the Tranche C
Guaranty or any transaction related thereto or the performance of the Credit
Parties' and the Sponsor's obligations thereunder. To the extent the Credit
Parties or the Sponsor have any such claims, counterclaims, offsets or defenses
to the Credit Documents, the Tranche C Guaranty or any transaction related
thereto or the performance of the Credit Parties' and the Sponsor's obligations
thereunder, the same are hereby waived, relinquished and released in
consideration of the Required Lenders' execution and delivery of this Amendment.

      SUBPART 4.10 Counterparts/Telecopy. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of executed counterparts of this Amendment by telecopy shall
be effective as an original and shall constitute a representation that an
original shall be delivered.

      SUBPART 4.11 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

      SUBPART 4.12 Entirety. This Amendment, the Amended Credit Agreement and
the other Credit Documents embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. The Credit Documents represent the final agreement of the
parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties.

      SUBPART 4.13 Attorney's Fees. The Credit Parties hereby promise to pay all
costs and expenses of the Agent in connection with this Amendment, including,
without limitation, the reasonable fees and expenses of Moore & Van Allen PLLC.

      SUBPART 4.14 Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

<PAGE>

      IN WITNESS WHEREOF the Borrower, the Guarantors and the Required Lenders
have caused this Amendment to be duly executed on the date first above written.

CREDIT PARTIES:                     CLUETT AMERICAN Corp.
                                    Cluett American Investment Corp.
                                    Cluett American Group, Inc.
                                    CONSUMER DIRECT CORPORATION
                                    ARROW FACTORY STORES, INC.
                                    GAKM RESOURCES CORPORATION
                                    CLUETT PEABODY RESOURCES CORPORATION
                                    CLUETT PEABODY HOLDING CORP.
                                    CLUETT, PEABODY & CO., INC.
                                    BIDERTEX SERVICES INC.
                                    GREAT AMERICAN KNITTING MILLS, INC.
                                    BIDERMANN TAILORED CLOTHING, INC.
                                    GOLD TOE BRANDS, INC.

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

                             [Signatures Continued]

<PAGE>

AGENT:                              BANK OF AMERICA, N.A.
                                    (formerly known as NationsBank, N. A.), as
                                    Agent

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

LENDERS:                            BANK OF AMERICA, N.A.
                                    (formerly known as NationsBank, N. A.)

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

                                    BANK OF AMERICA, N.A.
                                    (formerly known as NationsBank, N. A.),
                                    solely in its capacity as the Tranche C
                                    Lender

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

                                    THE ROYAL BANK OF SCOTLAND PLC

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

                                    FLEET NATIONAL BANK

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

                                    FLEET BUSINESS CREDIT CORPORATION
                                    (successor in interest to Sanwa Business
                                    Credit Corporation)

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

<PAGE>

                                    BANK AUSTRIA CREDITANSTALT
                                    CORPORATE FINANCE, INC.

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

                                    FIRST SOURCE LOAN OBLIGATIONS TRUST,
                                    By: First Source Financial Inc., its manager

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

                                    GENERAL ELECTRIC CAPITAL
                                    CORPORATION

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

                                    HSBC BANK USA

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

                                    AG CAPITAL FUNDING PARTNERS, L.P.
                                    By:  Angelo Gordon & Co., L.P. as Investment
                                         Advisor

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

                                    NORTHWOODS CAPITAL LIMITED
                                    By:  Angelo Gordon & Co., L.P. as Collateral
                                         Manager

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

                                    ARK CLO 2000-1, LIMITED
                                    By: Patriarch Partners, LLC,
                                    as Collateral Manager

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

<PAGE>

ACKNOWLEDGED
AND AGREED:                         VESTAR CAPITAL PARTNERS III, L.P.,
                                    a Delaware limited partnership, solely in
                                    its capacity as "Sponsor" under the Tranche
                                    C Guaranty

                                    By: VESTAR ASSOCIATES III, L.P.,
                                        its General Partner

                                    By: VESTAR ASSOCIATES CORPORATION III,
                                        its General Partner

                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------Exhibit 10.14

                        SHARE SALE AND PURCHASE AGREEMENT

                             dated November 22, 2002

                                between and among

       Hermann Schlosser, Ilse Schlosser, Karen Beck and Rolf Breternitz,

                                   as Sellers,

                   Hohenstaufen Zweihundertsechsundzwanzigste
                           Vermogensverwaltungs GmbH,

                                  as Purchaser,

                                       and

                              Mikron Infrared, Inc.

<PAGE>

                               Table of Contents

                                                                            Page
                                                                            ----

Section

1. DEFINITIONS AND INTERPRETATION.............................................2

   1.1 Definitions............................................................2

   1.2 Interpretations........................................................6

2. SALE AND PURCHASE OF THE SHARES............................................8

3. PURCHASE PRICE AND PAYMENT.................................................8

4. CLOSING AND POST-CLOSING..................................................12

5. REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS AND THE OTHER SELLERS......14

   5.1    Power and Authority................................................15

   5.2    Accuracy of Information............................................16

   5.3    Standing of the Companies..........................................16

   5.4    Title to the Shares................................................17

   5.5    Other Subsidiaries, Associations and Branches......................18

   5.6    The Accounts and the Pre-Closing Accounts..........................18

   5.7    Undisclosed Liabilities............................................20

   5.8    Conduct of Business since Accounts Date............................20

   5.9    Dividends..........................................................21

   5.10   Subsidies etc......................................................21

   5.11   Real Property and Other Assets.....................................22

   5.12   Intellectual Property..............................................22

   5.13   Agreements.........................................................23

   5.14   Anti-Competitive Arrangements......................................24

   5.15   No Powers of Attorney..............................................24

   5.16   Insider Contracts..................................................24

   5.17   Marketing Information..............................................24

   5.18   Customers..........................................................25

   5.19   Litigation and Complaints..........................................25

   5.20   Licenses and Compliance with Laws..................................25

   5.21   Employees..........................................................25

   5.22   Environmental......................................................27

   5.23   Insurance..........................................................28

   5.24   No Illegal or Improper Transactions................................29

   5.25   Tax    ............................................................29

   5.26   Brokers ...........................................................30

   5.27   Indebtedness etc between the Sellers and the Companies.............30

   5.28   Acquisition of Mikron Shares for Investment Purposes...............31

6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND MIKRON................32

   6.1    Power and Authority of the Purchaser...............................32

   6.2    Power and Authority of Mikron......................................32

<PAGE>

                               Table of Contents

                                                                            Page
                                                                            ----

   6.3    Consents and Approvals.............................................33

   6.4    Capital Stock......................................................34

   6.5    SEC Filings; Financial Statements..................................34

   6.6    Absence of Undisclosed Liabilities.................................34

   6.7    Absence of Certain Changes or Events...............................35

   6.8    No Litigation......................................................35

7. INDEMNIFICATION - GENERAL.................................................35

   7.1    Breach of the Warranties...........................................35

   7.2    Purchaser Claims...................................................36

   7.3    Several Liability..................................................36

   7.4    Limitation of Liability............................................36

   7.5    Defending Third Party Claims.......................................38

8. TAX INDEMNITY.............................................................39

9. GUARANTEE.................................................................40

10. NOTICES..................................................................40

11. MISCELLANEOUS............................................................41

12. GOVERNING LAW AND DISPUTES...............................................42

Schedules

1        Accounting Principles (previously delivered and deemed annexed hereto)

2        Material Agreements

5.6.1(b) Non-conforming financial statement preparation procedures re: Accounts

5.6.1(d) Unusual, non-recurring items; non-arm's length contracts Re: Accounts

5.6.2(c) Non-conforming financial statement preparation procedures re:
         Pre-Closing Accounts

5.6.2(e) Unusual, non-recurring items; non-arm's length contracts Re:
         Pre-Closing Accounts

5.6.3    Accounts Date Accounts Receivable Aging

5.6.4    Pre-Accounts Date Accounts Receivable Aging

5.65     Payments Re: post-Closing Date services/expenses

5.82(e)  Sales, assignments, transfers, etc. of material assets

5.8.2(j) Material investments in fixed assets

5.8.2(k) Increases in compensation or benefits

5.8.3    Related party payment transactions

5.10     Grants, subsidies and instruments pertaining to the receipt of
         financial assistance, trade secrets, etc.

5.11.2   Effect of consummation of sale of Shares on Leases

5.11.5   Capital expenditures

5.12.1   Intellectual property infringement claims

5.12.2   Registered intellectual property rights

<PAGE>

                                Table of Contents

5.12.5   Intellectual property rights held by Sellers, Close Relatives and
         Affiliates

5.13.5   Sole source suppliers; canceled orders and threats to cancel orders

5.15     Powers of attorney

5.16     Insider contracts

5.18     Customers

5.21.1   List of employees

5.21.2   Consulting agreements

5.21.3   Employees giving notice of termination

5.21.4   Commissions and non-salary remuneration

5.21.8   Employee benefit plans

5.21.11  Collective bargaining, shop or similar agreements

5.21.13  Remunerations under Employee Inventions Act

5.23     Insurance

5.25.1   Tax returns and taxes - open items

5.25.3   Tax penalties, fines, interest

5.25.4   Audits

5.27.3   Loan indebtedness owed by the Companies to the Sellers

5.27.4   Guarantees and indemnities

6.4      Mikron securities convertible into or exchangeable for common stock

6.5.2    Exceptions to Mikron's compliance with GAAP in its SEC Documents

Exhibits

A-1     Share Ownership of the Company

A-2     Share Ownership of  IMPAC Systems

A-3     Share Ownership of Infrapoint

B-1     Appreciated Amounts - Schlosser

B-2     Appreciated Amounts - Breternitz

C       Pre-Closing Accounts

D       Redemption Notice

E       Articles of Association of the Companies

<PAGE>

                        SHARE SALE AND PURCHASE AGREEMENT

AMONG

(1)   Hermann Schlosser ("Mr. Schlosser") and Ilse Schlosser ("Mrs. Schlosser"),
      both residing at Kaiser-Friedrich-Promenade, 149, D-61352 Bad Homburg
      v.d.H., Germany, Karen Beck, residing at Urbanstra(beta)e 41, D-14165
      Berlin, Germany ("Mrs. Beck") and Rolf Breternitz, residing at
      Ludwigstra(beta)e 12A, D-61348 Bad Homburg v.d.H., Germany ("Mr.
      Breternitz") (each a "Seller" and jointly the "Sellers");

(2)   Hohenstaufen Zweihundertsechsundzwanzigste Vermogensverwaltungs GmbH, a
      limited liability company duly incorporated, organized and validly
      existing under the laws of Germany, and registered under number HRB 39814
      with the Commercial Register of the Lower Court in Cologne, (the
      "Purchaser"); and

(3)   Mikron Infrared, Inc., a company duly incorporated, organized and validly
      existing in good standing under the laws of the State New Jersey in the
      United States of America, having its principal office located at 16
      Thornton Road, Oakland, New Jersey, USA 07436 ("Mikron").

WHEREAS

A.    IMPAC Electronic GmbH, registered under number HRB 23871 with the
      Commercial Register of the Municipal Court in Frankfurt am Main, (the
      "Company") is a limited liability company incorporated in Germany, having
      a registered share capital of DM1,600,000 divided into the shares as set
      out in Exhibit A-1 (the "IMPAC Shares").

B.    IMPAC Systems GmbH, registered under number HRB 18756 with the Commercial
      Register of the Municipal Court in Dresden ("IMPAC Systems"), is a limited
      liability company incorporated in Germany, having a registered share
      capital of (euro)50,000 divided into the shares as set out in Exhibit A-2
      (the "IMPAC Systems Shares").

C.    infra sensor Spezialpyrometer GmbH, registered under number HRB 2693 with
      the Commercial Register of the Municipal Court in Magdeburg ("Infra
      Sensor"), is a limited liability company incorporated in Germany, having a
      registered share capital of (euro)128,000 (the "Infra Sensor Shares").

D.    INFRAPOINT Messtechnik GmbH, registered under number HRB 4635 with the
      Commercial Register of the Municipal Court in Meiningen ("Infrapoint"), is
      a limited liability company incorporated in Germany, having a registered
      share capital of DM100,000 divided into the shares as set out in Exhibit
      A-3 (the "Infrapoint Shares").

E.    IMPAC France, Sarl, registered under number B 382401230 with RCS
      Strassbourg ("IMPAC France"), is a company incorporated under the laws of
      France, having an issued share capital of FF150,000, divided into 150
      shares of FF1,000 (the "IMPAC France Shares").

<PAGE>

F.    IMPAC Infrared Ltd., registered under number 03624461 with Company's House
      Cardiff ("IMPAC Infrared"), is a company incorporated under the laws of
      the United Kingdom having an issued share capital of (pound)20,000,
      divided into 2,000 shares of (pound)10 (the "IMPAC Infrared Shares").

G.    Mr. Schlosser, Mrs. Schlosser, Mrs. Beck and Mr. Breternitz own all of the
      IMPAC Shares.

H.    The Company owns all of the IMPAC France Shares, all of the IMPAC Infrared
      Shares and all of the Infra Sensor Shares.

I.    The Company and Dr. Christian Schiewe own, respectively, 90% and 10%, of
      the IMPAC Systems Shares.

J.    Mr. Schlosser and Mr. Breternitz own, respectively, 40% and 60% of the
      Infrapoint Shares.

K.    The Companies (as defined below) are engaged in the business of
      developing, manufacturing and selling non-contact infrared temperature
      measurement systems, devices and ancillary equipment.

L.    The Sellers wish to sell and the Purchaser wishes to purchase all the
      shares of the Company and Infrapoint owned by the Sellers, as set forth in
      Exhibits A-1, A-2 and A-3, on the terms and conditions set out in this
      Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Agreement:

      "Accounting Principles" means the accounting principles that have been
      consistently applied for each of the financial years immediately preceding
      the applicable Accounts Date for each of the Companies, such principles
      are set out in the Accounts which were previously delivered to the
      Purchaser, which are annexed as Schedule 1, and are in accordance with
      applicable laws and general accepted accounting principles in Germany;

      "Accounts" means collectively, the Companies Balance Sheets as at, and the
      audited profit and loss statements for the years ended on, the respective
      Accounts Dates of, each of the Companies, together with the respective
      auditor's reports and the notes relating to them, copies of all of which
      have been received by Mikron prior to the date hereof;

      "Accounts Date" means (a) February 28, 2002 with respect to the Company
      and each of the Subsidiaries, (b) December 31, 2001 with respect to Infra
      Sensor and IMPAC Systems; and (c) September 30, 2001 with respect to
      Infrapoint;

      "Affiliate" means, when referring to a person a person that directly or
      indirectly, through one or more intermediaries, controls, is controlled
      by, or is under common control with, the first-mentioned person;

                                       2
<PAGE>

      "Appreciated Amount" means as of any date of computation, with respect to
      Mr. Schlosser, Mr. Schlosser's Deferred Purchase Price, and with respect
      to Mr. Breternitz, Mr. Breternitz's Deferred Purchase Price, plus, in each
      case, the amount accreted thereon from the Closing Date to the relevant
      date of computation, as provided in Section 3.6.3;

      "Benefit Plan" and "Benefit Plans" have the meanings attributed to such
      terms in Section 5.21.8;

      "Business Day" means a day (other than a Saturday or Sunday) on which
      banks are generally open in Frankfurt am Main, Germany for normal
      business;

      "Cash Balance Adjustment" shall have the meaning attributed to such term
      in Section 3.4;

      "Change in Control" shall have the meaning attributed to such term in
      Section 3.6.3;

      "Close Relative" means any spouse, former spouse, child, step-child,
      adopted child, grandchild, parent or spouse's parent; or any child,
      step-child, adopted child or grandchild of any such person; or any spouse
      of any of the foregoing, and for the purposes of this definition "spouse"
      includes de facto spouse or co-habitee;

      "Closing" means closing of the sale and purchase of the Shares in
      accordance with Section 4;

      "Closing Date" means the date of this Agreement;

      "Closing Date Cash Balances" means the difference between (a) the
      aggregate amount of cash on deposit in the bank accounts maintained by all
      of the Companies as of the close of business on the date immediately
      preceding the Closing Date; and (b) the aggregate amount of all bank loans
      and bank account overdrafts owed by any of the Companies as of the close
      of business on the date immediately preceding the Closing Date;

      "Companies" means collectively, the Company, the Subsidiaries, IMPAC
      Systems and Infrapoint;

      "Companies Balance Sheets" means the audited balance sheets of each of the
      Companies, in each case as at the respective Accounts Dates of each of the
      Companies;

      "Company" means IMPAC Electronic GmbH;

      "Compounding Date" shall have the meaning attributed to such term in
      Section 3.6.2;

      "Contingent Payment" has the meaning attributed to such term in Section
      4.4;

      "Deferred Purchase Price" has the meaning attributed to such term in
      Section 3.2.3;

      "Exchange Act" means the United States Securities Exchange Act of 1934, as
      amended;

                                       3
<PAGE>

      "Founders" means Mr. Schlosser and Mr. Breternitz;

      "Governmental Entity" has the meaning attributed to such term in Section
      6.3;

      "Initial Payment" means such payment as defined in Section 3.2.1;

      "Intellectual Property Right" means all (i) patents, patent applications,
      patent disclosures and inventions, (ii) trademarks, service marks, trade
      dress, trade names, URL's, logos and corporate names and registrations and
      applications for registration thereof, together with all of the goodwill
      associated therewith, (iii) copyrights (registered or unregistered) and
      copyrightable works and registrations and applications for registration
      thereof, (iv) mask works and registrations and applications for
      registration thereof, (v) computer software, data, data bases and
      documentation thereof, (vi) trade secrets and other confidential
      information (including ideas, formulas, compositions, inventions (whether
      patentable or unpatentable and whether or not reduced to practice),
      know-how, manufacturing and production processes and techniques, research
      and development information, drawings, specifications, designs, plans,
      proposals, technical data, copyrightable works, financial and marketing
      plans and customer and supplier lists and information), (vii) other
      intellectual property rights and (viii) copies and tangible embodiments
      thereof (in whatever form or medium);

      "Lien" means any right which (a) shall entitle any person to terminate,
      amend, accelerate or cancel any agreement, option, license or other
      instrument to which any of the Companies is a party by reason of the
      occurrence of (i) a violation, breach or default thereunder by any of the
      Companies; or (ii) an event which with or without notice or lapse of time
      or both would become a default thereunder; or (b) if exercised by the
      holder thereof, will (i) entitle such person to accelerate the performance
      of any obligations or the payment of any sums owed by any of the Companies
      under any agreement, option, license or other instrument, or (ii) result
      in any loss of any benefit under, or the creation of any pledges, claims,
      equities, options, liens, charges, call rights, rights of first refusal,
      "tag" or "drag" along rights, encumbrances and security interests of any
      kind or nature whatsoever on any of the property or assets of any of the
      Companies;

      "Material Adverse Effect" means (i) any fact, event or circumstance that
      results in or could reasonably be expected to result in an adverse change
      or effect in the financial condition, assets, liabilities, business,
      properties, results of operations or business prospects of the Company
      and/or the Subsidiaries, IMPAC Systems or Infrapoint, considered
      collectively or individually, which change or effect is material with any
      other such changes or effects, to the specified entities or entity, or
      (ii) any event, matter, condition or effect which materially impairs the
      ability of the specified entities or entity to perform on a timely basis
      their or its obligations under this Agreement or the consummation of the
      transactions contemplated hereby;

      "Material Agreement" means each agreement listed in Schedule 2;

                                       4
<PAGE>

      "Maturity Date" means the fifth anniversary of the Closing Date, or such
      earlier date when the Appreciated Amount shall become due and payable
      pursuant to Section 3.6.4, 3.6.5 or 3.6.6;

      "Maturity Principal Amount" means with respect to Mr. Schlosser, the
      amount set forth on Exhibit B-1, and with respect to Mr. Breternitz, the
      amount set forth on Exhibit B-2;

      "Mikron Common Stock" means the common stock, par value $.003 per share,
      of Mikron;

      "Mikron Financial Statements" means the financial statements included in
      the Mikron SEC Documents;

      "Mikron SEC Documents" has the meaning attributed to such term in Section
      6.5.1;

      "Mr. Breternitz's Deferred Purchase Price" has the meaning attributed to
      such term in Section 3.2.3;

      "Mr. Schlosser's Deferred Purchase Price" has the meaning attributed to
      such term in Section 3.2.2;

      "Parties" means collectively, the Sellers, the Purchaser and Mikron;

      "Payment Designation Notice" has the meaning attributed to such term in
      Section 3.2.2;

      "Payment Date" has the meaning attributed to such term in Section 3.2.1;

      "Person" means a natural person, company, corporation, partnership,
      association, trust or any unincorporated organization;

      "Pre-Closing Accounts" means the unaudited balance sheet of each of the
      Companies as at the Pre-Closing Accounts Date, except for IMPAC Infrared,
      and the unaudited profit and loss report of each of the Companies, except
      for IMPAC Infrared, for the period between its Accounts Dates and the
      Pre-Closing Accounts Date, copies of which have been attached hereto as
      Exhibit C;

      "Pre-Closing Accounts Date" means September 30, 2002;

      "Profit Distributions" means the aggregate amount (before deduction of any
      withholding taxes) of any distribution of dividends, retained profits or
      profit reserves which have been authorized by the shareholders of the
      Company at any time on or after May 1, 2002 with respect to any dividends,
      retained profits or profit reserves relating to time periods prior to
      March 1, 2002 and which have been or will be paid by the Company to the
      Sellers at any time prior to the Closing;

      "Purchase Price" has the meaning attributed to such term in Section 3.1;

                                       5
<PAGE>

      "Purchaser Claim" has the meaning attributed to such term in Section 7.3;

      "SEC" means the United States Securities and Exchange Commission;

      "Section 5.27.3 Indebtedness" means the aggregate principal amount of all
      loan indebtedness, together with all accrued but unpaid interest thereon,
      owed by any of the Companies to any of the Sellers, as more particularly
      described on Schedule 5.27.3;

      "Section 3.4 Certificate" has the meaning attributed to such term in
      Section 3.4;

      "Securities Act" means the United States Securities Act of 1933, as
      amended;

      "Sellers' Representative" means Mr. Hermann Schlosser;

      "Shares" means collectively, all of the IMPAC Shares, all of the Infra
      Sensor Shares owned by Mr. Breternitz and all of the Infrapoint Shares;

      "Social Security Contributions" mean all payments to be made by any of the
      Companies under applicable law for health (Krankenversicherung),
      unemployment (Erwerbslosenversicherung), retirement (Rentenversicherung),
      disability (Erwerb-sunfahigkeitsversicherung), accident
      (Unfallversicherung), social care (Pflegeversicherung) and any other
      insurance coverage or benefit scheme;

      "Subsidiaries" means IMPAC France, IMPAC Infrared and Infra Sensor;

      "Tax", "Taxes" and "Taxation" mean (a) income taxes, ad valorem taxes,
      excise taxes, withholding taxes, stamp taxes or other taxes of or with
      respect to gross receipts, premiums, real property, personal property,
      windfall profits, sales, use, transfers, licensing, employment, payroll
      and franchises imposed by or under any federal, state, local or foreign
      statute, law, rule or regulation, and such terms shall include any
      interest, fines, penalties, assessments or additions to tax resulting
      from, attributable to or incurred in connection with any such tax or any
      contest or dispute thereof; (b) liability of any of the Companies or any
      fiduciary for the payment of any amounts of the type described in clause
      (a) as a result of being a member of an affiliated, combined consolidated
      or unitary group for any taxable period; and (c) liability of any of the
      Companies for the payment of any amounts of the type described in clauses
      (a) or (b) as a result of any express or implied obligation to indemnify
      any other person;

      "Taxation Authority" means any federal, state, local or foreign
      governmental agency, department or other entity which is authorized by
      applicable law to assess and collect Taxes;

      "Third Party Claim" has the meaning attributed to such term in Section
      7.5; and

      "Warranties" means the warranties and representations set out in Section 5
      below.

                                       6
<PAGE>

1.2   Interpretation.

      (a) As used in this Agreement and each Schedule hereof and Exhibit hereto,
      unless the context clearly indicates otherwise:

            (i) words used in the singular include the plural and words in the
            plural include the singular;

            (ii) reference to any person includes such person's successors and
            assigns, but only if such successors and assigns are permitted by
            this Agreement or such other Schedule hereof or Exhibit hereto, and
            reference to a person in a particular capacity excludes such Person
            in any other capacity;

            (iii) reference to any gender includes the other gender;

            (iv) whenever the words "include," "includes" or "including" are
            used in this Agreement or any Schedule hereof or Exhibit hereto,
            they shall be deemed to be followed by the words "without
            limitation" or "but not limited to" or words of similar import;

            (v) reference to any Article, Section, Exhibit or Schedule means
            such Article or Section of, or such Exhibit or Schedule to, this
            Agreement, as the case may be, and references in any Section or
            definition to any clause means such clause of such Section or
            definition;

            (vi) the words "herein," "hereunder," "hereof," "hereto" and words
            of similar import shall be deemed references to this Agreement as a
            whole and not to any particular Section or other provision hereof;

            (vii) reference to any agreement, instrument or other document means
            such agreement, instrument or other document as amended,
            supplemented and modified from time to time to the extent permitted
            by the provisions thereof and by this Agreement;

            (viii) reference to any law (including statutes and ordinances)
            means such law (including all rules and regulations promulgated
            thereunder) as amended, modified, codified or reenacted, in whole or
            in part, and in effect at the time of determining compliance or
            applicability, and reference to any particular provision of any law
            shall be interpreted to include any revision of or successor to that
            provision regardless of how numbered or classified;

            (ix) relative to the determination of any period of time, "from"
            means "from and including," "to" means "to but excluding" and
            "through" means "through and including";

            (x) in the event of any conflict between the provisions of the body
            of this Agreement and the Exhibits or Schedules hereto, the
            provisions of the body of this Agreement shall control; and

                                       7
<PAGE>

            (xi) the titles to Articles and headings of Sections contained in
            this Agreement have been inserted for convenience of reference only
            and shall not be deemed to be a part of or to affect the meaning or
            interpretation of this Agreement.

      (b) This Agreement and each of the Schedules hereof and Exhibits hereto
      were negotiated by the parties with the benefit of legal representation,
      and no rule of construction or interpretation otherwise requiring this
      Agreement or any of the Schedules hereof and Exhibits hereto to be
      construed or interpreted against any party shall apply to any construction
      or interpretation hereof. Subject to Section 12.4, this Agreement shall be
      interpreted and construed to the maximum extent possible so as to uphold
      the enforceability of each of the terms and provisions hereof, it being
      understood and acknowledged that this Agreement was entered into by the
      parties after substantial negotiations and with full awareness by the
      parties of the terms and provisions hereof and the consequences thereof.

      (c) Where a statement in this Agreement (including the schedules) is
      qualified by the expression "to the best of the Sellers' (or Founders')
      knowledge" or "so far as the Sellers (or Founders) are aware" or any
      similar expression shall be deemed to include each of the Seller's or
      Founder's, as the case may be, actual knowledge and what each of the
      Sellers or Founders who are active in the daily management of whichever of
      the Companies is the subject of such statement, should have known after
      due and careful inquiry of the Managing Director, the members of the Board
      of Directors and any relevant person(s) involved in the management of the
      business of each of the respective Companies, such as the controller, the
      human resources manager and the technology and manufacturing management.
      Except for statements qualified by a Founder or Seller after due and
      careful inquiry, in the manner set forth in the first sentence of this
      subsection, each of the Founders or the Sellers, as the case may be, shall
      be liable for any erroneous or untrue statement or Warranty that he or she
      may make in this Agreement (including the schedules), irrespective of
      whether the error contained therein or the untruth thereof shall have
      resulted from negligence or intent on the part of such Founder or Seller.

2.    SALE AND PURCHASE OF THE SHARES

2.1   Subject to (i) payment to the Sellers of the portion of the Purchase Price
      identified under Section 3.2.1 in accordance with the instructions of
      Seller's Representative pursuant to Section 3.3 below; and (ii) delivery
      of certificates evidencing the ownership of the Mikron Shares in
      accordance with Section 3.2.4 below, the Sellers hereby sell and assign
      and the Purchaser hereby purchases and accepts the assignment of the
      Shares under the terms of this Agreement.

2.2   The sale of the Shares by the Sellers to the Purchaser shall include all
      rights of the Sellers thereunder including, but not limited to, all rights
      to profits, as well as, in particular, profit distribution claims and
      profit drawing rights pertaining to all time periods commencing on and
      after March 1, 2002.

3.    PURCHASE PRICE AND PAYMENT

                                       8
<PAGE>

3.1   The purchase price for the Shares (the "Purchase Price") shall be

      3.1.1 600,000 unregistered shares of Mikron Common Stock (the "Mikron
            Shares");

      3.1.2 plus (euro)4,470,000

            (a) increased by the Cash Balance Adjustment in the amount of
            (euro)167,827.34; and

            (b) reduced by the Section 5.27.3 Indebtedness in the amount of
            (euro)952,200.00.

3.2   The Purchase Price shall be paid as follows:

      3.2.1 (euro)3,670,000 plus the Cash Balance Adjustment, and minus the
      Section 5.27.3 Indebtedness, i.e., (euro)2,885,627.34, shall be paid
      within four calendar days after Closing ("Payment Date") to the Sellers
      ("Initial Payment");

      3.2.2 (euro)680,000 ("Mr. Schlosser's Deferred Purchase Price") shall be
      paid to Mr. Schlosser pursuant to the terms, and subject to the conditions
      set forth in Section 3.6;

      3.2.3 (euro)120,000 ("Mr. Breternitz's Deferred Purchase Price" which,
      together with Mr. Schlosser's Deferred Purchase Price, is hereinafter
      referred to as the "Deferred Purchase Price") shall be paid to Mr.
      Breternitz pursuant to the terms, and subject to the conditions set forth
      in Section 3.6; and

      3.2.4 certificates evidencing the ownership of the Mikron Shares shall be
      delivered at Closing to the Sellers or the Sellers' Representative.

3.3   The specific amount to be paid to each of the Sellers pursuant to Section
      3.2.1 and the specific number of Mikron Shares to be issued and delivered
      to each of the Sellers pursuant to Section 3.2.4 shall be designated by
      Seller's Representative pursuant to a written notice delivered by him to
      Purchaser not later than three business days prior to the Closing Date
      (the "Payment Designation Notice").

3.4   At the Closing, the Sellers shall deliver a certificate of the Sellers'
      Representative attesting to the aggregate amount of the Closing Date Cash
      Balances (the "Section 3.4 Certificate"). In the event that the Closing
      Date Cash Balances shall be, in the aggregate, greater or less than
      (euro)1.00, the Purchase Price shall be increased or decreased, as the
      case may be, to the extent of the difference thereof (in either case, the
      "Cash Balance Adjustment").

3.5   Each of the Sellers recognizes and agrees that any and all payments and
      deliveries made by the Purchaser to the Sellers' Representative and/or
      pursuant to written instructions received from the Seller's Representative
      shall be in full discharge of the Purchaser's obligations to each of the
      Sellers under this Agreement. The Purchaser has no responsibility
      whatsoever for the allocation of the Purchase Price among the Sellers.
      However, upon request of Purchaser, the Sellers' Representative shall
      without undue delay inform the Purchaser upon the allocation of the
      Initial Payment among the Sellers.

                                       9
<PAGE>

3.6   Terms and Conditions Applicable to the Payment of the Deferred Purchase
      Price

      3.6.1 Purchaser shall pay to Mr. Schlosser and to Mr. Breternitz, and
      their respective successors, heirs and assigns, in lawful currency of the
      Federal Republic of Germany, the Appreciated Amount payable to each of
      them in accordance with the provisions of Section 3.6.2. Unless the
      provisions of Section 3.6.3 shall be applicable, the Appreciated Amount
      shall be due and payable only on the Maturity Date and in the Maturity
      Principal Amount.

      3.6.2 Each of Mr. Schlosser's Deferred Purchase Price and Mr. Breternitz's
      Deferred Purchase Price shall accrete in value at a yield of 9% per annum,
      compounded on each December 31 and June 30, commencing December 31, 2002
      (each a "Compounding Date"). The Appreciated Amount on each Compounding
      Date prior to the Maturity Date payable to Mr. Schlosser and to Mr.
      Breternitz is set forth on Exhibit B-1 and B-2, respectively. The
      Appreciated Amount on a date other than a Compounding Date is the
      Appreciated Amount on the immediately preceding Compounding Date (or the
      Closing Date if the date of computation is prior to the first Compounding
      Date), plus a portion of the difference between the Appreciated Amount as
      of the immediately preceding Compounding Date and the Appreciated Amount
      as of the immediately succeeding Compounding Date calculated by
      multiplying such difference by a fraction the numerator of which is the
      number of days that have elapsed since the immediately preceding
      Compounding Date and denominator of which is the number of days from the
      immediately preceding Compounding Date to the immediately succeeding
      Compounding Date.

      3.6.3 Each of Mr. Schlosser and Mr. Breternitz shall have the right to
      require the Purchaser to prepay the Appreciated Amount which shall be due
      and owing by it pursuant to the terms of this Section 3.6.3 in the event
      that a "Change in Control" (as hereinafter defined) occurs. The amount
      which shall be due and payable by the Company in connection with any such
      prepayment shall equal the Appreciated Amount as of the date selected by
      the Payee for prepayment (as hereinafter provided). For purposes hereof, a
      "Change in Control" shall be deemed to occur if: (a) any "person" or
      "group"(as such terms are defined in the U.S. Securities Exchange Act of
      1934, as amended) other than Mikron Infrared, Inc. ("Mikron") or any of
      its subsidiaries, or a trustee or any fiduciary holding securities under
      an employee benefit plan of Mikron or any of its subsidiaries, acting
      singly or in concert with one or more other persons, acquires securities
      representing 50% or more of the combined voting power of Mikron's then
      outstanding securities; (b) during any one year period, individuals who at
      the beginning of such period constitute the Board of Directors of Mikron
      and any new director whose election by the Board of Directors or
      nomination for election by Mikron's shareholders was approved by a vote of
      at least a majority of the directors then still in office who either were
      directors at the beginning of the period or whose election or nomination
      for election was previously so approved, cease for any reason to
      constitute a majority thereof; (c) the shareholders of Mikron approve a
      merger or consolidation of Mikron with any other corporation, other than
      (i) a merger or consolidation which would result in the voting securities
      of Mikron outstanding immediately prior thereto continuing to represent,
      in combination with the ownership of any trustee or other fiduciary
      holding securities under

                                       10
<PAGE>

      an employee benefit plan of Mikron, at least 50% of the combined voting
      power of the voting securities of Mikron or such surviving entity
      outstanding immediately after such merger or consolidation, or (ii) a
      merger or consolidation effected to implement a recapitalization of Mikron
      (or similar transaction) in which no person acquires more than 50% of the
      combined voting power of Mikron's then outstanding securities; (d) the
      shareholders approve a plan of complete liquidation of Mikron or an
      agreement for the sale or disposition by Mikron of all or substantially
      all of its assets; or (e) Gerald D. Posner shall cease to be a full time
      employee of Mikron. Each of Mr. Schlosser and Mr. Breternitz may exercise
      such right by delivery to the Purchaser, within 20 days of his receipt of
      notice that either a Change in Control or an Event of Default (as
      hereinafter defined) has occurred, of a redemption notice in the form of
      Exhibit D hereto specifying the required date of prepayment, which must be
      at least 10 days after the delivery of such notice to the Purchaser. The
      amount due and payable by the Purchaser on such specified prepayment date
      shall be the Appreciated Amount as of such date. The Purchaser, for
      itself, and on behalf of any successor to the Purchaser by merger,
      consolidation, operation of law or otherwise, covenants to give each of
      Messrs. Schlosser and Breternitz written notice of the occurrence of (x)
      an Event of Default not later than the date when the same shall occur, and
      (y) a Change in Control not later than the date upon which the Purchaser
      acquires actual notice of the occurrence thereof.

      3.6.4 The Purchaser shall have the right to prepay the Appreciated Amount
      payable to each of Messrs. Schlosser and Breternitz, in whole, but not in
      part, at any time at its option, without premium or penalty. The amount
      due and payable by the Purchaser on the date when such prepayment shall
      occur shall be the Appreciated Amount as of such date.

      3.6.5 Each of Messrs. Schlosser and Breternitz shall have the right, by
      notice in writing to the Purchaser, to declare the entire Appreciated
      Amount to become immediately due and payable (whereupon such amount shall
      become immediately due and payable) in the event that Mikron pays any cash
      dividend with respect to its common stock at any time prior to the date
      upon which the Purchaser's obligations to each of Messrs. Schlosser and
      Breternitz shall have been fully satisfied (an "Event of Default").
      Interest shall not be payable to Messrs. Schlosser and Breternitz except
      in the case of the failure to pay the Appreciated Amount respectively due
      to them when due, in which case such Appreciated Amount shall thereafter
      bear interest at the rate of 9% per annum until paid in full.

      3.6.6 Anything elsewhere contained in this Agreement to the contrary
      notwithstanding, the Appreciated Amount shall, without demand, notice or
      legal process of any kind, be declared and shall become immediately due
      and payable upon the occurrence of any of the following events (each a
      "Bankruptcy Event"): (i) the entry of a decree or order by a court or
      agency or supervisory authority having jurisdiction in the premises for
      the appointment of a conservator, receiver, trustee, or liquidator for the
      Purchaser or Mikron in any bankruptcy, insolvency, readjustment of debt,
      marshalling of assets and liabilities, or similar decree or order unstayed
      and in effect for a period of thirty (30) consecutive days; (ii) the
      consent by the Purchaser or Mikron to the appointment of a trustee,
      conservator, receiver, or liquidator in any bankruptcy, insolvency,
      readjustment of debt, marshalling of assets and liabilities, or similar
      proceedings of or relating to the Purchaser

                                       11
<PAGE>

      and involving substantially all of its property; or (iii) the Purchaser or
      Mikron shall admit in writing its inability to pay its debts generally as
      they become due, file a petition under any applicable bankruptcy,
      insolvency, or reorganization statute, make an assignment for the benefit
      of its creditors, or voluntarily suspend payment of its obligations.

      3.6.7 If payment of the Appreciated Amount is accelerated upon the
      occurrence of an Event of Default or a Bankruptcy Event, the amount
      immediately due and payable in such event shall equal the Appreciated
      Amount as of such date of acceleration. The Purchaser hereby promises to
      pay all costs and expenses, including reasonable attorneys fees and
      expenses, incurred in the collection of the Appreciated Amount and
      enforcement of the rights of Messrs. Schlosser and Breternitz with respect
      thereto.

      3.6.8 Except to the extent otherwise provided in Section 7.4.1, all
      payments hereunder shall be made without set-off, defense, deduction,
      counterclaim or withholding on account of taxes, levies, duties or any
      other reason whatsoever.

3.7   In the case of default with respect to the payment of the portion of the
      Purchase price identified in Section 3.2.1 the Purchaser shall pay
      interest thereon at a rate of 8% p.a. above the base rate according to
      ss.247 of the German Civil Code from Closing Date on.

3.8   For a period of ten calendar days after the Payment Date the Sellers will
      refrain from exercising any statutory or contractual right to rescind this
      Agreement by reason of non-payment of the Initial Payment.

4.    CLOSING AND POST-CLOSING

4.1   Closing shall take place on the Closing Date at such place as the Parties
      shall mutually agree upon. All actions taken at the Closing shall be
      deemed to have been taken simultaneously at the time the last of any such
      actions is taken or completed.

4.2   At Closing the Sellers shall

      4.2.1 deliver to the Purchaser a certificate executed by the Seller's
      Representative confirming the following:

            (a) Each of the representations and warranties of the Founders and
            the other Sellers contained in Section 5 is true, correct and
            complete on and as of the Closing Date.

            (b) All covenants, agreements and conditions contained in this
            Agreement to be performed or complied with by the Companies and the
            Sellers on or prior to the Closing Date have been performed or
            complied with.

            (c) On or prior to the Closing Date, all filings, registrations,
            approvals, notifications etc required by applicable laws in
            connection with the transfer of the Shares to the Purchaser, and the
            consummation of the transactions contemplated by this Agreement have
            been duly obtained by the Companies and the Sellers and shall be
            effective on and as of the date of the Initial Payment.

                                       12
<PAGE>

            (d) No Profit Distributions are due and owing by any of the
            Companies to any Person.

            (e) There has not occurred between the Accounts Date and the Closing
            Date (i) any Material Adverse Effect upon the assets, business,
            operations, employee relations, customer or supplier relations,
            operating results, prospects or condition (financial or otherwise)
            of the Companies taken as a whole and (ii) any material adverse
            Federal or state legislative or regulatory change affecting the
            respective businesses, products or services of the Companies taken
            as a whole.

            (f) All conditions precedent to the assignment of the Shares, have
            been fulfilled, and that the assignment of all of the Sellers'
            respective rights, titles and interests in the Shares therewith will
            become legally effective on and as of the date of the Initial
            Payment.

            (g) Certificates evidencing the ownership of the Mikron Shares have
            been delivered in accordance with Section 3.2.4.

4.2A  Within three calendar days after receipt of the Initial Payment Sellers'
      Representative shall send a confirmation of such receipt to Mikron.

4.3   At the Closing Purchaser and/or Mikron, as the case may be, shall

      4.3.1 deliver to the Sellers a certificate confirming that

            (a) each of the representations and warranties of the Purchaser and
            Mikron contained in Section 6 is true, correct and complete on and
            as of the Closing Date, and all covenants, agreements and conditions
            contained in this Agreement to be performed or complied with by the
            Purchaser and Mikron on or prior to the Closing Date have been
            performed or complied with.

            (b) on or prior to the Closing Date, any authorizations, consents,
            approvals or permits of any Governmental Entity that are required by
            law in connection with the lawful issuance of the Mikron Shares, and
            the consummation of the transactions contemplated by this Agreement
            have been duly obtained by the Purchaser and/or Mikron and are
            effective on and as of the Closing Date.

            (c) Mikron has taken all actions under all applicable U.S.
            securities laws necessary to consummate the issuance of the Mikron
            Shares to the Sellers.

            (d) Mikron has received loan proceeds in the aggregate principal
            amount of US$500,000 from Messrs. Gerald D. Posner and Dennis
            Stoneman which shall be repayable pursuant to capital appreciation
            notes containing substantially the same terms and conditions set
            forth in Section 3.6.

      4.3.2 Upon receipt of the certificate described in Section 4.2.1, pay to
      the Sellers the amount required to be paid pursuant to Section 3.2.1 by
      wire transfer to the accounts of the Sellers identified in the Payment
      Designation Notice, and shall deliver to the Sellers

                                       13
<PAGE>

      certificates evidencing Sellers' ownership of the Mikron Shares in the
      denominations set forth in the Payment Designation Notice, as full
      consideration for the Shares, subject to Purchaser's post-Closing right to
      set-off, pursuant to Section 387 of the German Civil Code, such amount or
      amounts as may be due and payable by any of the Sellers pursuant to
      Article 7 and/or 8 hereof against the Deferred Purchase price, and the
      Sellers' rights to receive the Contingent Payment pursuant to Section 4.4.

4.4   In the event that the Company receives from the German fiscal authorities
      a tax refund with respect to the Profit Distributions, the Purchaser shall
      pay to the Sellers the amount of such refund (the "Contingent Payment")
      not later than 15 business days after the date on which such refund
      payment is received by the Company.

4.5   Upon Closing, Mr. Schlosser hereby sells and transfers and the Purchaser
      hereby purchases and accepts the transfer of each of the loans comprising
      the Section 5.27.3 Indebtedness from the respective lenders who made such
      loans. The purchase price to be paid with respect to each of such loans
      shall be the principal amount thereof, i.e., (euro)952,200.00. Such
      purchase price shall be paid together and at the same time as the Initial
      Payment; Sections 3.2.1, 3.7, 3.8 and 4.2A shall apply accordingly. In the
      event that any bank who, by reason of its provision of financing to
      Purchaser and/or Mikron with respect to the consummation of the
      transactions contemplated herein and hereby, requires Purchaser to
      subordinate its rights with respect to any of the loans comprising the
      Section 5.27.3 Indebtedness that it shall be purchasing pursuant to this
      Section 4.5, Purchaser shall execute and deliver such subordination
      agreements as such bank or banks shall reasonably require.

4.6   At the Closing and from time to time thereafter, the Sellers shall, at no
      additional cost to the Purchaser, execute such additional instruments and
      take such other actions as Purchaser may request in order to effectively
      sell, transfer and assign the Shares to Purchaser and confirm Purchaser's
      title thereto.

4.7   With a view to making available to the Sellers the benefits of certain
      rules and regulations of the SEC which may permit the sale of the Mikron
      Shares to the public without registration, Mikron agrees to use its best
      efforts to: (a) make and keep public information available, as and when
      required of Mikron under U.S. securities laws; (b) file with the SEC, in a
      timely manner at its sole cost and expense, all reports and other
      documents, when and as required of Mikron under the Exchange Act; and (c)
      comply at all times in all material respects with all applicable criteria,
      requirements and rules imposed by the NASDAQ SmallCap Market, or any
      successor thereof, or any national or regional stock exchange upon which
      the Common Stock may, in the future, become listed for trading.

5.    REPRESENTATIONS AND WARRANTIES OF THE FOUNDERS AND THE OTHER SELLERS

      Subject to Article 7 below, each of the Founders severally, but not
      jointly, gives all of the following representations and warranties to the
      Purchaser as of the Closing Date. Subject to Article 7 below, each of the
      Sellers who is not a Founder severally, but not jointly,

                                       14
<PAGE>

      gives to the Purchaser only the representations and warranties contained
      in Section 5.1 (Power and Authority), 5.3 (Standing of the Companies), 5.4
      (Title to the Shares) and 5.28 (Acquisition of Mikron Shares for
      Investment Purposes) which are correct as of the Closing Date.

      In entering into this Agreement, Purchaser and Mikron are relying upon the
      correctness of the representations and warranties as defined in Section
      434 para 1 sentence 1 German Civil Code ("Beschaffenheitsangaben" as
      defined in ss. 434 Absatz 1 Satz 1 BGB) made by the Sellers and Founders
      below. The parties to this Agreement agree that the representations and
      warranties contained in this Article 5 are not given as "Garantien" in the
      meaning of Sections 444 Alt 2 and 443 of the German Civil Code and that
      none of Sellers' and Founders' respective statements in public, especially
      advertisement ("Werbung"), in the meaning of Sections 443 para. 1 and 434
      para 1 sentence 3 of the German Civil Code shall be interpreted as
      representation or warranty. The Founders, as partial debtors
      (Teilschuldner), shall be liable for these representations and warranties
      being correct both as of the Closing Date. The Founders, the Purchaser and
      Mikron acknowledge and agree that the representations and warranties
      contained in this Section 5 and the legal consequences which will result
      pursuant to Article 7 below if any of such representations and warranties
      shall not be correct or shall not be complied with are homogeneous with,
      and an inseparable part of, this Agreement.

      In entering into this Agreement, Purchaser and Mikron are relying upon the
      correctness of the representations and warranties made by the Sellers who
      are not Founders to Purchaser and Mikron pursuant to Sections 5.1 (Power
      and Authority), 5.3 (Standing of the Companies), 5.4 (Title to the Shares)
      and 5.28 (Acquisition of Mikron Shares for Investment Purposes). The
      Sellers who are not Founders shall be liable, as partial debtors
      (Teilschuldner), for these representations and warranties being correct as
      of the Closing Date. The Sellers who are not Founders, Purchaser and
      Mikron acknowledge and agree that the representations and warranties set
      forth in Section 5.1, 5.3, 5.4 and 5.28 and the legal consequences which
      will result pursuant to Article 7 below if any of such representations and
      warranties shall not be correct or shall not be complied with are
      homogeneous with, and an inseparable part of, this Agreement.

      No representations and/or warranties other than those expressly given in
      this Article 5 are given by the Sellers and/or the Founders. Section 434
      para 1 sentences 2 and 3 German Civil Code shall not apply.

      In the event that more than one of the Founders and/or the Sellers are
      liable for one and the same violation or incorrectness of any of the
      Warranties, the individual share of the aggregate liability which shall be
      owed by each of the affected Founders and/or Sellers shall be equivalent
      to the percentage of the Purchase Price that he or she shall receive
      hereunder.

5.1   Power and Authority

      5.1.1 The Sellers have full power and authority to sell, transfer and
      deliver to the Purchaser the Shares respectively owned by each of the
      Sellers and to perform all other

                                       15
<PAGE>

      undertakings hereunder and the execution and performance of this
      Agreement.

      5.1.2 Assuming all filings, registrations, approvals, notifications etc
      required by applicable laws are made, the execution of this Agreement by
      the Sellers, the assignment of the Shares to the Purchaser and the Closing
      of the transactions contemplated hereby:

            (a) will not violate any provision of the respective articles of
            association of any of the Companies;

            (b) will not violate any statute, rule, regulation, order, award,
            judgment, injunction or decree of any public body or authority by
            which the Sellers or any of the Companies or any of their properties
            or assets is bound;

            (c) will not result in a violation or breach of, or constitute a
            default under, any license, franchise, permit, indenture, agreement
            or other instrument to which any of the Sellers or any of the
            Companies is a party, or by which any of the Sellers or any of the
            Companies is bound; and

            (d) will not result in the creation or imposition of any Lien,
            charge or encumbrance of any nature on any of the properties or
            assets of the Companies.

      5.1.3 Except for Mr. Breternitz's 90% ownership of the Kleiber business
      and his 76% interest in MESELA which acts as a supplier and as a
      distributor in East Germany for the Companies and which ownership and
      shareholding are known to the Purchaser and to Mikron, none of the Sellers
      owns, directly or indirectly, any interest in, or is employed by, any
      entity that engages in any business activity that competes directly or
      indirectly with any of the business activities conducted by the Companies.

5.2   Accuracy of Information

      5.2.1 All information supplied in writing by the Companies, the Sellers or
      their agents to the Purchaser or its agents is in all material respects
      correct and not misleading in any material respect. To the best of the
      Founders' knowledge and information, such written information does not
      contain any misrepresentation of, and does not omit to state, any material
      fact regarding the matters set forth therein.

      5.2.2 The particulars relating to the Companies and their respective
      businesses, properties and assets set out in this Agreement, including the
      recitals and the schedules to this Agreement, are correct in all material
      respects.

5.3   Standing of the Companies

      5.3.1 Each of the Companies (except IMPAC France and IMPAC Infrared) is
      duly incorporated, registered and organized, and validly existing under
      the laws of Germany and has the corporate power to own its respective
      properties and carry on its respective business as and where its business
      is now conducted.

      5.3.2 IMPAC France is duly incorporated, registered and organized, and
      validly

                                       16
<PAGE>

      existing under the laws of France and has the corporate power to own its
      property and carry on its respective business as and where its business is
      now conducted.

      5.3.3 IMPAC Infrared is duly incorporated, registered and organized, and
      validly existing under the laws of the United Kingdom and has the
      corporate power to own its property and carry on its respective business
      as and where its business is now conducted.

      5.3.4 All returns, resolutions, minutes, annual reports and other
      documents which the Companies are required by law or regulations to file
      with or deliver to the respective governmental authorities having
      jurisdiction over them have been correctly prepared and duly filed or
      delivered.

      5.3.5 The articles of association (or the similar organizational
      documents) of the Companies, as listed in Exhibit E, are in full force and
      effect in compliance with applicable laws.

      5.3.6 The respective share registers and other statutory books and
      registers of IMPAC France and IMPAC Infrared are complete, properly kept
      and in their possession.

5.4   Title to the Shares

      5.4.1 Each of the Sellers has good and marketable title to the Shares he
      or she respectively owns, free and clear of all Liens, encumbrances,
      claims, options and restrictions of every kind.

      5.4.2 The Shares respectively owned by each of the Sellers as sold under
      this Agreement represent together one hundred per cent (100%) of the
      registered share capital of the Company and Infrapoint. The Shares have
      been validly issued and are fully paid and non-assessable. No repayments
      of share capital of the Company or Infrapoint has been made to any of the
      Sellers and no contribution obligation (Nachschu(beta)verpflichtung)
      exists with regard to the shares held by any of the Sellers in the Company
      or Infrapoint. There are no outstanding obligations, warrants, options,
      pre-emptive rights or other agreements to which any of the Sellers or any
      of the Companies is a party or otherwise bound, providing for the issuance
      of any additional shares, warrants, options or other securities, or for
      the purchase, repurchase, redemption or other acquisition of the Shares,
      except for this Agreement.

      5.4.3 The Company is the owner of one hundred per cent (100%) of the
      registered share capital of each of the Subsidiaries; and ninety percent
      (90%) of the registered share capital of IMPAC Systems. The shares of the
      Subsidiaries and IMPAC Systems issued to the Company have been validly
      issued and are fully paid and non-assessable. No repayments of share
      capital of any of the Subsidiaries or IMPAC Systems have been made to the
      Company and no contribution obligations (Nachschlu(beta)verpflichtungen)
      exist with regard to the shares held by the Company in any of the
      Subsidiaries and/or IMPAC Systems.

      5.4.4 There is no pledge, Lien or other form of security or encumbrance
      on, over or affecting any of the Shares or of any of the shares in the
      Subsidiaries, nor is there any

                                       17
<PAGE>

      commitment to give or create any of the foregoing.

      5.4.5 There are no voting agreements or other shareholder agreements with
      respect to the Sellers or the shares or ownership of any of the Companies.

5.5   Other Subsidiaries, Associations and Branches

      5.5.1 The Companies do not own, and have not agreed to acquire, any
      securities of any other corporation (whether incorporated in Germany or
      elsewhere), or any other entity or business association of whatever kind
      other than the Subsidiaries and IMPAC Systems.

      5.5.2 The Companies have outside of Germany no branch or permanent
      establishment other than the Subsidiaries.

5.6   The Accounts and the Pre-Closing Accounts

      5.6.1 The Accounts:

            (a) have been prepared in accordance with the Accounting Principles
            and applicable laws and regulations, and give a true and fair view
            of the financial condition of the Companies, individually, or on a
            consolidated basis, as the case may be, as at their respective
            Accounts Date and of the profit or loss of each of the Companies for
            the one year periods ending on their respective Accounts Dates;

            (b) have been prepared on bases consistent with the bases employed
            in the Companies' accounts for each of the three immediately
            preceding fiscal years, except as disclosed in Schedule 5.6.1(b);

            (c) contain either provisions adequate to cover, or full particulars
            in notes of, all Taxation and other liabilities and capital
            commitments (whether quantified, contingent or otherwise) of the
            Companies, individually, or on a consolidated basis, as the case may
            be, as at their respective Accounts Dates; and

            (d) are not affected by any unusual or non-recurring items or by any
            contract or arrangement which is not of arm's length nature, except
            as set out in Schedule 5.6.1(d).

      5.6.2 The Pre-Closing Accounts:

            (a) have been included in Exhibit C;

            (b) have been prepared in accordance with the Accounting Principles
            and applicable laws and regulations, with the exception, however,
            that no physical inventory was taken, and give a true and fair view
            of the financial condition of the Companies, individually, as at the
            Pre-Closing Accounts Date and of the profit or loss of each of the
            Companies for the periods commencing on the date immediately
            following their respective Accounts Dates and ending on the
            Pre-

                                       18
<PAGE>

            Closing Accounts Date;

            (c) have been prepared on bases consistent with the bases employed
            in the Companies' accounts for each of the three immediately
            preceding fiscal years, except as disclosed in Schedule 5.6.2(c);

            (d) contain either provisions adequate to cover, or full particulars
            in notes of, all Taxation and other liabilities and capital
            commitments (whether quantified, contingent or otherwise) of the
            Companies, individually as at the Pre-Closing Accounts Date; and

            (e) are not affected by any unusual or non-recurring items or by any
            contract or arrangement which is not of arm's length nature, except
            as shall be set out in Schedule 5.6.2(e).

      5.6.3 Schedule 5.6.3 is a true, correct and complete listing and aging of
      each of the Companies' respective accounts receivable in excess
      of(euro)5,000 as of their respective Accounts Dates determined in
      accordance with the Accounting Principles consistently applied and
      determined in a manner consistent with the presentation in the Accounts.
      All of such accounts receivable have arisen in bona fide arm's length
      transactions in the ordinary course of business and are valid and binding
      obligations of the account debtors. The Founders do not know of any
      circumstances that would make them believe that such accounts receivable
      are not collectible in full in the ordinary course of business within 180
      days of the relevant invoice date, except to the extent that reserves for
      doubtful accounts have been established by the Companies and are set forth
      on Schedule 5.6.3. The reserves for doubtful accounts established by the
      Companies and reflected on Schedule 5.6.3 have been determined in
      accordance with the Accounting Principles consistently applied and are
      consistent with the presentation in the Accounts, it being understood that
      in no event shall the reserve exceed 12.5% of the total face amount of the
      receivables.

      5.6.4 Schedule 5.6.4 sets forth a true, correct and complete listing and
      aging of each of the Companies' respective accounts receivable in excess
      of(euro)5,000 as of the Pre-Closing Accounts Date determined in accordance
      with the Accounting Principles consistently applied and determined in a
      manner consistent with the presentation in the Accounts. All of such
      accounts receivable shall have arisen in bona fide arm's length
      transactions in the ordinary course of business and shall be valid and
      binding obligations of the account debtors. The Founders do not know of
      any circumstances that would make them believe that such accounts
      receivable shall not be collectible in full in the ordinary course of
      business within 180 days of the relevant invoice date, except to the
      extent that reserves for doubtful accounts shall have been established by
      the Companies in the Pre-Closing Accounts and shall be set forth on
      Schedule 5.6.4. The reserves for doubtful accounts established by the
      Companies that shall be reflected in the Pre-Closing Accounts and on
      Schedule 5.6.4 shall be determined in accordance with the Accounting
      Principles consistently applied and shall be consistent with the
      presentation in the Accounts, it being understood that in no event shall
      the reserve exceed 12.5% of the total face amount of the receivables.

                                       19
<PAGE>

      5.6.5 Any payments (in the form of retainers or otherwise) from, the
      customers or potential customers of any of the Companies for services to
      be rendered or for expenses to be incurred subsequent to the Closing Date
      are set forth on Schedule 5.6.5 and have been recognized consistent with
      previously applied principles in the books of the Companies.

5.7   Undisclosed Liabilities

      As of the Closing Date, the Companies will not have, any debts,
      liabilities or obligations of any nature (whether accrued, absolute,
      contingent, direct, indirect, unliquidated or otherwise and whether due or
      to become due) arising out of transactions entered into on or prior to the
      Closing Date, or any transaction, series of transactions, action or
      inaction occurring on or prior to the Closing Date, or any state of facts
      or condition existing on or prior to the Closing Date (regardless of when
      such liability or obligation is asserted), except for (a) liabilities and
      obligations under agreements, contracts, leases or commitments disclosed
      in this Agreement or in a Schedule hereof (none of which relates to any
      breach of contract, breach of warranty, tort, injury caused to another,
      infringement, claim, lawsuit or violation of law or the allegation or
      claim thereof), and (b) liabilities and obligations arising in the
      ordinary course of business since the respective Accounts Dates of each of
      the Companies, consistent in form and amount with past practice, none of
      which liabilities or obligations, individually or in the aggregate, would
      have, individually or in the aggregate, a Material Adverse Effect. None of
      the Companies is under any obligation, contingent or otherwise, to refund
      or rebate any amounts paid or payable to any of them for services rendered
      prior to the date hereof, except for the rebate entitlements of certain
      customers as disclosed on Schedule 2, and for such matters for which
      warranty accruals shall have been established and included in the
      Pre-Closing Accounts.

5.8   Conduct of Business since Accounts Date

      5.8.1 The activities of the Companies during the periods from each of
      their respective Accounts Dates through the Closing Date have been
      conducted in a normal and proper manner and with a view to maintaining the
      Companies as going concerns.

      5.8.2 There has not been, arisen or occurred, during the periods between
      the respective Accounts Dates of each of the Companies and the Closing
      Date in respect of the Companies:

            (a) any change in their respective financial conditions or in the
            operations of their respective businesses which would have a
            Material Adverse Effect;

            (b) any amendment or termination of, or any agreement to amend or
            terminate, any material agreement;

            (c) any material obligations or liabilities incurred;

            (d) any waiver of any debts, claims or rights;

                                       20
<PAGE>

            (e) any sale, assignment, transfer, lease or other disposal of any
            material assets, other than as disclosed in Schedule 5.8.2(e);

            (f) any ex gratia payments or promises to any employee, other than
            year-end bonuses for the most recently completed fiscal year,
            respectively, of each of the Companies;

            (g) any loan or advance to any party in excess of (euro)10,000;

            (h) any change of accounting methods, principles or practices,
            except as disclosed in Schedule 5.6.1(b) and 5.6.2(c);

            (i) any change in manner or methods of paying creditors;

            (j) any material investments in fixed assets, other than as
            disclosed in Schedule 5.8.2(j); or

            (k) any increase in compensation or benefits or introduction of new
            benefits to any of the Sellers or any director, officer or employee
            of the Companies, other than as disclosed in Schedule 5.8.2(k).

      5.8.3 Full details of (a) all transactions since the respective Accounts
      Dates of each of the Companies between any of the Companies and each of
      the Sellers (or any person related, affiliated or in any other way
      connected with either of the Sellers); and (b) all payments by any of the
      Companies to the Sellers (or any Close Relative or affiliate of the
      Sellers) since the respective Accounts Dates of each of the Companies, are
      set out in Schedule 5.8.3.

5.9   Dividends

      Except (i) as set out in the Accounts and the minutes from the Companies'
      respective general shareholders' meetings; (ii) for the dividend
      distribution authorized by the Company's shareholders on February 26,
      2002; and (iii) for the Profit Distributions, none of the Companies has
      declared, since the respective Accounts Dates of each of the Companies,
      any dividends or made any other distributions of profits or assets to
      their respective shareholders. Except for such shareholders' resolutions
      as may be necessary to authorize the Companies to make the Profit
      Distributions, no shareholders' resolutions concerning profit
      distributions have been adopted for any of the Companies. All Profit
      Distributions, dividends or other distributions of profits or assets
      declared, made or paid by any of the Companies have been declared made and
      paid in accordance with applicable laws and their respective articles of
      association.

5.10  Subsidies etc.

      Other than as disclosed on Schedule 5.10, the Companies are not, as of the
      Closing Date, subject to any arrangement for receipt or repayment of any
      grant, subsidy or financial assistance from any government department or
      other body.

                                       21
<PAGE>

5.11  Real Property and Other Assets

      5.11.1 The Companies do not own any real property.

      5.11.2 The Company has provided or made available to Purchaser all leases
      for all real property leased by any of the Companies, as lessor or lessee
      (the "Properties"), as of the date hereof (the "Leases"). All such Leases
      are valid and binding in accordance with their respective terms and none
      of the Companies is in default in any respect under any Lease, except for
      such instances of default thereunder that would not individually or in the
      aggregate result in a Material Adverse Effect. Except as set forth in
      Schedule 5.11.2, the execution of this Agreement and the consummation of
      the transactions contemplated hereby, do not and will not result in a
      breach or violation of, or constitute a default or an event that, with the
      passage of time or the giving of notice, or both, would constitute a
      default, give rise to a right of termination, material modification
      (including as to the amount, timing or nature of lease payments),
      cancellation or acceleration or require the consent or approval of any
      party (other than one or more of the Companies (as applicable)) under any
      Lease

      5.11.3 The Companies have good and marketable title or rights as lessees
      to all personal, mixed, tangible and intangible property of any kind or
      nature owned or used by the Companies, and the Companies own each of the
      assets reflected in the Accounts, in each case, except to the extent
      otherwise disclosed in the Accounts or the schedules to this Agreement,
      free and clear of all Liens, claims and encumbrances. The assets and
      properties owned or leased by the Companies are, as at the Closing Date,
      sufficient to operate and conduct the respective businesses of the
      Companies in a manner consistent with at least the same standards of
      quality and reliability as have been achieved as of the date hereof.

      5.11.4 Machinery, equipment and other tangible assets owned by the
      Companies are in fair or good operating condition and repair, reasonable
      wear and tear excepted, are usable in the ordinary course of business and
      are adequate and suitable for the uses to which they are being put. None
      of such items requires any repairs or replacement except for maintenance
      in the ordinary course of business or such other repairs or replacements
      which are not material, individually or in the aggregate, in nature or
      cost. All such assets and property are located at the Properties.

      5.11.5 Except as set forth in Schedule 5.11.5, none of the Companies is
      contemplating, or is obligated to make any capital expenditures other than
      (a) in the ordinary course of their respective businesses; and (b) in
      amounts which in the aggregate, will not exceed (euro)20,000 for any of
      the Companies.

5.12  Intellectual Property

      5.12.1 To the best knowledge of the Founders and except as set forth in
      Schedule 5.12.1, the activities of the Companies (or of any licensee under
      any license granted by the Companies) do not infringe or are not likely to
      infringe on any Intellectual Property Rights of any third party and no
      claim has been made, has been threatened, or is likely to

                                       22
<PAGE>

      be made or threatened, against any of the Companies or any such licensee
      in respect of such infringement.

      5.12.2 Details of all registered Intellectual Property Rights (including
      applications to register the same) and all commercially significant
      unregistered Intellectual Property Rights owned or used by the Companies
      are set out in Schedule 5.12.2.

      5.12.3 The Companies use in their respective businesses no Intellectual
      Property Rights, other than the Intellectual Property Rights identified on
      Schedules 5.12.1 and 5.12.2, and are under no obligation to pay license
      fees or royalties for any Intellectual Property Rights other than those
      identified on said Schedules. The Companies do not carry on business under
      any names other than their respective corporate names.

      5.12.4 The Companies' abilities to use the Intellectual Property Rights
      used by them at the date of this Agreement will not be affected by the
      transactions contemplated hereby.

      5.12.5 Neither the Sellers nor any Close Relatives or affiliates of the
      Sellers, or any third party other than as disclosed in Schedule 5.12.5,
      have any rights to any Intellectual Property Rights used by any of the
      Companies.

      5.12.6 None of the Sellers holds any Intellectual Property Rights which
      are, or could be, used by any of the Companies or has any claim for
      compensation for such Intellectual Property Right.

5.13  Agreements

      5.13.1 None of the Companies is party to any contract, agreement,
      arrangement or obligation of material importance to its respective
      businesses, other than the Material Agreements listed in Schedule 2. Each
      Material Agreement is valid and in full force and effect and has been
      disclosed in full to the Purchaser.

      5.13.2 Except for the request received from Optrotherm GmbH to renegotiate
      the co-operation agreement of 1993 and the framework agreement of May 18,
      1995, which is likely to result in a termination of the co-operation
      agreement with Optrotherm (see Schedule 5.19.1), the Companies have
      neither received nor given notice of termination of any Material
      Agreement. No party to any Material Agreement has the right to terminate
      or modify its obligations as a result of the transactions contemplated by
      this Agreement.

      5.13.3 Neither the Companies, nor the other parties to the Material
      Agreements are in material default under or in breach of any Material
      Agreement.

      5.13.4 Except to the extent set forth in Schedule 2, none of the Companies
      is party to any contract, agreement, arrangement or obligation which was
      not entered into in the ordinary course of their respective businesses, or
      any agreement or arrangement which restricts the Companies' freedom to
      carry on any business in any part of the world in such manner as they deem
      to be fit.

      5.13.5 None of the Companies has since March 1, 2002 received any material
      complaints

                                       23
<PAGE>

      concerning products and/or services resulting in each individual case in a
      cost or other charge for any of the Companies exceeding (euro)1000. Except
      as set out in Schedule 5.13.5, none of the Companies' customers has since
      January 1, 2002 threatened or to the best of the Founders' knowledge
      attempted to cancel or reduce any material purchases from any of the
      Companies. None of the Companies' suppliers has since January 1, 2002
      canceled or reduced or to the knowledge of the Founders is currently
      attempting to cancel or reduce the supply of products or services to any
      of the Companies. None of the Companies' suppliers, with the exception (a)
      of public utility suppliers; (b) suppliers of sensors; and (c) Optrotherm
      GmbH, as disclosed in Schedule 5.13.5, is the sole source of supply
      without any other available source of supply preventing the Companies to
      obtain at substantially equivalent terms and conditions a source of supply
      of products or services.

5.14  Anti-Competitive Arrangements

      5.14.1 The Companies are not, nor have they been, since the respective
      dates of registration of each of the Companies, parties to any agreement,
      arrangement, concerted practice or course of conduct which:

            (a) infringes any law, legislation or regulation (civil or criminal)
            relating to competition, restrictive trade practices, anti-trust,
            monopolies, merger control, fair trading, restraint of trade,
            pricing, anti-dumping or free movement of goods and services in any
            jurisdiction in which the Companies carry on business or have assets
            or sales; or

            (b) is void or unenforceable (whether in whole or in part) or may
            render any of the Companies liable to proceedings under any such
            law, legislation or regulation as is referred to in subparagraph (a)
            above.

5.15  No Powers of Attorney

      Except for the signatory powers for their respective bank accounts and the
      general powers of representation granted to several managerial clerks
      (Prokura) as disclosed in Schedule 5.15, none of the Companies has granted
      any power of attorney or similar authority which remains in force as of
      the date of this Agreement.

5.16  Insider Contracts

      Except for the matters set forth on Schedule 5.16, the Companies are not
      parties to any contract or arrangement in which any of the Founders or any
      Close Relatives of the Founders is interested, directly or indirectly.

5.17  Marketing Information

      The marketing materials produced by or on behalf of the Companies is not
      subject to any restriction which materially and adversely affects the
      Companies' respective abilities to use such information for the purpose of
      their respective businesses.

                                       24
<PAGE>

5.18  Customers

      Schedule 5.18 is a complete anonymous list by volume of billings during
      the period between April 1, 2001 and March 31, 2002 to the 10 largest
      customers of the Companies considered on an aggregate basis. Except as set
      forth on Schedule 5.18, none of the customers to whom the Companies sold
      infrared temperature measurement systems, devices and ancillary equipment
      at any time since March 1, 2002, whether or not the Companies' 10 largest
      customers, has cancelled or otherwise terminated, or, to the knowledge of
      the Founders, threatened to cancel or otherwise terminate, its
      relationship with the Companies or materially reduced, or to the knowledge
      of the Companies and the Founders, has threatened to materially reduce,
      its business with the Companies. Neither any of the Companies nor any of
      the Founders has received any notice and none of them has knowledge or
      reason to believe that any customer intends to cancel or otherwise modify
      its relationship with the Companies on account of the transactions
      contemplated hereby or otherwise.

5.19  Litigation and Complaints

      5.19.1 The Companies are not engaged in any litigation or arbitration
      proceedings, and there are no such proceedings pending or threatened
      against or by any of the Companies. To the best of the Founders'
      knowledge, there are no matters or circumstances which are likely to give
      rise to any litigation or arbitration proceedings by or against the
      Companies.

      5.19.2 The Companies are not subject to any investigation, inquiry or
      enforcement proceedings or processes by any governmental, administrative
      or regulatory body, and to the best of the Founders' knowledge, the
      Founders are not aware of anything which is likely to give rise to any
      such investigation, inquiry, proceedings or process.

5.20  Licenses and Compliance with Laws

      The respective operations of the Companies have been conducted in
      compliance with applicable laws, their respective articles of association,
      and applicable regulations, judgments, orders and the like. Each of the
      Companies has all necessary licenses and permits required for the
      operation of its business; each such license and permit is in full force
      and effect; no violations are or have been recorded in respect of any such
      existing licenses or permits and remain uncorrected; no proceeding is
      pending which seeks the revocation or limitation of any such existing
      licenses or permits or that might prejudice their renewal; and no grounds
      exist for revocation of, or for the commencement of limitation proceedings
      with respect to, any of such licenses or permits.

5.21  Employees

      5.21.1 Schedule 5.21.1 describes the material particulars of the
      employment of each of the Companies' respective employees. Schedule 5.21.1
      also sets forth all outstanding offers (whether accepted or not) of
      employment made to any person by any of the Companies.

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<PAGE>

      5.21.2 Schedule 5.21.2 describes the material particulars of any agreement
      for the provision of consulting services to any of the Companies by any
      person.

      5.21.3 Except as set out in Schedule 5.21.3, no current employee of any of
      the Companies has given, or has been given, notice of termination of his
      employment or has indicated an intention to terminate his employment.

      5.21.4 Except as otherwise provided on Schedule 5.21.4, there is no scheme
      in operation by or in relation to the Companies under which any employee
      or other person is entitled to a commission or remuneration of any other
      sort arising in relation to the level of and/or calculated by reference to
      the whole or part of the turnover, profits or sales of the Companies.

      5.21.5 Except for statutory obligations under the Termination Protection
      Act (Kundigungsschutzgesetz), the Labor Management Relations Act
      (Betriebsver-fassungsgesetz) and the Statute for the Protection of
      Handicapped Persons (Schwerbehindertengesetz), the Companies have no
      obligation to make any severance payment or pay any compensation for loss
      of office or employment or a redundancy payment to any present or former
      employee (including directors) or other payment beyond payment of salary
      during the period of the notice of termination pursuant to applicable law
      and no such sums have been paid since the respective Accounts Dates of
      each of the Companies.

      5.21.6 The Companies have in all material respects complied with their
      obligations to their respective employees and former employees and any
      relevant trade union or other employee representative body. No claim has
      been made or threatened against any of the Companies or against any person
      to whom the Companies are or may be liable for compensation or
      indemnification and, to the best of the Founders' knowledge, no inquiry or
      investigation has been made or threatened by any governmental body or
      authority in respect of any matter relating to any application for
      employment by any person or the employment or termination of employment of
      any person, and the Sellers are not aware of any circumstance which may
      give rise to any such claim or investigation.

      5.21.7 During the twelve month period which preceded the date of this
      Agreement, none of the Companies (a) gave notice of any redundancies to
      any Governmental Entity or commenced discussions with appropriate employee
      representatives in connection with any proposed redundancies, and (b)
      failed to comply with any obligation, whether legal or otherwise, to
      engage in such discussions.

      5.21.8 Schedule 5.21.8 sets forth a complete list of all "employee benefit
      plans" including, but not limited to, employment contracts, bonus,
      pension, profit sharing, deferred compensation, incentive compensation,
      excess benefit, stock, stock option, severance, termination pay, change in
      control or other employee benefit plans, programs or arrangements,
      including those providing medical, dental, vision, disability, life
      insurance and vacation benefits (other than those required to be
      maintained by law), whether written or unwritten, qualified or
      unqualified, funded or unfunded, foreign or domestic, currently
      maintained, or contributed to, or required to be maintained or

                                       26
<PAGE>

      contributed to, by any of the Companies (each of which is referred to as a
      "Benefit Plan" and all of which are collectively referred to as the
      "Benefit Plans").

      5.21.9 Each of the Companies has made all payments or contributions, as
      required by each of the Benefit Plans, applicable law and generally
      accepted accounting practices in such aggregate amounts as are sufficient
      to cover the full amount of all liabilities, calculated as at the
      respective Accounts Dates of each of the Companies, in respect of the
      present and former directors, officers and employees of the Companies.
      Such payments and/or contributions and the respective obligations of the
      Companies under their respective Benefit Plans have been recorded in their
      respective Accounts or have been reflected in the notes thereto.

      5.21.10 No event has occurred and, to the knowledge of the Founders, there
      exists no condition or set of circumstances in connection with which any
      of the Companies is or would reasonably be expected to be subject to any
      material liability under the terms of any Benefit Plan, employment
      contract or any applicable law, rule or regulation, domestic or foreign.
      No statement, either written or oral, has been made by any of the
      Companies to any person with regard to any Benefit Plan that was not in
      accordance with the terms of the Benefit Plan and that would have a
      Material Adverse Effect.

      5.21.11 Except for the Shop Agreement identified in Schedule 5.21.11, none
      of the Companies is a party to or bound by any collective bargaining, shop
      or similar agreements.

      5.21.12 All Social Security Contributions of any of the Companies which
      shall be due and payable prior to Closing have been paid or shall be paid
      prior thereto in accordance with the applicable laws and statutes.

      5.21.13 Except as otherwise disclosed on Schedule 5.21.13, none of the
      Companies is subject to any obligation to pay remunerations under the
      Employee Inventions Act (Arbeitnehmererfindungsgesetz) and there are no
      circumstances on the basis of which any employee of any of the Companies
      could raise such a claim against any of the Companies.

5.22  Environmental

      5.22.1 For purposes of this Agreement, the term "Environmental Permit"
      means any permit, license, approval or other authorization issued under
      any Environmental Law (as defined below).

      5.22.2 None of the Companies and none of their respective properties,
      assets, businesses, and operations requires any Environmental Permit that
      is material to the business conducted respectively by each of the
      Companies, and each of the Companies and their respective properties,
      assets, businesses and operations is, and has been, in compliance with all
      applicable Environmental Laws (as defined below) and all non-material
      Environmental Permits, except for such violations as would not,
      individually or in the aggregate, have a Material Adverse Effect. The term
      "Environmental Laws" means any federal, state, local or foreign statute,
      code, ordinance, rule, regulation, policy, guideline,

                                       27
<PAGE>

      technical instruction, permit, consent, approval, license, judgment,
      order, writ, decree, injunction or other authorization, including the
      requirement to register underground storage tanks, relating to: (i)
      releases or discharges of "Hazardous Material" (as such term may be
      defined under any of the statutes identified below) into the environment
      or any structure, including into air, ambient air, soil, soil gas,
      sediments, land surface or subsurface, buildings or facilities, surface
      water, groundwater, publicly-owned treatment works, septic systems or
      land; or (ii) the generation, treatment, storage, recycling, disposal,
      use, handling, manufacturing, transportation, distribution in commerce, or
      shipment of Hazardous Material.

      5.22.3 No Environmental Claims or Environmental Liabilities (as such terms
      are defined below) are being asserted against any of the Companies and
      none of the Companies is aware of any acts, omissions, facts, or
      circumstances which would so subject it, arising from or based upon any
      act, omission, event, condition or circumstance occurring or existing on
      or prior to the date hereof or for which any of the Companies is
      responsible, including any such Environmental Claims or Environmental
      Liabilities arising from or based upon the present or former ownership or
      the present or former operation of assets, businesses or properties of any
      of the Companies which, if adversely determined, would individually or in
      the aggregate have a Material Adverse Effect. None of the Companies has
      received any notice of any violation of any Environmental Law or
      Environmental Permit or any Environmental Claim in connection with its
      present or former assets, properties, businesses or operations. No
      environmental assessment reports have been prepared by, or on behalf of,
      any of the Companies since January 1, 1997 (or earlier for any such matter
      which is unresolved) regarding the environmental condition of any of the
      Companies' properties or the environmental compliance of any of the
      Companies. The term "Environmental Claim" means any third party (including
      claims of Governmental Entities, employees or other private parties)
      action, lawsuit, claim, investigation proceeding which seeks to impose
      liability for (i) noise; (ii) pollution or contamination of the air,
      ambient air, surface water, ground water, soil, soil gas or any structure,
      building or facility; (iii) Hazardous Materials Management; (iv) exposure
      to Hazardous Material; (v) the safety or health of employees, consumers,
      customers or vendors; or (vi) any violation of any Environmental Law or
      Environmental Permit. The term "Environmental Liabilities" includes all
      costs arising from any Environmental Claim or violation or alleged
      violation or circumstance or condition which would give rise to a
      violation or liability under any Environmental Permit or Environmental Law
      under any theory of recovery, at law or in equity, and whether based on
      negligence, strict liability or otherwise, including but not limited to:
      remedial, removal, response, abatement, investigative, monitoring,
      personal injury and damage to property, and any other related costs,
      expenses, losses, damages, investigatory remediation or monitoring costs,
      penalties, fines, liabilities and obligations, including reasonable
      attorney's fees and court costs.

5.23  Insurance

      Schedule 5.23 is a correct and complete list and description, including
      policy numbers, of all fire and hazard, general liability, products
      liability, completed operations and workers' compensation insurance
      policies owned or held by the Companies or otherwise covering

                                       28
<PAGE>
      the Companies, their respective employees or assets. Such policies are in
      full force and effect, and the Companies are not in default under any of
      them. Such insurance is of the kind and in the amount not less than
      customarily obtained by entities of established reputation engaged in the
      same or similar business as the businesses respectively conducted by the
      Companies, and similarly situated to them. None of the Companies has
      received any notice of non-renewal, cancellation or intent to cancel,
      intent not to renew or intent to increase premiums or deductibles with
      respect to such insurance policies or, to the best knowledge of the
      Founders, is there any basis for any such action. Schedule 5.23 also
      contains a list of all pending claims with any insurance company and any
      instances within the previous three years of a denial of coverage of the
      Companies by any insurance company.

5.24  No Illegal or Improper Transactions

      None of the Companies, none of the Sellers and none of the Companies'
      respective directors, officers or employees has, directly or indirectly
      used funds or other assets of the Companies, or made any promise or
      undertaking, for (a) illegal contributions, gifts, entertainment or other
      expenses relating to political activity; (b) illegal payments to or for
      the benefit of governmental officials or employees, whether domestic or
      foreign; (c) illegal payments to or for the benefit of any person, firm,
      corporation or other entity, or any director, officer, employee, agent or
      representative thereof; or (d) the establishment or maintenance of a
      secret or unrecorded fund; and there have been no false or fictitious
      entries made in the books or records of the Companies.

5.25  Tax

      5.25.1 Except to the extent disclosed in Schedule 5.25.1, all tax returns,
      notices, computations and other documents relating to any Tax required by
      law to be filed by any of the Companies prior to Closing have been duly
      and properly filed and all requests from any Taxation Authority pertaining
      to any of such filings have been duly and properly answered. Except to the
      extent disclosed in Schedule 5.25.1, all returns, notices, computations
      and other documents and responses, relating to any taxable year challenged
      or which still may be challenged by the Taxation Authorities, are true and
      accurate, are not subject of any material dispute, and to the best
      knowledge of the Founders, are not likely to become subject to any
      material dispute.

      5.25.2 Each Tax with respect to each of the Companies which shall be due
      and payable prior to Closing has been paid or shall be paid prior. No
      assessments for Taxes have been made or proposed which have not been
      provided for in the accounts of the Companies. All Tax relating to the
      period up to and including the respective Accounts Dates of each of the
      Companies, whether due and payable or not, have been paid or accounted for
      in the Accounts.

      5.25.3 The Companies have not paid or become liable to pay, and there are
      not any circumstances which, to the best knowledge of the Founders, are
      likely to arise prior to Closing by reason of which any of the Companies
      is likely to become liable to pay, any penalty, fine, surcharge or
      interest to any Taxation Authority.

                                       29
<PAGE>

      5.25.4 Except to the extent otherwise disclosed on Schedule 5.25.4, none
      of the Companies has suffered any on-site investigation, audit or visit by
      any Taxation Authority during the period between January 1, 1997 and the
      date of this Agreement; and Founders are not aware, to the best of their
      knowledge, of any such investigation, audit or visit planned for the next
      twelve months.

      5.25.5 Neither any of the Companies nor the Purchaser shall become liable
      for the payment of any Tax solely by virtue of the execution and/or
      closing of this Agreement.

      5.25.6 No transactions or arrangements involving any of the Companies
      shall have taken place prior to Closing which are such that any Tax
      provision relating to transfer pricing is likely to be invoked by a
      Taxation Authority. Except as provided in the Accounts, the Companies have
      no liability as of their respective Accounts Dates to Taxation on income
      or gains except in respect of and to the extent of income and profits
      actually received, nor shall any arrangements prior to Closing exist which
      might give rise to such a liability.

      5.25.7 The Companies are not and will not become liable to Tax, other than
      Tax which shall have been paid or provided for prior to the Closing, on
      any transfer between any of the Sellers, of shares in the Companies prior
      to Closing.

      5.25.8 The Companies are not and will not become liable to Tax, based on
      circumstances prior to Closing, other than Tax which shall have been paid
      or provided for prior to Closing, in respect of the agreements set forth
      under Schedule 5.21.2 or any previous agreement for the provision of
      consulting services.

5.26  Brokers

      Neither of the Companies nor any of the Sellers has (i) incurred any
      obligation or liability, contingent or otherwise, for brokers' or finders'
      fees or commissions in connection with the transactions contemplated by
      this Agreement or (ii) made any statement or representation or entered
      into any discussion which could give rise to any such obligation or
      liability.

5.27  Indebtedness etc between the Sellers and the Companies

      5.27.1 There is no indebtedness due from the Sellers, any Close Relative
      or any affiliated person to the Companies that shall not have been
      satisfied in full on or prior to the Closing Date.

      5.27.2 None of the Companies has given any guarantees or indemnities in
      respect of any liabilities of the Sellers, any Close Relative or any
      affiliated person.

      5.27.3 Schedule 5.27.3 sets forth, with respect to each loan made by any
      of the Sellers to any of the Companies, the unpaid principal amount
      thereof and any accrued but unpaid interest thereon, Pre-Closing Accounts
      Date, the interest rate payable with respect thereto, the maturity date
      thereof and the terms of repayment applicable thereto. Except for the
      Section 5.27.3 Indebtedness, there is no indebtedness due from any of the
      Companies to any of the Sellers, or to any Close Relative or affiliate of
      any of the Sellers,

                                       30
<PAGE>

      that shall not have been satisfied in full on or prior to the Closing
      Date.

      5.27.4 Except as disclosed on Schedule 5.27.4, there are no guarantees and
      indemnities given by the Sellers, or any Close Relative or affiliate of
      the Sellers in respect of any liabilities of the Companies.

5.28  Acquisition of Mikron Shares for Investment Purposes

      5.28.1 Each of the Sellers who shall acquire any of the Mikron Shares
      pursuant to Section 3.2.2 acknowledges that he or she has been furnished
      with copies of Mikron's Annual Report on SEC Form 10-KSB for its fiscal
      year ended October 31, 2001, Mikron's Quarterly Reports on SEC Form 10-QSB
      for its fiscal quarters ended January 31, 2002, April 30, 2002 and July
      31, 2002, and such other documents, materials and information as such
      Seller deemed necessary or appropriate for evaluating his or her decision
      to receive some or all of the Mikron Shares as partial consideration of
      the Purchase Price payable to him or her pursuant to Section 3.1 hereof.
      Such Seller confirms that he or she has made such further investigation of
      Mikron as was deemed appropriate to evaluate the merits and risks of his
      or her decision to acquire the Mikron Shares to be delivered to him or
      her. Such Seller further acknowledges that he or she has had the
      opportunity to ask questions of, and receive answers from, the directors
      and officers of Mikron, and persons acting in Mikron's behalf, concerning
      the terms and conditions pertaining to his or her receipt of such shares.

      5.28.2 Such Seller represents that he or she is acquiring the Mikron
      Shares to be delivered to him or her hereunder for his or her own account
      with the present intention of holding such securities for purposes of
      investment, and that he or she has no intention of selling such securities
      in a public distribution in violation of the federal securities laws of
      the United States of America.

      5.28.3 Such Seller is not a "U.S. person" as such term is defined by the
      provisions of Regulation S promulgated by the SEC under the Securities Act
      ("Regulation S").

      5.28.4 Such Seller understands that (a) the Mikron Shares that he or she
      shall be acquiring hereunder are "Restricted Securities," as defined in
      Regulation S; (b) such securities have not been registered under the
      Securities Act, and are being issued in reliance on exemptions for
      "offshore" private offerings contained in Section 4(2) of the Securities
      Act and the provisions of Regulation S; (c) the Mikron Shares may not be
      re-offered or resold except through a valid and effective registration
      statement or pursuant to a valid exemption from the registration
      requirements under the Securities Act; and (d) until such time as such
      Seller's Mikron Shares become eligible for sale by him or her, either
      pursuant to the registration of such shares under the Securities Act, or
      pursuant to a valid exemption from such registration, the certificates
      evidencing such Seller's ownership of those Mikron Shares shall contain
      the following legend:

            "The securities represented by this certificate have not been
            registered under the Securities Act of 1933, as amended (the "Act").
            The transfer of the securities represented by this certificate is
            subject to the conditions

                                       31
<PAGE>

            specified in the share sale and purchase agreement, dated as of
            November 22, 2002, among Hohenstaufen Zweihundertsechsundzwanzigste
            Vermogensverwaltungs GmbH, Mr. Hermann Schlosser and others and
            Mikron Infrared, Inc. Hedging transactions involving the securities
            represented by this certificate may not be conducted unless in
            compliance with the Act and transfer of such securities is
            prohibited, except pursuant to the provisions of Regulation S
            promulgated under the Act, a registration of such securities under
            the Act or pursuant to an available exemption from such registration
            under the Act."

      5.28.5 Such Seller is fully aware of the restrictions on sale,
      transferability and assignment of the Mikron Shares, and that he or she
      must bear the economic risk of retaining ownership of such securities for
      an indefinite period of time. Such Seller is aware that (a) the Mikron
      Shares will not be registered under the Securities Act; and (b) because
      the issuance of the Mikron Shares has not been registered under the
      Securities Act, an investment in the Mikron Shares cannot be readily
      liquidated if such Seller desires to do so, but rather may be required to
      be held indefinitely.

6.    REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND MIKRON

      The Purchaser and Mikron hereby give the following representations and
      warranties to the Sellers. Unless otherwise specifically stated, the
      representations and warranties shall be true and accurate as of the date
      of Closing.

6.1   Power and Authority of the Purchaser

      6.1.1 The Purchaser is a limited liability corporation (Gesellschaft mit
      beschrankter Haftung) duly organized and validly existing under the laws
      of the Federal Republic of Germany.

      6.1.2 The Purchaser has full power and authority to purchase the Shares
      and to perform all other undertakings hereunder and the execution and
      performance of this Agreement. The execution, delivery and performance of
      this Agreement and all related agreements, documents and instruments, and
      the consummation of the transactions contemplated herein and therein have
      been duly and validly authorized by all necessary corporate action on the
      part of the Purchaser. This Agreement has been duly and validly executed
      by the Purchaser, and, assuming this Agreement constitutes a valid and
      binding obligation of Mikron and the Sellers, this Agreement constitutes a
      valid and binding agreement of the Purchaser, enforceable against the
      Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
      fraudulent transfer, reorganization, moratorium and similar laws of
      general applicability relating to or affecting creditors' rights and to
      general equity principles.

6.2   Power and Authority of Mikron

      6.2.1 Mikron is a corporation duly organized, validly existing, and in
      good standing under the laws of the State of New Jersey, and has the
      corporate power and authority to

                                       32
<PAGE>

      carry on its business as now conducted and to own, lease and operate its
      properties and assets. Mikron is duly qualified or licensed to transact
      business as a foreign corporation in good standing in the states of the
      United States and foreign jurisdictions where the character of its assets
      or the nature or conduct of its business requires it to be so qualified or
      licensed. Mikron has all requisite corporate power and authority to
      execute and deliver this Agreement and each instrument to be executed and
      delivered by Mikron in connection with the Closing, to perform its
      obligations hereunder and thereunder, and to consummate the transactions
      contemplated hereby. The execution and delivery of this Agreement and each
      instrument required hereby to be executed and delivered by Mikron prior to
      or at the Closing and the performance of its obligations hereunder and
      thereunder and the consummation by Mikron of the transactions contemplated
      hereby have been duly and validly authorized by all necessary corporate
      action on the part of Mikron, and no other corporate proceedings on the
      part of Mikron are necessary to authorize this Agreement or to consummate
      the transactions contemplated hereby. This Agreement has been duly and
      validly executed by Mikron, and, assuming this Agreement constitutes a
      valid and binding obligation of Purchaser and the Sellers, this Agreement
      constitutes a valid and binding agreement of Mikron, enforceable against
      Mikron in accordance with its terms, subject to bankruptcy, insolvency,
      fraudulent transfer, reorganization, moratorium and similar laws of
      general applicability relating to or affecting creditors' rights and to
      general equity principles.

6.3   Consents and Approvals

      The execution and performance of this Agreement do not, and the
      consummation of the transactions contemplated hereby and compliance with
      the provisions of this Agreement will not (a) conflict with or violate the
      Certificate of Incorporation or Bylaws of Mikron or the deed of foundation
      or the articles of association of the Purchaser, (b) conflict with or
      violate any statute, ordinance, rule, regulation, judgment, order, writ,
      injunction, decree or law applicable to Mikron or the Purchaser, or by
      which any of them or any of their respective properties or assets may be
      bound or affected, or (c) result in a violation or breach of or constitute
      a default (or an event which with or without notice or lapse of time or
      both would become a default) under, or give to others any rights of
      termination, amendment, acceleration or cancellation of, or result in any
      loss of any benefit under, any contract, agreement or arrangement to which
      Mikron or the Purchaser is a party, or the creation of Liens on any of the
      property or assets of Mikron or the Purchaser. No consent, approval, order
      or authorization of, or registration, declaration or filing with, any
      federal, state or local government or any court, administrative or
      regulatory agency or commission or other governmental authority or agency,
      domestic or foreign (a "Governmental Entity"), is required by Mikron or
      the Purchaser in connection with the execution of this Agreement by Mikron
      and the Purchaser or the consummation by them of the transactions
      contemplated hereby, except for consents, approvals, orders,
      authorizations, registrations, declarations or filings, the failure of
      which to obtain would not individually or in the aggregate have a Material
      Adverse Effect.

                                       33
<PAGE>

6.4   Capital Stock

      The authorized capital stock of Mikron consists of 15,000,000 shares of
      common stock, $.003 par value per share, of which 4,288,200 shares are
      issued and outstanding as of the date of this Agreement. All of the issued
      and outstanding shares of Mikron's capital stock are, and will be, duly
      and validly issued and outstanding and fully paid and non-assessable. None
      of the outstanding shares of Mikron's capital stock has been, and none of
      the shares of Mikron's capital stock to be issued hereunder will be,
      issued in violation of any preemptive rights of the current or past
      shareholders of Mikron. Except as set forth in Schedule 6.4, other than
      Mikron's common stock, there are no shares of any other class of capital
      stock or other equity securities of Mikron outstanding and no outstanding
      equity rights, including securities convertible into or exchangeable for
      capital stock, of Mikron. All outstanding securities of Mikron were issued
      in compliance with applicable federal and state securities laws.

6.5   SEC Filings; Financial Statements

      6.5.1 Mikron has timely filed since November 1, 1999, and made available
      to Sellers, all reports, proxy solicitation materials and other documents
      that Mikron has been required to file with the SEC pursuant to the
      Exchange Act, and the rules and regulations promulgated by the SEC
      thereunder (the "Mikron SEC Documents"). The Mikron SEC Documents (i) at
      the time filed, complied in all material respects with the applicable
      requirements of the Exchange Act and other applicable laws and (ii) did
      not, at the time they were filed (or, if amended or superseded by a filing
      prior to the date of this Agreement, then on the date of such filing)
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated in such Mikron SEC Documents or
      necessary in order to make the statements in such Mikron SEC Documents, in
      light of the circumstances under which they were made, not misleading.

      6.5.2 Except to the extent disclosed on Schedule 6.5.2, each of the Mikron
      Financial Statements (including, in each case, any related notes)
      contained in the Mikron SEC Documents complied as to form in all material
      respects with the applicable published rules and regulations of the SEC
      with respect thereto, was prepared in accordance with GAAP applied on a
      consistent basis throughout the periods involved (except as may be
      indicated in the notes to such financial statements or, in the case of
      unaudited interim statements, as permitted by Form 10-QSB of the SEC), and
      fairly presented in all material respects the consolidated financial
      position of Mikron and its subsidiaries as at the respective dates and the
      consolidated results of operations and cash flows for the periods
      indicated, except that the unaudited interim financial statements were or
      are subject to normal and recurring year-end adjustments which were not
      material in amount or effect.

6.6   Absence of Undisclosed Liabilities

      Mikron has no liabilities that are reasonably likely to have, individually
      or in the aggregate, a Material Adverse Effect, except liabilities which
      are accrued or reserved against in the consolidated balance sheets of
      Mikron as of October 31, 2001 and July 31,

                                       34
<PAGE>

      2002, included in the Mikron Financial Statements delivered prior to the
      date of this Agreement or reflected in the notes thereto. Mikron has not
      incurred or paid any liability since July 31, 2002, except for such
      liabilities incurred or paid (i) in the ordinary course of business
      consistent with past business practice and which are not reasonably likely
      to have, individually or in the aggregate, a Material Adverse Effect or
      (ii) in connection with the transactions contemplated by this Agreement.

6.7   Absence of Certain Changes or Events

      Since July 31, 2002, except as disclosed in the Mikron Financial
      Statements delivered prior to the date of this Agreement, (i) there have
      been no events, changes or occurrences which have had, or are reasonably
      likely to have, individually or in the aggregate, a Material Adverse
      Effect, and (ii) Mikron has not taken any action, or failed to take any
      action, prior to the date of this Agreement, which action or failure, if
      taken after the date of this Agreement, would represent or result in a
      material breach or violation of any of the covenants and agreements of
      Mikron provided in this Agreement

6.8   No Litigation

      There is no judicial or administrative action, proceeding, investigation
      or arbitration, civil or criminal, pending or, to the best of Mikron's or
      the Purchaser's knowledge, threatened, or any order, injunction or decree
      outstanding, against Mikron or the Purchaser.

7.    INDEMNIFICATION - GENERAL

7.1   Breach of the Warranties

      7.1.1 If and to the extent any of the representations and warranties set
      forth in Article 5 is incorrect or not complied with, the legal
      consequences set forth in this Article 7 shall apply. The Parties
      acknowledge that the legal consequences set forth in this Article 7 and
      the representations and warranties set forth in Article 5 are homogeneous
      with and an inseparable part of, this Agreement.

      7.1.2 If any of the representations and warranties set forth in Article 5
      is incorrect or not complied with, then Purchaser:

            (a) shall not be entitled to rescind this Agreement in accordance
            with Sections 437 para 2, 440, 323 and 326 para 5 of the German
            Civil Code ("Rucktritt"); and

            (b) shall be entitled to request from Sellers and/or Founders as the
            case may be, depending on the particular representations and
            warranties which are incorrect or not complied with, repayment
            (reduction of the Purchase Price in the meaning of Section 441 of
            the German Civil Code under replacement of Section 441 para. 3 of
            the German Civil Code by the calculation method set forth in this
            sentence) of such portion of the Purchase Price that will be
            necessary to put Purchaser or, at the Purchaser's option, whichever
            of the Companies shall be affected, into the position it would have
            been in if the respective representation and warranty had been
            correct or had been complied with, including the compensation of any

                                       35
<PAGE>

            damages, cost, loss or expense incurred by the affected company or
            the Purchaser as the case my be. The preceding sentence shall apply
            whether or not the representation and warranty which is incorrect or
            not complied with relates to a condition (Beschaffenheit) of any of
            the Companies.

7.2   Purchaser Claims

      7.2.1 As promptly after discovery of any breach or non-fulfillment of any
      of the Warranties as possible, Purchaser shall notify Sellers'
      Representative of an asserted claim for reduction of the Purchase Price
      under this Article 7. Such notice shall include a summary of the facts
      upon which any claim of breach or non-fulfillment by Sellers or Founders,
      as the case may be, of any of the Warranties is based and the amount
      involved, to the extent that such amount has been determined at the time
      when such notice is given (a "Purchaser Claim"). Without prejudice to the
      validity of the Purchaser Claim or alleged claim in question, Purchaser
      shall allow, and shall cause the Companies to allow, Sellers or Founders,
      as the case may be, and their accountants and their professional advisors
      to investigate the matter or circumstance alleged to give rise to such
      Purchaser Claim, and whether and to what extent any amount is payable in
      respect of such Purchaser Claim and, for such purpose, Purchaser shall
      give and shall cause the Companies to give such information and
      assistance, including access to Purchaser's and the Companies' premises
      and personnel and including the right to examine and copy or photograph
      any assets, accounts, documents and records, as Sellers or Founders
      respectively or their accountants or professional advisors may reasonably
      request.

7.3   Several Liability

      Subject to the limitations and conditions set forth in this Article 7 and
      in Article 5, the Sellers and Founders shall be severally but not jointly
      liable for any breach of the Warranties, for the repayment of the Purchase
      Price and/or for any claim for the reduction of the Purchase Price.

7.4   Limitation of Liability

      7.4.1 The liability of the Sellers shall be limited as follows:

            (a) The Sellers shall have no liability in respect of any breach or
            breaches of the Warranties unless the amount of the liability in
            respect of such breach or breaches exceeds in aggregate the sum of
            (euro)30,000 in which case (subject to the other provisions of this
            Section 7.4.1) the whole amount of the liability shall be payable.

            (b) Purchaser agrees that (i) from and after the Closing Date, it
            shall cause the Company to maintain in effect for not less than two
            years from the Closing Date one policy of liability insurance
            covering the Company for aggregate losses of up to(euro)1,000,000
            that the Company may incur as a result of Environmental Claims or
            Environmental Liabilities based on a potential contamination of the
            site encompassing the Company's premises located at Krifteler Str.
            32, 60326 Frankfurt; and (ii) the Founders shall have no liability
            in respect of the Warranties

                                       36
<PAGE>

            contained in Section 5.22 unless and until the aggregate amount of
            such losses exceeds the total amount of coverage available under
            such policies.

            (c) Liability in respect of the Warranties shall terminate:

                  (i) in respect of matters contained in Section 5.4 (Title),
                  six months after the date the respective statute of limitation
                  for such matters runs;

                  (ii) in respect of matters contained in Section 5.22
                  (Environmental), the fifth anniversary of the Closing Date; or
                  if, prior to that date, any of the Companies ceases to occupy
                  the land, buildings and other facilities presently occupied by
                  each of them (each an "Affected Premises"), the Founders'
                  liability for breach of any of the Warranties contained in
                  Section 5.22 with respect to each Affected Premises shall
                  terminate six months after the date when such occupation
                  terminates; (iii) in respect of matters contained in Section
                  5.25 (Tax) six months after the date the respective statute of
                  limitations for such matters runs, or six months after the
                  final assessment of any Taxes following a tax audit
                  (Betriebsprufung) for the respective Tax and the respective
                  period, whichever first occurs; and

                  (iv) on the second anniversary of the Closing Date in respect
                  of all others matters contained in Section 5; except in
                  respect of any claim of which notice, as provided in Section
                  7.2.1 is given to the Sellers' Representative before that
                  date.

            (d) The Sellers shall not be obligated to pay any amount to the
            extent any (i) specific allowance, provision or reserve is made in
            the Accounts in respect of the matter giving rise to a claim of
            liability; or (ii) any allowances, provisions or reserves are made
            in the Accounts in respect of other matters but are not needed for
            the purposes for which they have been established.

            (e) The liability of Mr. Schlosser, Mr. Breternitz and each of the
            other Sellers for payment of any amount or amounts that he or she
            may become obligated to pay pursuant to Article 7 and/or 8 hereof
            shall not exceed, in the aggregate:

            (i) as to Mr. Schlosser, the sum of the amount of the Purchase Price
            that he shall receive pursuant to Section 3.2.1 and Mr. Schlosser's
            Deferred Purchase Price if and to the extent Mr. Schlosser's
            Deferred Purchase Price has become due and payable or already been
            paid;

            (ii) as to Mr. Breternitz, the sum of the amount of the Purchase
            Price that he shall receive pursuant to Section 3.2.1 and Mr.
            Breternitz's Deferred Purchase Price if and to the extent Mr.
            Breternitz's Deferred Purchase Price has become due and payable or
            already been paid; and

                                       37
<PAGE>

            (iii) as to any of the other Sellers, the amount of the Purchase
            Price that he or she shall receive pursuant to Section 3.2.1.

      7.4.2 If any deficiency, damage, cost, loss or expense incurred by any of
      the Companies or the Purchaser, as the case may be, in respect of the
      breach of any of the Warranties generates a Tax credit, loss or deduction
      with respect thereto for any of the Companies, the amount of the reduction
      of the Purchase Price or the indemnity to be paid by the Founders shall be
      reduced by an amount equal to the actual reduction in Tax that the
      Companies shall be entitled to receive.

      7.4.3 Sellers or Founders respectively shall not be liable for, and
      Purchaser shall not be entitled to bring any Purchaser Claim or any other
      claim under or in connection with this Agreement if and to the extent
      that:

            (a) the amount of the Purchaser Claim is recovered from a third
            party or under an insurance policy in force on the Closing Date;

            (b) the Purchaser Claim results from a failure of Purchaser or the
            Companies to mitigate damages;

            (c) the matter to which the Purchaser Claim relates was known to
            Purchaser on or prior to the Closing Date, or would have been known
            by Purchaser on or prior to such date, but for the gross negligence
            of its employees, representatives or advisors; or

            (d) the Purchaser Claim results from or is increased by the passing
            of, or any change in, after the Closing Date, any law, statute,
            ordinance, rule, regulation, common law rule or administrative
            practice of any government, governmental department, agency or
            regulatory body including (without prejudice to the generality of
            the foregoing) any increase in the rates of taxes or any imposition
            of taxes or any withdrawal or relief from taxes not actually (or
            prospectively) in effect on the Closing Date.

7.5   Defending Third Party Claims

      If the Companies or Purchaser are sued or threatened to be sued by a third
      party, including without limitation any government agencies, or if the
      Companies or Purchaser are subjected to any audit or examination by any
      Tax Authority (in each case, a "Third Party Claim"), which may give rise
      to a Purchaser Claim, Purchaser shall give Sellers' Representative prompt
      notice of such Third Party Claim. Purchaser shall ensure that Sellers or
      Founders, as the case may be, shall be provided with all materials,
      information and assistance relevant in relation to the Third Party Claim,
      be given reasonable opportunity to comment or discuss with Purchaser any
      measures which Sellers or Founders would propose that Purchaser take or
      omit in connection with a Third Party Claim, and in particular Sellers or
      Founders, as the case may be, shall be given an opportunity to comment on,
      and assist, at their sole cost and expense, Purchaser in connection with
      its response to, opposition of or defense of any Third Party Claim. No
      admission of liability shall be made by or on behalf of the Purchaser or
      of the Companies

                                       38
<PAGE>

      and the Third Party Claim shall not be compromised, disposed of or settled
      without the written consent of Sellers or Founders, as the case may be,
      which consent shall not be unreasonably delayed or withheld. Further,
      Sellers or Founders, as the case may be, shall be entitled to retain
      counsel, at their sole cost and expense, to represent their respective
      interests in connection with, but not to direct or control Purchaser's
      response to, opposition of or defense of any Third Party Claim.

8.    TAX INDEMNITY

8.1   The Founders hereby severally but not jointly undertake and covenant to
      pay to the Purchaser, as a reduction of the Purchase Price:

      8.1.1 such amount as shall be necessary to indemnify any of the Companies
      against any and all liabilities for Taxes other than Taxes levied on the
      income of the Companies for the period up to the Closing Date, or Taxes
      levied on the income of the Companies for the period up to and including
      the Pre-Closing Accounts Date to the extent such Taxes

            (a) are not paid up to such date or reserved against in the
            Pre-Closing Accounts;

            (b) result from a reduction in the Tax refund underlying the
            Contingent Payment; or

            (c) result from any assessment for Taxes imposed upon any of the
            Companies for the period up to the Pre-Closing Accounts Date and
            such assessment is caused by the pure shift of taxable income into
            different Tax years (Phasenverschiebung); and

      8.1.2 an amount equal to all penalties and interest relating to such
      liabilities for Taxes, and all costs and expenses reasonably and properly
      incurred by the Purchaser in claiming any amount under this Article 8.

                                       39
<PAGE>

8.2   The amount of such reduction in the Purchase Price shall be reduced by the
      net present value of the Tax savings related to the matter for which
      indemnification is sought which will occur for a period after the
      Pre-Closing Accounts Date, calculated by application of a discounting
      factor of 5 %.

8.3   This Article shall also apply in the event that any of the Companies would
      have been assessed for Taxes but is not assessed for such taxes because of
      any Tax losses of any of the Companies. The amount of the reduction of the
      Purchase Price in such event shall be equal to the amount of Taxes which
      would have been assessed discounted for five years using the discounting
      factor as set forth above.

8.4   If the Founders become liable in respect of the same Tax amount under this
      Article 8 and also under Section 5.25 and/or Article 7, Purchaser shall be
      entitled to claim and receive a recovery only once, and such recovery
      shall be governed by the provisions of this Article 8.

8.5   Any Tax refund of the Companies, either paid to the Companies or offset
      against any Tax liability of the Companies, is for the benefit of the
      Sellers and shall be credited against any liability of the Sellers under
      this Agreement or, if such liability does not exist at the date of the
      refund, be paid to the Sellers.

8.6   Sections 7.3, 7.4 and 7.5 shall be applied with respect to any payment
      obligation of the Founders under this Article 8.

9.    GUARANTEE

      Mikron hereby guarantees the prompt fulfillment of the obligations of the
      Purchaser under this Agreement and agrees to make payment to the Sellers
      under this Guarantee at Sellers' first demand, if Sellers simultaneously
      state in writing that Purchaser has not performed any of its obligations
      hereunder when due.

10.   NOTICES

10.1  All notices and other communications hereunder shall be in writing and
      shall be deemed given if sent by facsimile transmission (if receipt is
      electronically confirmed) or by a prepaid overnight courier service (if
      receipt is confirmed in writing) addressed to the parties at the following
      addresses (or at such other address for a party as shall be specified by
      like notice):

      (a)   In the case of the Sellers:

            Mr. Hermann Schlosser
            Kaiser-Friedrich-Promenade 149
            D-61352 Bad Homburg v.d.H.
            Germany

            with a copy to

                                       40
<PAGE>

            CMS Hasche Sigle
            Friedrich-Ebert-Anlage 44
            D-60325 Frankfurt am Main,
            Germany
            Attention: Dr. Christoph Schucking
            Facsimile: + 49 69 71701220

      (b)   In the case of the Purchaser or Mikron:

            Mikron Infrared, Inc.
            16 Thornton Road
            Oakland, New Jersey 07436
            Facsimile: + 1 201 405 0090
            Attention: Chief Executive Officer

            with a copy to

            Arent Fox Kintner Plotkin & Kahn, PLLC
            1675 Broadway
            New York, New York 10019
            Facsimile: + 1 212 484 3990
            Attention: Steven D. Dreyer, Esq.

11.   MISCELLANEOUS

11.1  This Agreement, including the Schedules hereof and the Exhibits hereto,
      contain the entire agreement of the parties hereto with respect to the
      subject matter contained herein and therein. All prior negotiations and
      agreements between the parties hereto with respect to the transactions
      provided for herein are superseded by this Agreement. 11.2 No waiver of
      any of the provisions of this Agreement shall be effective against any
      party to this Agreement unless reduced in writing and duly signed by such
      party. The waiver by any party of any right hereunder or of any breach of
      any of the terms hereof or defaults hereunder shall not be deemed a waiver
      of any other rights or any subsequent breach or default, whether of the
      same or of a similar nature, and shall not in any way affect the terms
      hereof except to the extent of such waiver.

11.3  This Agreement can not be amended or modified unless made in writing and
      duly signed by or on behalf of the Sellers and the Purchaser. The
      provisions of the immediately preceding sentence shall not apply to the
      extent that a notarial recording of any amendment or modification may be
      required in connection with the consummation of the transactions
      contemplated hereby. In such event, the required amendment or modification
      shall be specifically approved in writing by the Sellers and the Purchaser
      and then notarially recorded.

11.4  Wherever possible, each provision of this Agreement will be interpreted in
      such manner as to be effective and valid under applicable law and in such
      a way as to, as closely as

                                       41
<PAGE>

      possible, achieve the intended economic effect of such provision and this
      Agreement as a whole, but if any provision contained herein is, for any
      reason, held to be invalid, illegal or unenforceable in any respect, such
      provision shall be ineffective to the extent, but only to the extent, of
      such invalidity, illegality or unenforceability without invalidating the
      remainder of such provision or any other provisions hereof, unless such a
      construction would be unreasonable.

11.5  This Agreement may not be transferred, assigned, pledged or hypothecated
      by any party hereto, other than by operation of law, except that the
      Purchaser may assign this Agreement to any of its affiliates. This
      Agreement shall be binding upon and shall inure to the benefit of the
      parties hereto and their respective successors and assignees.

11.6  Except as otherwise expressly provided in this Agreement, each party shall
      pay its, his or her own and its, his or her own advisers' fees and
      expenses (including financial and legal advisors) incurred in connection
      with the negotiation, execution and closing of this Agreement or the
      transactions contemplated herein and the Sellers shall bear the fees and
      expenses of the Companies incurred in connection with the negotiation,
      execution and closing of this Agreement. All notarial fees that may become
      payable with respect to the execution and recording of this Agreement, any
      amendment to or modification of this Agreement, and any additional
      instruments pertaining or ancillary to this Agreement that may be executed
      prior to, at or after the Closing, shall be borne solely by the Purchaser.

11.7  None of the Sellers or the Companies shall make any disclosure regarding
      the terms or conditions of this Agreement or the transfer and sale of the
      Companies to Purchaser without the Purchaser's prior written consent,
      which consent shall not be unreasonable withheld or delayed.

11.8  No failure or delay on the part of any party hereto in the exercise of any
      right hereunder shall impair such right or be construed to be a waiver of,
      or acquiescence in, any breach of any representation, warranty or
      agreement herein, nor shall any single or partial exercise of any such
      right preclude other or further exercise thereof or of any other right.

11.9  The Sellers and each of them hereby appoint Hermann Schlosser as their
      duly authorized representative in their name and on their behalf to act in
      any matter in which the Sellers may act as indicated in this Agreement,
      including without limitation any matter to be taken on, as a condition for
      or otherwise in relation to Closing.

11.10 This Agreement may be executed in any number of counterparts
      (Ausfertigungen), each of which will be considered an original instrument,
      but all of which together will be considered one and the same agreement.

12.   GOVERNING LAW AND DISPUTES

12.1  This Agreement shall be governed by and construed and enforced in
      accordance with the laws of the Federal Republic of Germany excluding the
      conflicts of laws provisions thereof and the provisions of the CISG.

12.2  Any dispute, controversy or claim arising out of or in connection with
      this Agreement, or

                                       42
<PAGE>

      the breach, termination or invalidity thereof, shall be settled by
      arbitration in accordance with the arbitration rules of the DIS e.V. The
      arbitral tribunal shall be composed of three arbitrators. The place of
      arbitration including the making of the award shall be Frankfurt am Main,
      Germany. The language to be used in the arbitral proceedings, and in all
      documents ands submissions made to the arbitral tribunal, shall be
      English. Each party to the arbitral proceedings shall bear its, his or her
      own and its, his or her own advisers' fees and expenses (including
      financial and legal advisors), provided, however, that each of the parties
      to such proceedings shall pay their respective pro rata shares of the fees
      and other charges imposed by the administrator of such proceedings.

IN WITNESS THEREOF this notarial deed including the Exhibits and Schedules
hereto

-     with the exception of certain balance sheets and other financial
      statements, lists of items, titles, rights and obligations contained in
      certain Exhibits and Schedules, in respect of which the persons appearing
      waived the right to have them read aloud and which instead have been
      presented to the persons appearing, were acknowledged and signed on each
      page by the persons appearing, and

-     with the further exception of the part of Schedule E, which is attached
      for identification purposes only and the content of which does not form a
      part of the declaration of the persons appearing in notarial form,

has been read aloud to the persons appearing and was confirmed and approved by
the persons appearing. The persons appearing then signed this Deed. All was done
at the day below written in the presence of me, the Notary Public, who also
signed this Deed and affixed my official Seal.

Basel, this 22nd (twenty-second) day of November 2002 (two thousand and two)

                                               /s/ Hermann Schlosser
                                      ------------------------------------------
                                      [Hermann Schlosser, individually and as
                                      attorney-in-fact for the other Sellers]

                                               /s/ Tim Johannsen-Roth
                                      ------------------------------------------
                                      [Tim Johannsen-Roth, attorney-in-fact for
                                      Hohenstaufen Zweihundertsechsundzwanzigste
                                      Vermogensverwaltungs  GmbH and Mikron
                                      Infrared, Inc.]

                                               /s/ Stephan Cueni
                                      ------------------------------------------
                                               Stephan Cueni, Notary Public

                                       43

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