Document:

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

by and among

J. M. STEWART
CORPORATION,

DISPLAY TECHNOLOGIES, INC.

and

J.M. STEWART
ACQUISITION, INC.

 

November 16, 2001

 

 

 

 

 

 

 

 

LIST OF SCHEDULES

	
Schedule 1.1(a)

    	
Tradenames, Trademarks, etc.

    
	

        Schedule 1.1(c)

    	

        
        Domain Names

    
	
Schedule 1.1(e)

    	

Equipment

    
	
        Schedule 1.1(i)

    	
        
        Deposits and Prepaid Advertising

    
	

        Schedule 1.1(j)

    	

        
        Accounts Receivable

    
	

        Schedule 2.1

    	

        
        Interim Balance Sheet

    
	

        Schedule 3.1(a)

    	

        
        Leases and Other Contracts

    
	

        Schedule 3.1(b)

    	

        
        Outstanding Accounts Payable

    
	

        Schedule 3.1(c)

    	

        
        Sales Orders for Finished Goods

    
	

        Schedule 3.1(e)

    	

        
        Other Obligations and Liabilities of JMS

    
	

        Schedule 8.1

    	

        
        States in which JMS is Qualified

    
	

        Schedule 8.3

    	

        
        Joint Ventures, etc.

    
	

        Schedule 8.4

    	

        
        Conflicts of Interest

    
	

        Schedule 8.5

    	

        
        Good and Marketable Title of JMS

    
	
            Schedule
            8.6

    	
             Pending Litigation, Arbitration and Administrative or Regulatory
            Proceedings of JMS

    
	
Schedule 8.7

    	
 Adverse
Changes

    
	
Schedule 8.8

    	
 Contracts
and Commitments

    
	
Schedule 8.9

    	
 Agreements
Related to Intellectual Property, Trademarks, etc.

    
	
        Schedule 8.10

    	
        
        Financial Statements - Exceptions to GAAP

    
	
Schedule 8.12

    	
 Tax
Matters of JMS and Parent

    
	
Schedule 8.13

    	
 Employee
Taxes, etc.

    
	
        Schedule 8.14

    	
        
        Insurance of JMS

    

 

	

        Schedule 8.16

    	

        
        No Violation of JMS

    
	
            Schedule
            8.17

    	
             List of Hazardous Substances, Hazardous Materials and Hazardous
            Wastes of JMS

    
	
        Schedule 8.18

    	
        
        Loss Sustained by JMS

    
	

        Schedule 8.27

    	

        
        Employee Benefits and ERISA

    
	

        Schedule 8.29

    	

        
        Customer Deposits

    
	

        Schedule
        12.7(a)

    	

         Existing Employment or Noncompetition Agreements

    
	

        Schedule
        12.7(b)

    	

         Continuing Employees

    

 

 

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE
AGREEMENT (hereinafter sometimes referred to as "this Agreement") made
this 16th day of November, 2001, by and among J. M. Stewart
Corporation, a Florida corporation ("JMS"), Display Technologies,
Inc., a Nevada corporation ("Parent"), and J.M. Stewart Acquisition,
Inc., a Florida corporation ("Buyer");

W I T N E S S E T H:

WHEREAS, JMS wishes to
transfer substantially all of its assets and all of the business presently
conducted by it (all such business is hereinafter sometimes referred to as
"The Acquired Business"), to Buyer in exchange for cash and the
assumption by Buyer of certain specified liabilities of JMS as herein provided;

WHEREAS, Buyer wishes
to acquire such assets and business of JMS all as hereinafter more fully set
forth;

WHEREAS, SouthTrust
Bank, an Alabama banking corporation, holds a valid, perfected first priority
security interest in all of the Purchased Assets and has consented to the sale
of the Purchased Assets pursuant to this Agreement; and

WHEREAS, Parent owns
all of the outstanding capital stock of JMS.

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereto mutually covenant and agree as
follows:

  
  ARTICLE 1

  ASSETS
  TO BE PURCHASED

  

Section
1.1.         Description
      of Purchased Assets. 
On the terms and
    subject to the conditions herein expressed, JMS agrees to sell, convey,
    transfer, assign, set over and deliver to Buyer on the Closing Date,
    effective as of the Effective Time (as said terms are defined in Section 4.2
    hereof) all of the assets, whether tangible or intangible, utilized by or in
    connection with, or produced by, The Acquired Business and owned by JMS or
    J.M. Stewart Industries, Inc., including but not limited to the following
    specified assets, regardless of where such assets are located:

(a)          the exclusive ownership of and
        right to use all tradenames, trademarks, service marks, trade dress,
        copyrights and applications therefor used in connection with The
        Acquired Business or otherwise owned or controlled by JMS, including,
        without limitation, those

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described in Schedule 1.1(a) hereto, along
        with the goodwill of the business associated with each of the foregoing;

(b)          all inventions, patents, patent
        rights, applications for patents, production rights, manufacturing
        rights, reproduction rights, similar rights, trade secrets, know-how,
        processes, formulae, licenses and designs;

(c)          all right, title and interest in
        the marks and domain names set forth on Schedule 1.1(c) hereto, as well
        as all right, title and interest, including copyright rights, in the
        Work or any portion thereof (as hereinafter defined), including the
        rights to use and/or sell for profit, distribute to third parties,
        display, perform, digitally transmit, create derivative works from,
        disassemble, reverse engineer, otherwise claim any ownership rights in
        or rightful title to the "look and feel" of the Work. For
        purposes of this Agreement, "Work" is defined as all
        documents, images, things, work product and works of authorship (all of
        which may be either electronic or hard copy) that are created by or for
        JMS, or in which JMS owns a transferable interest, including, without
        limitation, all website pages and in any software programs, scripts,
        graphics, animations, controls, user interfaces, database schemes or
        other tangible or intangible "products" or
        "information" developed by either JMS or any agent, employee
        or independent contractor of JMS for purposes related to or used in
        connection with The Acquired Business ;

(d)          all current inventories of raw
        materials, supplies, purchased parts to be incorporated in finished
        products, work-in-process and finished products (the
        "Inventory");

(e)          all tooling, molds, machinery,
        equipment and computer hardware, including, without limitation, those
        described in Schedule 1.1(e)hereto, (the "Equipment");

(f)          all books and records of JMS,
        including, without limitation, all purchasing accounting, sales, export,
        import, manufacturing, marketing, shipping, agent and distributor
        records, all marketing studies, customer lists, customer files, art
        work, supplier files, sales agent and manufacturers' representatives
        files, credit files, credit data, appraisals, valuations, and consulting
        studies and all other records and reports relating to the assets
        purchased and the liabilities assumed by Buyer, all printed and other
        advertising, sales and promotional materials, and catalogues and
        supplies, all general ledgers, books of accounts, financial statements
        and banking records, and all computer programs, computer software,
        computer manuals, flowcharts, printouts, data files, program
        documentation and all other related materials of JMS and all copies of
        each thereof in whatever form each of the foregoing may exist, including
        computer files and related documentation; provided that JMS may retain a
        copy of all tax returns and tax records;

(g)          all interests of JMS under the
        leases, employee noncompetition agreements and other contracts described
        in Schedule 3.1(a) hereto, subject to Buyer crediting JMS with any
        prepaid rent, taxes and similar prepaid items, prorated to the Effective
        Time;

(h)          any insurance proceeds paid
        after the Effective Time or payable to JMS pursuant to any contract of
        insurance as a result of damage to or loss of any of the assets owned or
        operated by JMS that are to be, or in the absence or loss would
        otherwise have been, sold to Buyer hereunder, or damage or loss with
        respect to or interruption of

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the operation of The Acquired Business,
        the purpose of this provision being to assure that Buyer receives the
        insurance proceeds otherwise payable to JMS intended to make JMS whole
        on account of any damage or loss to the assets that are purchased by
        Buyer or damage or loss to or interruption of the operations of The
        Acquired Business subsequent to the Effective Time;

(i)          all deposits, prepaid
        advertising, including, without limitation, prepaid catalogues,
        brochures, photographs and advertising, and other prepaid items and
        deferred charges related to The Acquired Business, including, but not
        limited to, those described in Schedule 1.1(i) hereto;

(j)          all accounts receivable of JMS
        existing on the Closing Date and the proceeds of any thereof, including,
        but not limited to, those listed in Schedule 1.1(j);

(k)          all stationery and other
        imprinted material and office supplies, business records (or copies
        thereof), the right to receive mail and other communications and
        shipments of merchandise addressed to JMS, and the rights to telephone
        numbers relating to The Acquired Business.

    
Said assets,
    properties, interests and business of JMS to be so sold, conveyed,
    transferred, assigned, set over and delivered to Buyer on the Closing Date
    are herein sometimes collectively called the "Purchased Assets".
    For purposes of this Agreement, the term, "current inventories" as
    used in subsection (d) above shall include only items which are saleable or
    are to be incorporated into a saleable product.

Section
1.2.          Retained
      Assets.

    
JMS shall on the
    Closing Date retain the following assets used in the conduct of its business
    (hereinafter referred to as the "Retained Assets"):

(a)          its corporate seal, minute books
        and stock record books;

(b)          cash on hand and in banks at the
        Effective Time except those proceeds of insurance policies insuring the
        Purchased Assets against damage or loss described in clause (h) of
        Section 1.1 hereof;

(c)          any tax refunds relating to
        transactions prior to the Effective Time and contract rights arising in
        connection with obligations or liabilities not assumed by Buyer;

(d)          any refund of insurance premiums
        or dividends with respect to an insurance policy pertaining to any
        policy year ending on or before the Effective Time or any policy year
        including the Effective Time (any such premium refund or dividend
        relating to a policy year containing the Effective Time being prorated
        so that JMS shall retain that portion of the premium refund or dividend
        pertaining to the portion of such policy year up to the Effective Time);
        and

(e)          JMS’ rights and obligations
        under the Government Contracts (as hereinafter defined) but only to the
        extent the United States Government does not consent to the transfer of
        said Government Contracts as contemplated in Section 6.9 herein.

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  ARTICLE 2

  PURCHASE
  PRICE OF THE PURCHASED ASSETS

  Section
  2.1          Purchase
  Price.          (a) The purchase
  price of the Purchased Assets shall be an amount equal to [Two Million Five
  Hundred Fifty-Seven Thousand Fifteen Dollars ($2,557,015)] (the "Interim
  Purchase Price"), reduced by the amount, if any, of the Post-Closing
  Adjustment (as defined below) (the Interim Purchase Price as adjusted by the
  Post-Closing Adjustment being referred to as the "Final Purchase
  Price"). The Interim Purchase Price was determined based on the balance
  sheet of JMS as of October 31, 2001, a copy of which is set forth as Schedule
  2.1 hereto (the "Interim Balance Sheet").

  (b) Not later than
  forty-five (45) days after the Closing Date, Buyer will prepare a balance
  sheet of the Acquired Business as of the Closing Date prepared in accordance
  with generally accepted accounting principles as consistently applied by JMS
  (the "Closing Balance Sheet"). The Interim Purchase Price shall be
  reduced by the amount, if any, that the value of the Net Assets (as defined
  below) reflected on the Closing Balance Sheet are less than the Net Assets
  reflected on the Interim Balance Sheet (such amount being referred to as the
  "Post-Closing Adjustment"). For the purposes of this Agreement,
  "Net Assets" shall mean the Purchased Assets less the Assumed
  Liabilities (as defined in Section 3.1 below).

 ARTICLE 3

PAYMENT
  OF THE PURCHASE PRICE AND

  
ASSUMPTION
  OF CERTAIN LIABILITIES

    

  
Section
  3.1.          Assumption
    of Certain Liabilities.     At the closing on the
  Closing Date, Buyer shall not be obligated to assume, and shall not assume,
  any of the liabilities and obligations of JMS whether existing as of the
  Effective Time or asserted after the Effective Time and relating to events
  that occurred before the Effective Time, or otherwise, except Buyer shall
  assume and agrees to pay, perform and discharge, as additional consideration
  for the Purchased Assets, the following liabilities and obligations of JMS as
  of the Effective Time (the "Assumed Liabilities"), which shall be
  assumed by Buyer on the Closing Date as of the Effective Time:

(a)          the future obligations of JMS as
      of the Effective Time under the contracts described in Schedule 3.1(a)
      hereto;

(b)          the outstanding accounts payable
      of JMS relating to The Acquired Business, entered in the ordinary course
      of business, as of the close of business on the date immediately prior to
      the Closing Date, as listed in Schedule 3.1(b) hereto (as the same may be
      updated immediately prior to the Closing Date);

(c)         the obligations of JMS to fill
      sales orders for finished goods with respect to The Acquired Business
      entered into in the ordinary course of business, provided, that all
      consideration for such sales shall belong to Buyer, each such individual
      obligation of JMS to fill sales orders for finished goods having an
      aggregate sales price in excess of $5,000 as of the close of business on
      November 15, 2001, being listed in Schedule 3.1(c) hereto (as the same may
      be updated immediately prior to the Closing Date);

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(d)          present and future warranty claims
      that are reserved for on the Closing Balance Sheet, calculated in a manner
      consistent with the past practices of The Acquired Business; and

(e)          those other obligations and
      liabilities of JMS that are specified in Schedule 3.1(e) hereto.
  
Section
  3.2.          Excluded
    Liabilities.     Buyer will not assume
  and does not agree to pay, perform or discharge the following ("Excluded
  Liabilities"):

(a)          any obligations and liabilities of
      JMS or Parent other than the Assumed Liabilities, regardless of when such
      liability arises; and

(b)          any liabilities related to the
      Retained Assets.

  
JMS and Parent will
  pay, perform or discharge (i) all liabilities of JMS other than the Assumed
  Liabilities, regardless of when such liabilities arise, and (ii) all
  liabilities related to the Retained Assets, as and when such liabilities and
  obligations become due.

Section
3.3.          Payment
    of Purchase Price.       On the Closing Date, Buyer shall
      pay to JMS by delivery of immediately available funds by wire transfer to
      an account designated by JMS an amount (the "Closing Payment")
      equal to the Interim Purchase Price less $100,000 (the "Reserve
      Amount").

  
(b)          If the Final
  Purchase Price exceeds the amount of the Closing Payment, Buyer shall remit to
  JMS an amount equal to the Final Purchase Price less the Closing Payment
  ninety (90) days after the Closing Date. If the amount of the Closing Payment
  exceeds the Final Purchase Price, JMS shall remit to Buyer an amount equal to
  the Closing Payment less the Final Purchase Price five (5) business days after
  JMS receives from Buyer the Closing Balance Sheet.

  Section
  3.4.          Assignment
    of Contract Rights.     In connection with
  the sale and transfer of the Purchased Assets and on the terms and subject to
  the conditions herein expressed, JMS will assign, or cause to be assigned, to
  Buyer all of JMS’ rights, title and interest in and to all contracts, leases
  and other agreements to be assumed by Buyer hereunder, and all guaranties,
  warranties and service contracts relating to the Purchased Assets.

  Section
  3.5.          Execution
    of Assignment and Assumption Agreement.     In connection with
  the sale and transfer of the Purchased Assets and the assumption of the
  liabilities to be assumed by Buyer pursuant to Section 3.1 of this
  Agreement, JMS and Buyer shall as of the closing execute and deliver an
  Assignment and Assumption Agreement (the "Assignment and Assumption
  Agreement") for each contract set forth in Schedule 3.1(a) hereto.

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  ARTICLE 4

  
  THE
  CLOSING

  Section
  4.1.          The
    Closing.     The closing shall
  take place at the offices of Bradley Arant Rose & White LLP located at
  2001 Park Place, Suite 1400, in Birmingham, Alabama on the first business day
  following the date upon which all of the conditions to Closing set forth
  herein have been satisfied or waived, or at such other time and place as the
  parties may agree upon in writing.

  Section
  4.2.          Closing
    Date; Effective Time.     For purposes of this
  Agreement, the term "Closing Date" shall mean the date on which the
  closing shall occur. For purposes of this Agreement, the term "Effective
  Time" shall mean the start of business on the Closing Date.

  
  ARTICLE 5

  DELIVERIES
    AT THE CLOSING

    
  
Section
  5.1.          Deliveries
    By JMS and Parent.     At the closing on the
  Closing Date, effective as of the Effective Time, JMS and Parent shall deliver
  to Buyer, in addition to all other items specified elsewhere in this
  Agreement, the following:

(a)          the Purchased Assets free and
      clear of all mortgages, pledges, liens, encumbrances or charges of any
      kind (except as otherwise disclosed herein or in any schedule hereto);

(b)          such instruments of sale,
      conveyance, transfer, assignment, endorsement, direction or authorization
      as will be sufficient or requisite, in the reasonable opinion of Buyer and
      its counsel, to vest in Buyer, its successors and assigns, all right,
      title and interest (which title and interest shall be good and marketable
      except to the extent disclosed herein or in any schedule hereto), in and
      to the Purchased Assets, including, without limitation, the Assignment and
      Assumption Agreement, the Bill of Sale, the Assignment of Intellectual
      Property, the Assignment of Lease Agreement, the Assignment of Government
      Contracts, the Assignment of Corporate Name, and the Internet Domain Name
      Transfer Agreement.

(c)          the legal opinion referred to in
      Article 12 hereof;

(d)          such assignments, and consents
      thereto, if any, of the various franchises, leases, contracts and
      commitments to be assumed by Buyer pursuant to Section 3.1 hereof as will
      be sufficient or requisite, in the reasonable opinion of Buyer and its
      counsel, to vest in Buyer all of JMS’ rights, powers and privileges
      thereunder;

(e)          a written consent from SouthTrust
      Bank releasing its lien on the Purchased Assets together with forms UCC-3
      from all parties with liens on the Purchased Assets evidencing the release
      of their respective liens;

(f)          Articles of Amendment to the
      respective Articles of Incorporation of JMS, J. M. Stewart Industries,
      Inc. and J.M. Stewart Manufacturing, Inc. changing their respective
      corporate names to names that do not include the phrase "J.M.
      Stewart," all of such Articles of Amendment to be duly authorized and
      executed and ready for filing with the Florida Secretary of State’s
      office; and

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(g)          Schedules 1.1(j), 3.1(b), 3.1(c)
      and 3.1(e), updated to a date as close as possible to the Closing Date.

  Section
  5.2.          Deliveries
  by Buyer.     At the closing on the
  Closing Date, Buyer shall deliver to JMS the following:

(a)          documents (including, without
      limitation, the Assignment and Assumption Agreement referred to in
      Section 3.5 hereof) evidencing the assumption by Buyer of the
      liabilities and franchises, agreements, leases, contracts and commitments
      of JMS to be assumed by Buyer pursuant to Section 3.1 hereof; and

(b)          The Closing Payment in accordance
      with the provisions of Section 3.3 hereof.
  
  
ARTICLE 6

  POST-CLOSING
  COVENANTS OF JMS

  
  
  AND
  PARENT

  
  JMS and Parent,
  jointly and severally, covenant and agree as follows:

      Section
      6.1.          Change
      of Names.     (a) At the
      closing on the Closing Date, JMS and Parent shall deliver to Buyer
      Articles of Amendment to the respective Articles of Incorporation of JMS,
      J.M. Stewart Industries, Inc., and J.M. Stewart Manufacturing, Inc.
      changing their respective corporate names to names that do not include the
      phrase "J. M. Stewart", all of such Articles of Amendment to be
      duly authorized and executed and ready for filing with the office of the
      Florida Secretary of State.

      (b)          Within five
      (5) business days following the Closing Date, JMS and Parent shall have
      filed all requisite documents in all states in which JMS, J.M. Stewart
      Industries, Inc. and J.M. Stewart Manufacturing, Inc. have registered to
      transact intrastate business notifying such states of their respective
      changes of corporate names. Thereafter, JMS and Parent will cooperate with
      Buyer in making such corporate names available to Buyer in each state in
      which JMS transacts, or has transacted, business, and JMS and Parent shall
      cease to use the name "J.M. Stewart Corporation" and all
      derivations thereof, including without limitation "J.M. Stewart
      Manufacturing" and "J.M. Stewart Industries".

      Section
      6.2.         Non-Solicitation
        and Non-Competition.      (a) For a period
      of five (5) years from and after the Closing Date, neither JMS nor Parent
      shall, directly or indirectly, (i) make known to any other person, firm,
      corporation or entity the names, addresses or any other information of any
      of The Acquired Business’ customers, employees, or vendors, nor will JMS
      or Parent, directly or indirectly, solicit, seek business from or contract
      with any firm, person, sole proprietorship, partnership, corporation or
      other entity which, at any time during the five (5) years preceding the
      Closing Date, was a customer, employee or vendor of The Acquired Business,
      or which had or planned to have a business relationship with The Acquired
      Business; or (ii) own, manage, operate, join, control, invest in or
      participate in or be employed by or give consultation or advice to or
      extend credit to or otherwise be connected in any manner, directly or
      indirectly, with any firm, person, corporation or enterprise which would
      be competitive with The

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      Acquired Business in any area of Canada, South
      America and the United States of America in which The Acquired Business is
      conducted by JMS or Parent immediately prior to the Effective Time or in
      which the products related to The Acquired Business are or have been sold.
      With respect to clause (ii) above, nothing herein shall prohibit JMS or
      Parent from acquiring and holding not more than five percent (5%) of any
      outstanding class of securities of any company whose shares are publicly
      traded on any exchange or in any established over-the-counter market, or
      from continuing to operate the businesses of Don Bell Industries, Inc. and
      Lockwood Sign Group, Inc. in the manner in which they have been operated
      prior to the Effective Time, provided that the operation of said
      businesses do not in any way violate the provisions of clause (i) above.
      JMS and Parent expressly agree that this Agreement is a partial restraint
      on its business and activities and contains reasonable limitations as to
      time, geographical area and scope of activity to be restricted that do not
      impose a greater restraint than is necessary to protect the goodwill and
      business interests of The Acquired Business and Buyer.

      (b)          The period
      during which the agreement contained in subparagraph (a) hereof shall
      apply shall be extended by one day for each day in which Buyer establishes
      one or more violations by JMS or Parent of any provision of such
      agreement, and Buyer shall be entitled to an injunction restraining JMS
      and Parent from further violations for a period of five (5) years from the
      date of the final decree less only such number of days subsequent to the
      date hereof as JMS and Parent have not violated such agreement. The burden
      shall be on JMS and Parent to establish the number of days, following the
      first established violation, on which violations have not occurred. The
      purpose of this provision is to prevent JMS and Parent from profiting from
      their own wrongs if JMS or Parent violates the agreement contained in
      subparagraph (a) hereof.

      (c)          JMS and
      Parent acknowledge and recognize that a violation of this Section 6.2 by
      JMS or Parent may cause irreparable and substantial damage and harm to
      Buyer, could constitute a failure of consideration, and that money damages
      will not provide a full remedy for Buyer for such violations. JMS and
      Parent agree that in the event of a breach of this Section 6.2, Buyer will
      be entitled, if it so elects, to institute and prosecute proceedings at
      law or in equity, to enforce the specific performance of this Section 6.2
      by JMS and Parent, and to enjoin JMS and Parent from engaging in any
      activity in violation hereof. JMS and Parent hereby consent to service of
      process, in personam jurisdiction, subject matter jurisdiction and venue
      in the Circuit Court of Shelby County, Alabama and in the United States
      District Court for the Northern District of Alabama. JMS and Parent
      further recognize that any material breach of any covenant, representation
      or warranty herein will authorize Buyer to withhold any payments to be
      made pursuant to this Agreement in accordance with Section 10.5.

      Section
      6.3.          Further
      Assurances.     Upon the
      reasonable request of Buyer at any time and from time to time after the
      Closing Date, JMS and Parent will forthwith execute and deliver such
      further instruments of assignment, transfer, conveyance, endorsement,
      direction or authorization and do all things necessary or proper, as Buyer
      or its counsel may reasonably request, in order to vest, perfect or
      confirm, of record or otherwise, the right, title and interest of Buyer,
      its successors and assigns, in and to the Purchased Assets and the
      assignment to, and assumption by Buyer of the franchises, agreements,
      leases, contracts and commitments to be assigned to, and assumed by, Buyer
      pursuant to this Agreement or otherwise to carry out the purpose of this
      Agreement.

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      Section
      6.4.         Confidentiality.      JMS and Parent
      agree that, after the Closing Date, each of them will treat as
      confidential and will not use or disclose to others or permit any
      affiliate of JMS to use or disclose to others, any trade secrets or other
      confidential information concerning the Purchased Assets, or The Acquired
      Business theretofore conducted by JMS, or concerning Buyer, or the
      business, operations or affairs thereof, until such information becomes
      publicly known through no fault of JMS or Parent, except in connection
      with the enforcement of their rights under this Agreement or as otherwise
      required by law or legal process or for a legitimate business purpose. JMS
      and Parent acknowledge that such confidential information shall include,
      but not be limited to, the identities of suppliers and business contacts
      of JMS, that such confidential information is important to The Acquired
      Business, that the value of the Purchased Assets derives in part from this
      confidential information possessed by JMS and Parent, and, if any of them
      breaches this Agreement, then Buyer will be deprived of the benefit of its
      bargain.

      Section
      6.5.          Availability
        of Employees.     JMS will, after
      the Closing Date, cooperate fully in providing to Buyer or its designees
      information necessary to prosecute or defend any third-party litigation
      relating to operation of The Acquired Business acquired by Buyer and will
      use its best efforts to provide and make available the services of
      employees and agents of JMS to participate in the preparation and
      prosecution or defense of such litigation, all at no charge to Buyer other
      than direct reasonable out-of-pocket expenses, which shall be charged to
      Buyer.

      Section
      6.6.          Allocation
        of Purchase Price.     Within forty-five
      (45) days following the Closing Date, JMS and Buyer shall agree upon the
      manner in which the Purchase Price shall be allocated among the Purchased
      Assets. Such allocation shall be made in accordance with Section 1060 of
      the Internal Revenue Code of 1986, as amended (the "Code"), and,
      to the extent required by the Code, JMS and Buyer shall file Form 8594,
      Asset Acquisition Statement Under Section 1060, with their respective tax
      returns for the taxable year that includes the Closing Date. If the
      parties are required by the Code to file Form 8495, JMS and Buyer shall
      file said Form 8495 in a manner consistent with the allocation of the
      Purchase Price as agreed to by said parties in accordance with this
      Section 6.6.

      Section
      6.7.          Accounts
        Receivable.     Ninety (90) days
      following the Closing Date, JMS and Parent shall repurchase from Buyer any
      uncollected accounts receivable that were on the books of JMS as of the
      Effective Time, as listed on Schedule 1.1(j), to the extent the amount of
      such uncollected accounts receivable exceeds the amount reserved for
      uncollected accounts receivable in the Closing Balance Sheet. Buyer shall
      have the right to offset any amounts owed to it under this Section 6.7
      against any payments otherwise owed to JMS or Parent by Buyer in
      accordance with Section 10.5 hereof.

      Section
      6.8.        Government Contracts.
           (a)  JMS, Parent and
      Buyer acknowledge that it will not be possible to effect an assignment
      prior to the Closing Date of that certain Contract for Commercial Items
      between the General Services Administration and JMS, signed February 3,
      1999, and that certain Nonappropriated Fund Purchase Agreement between the
      Air Force Nonappropriated Fund Purchasing Office and JMS, dated September
      23, 1997 (collectively, the "Government Contracts"). JMS, Parent
      and Buyer agree that following the Effective Time, each of them shall take
      all necessary steps to obtain the consent of the United States Government
      to the transfer of the Government Contracts from JMS to Buyer, including
      but not limited to seeking novation in accordance with applicable statutes
      and regulations,

9

 

      including 48 C.F.R. § ("FAR") 42.1204
      and/or as the respective contracting officer or other representative of
      the United States Government may request. If so requested by Buyer, JMS
      shall present as soon as practicable after the Closing Date, completed
      copies of the Novation Agreement prescribed at FAR 42.1204(e) executed by
      JMS and all documentation (including balance sheets) required of JMS or
      Parent either under FAR 42.1204(c) and/or as the respective contracting
      officer or other representative of the United States Government may
      request, which documentation will be complete in all material respects.
      JMS and Parent shall cooperate with Buyer as reasonably requested to
      obtain the consent of the United States Government to the transfer of the
      Government Contracts, including the execution of all necessary documents
      as requested by Buyer. JMS and Parent shall cooperate with Buyer in every
      manner required to cause continued satisfactory performance of the
      Government Contracts during the period prior to the Closing Date. JMS and
      Parent will direct the United States Government to make payments with
      respect to the Government Contracts directly into an account specified by
      Buyer. Any payments otherwise received by JMS or Parent from the United
      States Government with respect to the Government Contracts on or after the
      Closing Date shall be endorsed and delivered to Buyer for deposit, and not
      deposited by JMS or Parent.

      (b)          While the
      request for consent is pending or in the event that the United States
      Government declines to novate or otherwise consent to the transfer of any
      of the Government Contracts to Buyer, then JMS shall continue to perform
      all such Government Contracts in accordance with their terms and until
      performance is complete. Buyer shall provide to JMS, at no cost to JMS,
      any and all Purchased Assets, labor, management personnel, support
      systems, inventory, supplies and all other things reasonably necessary and
      shall cooperate in every manner required to complete contract performance,
      all at the direction of JMS and Parent. JMS and Parent shall use their
      best efforts to maintain satisfactory performance of the Government
      Contracts. Each of the Government Contracts shall be performed for the
      economic benefit of the Buyer. Neither JMS nor Parent shall retain any
      paid on such contracts on or after the Closing Date, but shall promptly
      and immediately render to Buyer all proceeds from and after the Closing
      date. Parent agrees that it shall not cause JMS to be dissolved during any
      period in which JMS is performing the Government Contracts.

  Section
  6.9.          Enforcement of Noncompetition
        Agreements.     To the extent that
  Buyer is prohibited from exercising the rights of JMS pursuant to those
  certain noncompetition agreements with those employees of JMS set forth on
  Schedule 12.7(a) that JMS is assigning to Buyer pursuant to this Agreement
  (the "JMS Noncompetition Agreements") and at the written request and
  expense of Buyer, JMS will enforce the JMS Noncompetition Agreements after the
  Closing Date for the benefit of Buyer.

  
  ARTICLE 7

  
  COVENANTS
  OF BUYER

    
  

  Section
  7.1.          Access
    to Records.     Buyer agrees, for a
  period of five (5) years after the Closing Date, to preserve and protect, or,
  in the event Buyer wishes to destroy or discard such items, offer to surrender
  to JMS, all books and records of JMS delivered to Buyer pursuant to this
  Agreement, and Buyer's books and records maintained for eighteen months after
  the closing relating to delivery of products to customers for the purpose of
  identifying whether JMS or Buyer is responsible for claims for loss or injury
  relating to the sale of products of The Acquired Business, and to afford, at
  JMS’ expense and subject to Section 6.4 hereof,

10

 

  to the officers, employees
  and authorized representatives of JMS, reasonably free and full access for
  legitimate business purposes during normal business hours to such books and
  records; and, Buyer further agrees that such officers, employees and
  authorized representatives of JMS shall be free during such period, subject to
  Section 6.4 hereof, to make copies of and to take notes from such books and
  records at JMS’ expense.

  Section
  7.2.          Availability
    of Employees and Facilities.     Buyer will, after the
  Closing Date, cooperate fully in providing to JMS or its designees information
  necessary to prosecute or defend any third-party litigation relating to the
  business of JMS and will use its best efforts to provide and make available
  the services of employees and agents of Buyer to participate in the
  preparation and prosecution or defense of such litigation, all at no charge to
  JMS other than direct reasonable out-of-pocket expenses, which shall be
  charged to JMS.

  Section
  7.3.          Accounts
    Receivable.     Buyer agrees that it
  will assign to JMS and Parent any and all rights to collect those accounts
  receivable that are repurchased by JMS and Parent pursuant to Section 6.7. If
  Buyer collects any payments on such accounts receivable after the accounts
  receivable have been repurchased, Buyer shall remit such payment to JMS and
  Parent.

  
  ARTICLE 8

  REPRESENTATIONS
  AND

  
  
  WARRANTIES
  OF JMS AND PARENT

  

  JMS and Parent,
  jointly and severally, warrant and represent to and covenant with Buyer and
  its successors and assigns (which warranties, representations and covenants
  together with the other warranties, representations and covenants of JMS and
  Parent set forth in this Agreement or contained in any schedule hereto, or in
  any certificate or other document required to be delivered to Buyer by JMS and
  Parent pursuant to this Agreement, shall, except as otherwise expressly
  provided herein, survive the closing hereof) as follows:

Section
8.1.          Organization,
        etc.     JMS is a
      corporation, duly organized, validly existing and in good standing under
      the laws of Florida and has the corporate power and all material licenses,
      permits, authorizations and approvals (governmental, corporate or
      otherwise) necessary to own and operate its properties and to carry on The
      Acquired Business as it is now being conducted. JMS is qualified to
      transact business as a foreign corporation in each jurisdiction in which
      the nature of the property owned, used or operated by JMS, or the nature
      of the activities conducted by JMS requires such qualification, each of
      which is listed on Schedule 8.1.

 
      Section
      8.2.         Real
        Estate.      Neither JMS or
      Parent, or any affiliate thereof, has any interest as owner in any real
      estate used in The Acquired Business.

      Section
      8.3.         Joint
        Venture, etc.      Except as set
      forth on Schedule 8.3 hereto, on the date hereof, neither JMS nor its
      shareholders, directors or officers own, nor on the Closing Date will own,
      any interest in any partnership, joint venture or other entity engaged in
      any business competitive with The Acquired Business, other than a less
      than 5% interest in publicly held entities.

11

 

      Section
      8.4.         Conflict
        of Interest.      Except as set
      forth on Schedule 8.4 hereto, no affiliate of JMS or Parent, no
      shareholder or officer or director or employee of JMS or Parent, nor any
      spouse or child of any of them, directly or indirectly

(a)          has any interest in (i) any
          entity which does business with JMS or (ii) any property, asset or
          right which is used by JMS in the conduct of The Acquired Business, or

(b)          has any contractual
          relationship with JMS respecting The Acquired Business.

      
There are no
      loans outstanding to or from any of such persons from or to JMS except (y)
      reasonable officer expense accounts and (z) as set forth in Schedule 8.4
      hereto.

      Section
      8.5.         Good
        Title, etc.      JMS has good and
      marketable title to all of the Purchased Assets, subject to no mortgages,
      pledges, liens, encumbrances or other charges of any kind, except as set
      forth in Schedule 8.5 hereto.

      Section
      8.6.          No
        Litigation.     There is no
      litigation at law or in equity, no arbitration proceeding and no
      proceeding before any commission or other administrative or regulatory
      authority pending, or to the knowledge of JMS or Parent threatened,
      against or affecting the Purchased Assets or The Acquired Business or JMS’
      right to carry on such businesses as conducted on the date hereof, except
      as set forth in Schedule 8.6. JMS is not in default with respect to any
      order, writ, injunction or decree of any federal, state, local or foreign
      court, department, agency or instrumentality. Except as set forth in
      Schedule 8.6, JMS is not presently engaged in any legal action to recover
      monies due to it or damages sustained by it.

      Section
      8.7.         No
        Adverse Change.      Except as
      otherwise disclosed in this Agreement or in Schedule 8.7, since June 30,
      2001, there has been no material adverse change in the financial
      condition, assets, liabilities, business (including relations with
      employees, dealers, distributors, entities with which JMS has joint
      marketing or endorsement relationships, government contracting officers,
      suppliers and customers) or property of JMS, the prospects of The Acquired
      Business or the Purchased Assets, and neither JMS nor Parent has any
      knowledge of any information not known to the public on the basis of which
      JMS or Parent would conclude that any such material adverse change may
      likely be expected to occur in the reasonably foreseeable future.

      Section
      8.8.          Contracts
        and Commitments.          Except as set
      forth in Schedule 8.8, Schedules 3.1(a), 3.1(b), 3.1(c) and 3.1(e)
      together contain a true and complete list and brief description of all
      written contracts, agreements and other instruments made other than in the
      ordinary course of business to which JMS is a party at the date hereof, or
      made in the ordinary course of business and referred to in clauses (a)
      through (j) of this Section 8.8. Except as shown in said Schedules 3.1(a),
      3.1(b), 3.1(c), 3.1(e) and 8.8, JMS is not a party to any written or oral

(a)          distributor, sales,
          advertising, agency, manufacturer's representative, joint marketing
          and endorsement agreements, or similar contract,

(b)          contract or collective
          bargaining agreement with or commitment to any labor union,

12

 

(c)          contract continuing over a
          period of more than six months from the date hereof for the future
          purchase of material, supplies, equipment or services involving more
          than $10,000 or for a quantity in excess of normal operating
          requirements,

(d)          contract continuing over a
          period of more than six months from the date hereof for the future
          sale of products or the performance of services by JMS,

(e)          profit-sharing, bonus, stock
          option, pension, retirement, stock purchase, hospitalization,
          insurance or similar plan or agreement, formal or informal, providing
          benefits to any current or former director, officer, employee or
          shareholder,

(f)          indenture, mortgage,
          promissory note, loan agreement or other agreement or commitment for
          the borrowing of money or for a line of credit,

(g)         contract or commitment of any
          other nature with any current or former director, officer, employee or
          shareholder,

(h)         contract or commitment for
          capital expenditures,

(i)          agreement or arrangement for
          the sale of any of its assets, property or rights other than in the
          ordinary course of its business or requiring the consent of any party
          to the transfer and assignment of such assets, property, and rights,
          or

(j)          guaranty of the obligations of
          third parties, other than the endorsement in the ordinary course of
          business of negotiable instruments for deposit or collection.

      
JMS has performed
      all the obligations required to be performed by it to date and is not in
      default or alleged to be in material default in any respect under any
      agreement, lease or contract to which it is a party, and there exists no
      event, condition or occurrence which, after notice or lapse of time, or
      both, would constitute such a default by it of any of the foregoing. JMS
      has furnished or made available to Buyer true and correct copies of all
      documents described in said Schedules 3.1(a), 3.1(b), 3.1(c), 3.1(e) and
      8.8 (collectively the "Contracts") and there have been no
      modifications, amendments or terminations thereof not reflected in such
      copies. None of the Contracts are materially unprofitable to JMS. JMS has
      no present expectation or intention of not fully performing or inability
      to perform, its obligations under any Contract, and neither JMS nor Parent
      has any knowledge of any breach or anticipated breach by any other party
      to any Contract. With respect to those Contracts listed in Section 8.8(a)
      which by their written terms have expired, JMS and the relevant parties
      have continued to operate in accordance with the terms of the written
      agreements notwithstanding their expiration. JMS has not received notice
      of the intent of any party to any of the Contracts to cancel or
      discontinue performance under any of the Contracts.

      Section
      8.9.         Copyrights,
        Trademarks, etc.      Except as
      identified on Schedule 8.9, no licenses, sublicenses, covenants or
      agreements have been granted or entered into by JMS or Parent in respect
      of any copyrights, trademarks, service marks, trade names, brand names,
      patents or trade secrets, used or usable in The Acquired Business. There
      are no copyrights, trademarks, service marks, trade names, brand names,
      patents or trade secrets that are not being sold to Buyer and without
      which the Business could not be conducted as presently conducted. Neither
      JMS nor Parent have been advised of any claim of infringement of any such
      copyright,

13

 

      proprietary right, trademark, service mark, trade name, brand
      name, patent or trade secret. After the Closing Date, JMS and Parent will
      not use or otherwise infringe upon any of the names used in The Acquired
      Business, including without limitation the name "J.M. Stewart
      Corporation" or any derivative or alteration thereof, which shall be
      sold, assigned and transferred to Buyer pursuant to this Agreement.

Section
8.10.          Financial
        Statements.

(a)          JMS has heretofore delivered
          to Buyer the balance sheet of JMS as of June 30, 2001 (such balance
          sheet being sometimes referred to as the "Base Balance
          Sheet" and such date being sometimes referred to as the
          "Base Balance Sheet Date"). JMS has also heretofore
          delivered to Buyer the Interim Balance Sheet. Except as set forth in
          Schedule 8.10 hereto, the Base Balance Sheet and Interim Balance Sheet
          have been prepared in accordance with generally accepted accounting
          principles consistently applied and present fairly the financial
          position of JMS as of the Base Balance Sheet Date and the date of the
          Interim Balance Sheet, respectively. The reserve amount established
          for losses with respect to warranties and the liability amount
          established for accounts payable are adequate to provide for (i)
          losses relating to warranty claims and (ii) amounts owing pursuant to
          accounts payable.

(b)          JMS has not used any improper
          accounting practice for the purpose of incorrectly reflecting on its
          financial statements or in its books of account, or for the purpose of
          not reflecting on such financial statements or in its books of
          account, any of its assets, liabilities, revenues or expenses.

(c)          The books of account, cost
          reports, sales reports and other financial data of JMS have been
          maintained and prepared in accordance with its normal practices,
          consistently applied.
      
Section
      8.11.         No
        Undisclosed Liabilities.      As of the date
      hereof, JMS has no liability of any nature, whether accrued, absolute,
      contingent or otherwise, relating to The Acquired Business not disclosed
      in this Agreement or any certificate, schedule or other instrument or list
      or information required to be furnished by JMS pursuant to this Agreement.

 
      Section
      8.12 .        Tax
        Matters.     For all periods
      prior to the date of this Agreement, except as set forth in Schedule 8.12.

(a)          all Federal, state, local and
          foreign tax returns and tax reports required to be filed by JMS and
          Parent have been timely filed with the appropriate governmental
          agencies in all jurisdictions in which such returns and reports are
          required to be filed and all of the foregoing are true, correct and
          complete;

(b)          all Federal, state, local and
          foreign income, profits, franchise, sales, use, occupation, property,
          excise, highway use and other taxes (including interest and penalties)
          due from JMS and Parent have been fully paid or adequate provisions
          made therefor;

(c)          no issues have been raised or
          proposed by any governmental tax authority with respect to any filed
          tax return of JMS or Parent, nor has any claim ever been made by an
          authority in a jurisdiction where JMS does not file tax returns that
          it is or may be subject to taxation by that jurisdiction; and

14

 

(d)          there are no liens, judgments
          or security interests on any of the Purchased Assets that arose in
          connection with any failure (or alleged failure) to pay any tax.
      
Section
      8.13.          Employee
        Taxes, etc.     With respect to
      The Acquired Business of JMS and except as set forth in Schedule 8.13:

(a)          proper and accurate amounts
          have been withheld by JMS from its employees for all periods prior to
          the Effective Time in compliance with the tax withholding provisions
          of applicable Federal, foreign, state and local laws;

(b)          proper and accurate Federal,
          foreign, state and local returns have been filed by JMS for all
          periods for which returns were due with respect to employee income tax
          withholding, social security and unemployment taxes, and the amounts
          shown thereon to be due and payable have been paid in full or adequate
          provisions therefor; and

(d)          hours worked by and payments
          made to the respective employees of JMS have not been in violation of
          the Fair Labor Standards Act or any applicable laws of the United
          States, any state or other jurisdiction dealing with such matters.
      
Section
      8.14.          Insurance.     With respect to
      The Acquired Business, JMS or Parent has in force all policies of
      insurance described in Schedule 8.14 insuring it which policies JMS
      believes provide adequate insurance with respect to all risks normally
      insured against by companies similarly situated, and it will have in force
      on the Closing Date policies of insurance of the same character and
      coverage as those so described in Schedule 8.14. JMS will promptly notify
      Buyer in writing of any changes in such insurance coverage occurring prior
      to the closing.

      Section
      8.15.         Ownership
        of Essential Assets; Presence of Essential Assets.      There is no
      material asset used by JMS in the conduct of The Acquired Business or
      without which The Acquired Business could not be conducted as presently
      conducted, which is not either owned by JMS or leased to JMS under any of
      the leases listed in Schedule 3.1(a), except as otherwise disclosed in
      this Agreement, and all such assets owned or used by JMS are encompassed
      within the Purchased Assets and are, on the date hereof, in good operating
      condition and repair, ordinary wear and tear excepted. On the Closing
      Date, effective as of the Effective Time, JMS will deliver to Buyer all of
      the Purchased Assets.

      Section
      8.16.          No
        Violation.     The execution and
      delivery of this Agreement and the consummation of the transactions
      contemplated hereby do not and will not except as described in Schedule
      8.16 hereto, or otherwise disclosed in this Agreement

(a)          violate, conflict with or
          result in a breach of or default under any of the terms, provisions or
          conditions of the articles of incorporation or bylaws of JMS or any
          statute, regulation or court or administrative order or process, or
          any agreement or instrument to which JMS is a party or by which it or
          any of its properties or assets, is bound;

(b)          result in the creation of any
          lien, charge or encumbrance upon any of the Purchased Assets under any
          of the foregoing;

(c)          terminate, delay or give any
          party thereto the right to terminate, delay, amend, abandon, or refuse
          to perform any provision of any agreement or instrument to which

15

 

JMS
          is a party;

(d)          accelerate or give any party
          thereto the right to accelerate or modify the time within which, or
          the terms under which, JMS is to perform any agreement or instrument;
          or

(e)          require the consent of any
          other person or entity to the transfer or assignment to Buyer, or the
          purchase or assumption by Buyer, pursuant to this Agreement of the
          properties, franchises, licenses, contracts, or other rights or
          commitments of JMS.
      
Section
      8.17.            Certain
        Governmental Regulations.      (a) Except as
      described in Schedule 8.17 hereto or otherwise disclosed in this
      Agreement, The Acquired Business of JMS has not been conducted in
      violation of any statute, law, ordinance or regulation of any governmental
      entity affecting The Acquired Business with respect to health and safety
      in plants and environmental and pollution control, including the
      disposition of hazardous or toxic waste materials. JMS has not received
      notice of and is not aware of any condition or event relating to The
      Acquired Business which by the passage of time would result in the
      violation of any such statute, law, ordinance or regulation of any
      governmental entity, or would require remedial action by JMS, except as
      described in Schedule 8.17 hereto.

      (b)          Without
      limiting the generality of the foregoing, JMS’ operations, including on
      site and off site disposal, have been and are presently being operated in
      all respects in conformity with all statutes, rules, regulations and other
      governmental requirements, including standards promulgated thereunder with
      respect to environmental and pollution controls and the generation,
      manufacture, refinement, transport, treatment, storage, handling,
      disposition, production or processing of hazardous substances, hazardous
      materials or hazardous wastes, as those terms are defined in the statutes
      named below, including, but not limited to, the requirements of the
      Resource Conservation Recovery Act ("RCRA"), 42 U.S.C.
      §§ 6901 et. seq., the Comprehensive Environmental
      Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
      §§ 9601 et. seq., the Clean Water Act 33 U.S.C.
      §§ 1251 et. seq., the Clean Air Act, 42 U.S.C.
      §§ 7401 et. set., or any environmental law in the
      State of Florida, or in any other state, country, province, county or
      locality in which the nature of the business of JMS would subject JMS to
      the environmental law of such state, country, province, county or
      locality, as the same shall be in effect and interpreted on the Closing
      Date (hereinafter collectively defined as "Environmental Law"),
      and JMS has not permitted, nor do JMS or Parent have any knowledge of, any
      release or threat of the release of such hazardous materials, substances
      or wastes, on site or off site of any such plant in violation of
      Environmental Law, or any condition or event relating to The Acquired
      Business which by the passage to time may require remedial action, which
      has not been cured by JMS as of the date hereof.

      (c)          Schedule 8.17
      hereto includes a complete list of hazardous substances, hazardous
      materials and hazardous wastes, as those terms are defined in the
      aforementioned Environmental Law, which are currently or have in the past
      been generated, manufactured, transported, produced, stored, handled,
      treated, refined or disposed of by JMS with respect to The Acquired
      Business (the "JMS Hazardous Waste") and also includes a
      complete list of all persons and entities used by JMS with respect to The
      Acquired Business to transport any such JMS Hazardous Waste. Also listed
      on Schedule 8.17 are all sites where JMS Hazardous Waste has been stored,
      treated, refined or otherwise disposed of.

      Section
      8.18.          No
        Losses.     Since June 30,
      2001, JMS has not sustained any loss

16

 

      on account of fire, flood, accident
      or other calamity of such character as to interfere materially with the
      continued operation of The Acquired Business regardless of whether or not
      such loss was insured against, other than as set forth in Schedule 8.18.

      Section
      8.19.          Approval.     JMS and Parent,
      at the time of closing, will have taken all requisite corporate action to
      approve this Agreement and the transactions contemplated by this
      Agreement, and there shall have at the time of closing been delivered to
      Buyer certified copies of the resolutions duly adopted in connection
      therewith.

      Section
      8.20.          No
        Untrue Statements.     Neither this
      Agreement, nor any certificate, schedule, or other instrument or list or
      information required to be furnished by JMS pursuant to this Agreement,
      contains any untrue statement of a material fact or omits to state any
      material fact necessary in order to make the statements contained herein
      or therein not misleading.

      Section
      8.21.          No
        Default Under Leases.     Each lease
      referred to in Schedule 3.1(a) is in full force and effect and no default
      exists on the part of JMS in the performance of its obligations under such
      leases, and JMS has not received any notice from the lessor under any such
      lease of the existence of any default on the part of JMS which has not
      been heretofore performed or cured by JMS. JMS has not made any prior
      assignment, whether for security purposes or otherwise, of the interest of
      JMS in, to or under any such lease. Payments under each of such leases has
      been paid to at least the Closing Date except to the extent, if any,
      reflected in Schedule 3.1(a). To the best of the knowledge of JMS there
      are no unperformed obligations on the part of the lessor under any lease
      with respect to the premises leased pursuant to such lease.

      Section
      8.22.          Confidential
        Material.     JMS will deliver
      to Buyer on the Closing Date all documents and other materials and all
      copies thereof owned or used by JMS reasonably believed by JMS to be both
      confidential and reasonably appropriate for the operation of The Acquired
      Business conducted by JMS through use of the Purchased Assets.

      Section
      8.23.          No
        Undue Influence.       JMS has not,
      directly or indirectly, made any payments to or entered into any
      transactions with any person as an inducement to such person (or to induce
      such person to influence another person) to take action deemed to be to
      the advantage of JMS in such person's official position with a
      governmental authority, or in such person's position with any other
      business entity, nor has JMS knowingly made any other payment to any
      person or entity, that was contrary to any law or regulation of any such
      governmental authority.

      Section
      8.24.          Sales
        Orders.     Each of the sales
      orders referred to in clause (c) of Section 3.1 of this Agreement and
      listed in Schedule 3.1(c) hereto was taken in the ordinary course of JMS’
      business.

      Section
      8.25.          Inventories.     All inventories
      shown on the Interim Balance Sheet consist of items of a quality and
      quantity usable or saleable in the ordinary course of business, each class
      thereof was priced at the lower of cost or market on the cost basis and,
      as to the classes of items inventoried and methods of counting and
      pricing, such inventories were determined in a manner consistent with
      prior years except as to minor amounts of inventory which in the aggregate
      are not material in amount.

      Section
      8.26.          Accounts
        Receivable.     All accounts
      receivable of JMS are reflected

17

 

      properly on its books and records have
      been accounted for consistently in accordance with GAAP, are valid
      receivables subject to no set-offs or counterclaims, are current and
      collectible, and will be collected in accordance with their terms at their
      recorded amounts, within 90 days of the Closing Date.

Section 8.27.         Employee
        Benefits and ERISA.

(a)          Schedule
8.27  hereto sets
          forth a complete and correct list of all Benefit Plans (as defined in
          Section 8.27(k) below).

(b)          JMS and Parent have delivered
          to Buyer complete and accurate copies of: all plan texts and other
          agreements adopted in connection with each Benefit Plan; all summary
          plan descriptions and other material employee communications relating
          thereto; and the most recent annual report and financial statement (or
          similar report) therefor, if any. JMS and Parent do not currently
          maintain, and in the past has not maintained any employee retirement,
          profit-sharing, stock bonus, deferred compensation, group insurance
          plans or other employee benefit or welfare plan in which employees of
          JMS participated, other than as set forth on Schedule 8.27 hereto.

(c)          No event has occurred
          relating, directly or indirectly, to the Benefit Plans in connection
          with which JMS, Parent or any Benefit Plan, directly or indirectly,
          would be subject to any liability under ERISA, including, but not
          limited to, Section 409, 502(i), 4062, 4063, 4064, 4069, 4201, 4244 or
          4243 thereof, the Internal Revenue Code of 1986, as amended (the
          "Code"), including, but not limited to, Section 4971
          thereof, or any other applicable law. No "prohibited
          transaction" (as defined in Section 4975 of the Code) and no
          "reportable event" (as defined in Section 4043(b) of ERISA)
          has occurred with respect to any Benefit Plan prior to the date
          hereof.

(d)          With respect to each Benefit
          Plan: (i) full payment of all amounts which JMS or Parent is or has
          been required to pay under the terms of each such plan to have paid as
          contributions to such plan has been made; (ii) no accumulated funding
          deficiency (as defined in Section 302 of ERISA and Section 412 of the
          Code), whether or not waived, exists with respect to any such plan;
          (iii) except as provided in Schedule 8.27 hereto, in all material
          respects, each such plan conforms to, and its administration is in
          compliance with, all applicable laws and regulations, including, but
          not limited to ERISA; and (iv) there are not actions, suits or claims
          pending (other than routine claims for benefits) or threatened against
          any such plan or against the assets of any such plan which could
          reasonably be expected to result in a liability.

(e)          No unpaid or contingent
          liability to the PBGC has been or is expected to be incurred, directly
          or indirectly, by JMS (other than for payment of PBGC premiums in the
          ordinary course). No event has occurred which presents a material risk
          of the termination or partial termination of any Pension Plan, which
          would result, directly or indirectly, in a liability on part of JMS.

(f)          Except as set forth on
          Schedule 8.27, there is no Benefit Plan which is a "welfare
          plan" (as defined in Section 3(a) of ERISA) and which provides
          medical, death or other benefits (whether or not insured) to employees
          beyond their retirement or other termination of service (other than (i)
          coverage mandated by statute and (ii) any such plan which provides a
          conversion privilege from group coverage to individual coverage upon
          retirement or separation from service).

18

 

(g)          Except as set forth on
          Schedule 8.27, there are no reserves, assets, surpluses or prepaid
          premiums under any Benefit Plan which is a welfare plan (as defined in
          Section 3(a) of ERISA).

(h)          There are no unfunded pension
          benefit obligations arising in any jurisdiction.

(i)          Except as set forth on
          Schedule 8.27, the consummation of the transactions contemplated by
          this Agreement will not (i) entitle any employee of JMS to severance
          pay, unemployment compensation or similar payment, or (ii) accelerate
          the time of payment, vesting, or increase the amount of any
          compensation due to any employee or JMS.

(j)          Neither JMS nor Parent has
          contributed to or become obligated to contribute to any multi employer
          plan (as defined in Section 4001(a)(3) of ERISA) with respect to any
          employee of JMS.

(k)          Whenever any of the terms set
          forth below is used in this Section 8.27, it shall have the following
          meaning: (i) "Benefit Plan" shall mean any plan, agreement,
          arrangement or commitment which is an employment or consulting
          agreement, executive compensation plan, bonus plan, deferred
          compensation agreement, employee pension, profit-sharing, savings or
          retirement plan, employee stock option or stock purchase plan,
          severance pay plan or arrangement, vacation plan or practice, group
          like, health, or accident insurance or other employee benefit plan,
          agreement, arrangement or commitment which is an "employee
          benefit plan," as defined in Section 3(3) of ERISA, with respect
          to which JMS has some liability or obligation to contribution or pay
          benefits and which related to current or former employees of JMS: (ii)
          "ERISA" shall mean the Employee Retirement Income Security
          Act of 1974, as amended; (iii) "PBGC" shall mean the Pension
          Benefit Guaranty Corporation; and (iv) "Pension Plan" shall
          mean an employee pension benefit plan, as defined in Section 3(2) of
ERISA.
      
Section
      8.28.         SouthTrust
        Lien.      SouthTrust Bank,
      an Alabama banking corporation ("SouthTrust") holds a valid,
      perfected first priority security interest in the Purchased Assets (the
      "SouthTrust Lien"). The SouthTrust Lien secures a debt equal to
      approximately $9,691,000 as of the date hereof.

  Section
  8.29.         Customer
        Deposits.      Schedule 8.29 sets
  forth a complete list (the "Deposit List") of customer deposits
  collected by JMS through the date of this Agreement for which the ordered
  product has not yet been delivered to the customer. The Deposit List shall
  include, at a minimum, the customer’s name and address, the product ordered,
  the date the deposit was received and the amount of the deposit. Schedule 8.29
  shall be updated as of the Closing Date.

  ARTICLE 9

  REPRESENTATIONS
  AND

  
  
  COVENANTS
  OF BUYER

  

  Buyer warrants and
  represents to and covenants with JMS as follows:

19

 

      Section 
      9.1.         Organization,
        etc.      Buyer is a
      corporation, duly organized, validly existing and in good standing under
      the laws of Delaware and has all necessary corporate power and authority
      to enter into this Agreement and the transactions contemplated hereby.

      Section
      9.2.          No
        Violation.     The execution and
      delivery of this Agreement and the consummation of the transactions
      contemplated hereby do not and will not violate, conflict with or result
      in a breach of or default under any of the terms, provisions or conditions
      of the certificate of incorporation or by-laws of Buyer or any statute,
      regulation or any court or administrative order or process, or any
      agreement or instrument to which Buyer is a party or by which it, or its
      properties or assets is bound or result in the creation of any lien,
      charge or encumbrance upon any of the assets of Buyer under any of the
      foregoing.

  Section
  9.3.          Payment
        of Liabilities Assumed.     Buyer shall pay and
  discharge all the liabilities and obligations of JMS that are assumed
  hereunder, as outlined in Schedules 3.1(a) and 3.1(e) when and as the same
  shall become due and payable or dischargeable.

  ARTICLE 10

  INDEMNIFICATION

    
  

  Section
  10.1.          Indemnity
    by JMS and Parent.     JMS and Parent,
  jointly and severally, agree to indemnify and hold harmless Buyer, its
  officers, directors, stockholders, employees, representatives and agents, and
  their affiliates, successors and assigns (collectively, the "Buyer
  Indemnitees") from and against any material loss, damage or expense
  (including reasonable attorney's fees) suffered by any Buyer Indemnitee,
  resulting from

(a)          any inaccuracy or
      misrepresentation in or breach of any of the representations, warranties
      or covenants made by JMS or Parent herein or in any Schedule hereto;

(b)          any inaccuracy or
      misrepresentation in or breach of any certificate or other agreement or
      document required to be delivered by JMS or Parent pursuant to any
      provision of this Agreement;

(c)          any suit in which a Buyer
      Indemnitee is involved alone or in conjunction with JMS or Parent, and
      resulting directly or indirectly from the alleged failure of JMS to pay
      any of the alleged liabilities or obligations of JMS or to fulfill any
      alleged contractual obligation of JMS incurred prior to the Closing and
      not assumed by Buyer;

(d)          any claim, demand, administrative
      proceeding or suit against a Buyer Indemnitee arising out of or related to
      the business or operations or any action or omission of JMS or any of its
      officers, directors, stockholders, employees, representatives, agents or
      any of their affiliates, including, without limitation, any tort claim or
      demand and any claim or liability arising out of the manufacture or sale
      of products or the performance of services by JMS (other than the
      liability for which has been assumed by Buyer); provided, however, that,
      with respect to products and services constituting a part of The Acquired
      Business purchased by Buyer, the acts, deeds, omissions or contractual
      undertakings giving rise to such claim, demand or liability were acts,
      deeds, omissions or contractual undertakings by JMS which shall have
      transpired, occurred

20

 

or been done, performed or omitted prior to the
      Effective Time.

  Section
  10.2.          Notification
    to JMS and Parent and Related Matters.     Upon obtaining
  knowledge thereof, Buyer shall promptly notify JMS in writing (which notice
  shall constitute notice to Parent) of any claim of loss, damage or expense
  which Buyer has determined has given or reasonably may give rise to a right of
  indemnification under this Agreement and shall specify details thereof,
  without regard to whether the amount of any loss, damage or expense has been
  finally determined, and JMS and Parent shall have a reasonable time to contest
  any such claim. If such claim or demand relates to a claim or demand by a
  third party against Buyer, JMS and Parent shall have the right to settle any
  such claim or demand (at JMS’ or Parent’s expense and without admitting
  that Buyer had any liability with respect thereto) or to employ counsel
  reasonably acceptable to Buyer to defend any such claim or demand asserted
  against Buyer and Buyer shall have the right to cooperate in the defense of
  any such claim with counsel of Buyer’s selection (the expense of which
  additional counsel to be borne by Buyer). So long as JMS and Parent are
  defending in good faith any such claim or demand, Buyer will not settle such
  claim or demand. Buyer shall make available to JMS, Parent or their respective
  representatives, at JMS’ and Parent’s expense, all records and other
  materials required by them for their use in contesting any such claim or
  demand asserted by a third party against Buyer. Whether or not JMS or Parent
  so elect to defend any such claim or demand, Buyer shall have no obligation to
  do so. If such claim or demand relates to a claim or demand other than one
  asserted by a third party against Buyer, Buyer shall promptly notify JMS
  (which notice shall constitute notice to Parent) of Buyer’s claim or demand
  against JMS or Parent and of Buyer’s demand for indemnification hereunder.
  JMS shall then promptly pay to Buyer the amount of Buyer’s claim or demand,
  if undisputed. In the event that JMS or Parent shall dispute such claim or
  demand or any portion thereof, JMS or Parent shall immediately notify Buyer in
  writing, specifying in detail the portion of such claim or demand (if less
  than all) which is disputed and the facts relied upon by JMS or Parent as a
  basis for such dispute. JMS, Parent and Buyer agree to negotiate in good faith
  to attempt to reach a resolution of any disputed claim or demand for
  indemnification hereunder in order to attempt to avoid resorting to
  arbitration as provided by this Agreement.

  Section
  10.3.         Indemnity
    by Buyer.      Buyer agrees to
  indemnify and hold harmless JMS, Parent, their respective officers, directors,
  stockholders, employees, representatives and agents, and their affiliates (the
  "JMS Indemnitees") from and against any material loss, damage or
  expense (including reasonable attorneys' fees) suffered by the JMS Indemnitees
  resulting from

(a)          any inaccuracy in or
      misrepresentation in or breach of any of the representations, warranties
      or covenants made by the Buyer herein or in any schedule hereto;

(b)          any inaccuracy or
      misrepresentation in or breach of any certificate or other agreement or
      document required to be delivered by Buyer pursuant to any provision of
      this Agreement;

(c)          any suit in which JMS or an JMS
      Indemnitee is involved alone or in conjunction with Buyer, and resulting
      directly or indirectly from alleged failure of Buyer to pay any of the
      alleged liabilities or obligations of Buyer or to fulfill any alleged
      contractual obligation of Buyer arising following the Closing or expressly
      assumed by Buyer; provided, however, that neither JMS nor any JMS
      Indemnitee shall be entitled to assert any rights of indemnification
      hereunder to the extent that JMS has retained such liability; or

21

 

(d)          any claim, demand, administrative
      proceeding or suit against JMS Indemnitee arising out of or related to the
      business or operations or any action or omission of Buyer or any of its
      officers, directors, stockholders, employees, representatives, agents or
      any of their affiliates, including, without limitation, any tort claim or
      demand and any claim or liability arising out of the manufacture or sale
      of products or the performance of services by Buyer (other than a
      liability of JMS which has not been expressly assumed by Buyer); provided,
      however, that, with respect to products and services constituting a part
      of The Acquired Business purchased by Buyer, the acts, deeds, omissions or
      contractual undertakings giving rise to such claim, demand or liability
      were acts, deeds, omissions or contractual undertakings by Buyer which
      shall have transpired, occurred or been done, performed or omitted after
      the Effective Time.

  Section
  10.4.         Notification
    to Buyer.      Upon obtaining
  knowledge thereof, JMS or Parent shall promptly notify Buyer of any claim or
  demand which JMS or Parent has determined has given or reasonably may give
  rise to a right of indemnification under this Agreement and Buyer shall have a
  reasonable time to contest any such claim. If such claim or demand relates to
  a claim or demand asserted by a third party against JMS or Parent, Buyer shall
  have the right to settle any such claim or demand (at the expense of Buyer and
  without admitting that JMS or Parent had any liability with respect thereto)
  or to employ counsel reasonably acceptable to JMS or Parent to defend any such
  claim or demand asserted against JMS or Parent, and JMS or Parent shall have
  the right to cooperate in the defense of any such claim with counsel of JMS’
  or Parent’s selection (the expense of which additional counsel to be borne
  by JMS or Parent). So long as Buyer is defending in good faith any such claim
  or demand, neither JMS nor Parent will settle such claim or demand. JMS and
  Parent shall make available to Buyer or its representatives, at the expense of
  Buyer all records and other materials required by them for their use in
  contesting any such claim or demand asserted by a third party against JMS or
  Parent. Whether or not Buyer so elects to defend any such claim or demand, JMS
  and Parent shall have no obligation to do so. If such claim or demand relates
  to a claim or demand other than one asserted by a third party against JMS or
  Parent, JMS and Parent shall promptly notify Buyer of JMS’ or Parent’s
  claim or demand against Buyer and of JMS’ and Parent’s demand for
  indemnification hereunder. Buyer shall then promptly pay to JMS or Parent, as
  appropriate, the amount of JMS’ or Parent’s claim or demand, if
  undisputed. In the event that Buyer shall dispute such claim or demand or any
  portion thereof, Buyer shall immediately notify JMS and Parent in writing
  specifying in detail the portion of such claim or demand (if less than all)
  which is disputed and the facts relied upon by Buyer as a basis for such
  dispute. JMS, Parent and Buyer agree to negotiate in good faith to attempt to
  reach a resolution of any disputed claim for indemnification hereunder in
  order to attempt to avoid resorting to a court of competent jurisdiction for
  such resolution.

  Section
  10.5.          Right of
    Offset Against Amounts Due JMS and Parent.     JMS and Parent agree
  to pay promptly in accordance with Section 10.2 above the amount which JMS and
  Parent may owe to Buyer from time to time by reason of the provisions of this
  Agreement or otherwise. Should JMS fail or refuse to pay any such amount
  promptly as set forth herein, then Buyer, at its election, may elect to offset
  any amount thus due and owing against any amounts which may be due to be paid
  pursuant to any other provision hereof, including, without limitation, the
  Reserve Amount.

22

 

  ARTICLE 11
  

  SURVIVAL
  OF REPRESENTATIONS AND WARRANTIES OF JMS
  

  

  All representations,
  warranties, covenants and obligations in this Agreement and the Schedules
  hereto shall survive the closing and shall continue in full force and effect
  for the benefit of Buyer in accordance with the terms thereto, notwithstanding
  the closing or any investigation by Buyer prior thereto, and shall terminate
  on the third anniversary of the Closing Date; provided, however, the
  representations and warranties contained in Sections 8.12, 8.13 and 8.27 shall
  continue for the period of the statute of limitations related to the subject
  thereof.

  
  

  ARTICLE 12

  CONDITIONS
  TO CLOSING APPLICABLE TO BUYER
  

  The obligations of
  Buyer hereunder (including the obligation of Buyer to close the transactions
  and consummate the purchase herein contemplated) are subject to the following
  conditions precedent:

      Section
      12.1.         Correctness
        of Warranties, etc.      The warranties
      and representations made by JMS and Parent herein or in any Schedules or
      list or information required to be delivered pursuant hereto shall be true
      and correct in all material respects on and as of the Closing Date with
      the same effect as if such warranties and representations had been made on
      and as of the Closing Date and JMS and Parent shall have in all material
      respects, performed and complied with all agreements, covenants and
      conditions on their parts required to be performed or complied with on or
      prior to the Closing Date.

      Section
      12.2.         No
        Undisclosed Liabilities, etc.      On the Closing
      Date, JMS shall not have any material liability of any nature, whether
      accrued, absolute, contingent or otherwise, relating to The Acquired
      Business (of the types which would be reflected in balance sheets or the
      notes thereto prepared in accordance with generally accepted accounting
      principles) other than those disclosed in the Interim Balance Sheet and
      Schedule hereto, those incurred in the ordinary course of its business
      since the date of the Interim Balance Sheet, and those agreed to in
      writing by Buyer.

      Section
      12.3.         No
        Proceedings.      No proceeding or
      formal investigation shall have been commenced by any governmental or
      regulatory agency or by any other person or entity with respect to any of
      the transactions contemplated by this Agreement.

      Section
      12.4.          Satisfaction
        of Buyer and its Counsel.     All proceedings
      to be taken in connection with the consummation of the transactions
      contemplated by this Agreement, and all documents incident thereto, shall
      be reasonably satisfactory in form and substance to Buyer and its counsel,
      and Buyer and its counsel shall have received copies of such documents as
      its counsel may reasonably request in connection with said transactions.

      Section
      12.5.         Opinion
        of Counsel.      At the closing
      there shall be delivered to Buyer the written opinion of Kilpatrick
      Stockton, LLP, counsel for JMS and Parent, dated the Closing Date. Such
      opinion shall be acceptable to Buyer and its counsel.

23

 

      Section
      12.6.         Consents.      In the case of
      those properties, franchises, agreements, leases, contracts or other
      rights or commitments of JMS and to be assumed by Buyer which are not
      transferable or assignable to Buyer or cannot be purchased or assigned by
      Buyer pursuant to this Agreement without the consent of another party,
      there shall have been delivered to Buyer the written consent of such party
      to such transfer and assignment to Buyer and assumption by Buyer pursuant
      to this Agreement.

Section
12.7.          Employment
        and Noncompetition Agreements.

(a)          JMS and Parent shall assign to
          Buyer all existing noncompetition agreements with those persons set
          forth on Schedule 12.7(a), and will terminate any existing employee
          agreements with such persons.

(b)          Buyer shall have entered into
          Noncompetition Agreements and employment arrangements with those
          persons listed on Schedule 12.7(b) in forms acceptable to Buyer.
      
Section
      12.8.         Manufacturing
        Agreement.       Buyer shall have
      entered into a manufacturing agreement with ESCO Manufacturing,
      Incorporated in a form acceptable to Buyer.

      Section
      12.9.          Release
        of Liens.     Any and all liens
      with respect to the Purchased Assets shall have been released, and
      SouthTrust shall have consented in writing to the transfer of the
      Purchased Assets to Buyer.

Section
12.10.          Bankruptcy.       (a)     Neither Parent
  nor JMS shall have filed a petition for bankruptcy protection or be adjudged
  bankrupt or insolvent under any applicable federal or state bankruptcy or
  insolvency law, nor shall a receiver or trustee be appointed for all or
  substantially all of the assets of JMS or Parent.

  
(b)          Buyer shall have
  received from Raymond James & Associates, Inc. ("Raymond James")
  a letter setting forth (i) that Raymond James marketed The Acquired Business
  in a manner consistent with customary industry practice and (ii) Buyer’s
  offer embodied in this Agreement constitutes the highest and best offer
  received by Raymond James that was reasonably determined to be able to be
  consummated within a reasonable time.

 ARTICLE 13

CONDITIONS
  TO CLOSING APPLICABLE TO JMS AND PARENT
  
  
The obligations of
  JMS and Parent hereunder (including the obligation of JMS and Parent to close
  the transactions herein contemplated) are subject to the following conditions
  precedent:

      Section
      13.1.          Correctness
        of Warranties, etc.     All warranties
      and representations made by Buyer herein shall be true and correct in all
      material respects on and as of the Closing Date with the same effect as if
      such warranties and representations had been made on and as of the Closing
      Date, and Buyer shall have, in all material respects, performed and
      complied with all agreements, covenants and conditions on its part
      required to be performed or complied with on 

24

 

 
 or prior to the Closing Date.

      Section
      13.2.          No
        Proceedings.     No proceeding or
      formal investigation shall have been commenced by any governmental or
      regulatory agency or by any other person or entity with respect to any of
      the transactions contemplated in this Agreement.

  Section
  13.3.         Satisfaction
        of JMS and its Counsel.      All proceedings to be
  taken in connection with the consummation of the transactions contemplated by
  this Agreement, and all documents incident thereto, shall be reasonably
  satisfactory in form and substance to JMS and its counsel, and JMS and its
  counsel shall have received copies of such documents as its counsel may
  reasonably request in connection with said transactions.

  
  ARTICLE 14
  

  BROKERS
  

  The parties hereto
  agree that this Agreement was not induced or procured through any person, firm
  or corporation acting as a broker or finder, other than Raymond James &
  Associates, Inc., whose fee shall be at the expense of JMS and not Buyer.
  Buyer, on the one hand, and JMS and Parent, on the other, agree to hold each
  other harmless from any loss, damage or expense resulting from any claim by
  any other person, firm or corporation based upon any such other person, firm
  or corporation having acted as a broker or finder for or in connection with
  this transaction on behalf of Buyer on the one hand, or on behalf of JMS and
  Parent on the other.

 ARTICLE 15
  

  MISCELLANEOUS

    
    
Section
    15.1.         
    Termination.      JMS or Parent may
    terminate this Agreement prior to the Closing Date if the Buyer has not
    satisfied those conditions to closing set forth in Article 13 hereof on or
    prior to the close of business on November 21, 2001. Buyer may terminate
    this Agreement prior to the Closing Date if (i) JMS and Parent have not
    satisfied those conditions to closing set forth in Article 12 hereof on or
    prior to the close of business on November 21, 2001, or (ii) JMS or Parent
    files a petition for bankruptcy protection or either is adjudged bankrupt or
    insolvent under any applicable federal or state bankruptcy or insolvency
    laws, or if a receiver or trustee is appointed for all or substantially all
    of the respective assets of JMS or Parent.

    Section
    15.2.         Notices.      Unless otherwise
    notified in writing to the contrary, any notice required or permitted by the
    terms hereof to be given any party hereto shall be effectively delivered for
    all purposes if delivered personally or if mailed, upon deposit in the
    United States mail, postage prepaid, and if directed to JMS or Parent,
    properly addressed to Parent at Display Technologies, Inc., 201 McCullough
    Drive, Suite 220, Charlotte, North Carolina 28262, Attention: Bill Lunsford
    with copy thereof addressed and mailed to Kilpatrick Stockton, LLP,
    Attention: Larry Ledbetter, and if directed to Buyer properly addressed to
    J.M. Stewart Acquisition, Inc., c/o EBSCO Industries, Inc. at 5724 Highway
    280 East, Birmingham, Alabama 35242, Attention: President or Chief Financial
    Officer, with a copy thereof addressed and mailed to Bradley Arant Rose
    & White LLP, 2001 Park Place, Suite 1400, Birmingham, Alabama 35203,
    Attention: Denson N. Franklin III.

    Section
    15.3.         Governing
      Law; Arbitration.      This Agreement
    shall be governed in

25

 

    all respects in conformity with the intent of the
    parties as expressed in the provisions of this Agreement. To the extent any
    issue between the parties is not controlled by this Agreement, then any
    dispute between the parties shall be governed and construed in accordance
    with the laws of the State of Alabama, without regard to its choice of law
    principles. UNLESS THIS AGREEMENT SPECIFICALLY PROVIDES FOR ANOTHER TYPE OF
    DISPUTE RESOLUTION WITH RESPECT TO A PARTICULAR KIND OF DISPUTE, ANY AND ALL
    CONTROVERSIES AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
    THE BREACH THEREOF, SHALL BE SETTLED BY FINAL AND BINDING ARBITRATION IN
    ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
    ASSOCIATION THEN IN EFFECT. Any such arbitration proceedings shall be and
    remain confidential. The panel of arbitrators for any such arbitration shall
    consist of three members of the American Arbitration Association, one of
    whom shall be selected by Buyer, one of whom shall be selected by JMS, and
    the third who will be selected by the other two. Judgment upon the decision
    rendered by the arbitrators may be entered in any court having jurisdiction
    thereof. The parties specifically acknowledge that this Agreement evidences
    a transaction involving, affecting, affected by, and a part of, interstate
    commerce and that this agreement to arbitrate is governed by and enforceable
    under 9 U.S.C. §§ 1 et seq. The place of arbitration shall be
    Birmingham, Alabama.

    Section
    15.4.         Captions.      The captions and
    other headings contained in this Agreement as to the contents of particular
    articles, sections, paragraphs or other subdivisions contained herein are
    inserted for convenience of reference only and are in no way to be construed
    as part of this Agreement or as limitations on the scope of the particular
    articles, sections, paragraphs or other subdivisions to which they refer and
    shall not affect the interpretation or meaning of this Agreement.

    Section
    15.5.         Incorporation
      of Schedules. This Agreement
    shall be deemed to have incorporated by reference all of the Schedules
    referred to herein to the same extent as if such Schedules were fully set
    forth herein. Each reference herein to "the Agreement" or
    "this Agreement" shall be construed to include each such Schedule.

    Section
    15.6.         Entire
      Agreement and Amendment.      This Agreement and
    the Schedules attached hereto and additional documents and agreements
    delivered by the parties at the closing on the Closing Date represent the
    entire understanding and agreement between the parties with respect to the
    subject matter hereof and shall supersede any prior agreements and
    understanding between the parties with respect to that subject matter. This
    Agreement may not be amended or modified except by a written instrument
    executed by an officer of Buyer, and an officer of JMS and Parent.

    Section
    15.7.          Successors
      and Assigns; No Third-Party Rights.     This Agreement may
    not be assigned by JMS or Parent without the written consent of Buyer. This
    Agreement shall bind and inure to the benefit of and be enforceable by the
    parties hereto, and their respective successors, heirs, and personal and
    legal representatives, but no assignment shall relieve any party of its
    obligations hereunder. Nothing expressed or referred to in this Agreement
    will be construed to give any person other than the parties to this
    Agreement any legal or equitable right, remedy or claim under or with
    respect to this Agreement or any provision of this Agreement. This Agreement
    and all of its provisions and conditions are for the sole and exclusive
    benefit of the parties to this Agreement and their Successors and assigns.

26

 

Section
15.8.         Counterparts.      This Agreement may be
executed simultaneously and in any number of counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

27

 

IN WITNESS WHEREOF,
JMS, Parent and Buyer have each caused this Agreement to be duly executed on
their respective behalves by their respective duly authorized officers, all as
of the day and year first above written.

	   	

J. M. STEWART
CORPORATION

By

Its

 

DISPLAY TECHNOLOGIES,
INC.

By

Its

 

J.M. STEWART
ACQUISITION, INC.

By

Its<PAGE>

                            ASSET PURCHASE AGREEMENT

         This Asset Purchase Agreement (this "Agreement") is made as of this
26th day of November 2001, by and among Wire One Technologies, Inc., a Delaware
corporation ("Buyer"), Axxis, Inc., a Kentucky corporation ("Seller"), and the
shareholders of Seller named on the signature page hereof (each, a
"Shareholder", and collectively, the "Shareholders") (Seller and the
Shareholders are sometimes referred to individually as a "Seller Party", and
collectively as "Seller Parties").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain
of the assets, properties and rights owned by or used in the business and
operations conducted by Seller's "Technologies" division (collectively, the
"Business"), upon the terms and subject to the conditions set forth in this
Agreement;

         WHEREAS, the Business constitutes only a portion of Seller's
operations, and Seller will continue to operate the remainder of its business
after the Closing (as hereinafter defined); and

         WHEREAS, as consideration for such asset sale and purchase, (i) Buyer
desires to issue, and Seller desires to receive, shares of Buyer's common stock,
$0.0001 par value ("Common Stock") and the cash payments described herein, and
(ii) Buyer shall assume specified liabilities of Seller, upon the terms and
subject to the conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, agreements, representations, warranties, and covenants herein
contained, the parties hereby agree as follows:

                           1. Closing; Registration Rights; Allocation

                  1.1 Closing Date; Effective Date; Effective Time. The closing
(the "Closing") of the purchase and sale of the Assets contemplated hereby shall
be held on the date hereof (the "Closing Date") at the offices of counsel to
Buyer, Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103,
or such other location as may be mutually agreed upon by the parties.
Notwithstanding the foregoing, from and after the Closing, the purchase and sale
of the Assets shall be deemed to have occurred at 11:59 p.m. (the "Effective
Time") on September 30, 2001 (the "Effective Date").

                  1.2 Sale of Assets. At the Closing, Seller shall sell to
Buyer, free and clear of all liens, mortgages, security interests, encumbrances,
pledges, charges, restrictions on transfer, or adverse claims (collectively,
"Liens"), and Buyer shall buy from Seller, all of Seller's right, title and
interest in the assets used in, or necessary for the operation of, the Business
(the "Assets") that are not Excluded Assets (as hereinafter defined), including,
without limitation, the following:

<PAGE>

                  (a) the right to bill customers of Seller for work performed
(but not yet billed) by Seller as part of the Business, on all jobs in progress
on the Effective Date based upon the terms of the agreements identified on
Schedule 2.9(a) (the "In-Progress Jobs"), which In-Progress Jobs include the
"backlog jobs" identified on Schedule 1.2(a)-1 and the net underbilling
receivables set forth in the last column of the chart set forth on Schedule
1.2(a)-2 (the "Underbilling Receivables");

                  (b) Seller's entire right, title and interest in, to and under
all In-Progress Jobs;

                  (c) all accounts receivable, and all notes and other
negotiable instruments and rights to receive payment, generated in the conduct
of the Business on or after the Effective Date, all of which are identified on
Schedule 1.2(c) (the "Post-Effective Date Receivables");

                  (d) Seller's inventory to be used to satisfy Seller's
obligations under In-Progress Jobs, as specified on Schedule 1.2(d);

                  (e) the vehicles of Seller specified on Schedule 1.2(e);

                  (f) the office furniture, warehouse equipment, office and
computer equipment technical equipment, media room equipment, demonstration
equipment, hardware, fixtures, office supplies and other tangible property and
any related documentation and user materials, and Seller's rights under all
related warranties, specified on Schedule 1.2(f);

                  (g) the leasehold interests of Seller specified on Schedule
1.2(g);

                  (h) all goodwill of the Business as a going concern;

                  (i) all rights of Seller under express or implied warranties
from suppliers or contractors with respect to the Assets;

                  (j) all claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind arising out of the Assets or the
Business;

                  (k) all existing business and marketing records related to the
Business, including accounting and operating records, asset ledgers, inventory
records, budgets, databases, event calendars, information and data respecting
leased or owned equipment, files, books, correspondence and mailing lists,
creative, promotional and advertising materials and brochures, and other
business records;

                  (l) all media, including, without limitation disks, tapes and
compact discs, and other tangible property necessary for the transfer of the
Assets from Seller to Buyer pursuant to the terms and conditions of this
Agreement; and

                  (m) all purchase or service orders of the Business taken by
Seller and not fulfilled as of the Effective Date (which are identified on
Schedule 2.9(a)).

                  1.3 Documentation of Sale. The sale and delivery of the Assets
shall be effected by:

                                        2
<PAGE>

                  (a) a Bill of Sale and Assignment in substantially the form of
Exhibit A (the "Bill of Sale");

                  (b) an Assumption Agreement in substantially the form of
Exhibit B (the "Assumption Agreement");

                  (c) a Power of Attorney in favor of Buyer in substantially the
form of Exhibit C (the "Power of Attorney"); and

                  (d) such deeds, endorsements, assignments and other
instruments of transfer and conveyance, agreements, and documents reasonably
satisfactory in form and substance to Buyer and its counsel as may be requested
by Buyer.

                  1.4 No Other Liabilities or Obligations Assumed. Schedule 1.4
sets forth the liabilities of Seller to be assumed by Buyer upon the Closing
(the "Assumed Liabilities"), which Assumed Liabilities Buyer hereby assumes and
agrees to pay when due. Except as specifically set forth in Schedule 1.4, Buyer
expressly does not, and shall not, assume or be deemed to have assumed under
this Agreement or by reason of any transaction contemplated hereunder or
otherwise, any debts, liabilities (contingent or otherwise) or obligations of
Seller or the Business of any nature whatsoever, whether the same are direct or
indirect, fixed or contingent, or known or unknown, whether arising under an
agreement or contract or otherwise. Notwithstanding any other provision of this
Agreement, the Assumed Liabilities shall not include:

                  (a) any debts, liabilities (contingent or otherwise) or
obligations of Seller with respect to those Assumed Liabilities referred to in
this Section 1.4 arising out of any contract, agreement, commitment or lease (i)
required to be listed but not listed on Schedule 1.4 hereto regardless of any
knowledge thereof on the part of Buyer or (ii) the benefits of which are not
validly assigned to Buyer;

                  (b) any liabilities or obligations of Seller (whether direct
or indirect, contingent or otherwise) arising (i) under or in connection with
any Employee Benefit Plan (as hereinafter defined) or (ii) under Title IV or
Section 302 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), Section 412 of the Internal Revenue Code of 1986, as amended (the
"Code") or Section 4980B of the Code; or

                  (c) except as specifically set forth in Schedule 1.4, any
liabilities or obligations of Seller with respect to accounts payable and
payment obligations incurred in the conduct of the Business through and
including the Closing Date.

                  1.5 Purchase Price; Payment.

                  (a) Purchase Price. The consideration to be paid by Buyer for
the Assets shall consist of the following elements:

                           (i) 320,973 shares of Common Stock to be issued at
         Closing (the "Shares"), such number of shares being equal to the
         integral number of shares of Common Stock (rounded up to the nearest
         share) that may be purchased for TWO MILLION FIFTY ONE THOUSAND
         SEVENTEEN DOLLARS ($2,051,017) (the "Stock Purchase Price") at a price
         per share of $6.39 (the "Per Share Price"), such Per Share Price being
         equal to the closing sales price of Buyer's Common Stock on the Nasdaq
         National Market on November 19, 2001;

                                       3
<PAGE>

                           (ii) All expenses of the Business paid by Seller in
         the ordinary course of business consistent with past custom and
         practice after the Effective Time and through and including the Closing
         Date and all cash relating to Post-Effective Date Receivables (as
         hereinafter defined) and Underbilling Receivables collected during such
         period shall be calculated (the definitive calculation of such sum is
         referred to herein as the "Adjustment"). At the Closing, based upon the
         estimate of the Adjustment calculated on Exhibit D hereto (the
         "Estimated Adjustment"), to the extent such expenses exceed such cash,
         Buyer shall pay Seller such excess in cash, and to the extent such
         expenses are less than such cash, Seller shall pay Buyer such
         deficiency in cash, subject to increase or decrease after the Closing
         pursuant to Section 1.6 of this Agreement;

                           (iii) Buyer's assumption of the Assumed Liabilities;
         and

                           (iv) The payment to Seller of $4,776.50 in cash on or
         before the first day of each of the 18 consecutive months beginning
         with December 1, 2001 and continuing through May 1, 2003.

                  (b) Delivery of Shares. At the Closing, Buyer shall:

                           (i) deliver to the Seller a certificate representing
         272,827 (approximately 85%) of the Shares; and

                           (ii) deliver to Fulbright & Jaworski L.L.P., as
         escrow agent (the "Escrow Agent"), a certificate representing 48,146
         (approximately 15%) of the Shares (the "Escrowed Shares"), to be held
         in escrow to secure Seller Parties' indemnification obligations under
         this Agreement pursuant to the terms of an Escrow Agreement ("Escrow
         Agreement") substantially in the form of Exhibit E.

                  (c) Registration of the Shares.

                           (i) Buyer shall:

                                    (A) as soon as practicable after the
         Closing, prepare and file with the Securities and Exchange Commission
         (the "SEC") a registration statement on Form S-3 (the "Registration
         Statement") relating to the resale of the Shares by Seller;

                                    (B) use its reasonable best efforts, subject
         to receipt of necessary information from Seller, to cause the SEC to
         declare the Registration Statement effective as promptly as practicable
         after the Registration Statement is filed by Buyer;

                                    (C) promptly prepare and file with the SEC
         (and provide notice to Seller of any such filing) such amendments and
         supplements to the Registration Statement and the prospectus used in
         connection therewith as may be necessary to keep the Registration
         Statement effective until the earlier of (1) the date all of the Shares
         covered by the Registration Statement have been sold by Seller, or (2)
         the date that is the second anniversary of the Closing Date;

                                       4
<PAGE>

                                    (D) furnish to Seller such number of copies
         of prospectuses as Seller may reasonably request in order to facilitate
         the public sale or other disposition by Seller pursuant to the
         Registration Statement of all or any of the Shares owned by Seller;

                                    (E) notify each holder of Shares covered by
         such Registration Statement at any time when a prospectus relating
         thereto is required to be delivered under the Securities Act of 1933,
         as amended (the "Securities Act"), of the happening of any event as a
         result of which the prospectus included in such Registration Statement,
         as then in effect, includes an untrue statement of a material fact or
         omits to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances then existing. Buyer will use reasonable best efforts
         to amend or supplement such prospectus in order to cause such
         prospectus not to include any untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances then existing; provided, however, that Buyer, in good
         faith, may delay the filing of any such amendment or supplement for a
         reasonable period of time in order to permit Buyer (1) to effect
         disclosure or disposition or consummation of any transaction requiring
         confidential treatment which is being actively pursued at such time and
         which would require disclosure in the Registration Statement or (2) to
         negotiate, effect or complete any transaction which Buyer reasonably
         believes might be jeopardized, delayed or made more costly to Buyer by
         disclosure in the Registration Statement; and

                                    (F) bear all expenses in connection with the
         procedures in paragraphs (A) through (E) of this Section 1.5(c)(i) and
         the registration of the Shares pursuant to the Registration Statement,
         other than fees and expenses, if any, of counsel and other advisers to
         Seller or underwriting discounts, brokerage fees and commissions
         incurred by Seller, if any.

                           (ii) (A) Notwithstanding the generality of the
         foregoing clauses, Seller agrees that upon notice from Buyer at any
         time or from time to time during the time the prospectus relating to
         the Shares covered by the Registration Statement and proposed to be
         sold by Seller is required to be delivered under the Securities Act of
         the happening of any event as a result of which, in Buyer's opinion,
         the prospectus included in the Registration Statement, as then in
         effect, includes an untrue statement of a material fact or omits to
         state a material fact required to be stated therein or necessary to
         make the statements therein not misleading in light of the
         circumstances then existing, Seller will forthwith discontinue Seller's
         disposition of such Shares pursuant to the Registration Statement until
         the time of Seller's receipt of a supplement to or an amendment of such
         prospectus as may be necessary so that, as thereafter delivered to the
         purchaser of such Shares, such prospectus shall not include, in Buyer's
         opinion, an untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading in light of the circumstances then
         existing.

                                       5
<PAGE>

                                    (B) Seller shall furnish Buyer such
         information regarding Seller and the distribution of the Shares covered
         by the Registration Statement as Buyer may from time to time reasonably
         request in writing.

                                    (C) Seller agrees to give at least two (2)
         Business Days' (as hereinafter defined) prior written notice to Buyer
         of any proposed sale of the Shares pursuant to the Registration
         Statement that would occur more than ten (10) Business Days after the
         effective date of the Registration Statement and not to make such sale
         (I) unless such two (2) Business Days elapse without response from
         Buyer, or (II) in the event Buyer sends Seller written notice stating
         that an amendment to the Registration Statement or supplement to the
         prospectus must be filed in accordance with the second sentence of
         Section 1.5(c)(i)(E), until Buyer notifies Seller that the Registration
         Statement has been amended or the prospectus supplemented as required;
         provided, however, that Buyer agrees to file such amendment or
         supplement promptly upon the resolution of the disclosure issue
         necessitating such delay, or, in any event, not more than thirty (30)
         days after receipt of Buyer's written notice.

                           (iii) Buyer will use its commercially reasonable
         efforts to cause the Shares covered by and to be sold pursuant to the
         Registration Statement to be listed on any securities exchanges or
         markets on which shares of Common Stock are then listed.

                           (iv) (A) In the event of a registration of any of the
         Shares under the Securities Act pursuant to this Section 1.5(c), Buyer
         will, to the extent permitted by applicable law, indemnify and hold
         harmless Seller against all losses, claims, damages or liabilities to
         which Seller may become subject under the Securities Act, the
         Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
         other federal or state statutory law or regulation, or at common law or
         otherwise (including in settlement of any litigation, if such
         settlement is effected with the written consent of Buyer), insofar as
         such losses, claims, damages or liabilities (or actions in respect
         thereof) arise out of or are based upon any untrue statement or alleged
         untrue statement of any material fact contained in the Registration
         Statement, including the prospectus, financial statements and
         schedules, and all other documents filed as a part thereof, as amended
         at the time of effectiveness of the Registration Statement, including
         any information deemed to be a part thereof as of the time of
         effectiveness pursuant to paragraph (b) of SEC Rule 430A, or pursuant
         to SEC Rule 434, or the prospectus, in the form first filed with the
         SEC pursuant to SEC Rule 424(b), or filed as part of the Registration
         Statement at the time of effectiveness if no Rule 424(b) filing is
         required, or any amendment or supplement thereto, or arise out of or
         are based upon the omission or alleged omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading, and will reimburse Seller for any
         legal or other expenses reasonably incurred by Seller in connection
         with investigating, defending, settling, compromising or paying any
         such loss, claim, damage, liability or action; provided, however, that
         Buyer will not be liable in any such case if and to the extent that any
         such loss, claim, damage or liability arises out of or is based upon an
         untrue statement or alleged untrue statement or omission or alleged
         omission so made in conformity with information furnished in writing by
         Seller specifically for use in such Registration Statement. For
         purposes of this Section 1.5(c)(iv), the term "Registration Statement"
         shall include any final prospectus, exhibit, supplement or amendment
         included in or relating to, and any document incorporated by reference
         in, the Registration Statement referred to in Section 1.5(c)(i).

                                       6
<PAGE>

                                    (B) Seller will, to the extent permitted by
         applicable law, indemnify and hold harmless Buyer, each person, if any,
         who controls Buyer within the meaning of the Securities Act, each
         officer of Buyer who signs the Registration Statement and each director
         of Buyer, against all losses, claims, damages or liabilities, joint or
         several, to which Buyer or such officer or director may become subject
         under the Securities Act, the Exchange Act or any other federal or
         state statutory law or regulation, or at common law or otherwise
         (including in settlement of any litigation, if such settlement is
         effected with the written consent of Seller), insofar as such losses,
         claims, damages or liabilities (or actions in respect thereof) arise
         out of or are based upon any untrue statement or alleged untrue
         statement of any material fact contained in the Registration Statement
         or any amendment or supplement thereof, or arise out of or are based
         upon the omission or alleged omission to state therein a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, and will reimburse Buyer and each such officer,
         director, underwriter and controlling person for any legal or other
         expenses reasonably incurred by them in connection with investigating
         or defending any such loss, claim, damage, liability or action;
         provided, however, that Seller will be liable hereunder in any such
         case if and only to the extent that any such loss, claim, damage or
         liability arises out of or is based upon an untrue statement or alleged
         untrue statement of a material fact or omission or alleged omission of
         a material fact made in reliance upon and in conformity with
         information pertaining to Seller furnished in writing to Buyer by
         Seller specifically for use in the Registration Statement; and provided
         further, however, that the liability of Seller hereunder shall not in
         any event exceed the proceeds received from the sale of Seller's Shares
         covered by such Registration Statement.

                                    (C) Promptly after receipt by an indemnified
         party under this Section 1.5(c)(iv) of notice of the threat or
         commencement of any action, such indemnified party will, if a claim in
         respect thereof is to be made against an indemnifying party under this
         Section 1.5(c)(iv), promptly notify the indemnifying party in writing
         thereof; but the omission to so notify the indemnifying party will not
         relieve it from any liability which it may have to any indemnified
         party for contribution or otherwise than under the indemnity agreement
         contained in this Section 1.5(c)(iv) to the extent it is not prejudiced
         as a result of such failure. In case any such action is brought against
         any indemnified party and such indemnified party seeks or intends to
         seek indemnity from an indemnifying party, the indemnifying party will
         be entitled to participate in, and, to the extent that it may wish,
         jointly with all other indemnifying parties similarly notified, to
         assume the defense thereof with counsel reasonably satisfactory to such
         indemnified party; provided, however, if the defendants in any such
         action include both the indemnified party and the indemnifying party
         and the indemnified party shall have reasonably concluded that there
         may be a conflict between the positions of the indemnifying party and
         the indemnified party in conducting the defense of any such action or
         that there may be legal defenses available to it and/or other
         indemnified parties which are different from or additional to those
         available to the indemnifying party, the indemnified party or parties
         shall have the right to select separate counsel to assume such legal
         defenses and to otherwise participate in the defense of such action on
         behalf of such indemnified party or parties. Upon receipt of notice
         from the indemnifying party to such indemnified party of its election
         so to assume the defense of such action and approval by the indemnified
         party of counsel, the indemnifying party will not be liable to such
         indemnified party under this Section 1.5(c)(iv) for any legal or other
         expenses subsequently incurred by such indemnified party in connection
         with the defense thereof unless (1) the indemnified party shall have
         employed such counsel in connection with the assumption of legal
         defenses in accordance with the proviso to the preceding sentence (it
         being understood, however, that the indemnifying party shall not be
         liable for the expenses of more than one separate counsel, approved by
         such indemnifying party in the case of paragraph (A), representing all
         of the indemnified parties who are parties to such action) or (2) the
         indemnified party shall not have employed counsel reasonably
         satisfactory to the indemnifying party to represent the indemnified
         party within a reasonable time after notice of commencement of action,
         in each of which cases the reasonable fees and expenses of counsel
         shall be at the expense of the indemnifying party.

                                       7
<PAGE>

                                    (D) In order to provide for just and
         equitable contribution to joint liability under the Securities Act in
         any case in which either (1) any indemnified party exercising rights
         under this Agreement makes a claim for indemnification pursuant to this
         Section 1.5(c)(iv) but it is judicially determined (by the entry of a
         final judgment or decree by a court of competent jurisdiction and the
         expiration of time to appeal or the denial of the last right of appeal)
         that such indemnification may not be enforced in such case
         notwithstanding the fact that this Section 1.5(c) provides for
         indemnification in such case, (2) contribution under the Securities Act
         may be required on the part of any such indemnified party in
         circumstances for which indemnification is provided under this Section
         1.5(c), or (3) the indemnification provided for by this Section 1.5(c)
         is insufficient to hold harmless an indemnified party, other than by
         reason of the exceptions provided therein, then, and in each such case,
         Buyer and Seller will contribute to the aggregate losses, claims,
         damages or liabilities to which they may be subject (after contribution
         from others) (x) in such proportion as is appropriate to reflect the
         relative fault of the indemnifying party on the one hand and the
         indemnified party on the other or (y) if the allocation provided by
         clause (x) above is not permitted by applicable law, or provides a
         lesser sum to the indemnified party than the amount hereinafter
         calculated, in such proportion as is appropriate to reflect not only
         the relative fault referred to in clause (x) above but also the
         relative benefits received by the indemnifying party and the
         indemnified party from the registration of the securities as well as
         the statements or omissions which resulted in such losses, claims,
         damages or liabilities and any other relevant equitable considerations.
         Seller will not be required to contribute any amount in excess of the
         proceeds received from the sale of its Shares covered by such
         Registration Statement and no person or entity guilty of fraudulent
         misrepresentation (within the meaning of Section 11(f) of the
         Securities Act) will be entitled to contribution from any person or
         entity who was not guilty of such fraudulent misrepresentation.

                                    (E) The obligations of the Buyer and Seller
         under this Section 1.5(c)(iv) shall survive completion of any offering
         of Shares pursuant to a Registration Statement and the termination of
         Buyer's obligations under Section 1.5(c)(i). No indemnifying party, in
         the defense of any such claim or litigation, shall, except with the
         consent of each indemnified party, consent to entry of any judgment or
         enter into any settlement which does not include as an unconditional
         term thereof the giving by the claimant or plaintiff to such
         indemnified party of a release from all liability in respect to such
         claim or litigation.

                                       8
<PAGE>

                           (v) In the event that the Registration Statement has
         not been declared effective by the SEC on or prior to the 10th Business
         Day after the Closing Date, immediately upon effectiveness of such
         Registration Statement, Buyer shall calculate the integral number of
         shares of Common Stock (rounded up to the nearest share) that may be
         purchased for the Stock Purchase Price at a price per share equal to
         the average of the closing sales prices of Buyer's Common Stock on the
         Nasdaq National Market on the ten (10) trading days immediately
         preceding such effective date of the Registration Statement. As used
         hereinafter, the term "Adjusted Shares" shall refer to such number of
         shares of Common Stock calculated pursuant to the preceding sentence;
         provided, however, that in the event that such number of shares of
         Common Stock is greater than 385,168 (120% of the number of Shares
         identified in Section 1.5(a)(i)), the term "Adjusted Shares" shall mean
         385,168 shares of Common Stock (120% of the number of Shares identified
         in Section 1.5(a)(i)). Buyer shall immediately notify Seller of such
         calculation of Adjusted Shares, and, as soon as practicable thereafter,
         (A) if the number of Shares exceeds the number of Adjusted Shares,
         Buyer and Seller shall take such action as is necessary to cause 85% of
         such excess number of Shares to be returned to Buyer by Seller and 15%
         of such excess number of Shares to be returned to Buyer by the Escrow
         Agent, or (B) if the number of Adjusted Shares exceeds the number of
         Shares, Buyer shall take such action as is necessary to cause 85% of
         such excess number of shares of Common Stock to be issued to Seller and
         15% of such excess number of shares of Common Stock to be delivered to
         the Escrow Agent to be held in escrow pursuant to the Escrow Agreement.
         Notwithstanding the foregoing, in the event that the delay in causing
         the Registration Statement to be declared effective by the SEC is due
         to Seller's failure to provide necessary information required therefor,
         the 10-Business Day period contemplated in this Section 1.5(c)(v) shall
         be extended by the number of Business Days of delay caused by such
         failure of Seller. In the event any adjustment in the number of shares
         of Common Stock issued to Seller under this Agreement is necessary
         pursuant to this Section 1.5(c)(v), as used in this Agreement, the term
         "Shares" shall refer to the Adjusted Shares (except in Sections
         1.5(a)(i), 1.5(b), 1.5(c)(i)(A) and 5.2(a)), and the term "Escrowed
         Shares" shall refer to the shares of Common Stock held by the Escrow
         Agent after giving effect to the adjustment required under this Section
         1.5(c)(v) (except in Sections 1.5(b)(ii) and 5.2(a)).

                  (d) Allocation. Within 60 days following the Closing Date,
Buyer, subject to the approval of Seller, shall prepare and finalize a schedule
setting forth an allocation of the consideration described in Section 1.5(a)
(including any adjustment to the Estimated Adjustment pursuant to Section 1.6
hereof and any adjustment to the number of Shares pursuant to Section 1.5(c)(v))
among the Assets (the "Allocation Schedule"). Each party agrees to report the
transactions contemplated hereby for federal income tax and all other tax
purposes (including, without limitation, for purposes of Section 1060 of the
Code) in a manner consistent with the Allocation Schedule, and in accordance
with all applicable rules and regulations, and to take no position inconsistent
with the allocation set forth therein in any administrative or judicial
examination or other proceeding. Each of Buyer and Seller shall timely file the
appropriate forms in accordance with the requirements of Section 1060 of the
Code and this Section 1.5(d).

                                       9
<PAGE>

                  1.6 Post-Closing Adjustment.

                  (a) On or prior to February 1, 2002 (or such later date as
Buyer and Seller may mutually agree in writing) (the "Deadline"),
representatives of Buyer and Seller shall jointly determine the Adjustment. Upon
certification in writing of the amount of the Adjustment jointly by such
representatives:

                           (i) if the Adjustment is greater than Estimated
         Adjustment, Buyer shall, within five Business Days of such
         certification, pay to Seller in cash the amount of such deficiency; or

                           (ii) if the Estimated Adjustment exceeds the
         Adjustment, Seller shall, within five Business Days of such
         certification, pay to Buyer in cash the amount of such excess.

                  (b) In the event that the representatives of Seller and Buyer
are unable jointly to determine the amount of the Adjustment by the Deadline,
Seller and Buyer hereby agree that such determination shall be referred to a
mutually satisfactory independent public accounting firm of national stature
that has not been employed by any party hereto for the two (2) years preceding
the date of such referral (the "Selected Accountants"), which shall promptly
make a determination. The determination of the Selected Accountants shall be
conclusive and binding on Buyer and Seller. One-half of the fees of the Selected
Accountants shall be borne by Seller, and one-half shall be borne by Buyer. If
the Selected Accountants determine that the Adjustment is greater than Estimated
Adjustment, Buyer shall, within five Business Days of such determination, pay to
Seller in cash the amount of such deficiency. If the Selected Accountants
determine that the Estimated Adjustment exceeds the Adjustment, Seller shall,
within five Business Days of such determination, pay to Buyer in cash the amount
of such excess.

                  1.7 Excluded Assets. Anything to the contrary notwithstanding,
the Assets shall not include any of the following rights, properties or assets
(the "Excluded Assets"):

                  (a) all accounts receivable of Seller generated by Seller
prior to the Effective Time for which Seller has prepared and issued invoices
(excluding the Underbilling Receivables);

                  (b) this Agreement, and any of the other documents to be
executed in connection herewith (collectively, the "Other Transaction
Documents"), or any right, title or interest of Seller or any of the
Shareholders hereunder or thereunder;

                  (c) any and all rights to any tax refund due to Seller,
accrued and prepaid expenses and deposits, and any and all prepaid insurance
premiums, whether or not related to the Business;

                  (d) the Shares;

                                       10
<PAGE>

                  (e) any records relating to the internal governance of Seller;

                  (f) the names "Axxis", "Allied" and "Allied Communications";

                  (g) the accounting software applications system known as "SBT"
and "AVAIL" (the "Accounting Software") (provided that Buyer and its
representatives shall be entitled to reasonable access to the Accounting
Software in accordance with Section 7.4(b) of this Agreement); and

                  (h) all assets primarily used in, or necessary for the
operation of, Seller's ongoing studio and rental business (the "Other
Business").

                  1.8 Office Space Leases. At the Closing:

                  (a) Buyer will enter into an assumption agreement, in
substantially the form attached hereto as Exhibit F (the "Indianapolis Lease
Assumption"), for Seller's lease for office space in Indianapolis, Indiana;

                  (b) Buyer will enter into a sublease, in substantially the
form attached hereto as Exhibit G (the "Louisville Sublease"), for approximately
21,225 square feet of Seller's office space in Louisville, Kentucky; and

                  (c) Buyer will enter into an assumption agreement, in
substantially the form attached hereto as Exhibit H (the "Richmond Amended Lease
Assumption"), for Seller's amended lease for office space in Richmond, Indiana.

                  2. Representations and Warranties of Seller and the
Shareholders

         Seller and the Shareholders hereby, jointly and severally, represent
and warrant to Buyer as follows:

                  2.1 Organization and Standing. Seller (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Kentucky, (b) has full right, power and authority to enter into and
perform and do all things contemplated under this Agreement and the Other
Transaction Documents to which it is a party necessary to give effect to the
provisions of this Agreement and such Other Transaction Documents, to own and
lease the Assets and to carry on and operate the Business as now being conducted
and proposed to be conducted by it under existing agreements, (c) is duly
qualified or licensed to do business and is in good standing as a foreign
corporation in every jurisdiction in which the character of the Assets or nature
of the Business requires such qualification, and (d) does not own any of the
Assets, and does not conduct any of the Business, through any other corporation,
limited liability company, partnership or other entity.

                  2.2 Authorization and Binding Obligations. The execution,
delivery and performance by Seller of this Agreement and the Other Transaction
Documents to which Seller is a party have been duly and validly authorized by
all necessary corporate action, including, without limitation, any necessary
approval of the entire transaction by the requisite vote of Seller's
shareholders. This Agreement and the Other Transaction Documents to which Seller
is a party have been duly executed and delivered by Seller and constitute valid
and binding agreements of Seller, enforceable in accordance with their
respective terms, except as their enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws relating to or affecting creditors' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles. The Shareholders are the owners of 62.2% of the issued and
outstanding capital stock of Seller, the remainder of which is owned by Roy
Ridge.

                                       11
<PAGE>

                  2.3 No Contravention. Except for the requirement of consent of
Fifth Third Bank, Seller's primary lender, the execution, delivery and
performance of this Agreement and the Other Transaction Documents to which
Seller is a party, the consummation of the transactions contemplated hereby and
thereby and the compliance with the provisions hereof and thereof by Seller do
not (a) violate any provision of the articles of incorporation or bylaws of
Seller, (b) conflict with, result in the breach of, or constitute a default
under, or result in the creation of any Lien upon any of the Assets, or require
any authorization, consent, approval, exemption or other action by or notice to
any third party (including any shareholder of Seller not a party to this
Agreement), court or other governmental or administrative body, under the
provisions of any agreement or other instrument to which Seller is a party or by
which any of the Assets are bound or affected or (c) violate any laws,
regulations, orders or judgments applicable to Seller or the Business.

                  2.4 Compliance with Laws. Seller has complied with, and is now
in compliance with, all laws, rules, regulations, orders, judgments and decrees
of any governmental, regulatory or administrative body, agency or authority, or
any court or judicial authority (each, an "Authority") applicable to the
Business. Seller possesses each franchise, license, permit, authorization,
certification, consent, variance, permission, order or approval of or from any
Authority, and has filed all filings, notices or recordings with any such
Authority (collectively, "Licenses") material to, or necessary for the conduct
of, the Business and is now and, has at all times in the past, been in
compliance with each of such Licenses. No proceeding or other action is pending
or, to the best knowledge of Seller and the Shareholders, threatened, to revoke,
amend, or limit any License, and Seller and the Shareholders have no basis to
believe that any such proceeding or action would result from the consummation of
the transactions contemplated by this Agreement or by the Other Transaction
Documents, or that any such License would not be renewed in the ordinary course.

                  2.5 Environmental and Safety Laws. Seller is not in violation
of any applicable law relating to the environment with respect to the facilities
identified in Section 1.8 hereof or occupational health and safety, and no
material expenditures are or will be required by Seller in order to comply with
any such existing law.

                  2.6 Tax Matters. Seller has, within the times and in the
manner prescribed by law, filed all required tax returns, including sales and
use tax returns, has paid or provided for all taxes, including sales and use
taxes owed by Seller, with respect to the Business (whether or not shown on any
tax return to be due and owing by it), has paid or provided for all deficiencies
or other assessments of taxes, interest or penalties owed by it, and all such
tax returns were correct and complete in all material respects when filed. No
taxing Authority has asserted, or will successfully assert, any claim for the
assessment of any additional taxes of any nature with respect to any periods
covered by any such tax returns, and all taxes or other charges required to be
withheld or collected by Seller with respect to the Business have been duly
withheld or collected and, to the extent required, have been paid to the proper
taxing Authority or properly segregated or deposited as required by law.

                                       12
<PAGE>

                  2.7 Employee Benefit Plans; ERISA; Employees.

                  (a) As used in this Agreement, the term "ERISA Affiliate"
means any person or entity (whether or not incorporated) which, by reason of its
relationship with Seller or a subsidiary is required to be aggregated with
Seller or a subsidiary under Sections 414(b), 414(c), 414(m) or 414(o) of the
Code, or which, together with Seller or a subsidiary is a member of a controlled
group within the meaning of Section 4001(a) of ERISA.

                  (b) Schedule 2.7(b) lists each "employee benefit plan" as
defined in Section 3(3) of ERISA, whether or not subject to ERISA, and each
other employment, severance, consulting, confidentiality, deferred, incentive,
fringe benefit, change in control, retention, stock option or other equity based
or other compensatory or benefit plan, policy, agreement or arrangement that (i)
is maintained, administered, contributed to or required to be contributed to by
Seller, or its ERISA Affiliates or to which Seller or any ERISA Affiliate is a
party, and (ii) covers any current or former employee or other personnel of
Seller or any of its ERISA Affiliates who provides or has provided services to
or in connection with the Business (the "Business Employees"). Each such plan,
policy, agreement or arrangement is herein referred to as an "Employee Benefit
Plan." Copies of the Employee Benefit Plans, including, but not limited to, any
trust instruments, insurance contracts and all amendments thereto have been
furnished to Buyer. Except as set forth on Schedule 2.7(b), neither Seller nor
any of its ERISA Affiliates is or ever was obligated to contribute to or a
participating employer under a multiemployer plan within the meaning of Section
3(37) of ERISA or an employee pension plan covered by Title IV of ERISA, Section
302 of ERISA or Section 412 of the Code.

                  (c) With respect to any funded employee pension plan within
the meaning of Section 3(2) of ERISA, there has been no accumulated funding
deficiency within the meaning of Section 302(a)(2) of ERISA or Section 412 of
the Code, which has resulted or could result in the imposition of a Lien upon
any of the Assets, and no event has occurred and no circumstance exists under
which Seller has incurred or may incur, a liability (directly or indirectly),
under Title IV of ERISA or Section 4980B of the Code which could become a
liability of Buyer or which could result in the imposition of a Lien upon any of
the Assets.

                                       13
<PAGE>

                  (d) Schedule 2.7(d) contains a true and complete list of all
employees, independent contractors, officers or directors of Seller who are
employed or performing services primarily for the Business (including for such
purposes certain corporate and administrative personnel, as specified therein)
on the date hereof (collectively, the "Closing Date Employees"), the title and
rate of compensation of each Closing Date Employee, and the amount of any
accrued vacation leave as of the date of this Agreement. Seller has, on or prior
to the Closing Date, (i) paid all accrued salary and bonuses, and accrued
amounts for sick leave, maternity leave and other leave (other than accrued
vacation leave) due and payable to the Closing Date Employees on or prior to the
Closing Date, and (ii) notified each Closing Date Employee that his or her
employment by Seller shall be terminated as of the Closing. Seller is not in
default with respect to any withholding or other employment taxes or payments
with respect to accrued vacation or severance pay on behalf of any Closing Date
Employee, former employee of the Business or independent contractor of the
Business for which it is obligated on the date hereof, and has made all such
necessary payments or adjustments arising through the Closing Date. Seller has
not instituted any "freeze" of, or delayed or deferred the grant of, any
cost-of-living or other salary adjustment for any Closing Date Employee.
Schedule 2.7(d) lists the name, title and rate of compensation of each employee
of the Business whose employment was terminated within 90 days prior to the date
of this Agreement. Seller has not engaged in any unfair labor practice or
discriminated on the basis of race, color, religion, sex, national origin, age,
disability or handicap in its employment conditions or practices with respect to
the Business. No employee or independent contractor of the Business has filed
or, to the best knowledge of Seller and the Shareholders, threatened, any
claims, and there is no reasonable basis for a claim against Seller relating to
employment or similar matters (including, without limitation, compensation and
benefits) with Seller with respect to the Business. There are not in existence
or, to the best knowledge of Seller and the Shareholders, threatened any work
stoppages respecting employees or independent contractors of Seller with respect
to the Business or unfair labor practice complaints against Seller with respect
to the Business. Seller is not a party to any collective bargaining agreement,
no representation question exists respecting the Closing Date Employees and no
collective bargaining agreement is currently being negotiated by Seller covering
its employees, nor is any grievance procedure or arbitration proceeding pending
under any collective bargaining agreement and no claim therefor has been
asserted. Seller has not received notice from any union or any employee setting
forth demands for representation, elections or for present or future changes in
wages, terms of employment or working conditions. There have been no audits of
the equal employment opportunity practices of Seller, nor does any basis for any
such audit exist. Seller does not have any severance agreement, policy, practice
or other arrangement with respect to severance with any Closing Date Employee
other than the Employee Benefit Plans.

                  2.8 Litigation. Except as set forth on Schedule 2.8, there is
no pending or, to the best knowledge of Seller and the Shareholders, threatened,
adverse claim, dispute, governmental investigation, suit, action, arbitration,
legal, administrative or other proceeding of any nature, domestic or foreign,
criminal or civil, at law or in equity, by or against or otherwise affecting the
Business or the Assets.

                  2.9 Agreements.

                  (a) Schedule 2.9(a) sets forth a true and complete list of all
In-Progress Jobs, all purchase or service orders taken but not fulfilled by
Seller as of the Effective Date, and all other agreements relating to the
Business or the Assets that involve payments to or by Seller in excess of $5,000
individually or $15,000 in the aggregate, including, without limitation,
commitments, including guarantees of any indebtedness, or instruments binding
Seller as of the Closing Date with respect to the Business or the Assets, and
all powers of attorney. True and complete copies of each such agreement,
commitment or instrument have been delivered to Buyer.

                  (b) To the best knowledge of Seller and the Shareholders, each
such agreement is the valid and binding obligation of the other contracting
party, enforceable in all material respects in accordance with its terms against
the other contracting party, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws and by general principles of equity, has not been cancelled
in whole or in part and is in full force and effect.

                                       14
<PAGE>

                  (c) Seller has fulfilled all material obligations required to
have been performed by it prior to the date hereof with respect to each such
agreement, and Seller has no reason to believe that the other contracting party
will not be able to fulfill all of its or his obligations when due in respect
thereof.

                  (d) To the best knowledge of Seller and the Shareholders, no
other contracting party to any such agreement is now in breach thereof, and
there are not now, nor have there been in the twelve (12) month period prior to
the date hereof, any material disputes between Seller and any such other
contracting party.

                  (e) Each such agreement shall be assigned to Buyer at Closing.

                  (f) Seller is not a party to, or bound by, any agreement or
commitment that restricts the conduct of the Business anywhere in the world.

                  (g) Schedule 2.9(g) sets forth a true and complete list of
each proposed agreement, commitment, arrangement, or other understanding under
discussion since the Effective Date, including, without limitation, any proposed
purchase or service order relating to the Business, between Seller and any third
party that would, or reasonably could be expected to, be required to be
disclosed pursuant to any provision of this Agreement, if same had been executed
prior to and remained in effect as of the date hereof. True and complete copies
of the most recent draft of each such agreement and all other documents
evidencing the current state of such discussions have been delivered to Buyer.

                  2.10 Suppliers and Customers. Schedule 2.10 is a true and
complete list of the suppliers and customers with whom Seller has done business
with respect to the Business within six (6) months prior to the Closing Date,
and lists each outstanding purchase or service order (or correspondence with
respect to a proposed purchase or service order) with respect to the Business,
identifying in each case the vendor, supplier, contractor or inventor and the
items being purchased and stating the quantity and price thereof. The
relationships of Seller with the persons listed in Schedule 2.10 are good
commercial working relationships, and no such person has canceled or otherwise
terminated, or threatened to cancel or terminate, its relationship with Seller,
or decreased or limited materially, or threatened to decrease or limit
materially, its business done with Seller, and there is no reason to believe
that any such person would not continue its business relationship with Buyer
following the Closing on substantially the same terms as such person has
heretofore done business with Seller.

                  2.11 Tangible Property. Seller has good and marketable title
to each item of tangible personal property that is an Asset, free and clear of
all liens and other encumbrances, and, with immaterial exceptions, each such
item of tangible personal property is in good operating condition and repair,
ordinary wear and tear excepted, and useable in the ordinary course of the
Business. Schedule 2.11 contains a complete and accurate list setting forth a
description of each item of tangible property that is an Asset, and describes
the nature of Seller's interest in any property listed thereon that is not owned
entirely by Seller free and clear of any Lien.

                                       15
<PAGE>

                  2.12 Real Property.

                  (a) Schedule 2.12(a) identifies each real property leased or
subleased by any Seller Party and used in the Business ("Leased Real Property").
No such lease or sublease with respect to such Leased Real Property (the "Real
Property Leases") is subject to any Lien.

                  (b) True and complete copies of the Real Property Leases have
been delivered to Buyer by Seller. Subject to the terms of the respective Real
Property Leases, the Seller Party party thereto has a valid and subsisting
leasehold or subleasehold estate in each Leased Real Property. The Real Property
Leases are in full force and effect and neither the Seller Party party thereto
nor, to the knowledge of the Seller Parties, any other party to any Real
Property Lease is in default thereunder, and no event exists which, with the
giving of notice or the passage of time, or both, may become a default under any
Real Property Lease. Seller Parties' occupation, possession and use of the
Leased Real Property has not been disturbed and no claim has been asserted or
threatened adverse to the rights of any Seller Party to the continued
occupation, possession and use of any of the Leased Real Property.

                  (c) All buildings, structures, improvements and facilities
included within the Leased Real Property, including, but not limited to, the
roofs and structural elements thereof, and the heating, ventilation, air
conditioning, plumbing, electrical, mechanical, sewer, waste water, storm water,
paving and parking equipment, systems and facilities included therein
(collectively, the "Improvements") are in good operating condition and repair,
reasonable wear and tear not caused by neglect excepted. There are no
unsatisfied requests for any repairs, restorations or improvements to the Leased
Real Property and Improvements from any Authority; there are no ongoing repairs
to the Leased Real Property and/or Improvements being made by or on behalf of
any Seller Party, and all repairs for which payment is due have been paid for.
No portion of the Leased Real Property has suffered any damage by fire or other
casualty which heretofore has not been repaired and restored. The walls, roof
and subterranean portions, if any, of the Improvements are sound and watertight
and there is no water, chemical or gaseous seepage, diffusion or other intrusion
into said Improvements which would impair the beneficial use of the Leased Real
Property and Improvements by Buyer and/or its subtenants, licensees or other
occupants thereof permitted by Buyer.

                  2.13 Third Party Components, Rights, etc.

                  (a) Seller has validly and effectively obtained the right and
license to use the third-party programs included in the Assets and, with respect
to such third-party programs, such other rights and licenses as provided for
under the agreements relating thereto, and Seller has the right to assign and
transfer to Buyer the foregoing rights and licenses.

                  (b) Seller has not granted, transferred, or assigned any
right, title or interest in or to any Asset to any person or entity. There are
no contracts, agreements, licenses, and other commitments and arrangements in
effect with respect to the marketing, distribution, licensing, or promotion of
any material Asset by any independent salesperson, distributor, sublicensor, or
other remarketer or sales organization.

                                       16
<PAGE>

                  2.14 Insurance. Seller has, through the Closing Date,
maintained the insurance policies set forth on Schedule 2.14 with respect to the
Assets, the conduct of the Business and the Leased Real Property, which policies
are, and at all times from the Effective Time to the Closing Date have been, in
full force and effect, and are sufficient in amount (subject to reasonable
deductibles) to allow Seller to replace any of the Assets that might be damaged
or destroyed or to satisfy any claim with respect to the conduct of the Business
or to any of the Leased Real Property.

                  2.15 Financial Statements. Seller has delivered to Buyer (i)
unaudited balance sheets of the Business as of December 31, 2000 and 1999, and
related statements of income for the fiscal years then ended (the "Year-End
Financials") and (ii) the unaudited balance sheet of the Business as of the
Effective Date (the "Effective Date Balance Sheet"), and the related unaudited
statement of income of the Business for the period ended on the Effective Date
(collectively with the Effective Date Balance Sheet, the "Interim Financials").
The Year-End Financials and the Interim Financials are correct in all material
respects and have been prepared in material compliance with generally accepted
accounting principles ("GAAP"). The Year-End Financials and Interim Financials
present fairly in all material respects the financial condition and operating
results of Seller as of the dates and during the periods indicated therein,
subject, in the case of the Interim Financials, to normal year-end adjustments,
which will not be material in amount or significance. A true, correct and
complete copy of the Effective Date Balance Sheet is attached hereto as Exhibit
I.

                  2.16 Certain Transactions. Since the Effective Date, Seller
has conducted the Business in the ordinary course consistent with past custom
and practice and has not, in any manner with respect to the Business or the
Assets:

                  (a) suffered any change, event or condition that, individually
or in the aggregate, has had or could reasonably be expected to have a material
adverse effect upon the Business, the Assets or Seller's and the Shareholders'
ability to consummate the transactions contemplated herein;

                  (b) entered into any transaction, contract or commitment
individually involving payments from Seller in excess of $10,000 (other than
this Agreement or as disclosed on Schedule 2.16(b));

                  (c) except in the ordinary course of business consistent with
past custom and practice, including as to quantity and frequency, incurred or
paid any liability or obligation, incurred any indebtedness for borrowed money
or assumed, guaranteed, endorsed or otherwise become responsible for the
obligations of any other individual, corporation or other entity;

                  (d) entered into or amended any employment, consulting or
other agreement with, increased any compensation payable to, awarded any bonus
to, made any loan to, paid any expense or contribution on behalf of, given any
gift to, or otherwise conferred any benefit (directly or indirectly) upon, any
of its officers, employees, shareholders or consultants, except in the ordinary
course of business consistent with past custom and practice including as to
quantity and frequency;

                                       17
<PAGE>

                  (e) made any capital expenditures in excess of $10,000 other
than those made the ordinary course of business, consistent with past custom and
practice;

                  (f) sold, transferred, leased, assigned or otherwise disposed
of any Asset or properties of the Business, except in the ordinary course of
business, consistent with past custom and practice;

                  (g) created or assumed or permitted to be created or assumed
any Lien affecting any Asset or properties of the Business;

                  (h) made any tax election or settled or compromised any
federal, state, local or other tax liability either not in accordance with past
practice, or which has had or could reasonably be expected to have a material
adverse effect upon the Business or the Assets;

                  (i) taken any action that was intended or may reasonably be
expected to result in any of the representations and warranties set forth in
this Agreement being or becoming untrue;

                  (j) made a material change in the methods of accounting in
effect as of the date that the December 31, 2000 financial statements of the
Business were finalized;

                  (k) except in the ordinary course of business consistent with
past custom and practice, created, renewed, amended or terminated or given
notice of a proposed renewal, amendment of termination of, any material
contract, agreement or lease for goods or services to which Seller is a party or
by which Seller or any of the Assets are bound;

                  (l) except in the ordinary course of business consistent with
past custom and practice, rendered services under any In-Progress Contract or
taken purchase or service orders relating to the business of the Business; or

                  (m) agreed to do any of the foregoing.

                  2.17 No Undisclosed Liabilities. Except as set forth on the
Schedules to this Agreement, as of the date hereof, Seller has no direct or
indirect indebtedness, liabilities, claims, losses, damages, deficiencies,
obligations or responsibilities, liquidated or unliquidated, accrued, absolute,
contingent, or otherwise, relating to the Assets.

                  2.18 Receivables. Schedule 1.2(a)-2 includes an accurate and
complete breakdown of all Underbilling Receivables as of the Effective Date, and
Schedule 1.2(c) includes an accurate and complete breakdown of all
Post-Effective Date Receivables as of the Closing Date (the Underbilling
Receivables and Post-Effective Date Receivables are referred to collectively as
the "Receivables"). All such Receivables (a) have arisen only from bona fide
transactions in the ordinary course of business consistent with past custom and
practice, (b) represent valid obligations, and (c) are expected to be
collectible in the aggregate face amounts thereof without any counterclaim or
set-off when due, except, in the case of Underbilling Receivables, to the extent
of the normal allowance for doubtful accounts with respect to accounts
receivable that are computed in a manner consistent with GAAP and as reflected
in the Effective Date Balance Sheet, or, in the case of Post-Effective Date
Receivables, as reflected in the books and records of Seller, and (d) are owned
by Seller free of all Liens. No discount or allowance from any Receivable as of
the Closing Date has been made or agreed to (other than customary payment
discounts in the ordinary course of business consistent with past custom and
practice). For the purposes of this Agreement, any person or entity shall be
deemed to own subject to a Lien any property or asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
property or asset.

                                       18
<PAGE>

                  2.19 Interested Party Transactions. As it relates to the
Business, neither the Shareholders nor any manager of Seller (nor, to the actual
knowledge of Seller and the Shareholders, any ancestor, sibling, descendant or
spouse of any of such persons, or any trust, partnership or corporation in which
any of such persons has or has had an interest) has or has had, directly or
indirectly, (i) an interest in any entity that furnished or sold, or furnishes
or sells, services, products or technology that Seller furnishes or sells in the
conduct of the Business, or proposes to furnish or sell in the conduct of the
Business, or (ii) any interest in any entity that purchases from or sells or
furnishes to Seller, any goods or services, except for the Louisville, Kentucky
office space lease between Seller and Columbia Properties, LLC and the Richmond,
Indiana office space lease between Seller and Roy Ridge, or (iii) a beneficial
interest in any agreements of Seller; provided, however, that ownership of no
more than one percent (1%) of the outstanding voting stock of a publicly traded
corporation shall not be deemed to be an "interest in any entity" for purposes
of this Section 2.19.

                  2.20 Assets. Except for the Excluded Assets, the Assets are
all of the assets, properties, goodwill, and rights of every nature, kind and
description, whether tangible or intangible, real, personal or mixed, wherever
located, used in and material to, or necessary for the operation of, the
Business.

                  2.21 Brokers or Finders. Seller has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement,
the Other Transaction Documents or any transaction contemplated hereby or
thereby. Seller and the Shareholders, jointly and severally, shall indemnify and
hold Buyer harmless with respect to any claim by any broker, agent, or finder
claiming to have acted on behalf of Seller or the Shareholders, respecting the
subject matter hereof.

                  2.22 Securities Act Matters.

                  (a) Seller acknowledges that its representations and
warranties contained herein are being relied upon by Buyer as a basis for the
exemption of the issuance of the Shares hereunder from the registration
requirements of the Securities Act and any applicable state securities laws.

                  (b) Seller understands that (i) when issued, the Shares will
not be registered under the Securities Act or any state securities laws by
reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act and applicable state securities laws (but
that the Shares will be registered as set forth in Section 1.5(c) of this
Agreement) and (ii) the Shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act and applicable state
securities laws or is exempt from such registration.

                                       19
<PAGE>

                  (c) Seller is acquiring the Shares for its own account and not
with a view to, or for sale in connection with, directly or indirectly, any
distribution thereof that would violate the Securities Act or applicable state
securities laws.

                  (d) Seller has relied upon independent investigations that it
and its representatives have made and is fully familiar with the business,
results of operations, financial condition, prospects and other affairs of Buyer
and realizes that the Shares are a speculative investment involving a high
degree of risk for which there is no assurance of any return.

                  (e) Seller has such knowledge and experience in financial and
business affairs and is capable of determining the information necessary to make
an informed investment decision, of requesting such information from Buyer, and
of utilizing the information that it has received from Buyer to evaluate the
merits and risks of its investment in the Shares and is able to bear the
economic risk of its investment in the Shares, and understands that it must do
so for an indefinite period of time.

                  (f) Seller and its attorneys, accountants, investment and
financial advisors, if any, have been provided access to such information about
Buyer as it or its advisors, if any, have requested.

                  (g) Seller is an "accredited investor" as defined in
Regulation D under the Securities Act.

                  (h) Seller understands that until the Registration Statement
has been declared effective, the certificates representing the Shares will bear
the following legend (or a substantially similar legend):

                  "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY
                  STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED,
                  SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT SUCH
                  REGISTRATION OR THE DELIVERY TO THE COMPANY OF AN OPINION OF
                  COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
                  DISPOSITION WILL NOT REQUIRE REGISTRATION OF SUCH SECURITIES
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED."

                  2.23 No Misleading Statements. No information furnished by or
on behalf of Seller to Buyer contains any untrue statement of a material fact or
omits to state a material fact necessary to make such statement, in the light of
the circumstances under which it was made, not misleading. All written
information, in whatever form, furnished by Seller to Buyer was true and correct
as of the date so furnished and, except as the accuracy thereof is affected by
the passage of time, remains true and correct in all material respects as of the
date hereof.

                                       20
<PAGE>

                  3. Representations and Warranties of the Shareholders

         Each of the Shareholders, severally and not jointly, represents,
warrants and covenants to Buyer that:

                  3.1 Binding Obligations. This Agreement and the Other
Transaction Documents to which such Shareholder is a party have been duly
executed and delivered by such Shareholder and constitute valid and binding
agreements of such Shareholder, enforceable in accordance with their respective
terms, except as their enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws relating to or affecting creditors' rights generally
and the exercise of judicial discretion in accordance with general equitable
principles. Such Shareholder is a shareholder of Seller.

                  3.2 No Contravention. The execution, delivery and performance
of this Agreement and the Other Transaction Documents to which such Shareholder
is a party, the consummation of the transactions contemplated hereby and thereby
and the compliance with the provisions hereof and thereof by such Shareholder do
not (a) conflict with, result in the breach of, or constitute a default under,
or require any authorization, consent, approval, exemption or other action by or
notice to any third party (including any shareholder of Seller not a party to
this Agreement), court or other governmental or administrative body, under the
provisions of any agreement or other instrument to which such Shareholder is a
party or by which the property of such Shareholder is bound or affected or (b)
violate any laws, regulations, orders or judgments applicable to such
Shareholder.

                  3.3 No Misleading Statements. No information furnished by or
on behalf of such Shareholder to Buyer contains any untrue statement of a
material fact or omits to state a material fact necessary to make such
statement, in the light of the circumstances under which it was made, not
misleading. All written information, in whatever form, furnished by such
Shareholder to Buyer was true and correct as of the date so furnished and,
except as the accuracy thereof is affected by the passage of time, remains true
and correct in all material respects as of the date hereof.

                  3.4 Brokers or Finders. Such Shareholder has not incurred, and
will not incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement, the Other Transaction Documents or any transaction contemplated
hereby or thereby. Seller and the Shareholders, jointly and severally, shall
indemnify and hold Buyer harmless with respect to any claim by any broker,
agent, or finder claiming to have acted on behalf of Seller or the Shareholders,
respecting the subject matter hereof.

                           4. Representations and Warranties of Buyer

         Buyer represents and warrants to Seller and the Shareholders as
follows:

                                       21
<PAGE>

                  4.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with full corporate right, power and authority to enter into and
perform and do all things contemplated under this Agreement and the Other
Transaction Documents to which it is a party necessary to give effect to the
provisions of this Agreement and such Other Transaction Documents.

                  4.2 Authorization and Binding Obligations. The execution,
delivery and performance by Buyer of this Agreement and the Other Transaction
Documents to which Buyer is a party have been duly and validly authorized by all
necessary corporate action, including approval of the entire transaction by the
requisite vote of the board of directors of Buyer. This Agreement and the Other
Transaction Documents to which Buyer is a party have been duly executed and
delivered by Buyer and constitute valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as their
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors' rights generally and the exercise of
judicial discretion in accordance with general equitable principles.

                  4.3 No Contravention. The execution, delivery and performance
of this Agreement and the Other Transaction Documents to which Buyer is a party,
the consummation of the transactions contemplated hereby and thereby and the
compliance with the provisions hereof and thereof by Buyer do not (a) violate
any provision of the certificate of incorporation or bylaws of Buyer, (b)
conflict with, result in the breach of, or constitute a default under, or
require any authorization, consent, approval, exemption or other action by or
notice to any third party, court or other governmental or administrative body,
under the provisions of any agreement or other instrument to which Buyer is a
party or by which the property of Buyer is bound or affected, or (c) violate any
laws, regulations, orders or judgments applicable to Buyer.

                  4.4 Issuance of the Shares. Upon issuance hereunder, the
Shares shall be validly issued, fully paid and non-assessable and shall be free
and clear of any Liens, except that the Escrowed Shares shall be subject to the
provisions of the Escrow Agreement.

                  4.5 SEC Filings. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act, and Buyer has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Exchange Act, including material
filed pursuant to Section 13(a) or 15(d) thereof. Buyer has delivered or made
available to Seller and the Shareholders true and complete copies of the
following documents (the "SEC Documents") filed with the SEC:

                  (a) Buyer's Annual Report on Form 10-K for the year ended
December 31, 2000;

                  (b) Buyer's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2001, June 30, 2001 and September 30, 2001;

                  (c) Buyer's Current Report on Form 8-K, filed on August 1,
2001, and the amendments thereto filed on October 1, 2001 and October 3, 2001;

                                       22
<PAGE>

                  (d) Buyer's proxy statement (and the supplement thereto) in
connection with its Annual Meeting of Stockholders held on May 25, 2001; and

                  (e) Buyer's registration statement on Form S-3 (No.
333-69432), filed on September 14, 2001, and post-effective amendment No. 1
thereto, filed on September 26, 2001.

Buyer has not provided Seller or any Shareholder any material non-public
information or any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by Buyer but which has not been
so disclosed. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder and other federal, state and local
laws, rules and regulations applicable to such SEC Documents, and none of the
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The SEC Documents contain all material information
concerning Buyer, and no event or circumstance has occurred which would require
Buyer to disclose such event or circumstance in order to make the statements in
the SEC Documents not misleading on the date hereof but which has not been so
disclosed.

                  4.6 Brokers or Finders. Buyer has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement,
the Other Transaction Documents or any transaction contemplated hereby or
thereby. Buyer shall indemnify and hold Seller and the Shareholders harmless
with respect to any claim by any broker, agent, or finder claiming to have acted
on behalf of Buyer respecting the subject matter hereof.

                  4.7 No Misleading Statements. No information furnished by or
on behalf of Buyer to any Seller Party contains any untrue statement of a
material fact or omits to state a material fact necessary to make such
statement, in the light of the circumstances under which it was made, not
misleading. All written information, in whatever form, furnished by Buyer to any
Seller Party was true and correct as of the date so furnished and, except as the
accuracy thereof is affected by the passage of time, remains true and correct in
all material respects as of the date hereof.

                           5. Closing Conditions and Deliveries

                  5.1 Conditions to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to the fulfillment on or before the
Closing of each of the following conditions, except such conditions as may be
waived by Buyer:

                  (a) Delivery of Other Transaction Documents. Seller and the
Shareholders shall have delivered to Buyer the following Other Transaction
Documents, duly executed by all Seller Parties party to each such Other
Transaction Document:

                           (i) the Bill of Sale;

                           (ii) the Assumption Agreement;

                                       23
<PAGE>

                           (iii) the Power of Attorney;

                           (iv) the Indiana Lease Assumption, Louisville
         Sublease and Richmond Amended Lease Assumption (collectively, the "Real
         Estate Documents");

                           (v) the Escrow Agreement;

                           (vi) a Management Services Agreement (the "Service
         Agreement"), in substantially the form of Exhibit J, between Seller and
         Buyer with respect to the transition services described therein; and

                           (vii) such other instruments of sale, transfer,
         conveyance or assignment as Buyer and its counsel reasonably shall have
         requested prior to the Closing Date for the sale, transfer, conveyance
         and assignment of the Assets to Buyer.

                  (b) Secretary's Certificate. Seller shall have delivered to
Buyer a certification of the secretary of Seller, dated the Closing Date, (i)
attaching resolutions of the board of directors of Seller and any required
consent of the shareholders of Seller in connection with the authorization and
approval of the execution, delivery and performance by Seller of this Agreement
and the Other Transaction Documents to which Seller is a party, certified as
being in full force and effect as of the Closing Date; and (ii) setting forth
the incumbency of the officers of Seller who have executed and delivered this
Agreement and each of the Other Transaction Documents to which Seller is a
party, including therein a signature specimen of each such officer.

                  (c) Good Standing Certificates. Seller shall have delivered to
Buyer certificates, dated as of the Closing Date or within three (3) Business
Days prior to the Closing Date, executed by the proper official in each
jurisdiction, as to the good standing of Seller in State of Kentucky and in each
jurisdiction in which the character of the Assets or nature of the Business
requires that Seller be qualified as a foreign corporation, including, without
limitation, the State of Indiana.

                  (d) Consents. Seller shall have delivered to Buyer all written
consents which are required under any contract or agreement being assigned to
Buyer hereunder; provided, however, that as to any such contract or agreement
the assignment of which by its terms requires prior consent of any of the
parties thereto, if such consent is not obtained prior to or on the Closing
Date, Seller shall deliver to Buyer written documentation setting forth
arrangements for the transfer of the economic benefit of such contracts or
agreements to Buyer as of the Closing Date under terms and conditions acceptable
to Buyer.

                  (e) Payment of Estimated Adjustment. Seller shall have paid to
Buyer the Estimated Adjustment, if such adjustment was in favor of Buyer.

                  5.2 Conditions to Seller's and the Shareholders' Obligations.
The obligations of Seller and the Shareholders under this Agreement are subject
to the fulfillment on or before the Closing of each of the following conditions,
except such conditions as may be waived by Seller and the Shareholders:

                                       24
<PAGE>

                  (a) Delivery of Shares. Buyer shall have delivered to Seller a
certificate representing the portion of the Shares set forth in Section
1.5(b)(i), and shall have delivered to the Escrow Agent a certificate
representing the Escrowed Shares pursuant to Section 1.5(b)(ii).

                  (b) Payment of Estimated Adjustment. Buyer shall have paid to
Seller the Estimated Adjustment, if such adjustment was in favor of Seller.

                  (c) Other Transaction Documents. Buyer shall have delivered to
Seller and the Shareholders the following Other Transaction Documents, duly
executed by Buyer:

                           (i) the Assumption Agreement;

                           (ii) the Real Estate Documents;

                           (iii) the Escrow Agreement; and

                           (iv) the Service Agreement.

                           6. Indemnification

                  6.1 Indemnification by Seller and the Shareholders.

                  (a) Joint and Several Obligations. Seller and each of the
Shareholders, jointly and severally, shall indemnify and hold harmless Buyer,
its successors and assigns, at all times after the Closing Date, against and in
respect of:

                           (i) Liabilities of Seller. Other than liabilities
         expressly assumed by Buyer as provided in Section 1.4 of this
         Agreement, all liabilities and obligations of Seller and the Business
         of any kind or nature whatsoever relating to Seller or the Business,
         whether accrued, absolute, fixed, contingent or otherwise, known or
         unknown;

                           (ii) Misrepresentations. Any damage, loss, cost,
         expense or liability (including reasonable attorneys' fees) resulting
         to Buyer from any false, misleading or inaccurate representation,
         breach of warranty or non-fulfillment of any agreement or condition on
         the part of Seller under this Agreement or any Other Transaction
         Document to which Seller is a party or from any misrepresentation in or
         any omission from any certificate, schedule or other instrument
         furnished or to be furnished to Buyer hereunder;

                           (iii) Taxes. Any tax, including any use or sales tax,
         for which Seller or any of Seller's officers and directors is or may be
         liable in respect of the conduct of the Business prior to the Closing;

                           (iv) Conduct of the Business. Any claim arising out
         of or in connection with the conduct of the Business prior to the
         Effective Time, including severance costs for discharged employees, and
         any negligence, willful misconduct, fraud or other tort claim arising
         out of or in connection with the conduct of the Business by Seller from
         the Effective Time through the Closing; and

                                       25
<PAGE>

                           (v) Actions and Suits. All claims, actions, suits,
         proceedings, demands, assessments, judgments, costs and expenses,
         including, without limitation, legal fees and expenses, incident to any
         of the foregoing.

                  (b) Several Obligations. Each of the Shareholders, severally
and not jointly, shall indemnify and hold harmless Buyer, its successors and
assigns, at all times after the Closing Date, against and in respect of:

                           (i) Misrepresentations. Any damage, loss, cost,
         expense or liability (including reasonable attorneys' fees) resulting
         to Buyer from any false, misleading or inaccurate representation,
         breach of warranty or non-fulfillment of any agreement or condition on
         the part of such Shareholder under this Agreement or any Other
         Transaction Document to which such Shareholder is a party or from any
         misrepresentation in or any omission from any certificate, schedule or
         other instrument furnished or to be furnished by such Shareholder to
         Buyer hereunder; and

                           (ii) Actions and Suits. All claims, actions, suits,
         proceedings, demands, assessments, judgments, costs and expenses,
         including, without limitation, legal fees and expenses, incident to any
         of the foregoing.

                  6.2 Indemnification by Buyer. Buyer shall indemnify and hold
harmless Seller and the Shareholders, at all times after the Closing Date,
against and in respect of:

                  (a) Assumed Liabilities. All Assumed Liabilities;

                  (b) Misrepresentations. Any damage, loss, cost, expense or
liability (including reasonable attorneys' fees) resulting to Seller and the
Shareholders from any false, misleading or inaccurate representation, breach of
warranty or non-fulfillment of any agreement or condition on the part of Buyer
under this Agreement or any Other Transaction Document to which Buyer is a party
or from any misrepresentation in or any omission from any certificate or other
instrument furnished or to be furnished to Seller or any Shareholder hereunder;
and

                  (c) Actions and Suits. All claims, actions, suits,
proceedings, demands, assessments, judgments, costs and expenses, including,
without limitation, legal fees and expenses, incident to any of the foregoing.

                  6.3 Indemnification Procedure.

                  (a) Notice of Claim; Right to Cure. A party that may be
entitled to indemnification pursuant to Section 6.1 or 6.2 (the "Indemnitee")
shall promptly give written notice (a "Notice of Claim") to the party liable for
such indemnification (the "Indemnitor"). A Notice of Claim shall set forth (a) a
description, in reasonable detail, of the facts and circumstances with respect
to the subject matter of such claim or potential claim for indemnification, and
(b) a breakdown of the anticipated total amount (the "Claimed Amount") of the
actual damage, liability or loss, including reasonable attorneys' fees and other
costs and expenses ("Damages") comprising the indemnification claim. Upon
receipt of a Notice of Claim, the Indemnitor may elect to cure the circumstances
giving rise to the indemnification claim within thirty (30) days after the date
of receipt of the Notice of Claim. If such cure cannot be effected within such
30-day period, the Indemnitor shall proceed in accordance with Section 6.3(b),
in the case of a claim other than a third-party claim, or in accordance with
Section 6.3(c), in the case of a claim made against an Indemnitee by a third
person. The Indemnitee's failure to give prompt notice or to provide copies of
documents or to furnish relevant data shall not constitute a defense (in whole
or in part) to any claim by the Indemnitee against the Indemnitor for
indemnification, except and only to the extent that such failure shall have
caused or increased such liability or materially adversely affected the ability
of the Indemnitor to defend against or reduce its liability.

                                       26
<PAGE>

                  (b) Claims Other Than Third-Party Claims. In the case of an
indemnification claim other than a third-party claim:

                           (i) If the Indemnitor does not elect to cure the
         circumstances giving rise to the indemnification claim in accordance
         with Section 6.3(a), within 30 days after its receipt of a Notice of
         Claim, the Indemnitor shall provide to the Indemnitee a written
         response (a "Response Notice") in which the Indemnitor shall: (A) agree
         that the full Claimed Amount is due to such Indemnitee, (B) agree that
         a portion, but not all, of the Claimed Amount is due to such Indemnitee
         or (C) contest that any portion of the Claimed Amount is due to such
         Indemnitee.

                           (ii) If the Indemnitor in the Response Notice agrees
         that an amount equal to all or a portion of the Claimed Amount is due
         to the Indemnitee (the "Agreed Amount"), the Indemnitor shall promptly
         pay to the Indemnitee the Agreed Amount.

                           (iii) If the Indemnitor in the Response Notice
         contests an amount equal to all or any portion of the Claimed Amount
         (the "Contested Amount"), the Indemnitor and Indemnitee shall, within
         30 Business Days after the Indemnitee's receipt of the Response Notice,
         select a mutually acceptable arbitrator and submit the dispute with
         respect to such Contested Amount for binding and final determination by
         such arbitrator in accordance with the then-current regulations of the
         American Arbitration Association. The parties agree that any
         arbitration shall be conducted by an individual arbitrator, as opposed
         to a panel consisting of several arbitrators. Judgment upon the award
         rendered by the arbitrator resulting from such arbitration shall be in
         writing, and shall be final and binding upon all involved parties. The
         site of any arbitration shall be within New York, New York. The award
         may be confirmed and enforced in any court of competent jurisdiction.
         If the arbitrator determines that an amount equal to all or a portion
         of the Contested Amount is due to the Indemnitee (the "Award Amount"),
         the Indemnitor shall promptly pay to the Indemnitee the Award Amount.

                  (c) Third-Party Claims. In the case of a claim made against an
Indemnitee by a third person, if the Indemnitor does not elect to cure the
circumstances giving rise to the indemnification claim in accordance with
Section 6.3(a), the Indemnitor shall have the right, at its election, by written
notice to the Indemnitee, to assume the defense of the claim as to which such
notice has been given. Except as provided in the next sentence, if the
Indemnitor so elects to assume such defense, it shall diligently and in good
faith defend such claim and shall keep the Indemnitee reasonably informed of the
status of such defense, and the Indemnitee shall cooperate fully with the
Indemnitor in the defense of such claim, provided that in the case of any
settlement providing for remedies other than monetary damages for which
indemnification is provided, the Indemnitee shall have the right to approve the
settlement, which approval shall not be unreasonably withheld or delayed. If the
Indemnitor does not so elect to defend any claim as aforesaid or shall fail to
defend any claim diligently and in good faith (after having so elected), the
Indemnitee may assume the defense of such claim and take such other action as it
may elect to defend or settle such claim as it may determine in its reasonable
discretion, provided that the Indemnitor shall have the right to approve any
settlement, which approval will not be unreasonably withheld or delayed.

                                       27
<PAGE>

                  6.4 Limitations on Indemnification.

                  (a) Basket Amount.

                           (i) The indemnification provided for in Section 6.1
         shall not apply until Buyer's claims for Damages exceed $25,000 in the
         aggregate, whereupon claim may be made for all amounts in excess of
         $25,000.

                           (ii) The indemnification provided for in Section 6.2
         shall not apply until Seller's and the Shareholders' collective claims
         for indemnification exceed $25,000 in the aggregate, whereupon claim
         may be made for all amounts in excess of $25,000.

                  (b) Liability Cap. Notwithstanding anything to the contrary in
this Agreement, in no event shall the aggregate amount of collective liability
of Seller and the Shareholders pursuant to Section 6.1 exceed the market value
of the Shares (or, in the event that any adjustment has occurred pursuant to
Section 1.5(c)(v), the market value of the Adjustment Shares) on the effective
date of the Registration Statement. For purposes of this Section 6.4(b), the
market value of each Share shall equal the average of the closing sale prices of
Buyer's Common Stock on the Nasdaq National Market on the ten (10) trading days
immediately preceding the effective date of the Registration Statement.

                  (c) Insurance Proceeds and Other Set-Offs. The amount of any
Damages for which indemnification is provided under Section 6.1 or Section 6.2
shall be net of any amounts recovered or recoverable by the Indemnitee under
insurance policies with respect to such Damages and shall be (i) increased to
take account of any net tax cost incurred by the Indemnitee arising from the
receipt of indemnity payments hereunder (grossed up for such increase) and (ii)
reduced to take account of any net tax benefit realized by the Indemnitee
arising from the incurrence or payment of any such Damages. In computing the
amount of any such tax cost or tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnity payment hereunder
or the incurrence or payment of any indemnified Damages.

                  6.5 Payment of Indemnification Claims. In the event that
Seller or the Shareholders are entitled to indemnification pursuant to Section
6.2, Buyer shall make payment of such indemnification claim in cash. In the
event that Buyer is entitled to indemnification pursuant to Section 6.1, the
payment of such indemnification by Seller or the Shareholders shall be in cash;
provided, however, that Buyer may elect to satisfy any part of an
indemnification obligation owed by any Seller Party pursuant to Section 6.1(a)
by, jointly with the Sellers' Representative (as hereinafter defined), directing
the Escrow Agent to (i) return to Buyer an integral number of Escrowed Shares
equal in value to any portion of the indemnification obligation that Buyer has
elected to satisfy in such manner, (ii) pay to Buyer any portion of the cash, if
any, deposited in the Escrow Account (as defined in the Escrow Agreement) by
Seller in lieu of Escrowed Shares, up to the amount of the outstanding
indemnification obligation in favor of Buyer, or (iii) tender to Buyer a
combination of Escrowed Shares and cash deposited in the Escrow Account in
accordance with clauses (i) and (ii) of this Section 6.5; provided, however,
that the combined value of the Escrowed Shares and cash from the Escrow Account
tendered to Buyer shall not exceed the amount of the outstanding indemnification
obligation in favor of Buyer. For purposes of this Section 6.5, the value of
each Escrowed Share to be returned to Buyer in payment of an indemnification
obligation shall be equal to the average of the closing sale prices of the
Common Stock on the Nasdaq National Market during the ten (10) trading days
immediately preceding the date upon which Buyer and the Sellers' Representative
direct that the Escrow Agent return such Escrowed Share to Buyer.

                                       28
<PAGE>

                           7. Post-Closing Covenants

                  7.1 Further Assurances; Cooperation. The parties shall, at any
time, and from time to time, after the Closing Date, execute and deliver such
further instruments of conveyance and transfer and take such additional action
as may be reasonably necessary to effect, consummate, confirm or evidence the
transactions contemplated by this Agreement and the Other Transaction Documents,
including, without limitation: (i) inventorying and listing of the Assets, (ii)
using their best efforts to obtain any third party consents not obtained as of
the Closing Date, (iii) filing of tax returns, including, without limitation,
the filing of sales and use tax returns and notices as any party hereto may
reasonably require, (iv) conducting, at the expense of Buyer, a financial audit
of the Business in connection with the integration of the financial statements
of the Business into the financial statements of the Buyer, (v) cooperating to
facilitate the transition of Business customers and suppliers to Buyer, and (vi)
releasing the liens in favor of Panasonic, Yamaha and Sony referenced on
Schedule 2.11.

                  7.2 Delivery of Assets. Seller agrees that it will transfer or
make available to Buyer, promptly after the receipt thereof, any property that
Seller receives after the Closing Date in respect of the Assets transferred or
intended to be transferred to Buyer under this Agreement.

                  7.3 Payment of Liabilities. Seller shall, as of the Closing
Date or when due, satisfy all of its liabilities or obligations relating to the
Business that are not Assumed Liabilities. Buyer shall satisfy each Assumed
Liability when due.

                  7.4 Books and Records; Accounting Software.

                  (a) Buyer shall preserve and retain the corporate, accounting,
tax, legal and other records of the Business that shall come into Buyer's
possession as a result of the transactions contemplated hereby for a period of
not less than five (5) years from the Closing Date and give reasonable access to
Seller and the Shareholders, and Seller's officers, auditors, counsel, and other
representatives for the purpose of preparing or defending tax returns or for
other reasonable business purposes.

                                       29
<PAGE>

                  (b) For a period of 180 days after the Closing, Seller shall
give Buyer's officers, employees, auditors and other representatives reasonable
access to the Accounting Software for the purpose of effecting the transition to
Buyer's accounting software and for other reasonable business purposes.

                  7.5 Destruction of Copies of Certain Assets. After the Closing
Date, Seller shall, upon the written request of Buyer, immediately destroy or
erase all of Seller's copies of computer software and Business records included
in the Assets and, upon Buyer's request, promptly confirm destruction of same by
signing and returning to Buyer an "affidavit of destruction" acceptable to
Buyer; provided, however, that Seller shall be entitled to retain a copy of
those specific records, and only those specific records, that contain
information that (i) is not related to the Business, (ii) is neither
confidential nor privileged and (iii) Seller has a reasonable need to retain.

                  7.6 Employee Matters.

                  (a) Buyer does not and will not assume the sponsorship of, the
responsibility for contributions to, or any liability under or in connection
with, any Employee Benefit Plan. Without limiting the foregoing, Seller shall be
liable for continuation coverage (including any penalties, excise taxes or
interest resulting from the failure to provide continuation coverage) required
by Section 4980B of the Code with respect to (i) qualifying events incurred by
any Business Employee who does not become an employee of Buyer on or immediately
following the Closing (or covered dependents or qualified beneficiaries of such
employee), and (ii) any qualifying events which occur on or before the Closing
Date incurred by any Business Employee who becomes an employee of Buyer on or
immediately following the Closing Date (or covered dependents or qualified
beneficiaries of such employee). Buyer will in no event be deemed to be a
successor employer (within the meaning of Treasury Regulation Section
54.4980B-2) of Seller for purposes of applying the provisions of Section 4980B
of the Code following the Closing with respect to any current or former employee
of Seller.

                  (b) Buyer shall, as of the Closing Date, offer employment to
the Closing Date Employees. Any such Closing Date Employee who accepts Buyer's
offer of employment and who, within seven days of the Closing Date, commences
employment with Buyer by reporting for work and being actively employed by Buyer
for at least one day is hereinafter referred to as a "Transferred Employee."
Buyer shall offer to provide or cause to be provided to Transferred Employees,
through December 31, 2001, compensation and benefits that are substantially
comparable, in the aggregate, to the compensation and benefits (exclusive of any
such compensation and benefits consisting of or based on any equity securities)
provided to them by Seller under the Employee Benefit Plans immediately prior to
the Closing. Subject to the satisfaction of applicable enrollment requirements,
each Transferred Employee (and his or her eligible spouse or dependents) who, as
of the Closing Date, participates in Employee Benefit Plans of Seller shall, as
soon as administratively feasible following such Transferred Employee's
commencement of employment with Buyer, become eligible to participate in
employee benefit plans maintained by Buyer for its employees. Each Transferred
Employee will carry with him or her and have available for use, in accordance
with Buyer's policies, the amount of vacation leave available to him or her
under Seller's vacation policy on the day prior to the Closing Date. For all
purposes of Buyer's employee benefit plans, the date of hire for each
Transferred Employee shall be the date such Transferred Employee was originally
hired by Seller.

                                       30
<PAGE>

                  (c) With respect to any Transferred Employee (including any
dependent thereof) who is hospitalized or is on short-term disability under any
Employee Benefit Plan on or prior to the Closing Date and who remains
hospitalized or on short-term disability after such date, Seller shall be
responsible for claims and expenses incurred both before and after the Closing
Date in connection with such individual, to the extent that such claims and
expenses are covered by an Employee Benefit Plan of Seller, until such time (if
any) that, in the case of a Transferred Employee, such individual commences
full-time employment with Buyer, and, in the case of a dependent of a
Transferred Employee, such dependent's hospitalization has terminated.

                  (d) Seller shall be responsible for, and Buyer does not and
will not assume any liability (direct or indirect, contingent or otherwise) that
may arise under or in connection with any state or local law similar to the
Worker Adjustment and Retraining Notification Act, 29 U.S. Stat. ss. 2010 et.
seq., as a result of the transactions contemplated hereby.

                  7.7 Non-Competition.

                  (a) During and for a period of two (2) years following the
Closing, no Seller Party shall, without the prior written consent of Buyer,
engage directly or indirectly in a Competitive Business Activity (as defined
below) anywhere in the Restricted Territory (as defined below). The term
"Competitive Business Activity" shall mean (i) engaging in, or managing or
directing persons engaged in, the business of the Business as of the Closing
Date (including, without limitation, rendering services after the Closing under
any In-Progress Jobs or taking purchase or service orders relating to the
business of the Business); (ii) acquiring of having an ownership interest in any
entity that competes with the Business as of the Closing Date (except for
ownership of one percent (1%) or less of any entity whose securities have been
registered under the Securities Act or Section 12 of the Exchange Act); or (iii)
participating in the financing, operation, management or control of any firm,
partnership, corporation, business or other entity described in clause (ii) of
this sentence. The term "Restricted Territory" shall mean the United States of
America and each and every state, county, city, municipality or other political
subdivision thereof. Buyer acknowledges that the Business comprises only a
portion of Seller's operations and that during the two-year post-Closing period
contemplated under this Section 7.7, Seller will continue to operate the Other
Business in the ordinary course of business within the historical parameters of
the Other Business, and that neither the operation of the Other Business within
such parameters, nor the performance of Seller's obligations under the Service
Agreement, shall constitute a "Competitive Business Activity" for purposes of
this Section 7.7.

                  (b) The covenants contained in Section 7.7(a) shall be
construed as a series of separate covenants, one for each state, county, city,
municipality or other political subdivision of the Restricted Territory. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms to the covenant contained in Section 7.7(a).

                                       31
<PAGE>

                  (c) Each Seller Party acknowledges that the covenants
contained in this Section 7.7 are reasonable and valid in geographical and
temporal scope and content and in all other respects, and are necessary for the
adequate protection of Buyer's legitimate business interests, because, among
other things, Buyer conducts business throughout the United States, Buyer is
engaged in a highly competitive industry, and Seller Parties have had unique
access to confidential business information relating to the Business and the
Assets. Each Seller Party also acknowledges that any breach of the covenants set
forth in this Section 7.7 will give rise to irreparable injury to Buyer, that
the remedy at law of Buyer for any such breach or threatened breach will be
inadequate and that, in addition to any other remedy therefor that Buyer may
have, it shall be entitled to temporary injunctive relief before trial from any
court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of proving actual damages and without
the requirement of any bond or other security.

                  (d) Each Seller Party agrees that the existence of any claim
or cause of action by such Seller Party against Buyer shall not constitute a
defense to the enforcement by Buyer of the covenants set forth in this Section
7.7, and that any such claim or cause of action against Buyer shall be litigated
separately.

                  (e) If, in any judicial proceeding, a court refuses to enforce
any of the separate covenants (or any part thereof) set forth in this Section
7.7, then such unenforceable covenant (or such part) shall be eliminated from
this Agreement to the extent necessary to permit the remaining separate
covenants (or parts thereof) to be enforced, and such remaining covenants shall
be given full effect without regard to the invalid covenant (or part thereof).
In the event that any of the separate covenants (or any part thereof) set forth
in this Section 7.7 is deemed by a court to exceed the geographical or temporal
scope or content or other limitations permitted by applicable laws, then such
covenant (or part thereof) shall be reformed to the geographical or temporal
scope or content or other limitations, as the case may be, permitted by
applicable laws, and, in such reduced form, shall be given full effect.

                  7.8 Non-Solicitation. During and for a period of two (2) years
following the Closing, no Seller Party shall, without Buyer's prior written
consent, directly or indirectly, (i) solicit the employment of any of the
Transferred Employees or any officer, senior manager or other key employee of
Buyer or any subsidiary of Buyer or (ii) hire any Transferred Employee, officer,
senior manager or other key employee whose employment Buyer or any subsidiary of
Buyer has terminated within 90 days following such solicitation or hire;
provided, however, that this Section 7.8 shall not prevent advertisements,
solicitations, position listings or notices of employment opportunities that are
published or made available to the public or hiring of personnel responding
thereto and shall not impair the rendering of services to Seller by Transferred
Employees pursuant to and in accordance with the Service Agreement.
Notwithstanding anything herein to the contrary, if Buyer terminates its
employment of any Transferred Employee and such Transferred Employee approaches
Seller for employment without solicitation, direct or indirect, from Seller,
Seller shall not be prohibited from offering employment to such terminated
Transferred Employee during the two-year post-Closing period contemplated in
this Section 7.8.

                           8. Miscellaneous

                  8.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York, without giving effect to any
choice or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction that would cause the application of the laws of any
jurisdiction other that the State of New York).

                                       32
<PAGE>

                  8.2 Jurisdiction. Except as otherwise provided in Section 6.3,
any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement, the Other
Transaction Documents or the transactions contemplated hereby or thereby shall
be brought exclusively in a New York State or United States Federal court
sitting in New York County, and each of the parties hereby expressly submits to
such jurisdiction and venue of such court (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.

                  8.3 Survival. Except as otherwise expressly provided herein,
the several representations, warranties, covenants, and agreements of the
parties contained in this Agreement or in any Other Transaction Document shall
be deemed to be material and to have been relied upon by Buyer, Seller and the
Shareholders notwithstanding any investigation made by Buyer, Seller or the
Shareholders, shall survive the Closing Date and shall remain operative and in
full force and effect until December 31, 2002, except insofar as an
indemnification claim has been asserted by any party and has not been resolved
prior to the end of such two-year period; provided, however, that the
representations and warranties of Seller and the Shareholders set forth in
Sections 2.5, 2.6 and 2.7 shall survive for the period of the applicable statute
of limitations, and the respective representations, warranties, covenants and
agreements of Buyer, Seller and the Shareholders contained in Sections 2.11,
2.13, 2.17, 2.21, 3.4, 4.4, 4.6, 6.1(a)(i), 6.1(a)(iii), 6.1(a)(iv), 6.2(a),
6.4, 6.5, 7.1, 7.2 and 8.11 shall continue without any time limitation.

                  8.4 Notices. Any notices authorized to be given hereunder
shall be in writing and deemed given, if delivered personally or by overnight
courier, on the date of delivery, if a Business Day, or if not a Business Day,
on the first Business Day following delivery, or if mailed, three days after
mailing by registered or certified mail, return receipt requested, and in each
case, addressed, as follows:

                  If to Buyer:

                  Wire One Technologies, Inc.
                  225 Long Avenue
                  Hillside, New Jersey 07205
                  Attention:  Jonathan Birkhahn, Esq.
                  Facsimile:  (973) 391-9776
                  E-mail address:  jbirkhahn@wireone.com

                  and a copy to:

                  Fulbright & Jaworski L.L.P.
                  666 Fifth Avenue
                  New York, New York  10103
                  Attention:  Neil Gold, Esq.
                  Facsimile:  (212) 318-3400
                  E-mail address:  ngold@fulbright.com

                                       33
<PAGE>

                  If to Seller Parties or Sellers' Representative:

                  Axxis, Inc.
                  845 South Ninth Street
                  Louisville, Kentucky 40203
                  Attention:  President
                  Facsimile:  (502) 568-6326

                  and a copy to:

                  Wyatt, Tarrant & Combs, LLP
                  2700 PNC Plaza
                  500 West Jefferson Street
                  Louisville, Kentucky  40202
                  Attention:  Michael B. Vincenti, Esq.
                  Facsimile:  (502) 589-0309
                  E-mail address:  mvincenti@wyattfirm.com

or if delivered by facsimile, on a Business Day before 4:00 p.m. local time of
addressee, on transmission confirmed electronically, or if at any other time or
day on the first Business Day succeeding transmission confirmed electronically,
to the facsimile numbers provided above, or to such other mailing or personal
delivery address or facsimile number as any party shall specify to the other,
pursuant to the foregoing notice provisions. When used in this Agreement, the
term "Business Day" shall mean a day other than a Saturday, Sunday or a day on
which commercial banks in New York, New York are generally closed for business.

                  8.5 Entire Agreement; Amendments. Except for the Mutual
Confidentiality Agreement between Seller and Buyer dated August 10, 2001, this
Agreement and the Other Transaction Documents (i) set forth the entire agreement
of the parties respecting the subject matter hereof, (ii) supersede any prior
and contemporaneous understandings, agreements, or representations by or among
the parties, written or oral, to the extent they related in any way to such
subject matter, and (iii) may not be amended orally, and no right or obligation
of any party may be altered, except as expressly set forth in a writing signed
by such party.

                  8.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall for all purposes be deemed an original, and
all such counterparts shall together constitute but one document.

                  8.7 Headings. The section and subsection headings do not
constitute any part of this Agreement and are inserted herein for convenience of
reference only.

                  8.8 Public Announcements. Neither Buyer on the one hand nor
Seller or any Shareholder on the other shall make any press release or other
public statement concerning the matters covered by this Agreement without the
approval of the other party, except as in the opinion of counsel for the party
making the release or statement is required by law or applicable regulation, and
shall, in any event, to the extent practicable, permit the other party an
opportunity to review any such release or statement prior to dissemination.

                                       34
<PAGE>

                  8.9 Waiver. No waiver of a breach of, or default under, any
provision of this Agreement shall be deemed a waiver of such provision or of any
subsequent breach or default of the same or similar nature or of any other
provision or condition of this Agreement.

                  8.10 Binding Effect and Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their successors
and assigns. Neither Seller nor the Shareholders, on the one hand, nor Buyer, on
the other, may assign any obligation under this Agreement except with the prior
written consent of the other party hereto.

                  8.11 Expenses. Each party shall bear its own expenses incurred
with respect to the preparation of this Agreement and the Other Transaction
Documents and, except as otherwise provided herein, the consummation of the
transactions contemplated hereby and thereby.

                  8.12 Appointment of Representative.

                  (a) Powers of Attorney. Each Seller Party irrevocably
constitutes and appoints J. Michael Smith (the "Sellers' Representative") as
such Seller Party's true and lawful agent, proxy, and attorney-in-fact and
authorizes the Sellers' Representative to act for such Seller Party and in such
Seller Party's name, place, and stead, in any and all capacities to do and
perform every act and thing required or permitted to be done in connection with
the transactions contemplated by this Agreement and any Other Transaction
Document, as fully to all intents and purposes as such person might or could do
in person, including, without limitation, the power to:

                           (i) receive all notices required to be delivered to
         such Seller Party under this Agreement, including, without limitation,
         any notice of a claim for which indemnification is sought under Section
         6 hereof;

                           (ii) take any and all action on behalf of such Seller
         Party from time to time as the Sellers' Representative may deem
         necessary or desirable to defend, pursue, resolve, and/or settle claims
         under this Agreement, including, without limitation, claims for
         indemnification under Section 6 hereof; and

                           (iii) engage and employ agents and representatives
         (including accountants, legal counsel, and other professionals) and
         incur such other expenses as he deems necessary or prudent in
         connection with the administration of the foregoing.

Each Seller Party grants unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing necessary or desirable
to be done in connection with the transactions contemplated by this Agreement
and any Other Transaction Document, as fully to all intents and purposes as such
Seller Party might or could do in person, hereby ratifying and confirming all
that the Sellers' Representative may lawfully do or cause to be done by virtue
hereof. Each Seller Party, by executing this Agreement, agrees that such agency,
proxy, and power of attorney are coupled with an interest, and are therefore
irrevocable without the consent of the Sellers' Representative and shall survive
the death, incapacity, or bankruptcy of such Seller Party to the extent
permitted by applicable law. Each Seller Party acknowledges and agrees that,
upon execution of this Agreement, any delivery by the Sellers' Representative of
any waiver, amendment, agreement, opinion, certificate, or other documents
executed by the Sellers' Representative or any decisions made by the Sellers'
Representative pursuant to this Section 8.12 shall bind such Seller Party with
respect to such documents or decision as fully as if such Seller Party had
executed and delivered such documents or made such decisions.

                                       35
<PAGE>

                  (b) Not Liable. The Sellers' Representative shall not have, by
reason of this Agreement, a fiduciary relationship in respect of any Seller
Party, except in respect of amounts received on behalf of such Seller Party. The
Sellers' Representative shall not be liable to any Seller Party for any action
taken or omitted by him or any agent employed by him hereunder or under any
Other Transaction Document, or in connection therewith, except that the Sellers'
Representative shall not be relieved of any liability imposed by law for gross
negligence or willful misconduct. The Sellers' Representative shall not be
liable to the Seller Parties for any apportionment or distribution of payments
made by him in good faith and, if any such apportionment or distribution is
subsequently determined to have been made in error, the sole recourse of any
Seller Party to whom payment was due, but not made, shall be to recover from the
other Seller Parties any payment in excess of the amount to which they are
determined to have been entitled. The Sellers' Representative, in such capacity,
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions, or conditions of this Agreement or
any Other Transaction Document.

                  (c) Replacement of the Sellers' Representative. Upon the
death, disability, or incapacity of the initial Sellers' Representative
appointed pursuant to Section 8.12(a) above, each Seller Party acknowledges and
agrees that such Sellers' Representative's executor, guardian, or legal
representative, as the case may be, shall (in consultation with the Seller
Parties) appoint a replacement reasonably believed by such person to be capable
of carrying out the duties and performing the obligations of the Sellers'
Representative hereunder within thirty (30) days. In the event that the Sellers'
Representative resigns for any reason, the Sellers' Representative shall (in
consultation with the Seller Parties) select another representative to fill such
vacancy. Any substituted representative shall be deemed the Sellers'
Representative for all purposes of this Agreement and any Other Transaction
Document.

                  (d) Actions of the Sellers' Representative; Liability of the
Sellers' Representative. Each Seller Party agrees that Buyer shall be entitled
to rely on any action taken by the Sellers' Representative, on behalf of the
Seller Parties, pursuant to Section 8.12(a) above (each, an "Authorized
Action"), and that each Authorized Action shall be binding on each Seller Party
as fully as if such Seller Party had taken such Authorized Action. Buyer agrees
that the Sellers' Representative shall have no liability to Buyer for any
Authorized Action, except to the extent that such Authorized Action is found by
a final order of a court of competent jurisdiction to have constituted fraud or
willful misconduct. The Seller Parties hereby release and discharge Buyer from
and against any liability arising out of or in connection with the Sellers'
Representative's failure to distribute any amounts received by the Sellers'
Representative on Seller Parties' behalf to the Seller Parties.

            [The remainder of this page is intentionally left blank.]

                                       36
<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Asset Purchase
Agreement as of the date first written above.

                                BUYER:

                                WIRE ONE TECHNOLOGIES, INC.

                                By:
                                   ---------------------------------------------
                                      Name:   Jonathan Birkhahn
                                      Title:  Executive Vice President Business
                                              Affairs and General Counsel

                                SELLER:

                                AXXIS, INC.

                                By:
                                   ---------------------------------------------
                                      Name:   David T. Richardson
                                      Title:  President

                                SHAREHOLDERS:

                                ------------------------------------------------
                                              Stephen A. Smith

                                ------------------------------------------------
                                              J. Michael Smith

                                ------------------------------------------------
                                              Kenneth W. Rousseau

                                ------------------------------------------------
                                              Michael R. Graves

                                ------------------------------------------------
                                              R. Blake Harris

<PAGE>

                                    SCHEDULES

   Schedule                  Subject Matter
   --------                  --------------
   1.2(a)-1      Backlog jobs
   1.2(a)-2      Underbilling Receivables
    1.2(c)       Post-Effective Date Receivables
    1.2(d)       Inventory
    1.2(e)       Vehicles
    1.2(f)       Furniture, equipment and other tangible assets
    1.2(g)       Leasehold interests
      1.4        Assumed Liabilities
    2.7(b)       Employee Benefit Plans, multiemployer plans
    2.7(d)       Closing Date Employees, terminated employees
      2.8        Litigation
    2.9(a)       In-Progress Jobs, orders and other agreements
    2.9(g)       Proposed agreements
     2.10        Suppliers and customers
     2.11        Tangible property
    2.12(a)      Leased Real Property
     2.14        Insurance policies
    2.16(b)      Certain transactions

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