EXHIBIT 10.19

ASSET PURCHASE AGREEMENT

AMONG:

SAGAMORE HOLDINGS, INC.,
A FLORIDA CORPORATION ("PARENT"),

NECI ACQUISITION, INC.
A FLORIDA CORPORATION ("PURCHASER"),

NEXUS CUSTOM ELECTRONICS, INC.,
A DELAWARE CORPORATION ("SELLER"),

AND

JACO ELECTRONICS, INC.,
A NEW YORK CORPORATION ("SHAREHOLDER")

DATED AS OF SEPTEMBER 20, 2004

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TABLE OF CONTENTS

1. DEFINITIONS.............................................................................................1
1.1. Code...........................................................................................2
1.2. Company Plan...................................................................................2
1.3. Consent........................................................................................2
1.4. Contract.......................................................................................2
1.5. Contract Year..................................................................................2
1.6. Damages........................................................................................2
1.7. Disclosure Schedules...........................................................................2
1.8. Encumbrance....................................................................................2
1.9. Entity.........................................................................................2
1.10. GAAP. ......................................................................................2
1.11. Governmental Authorization.....................................................................2
1.12. Governmental Body..............................................................................3
1.13. Hazardous Material.............................................................................3
1.14. Knowledge......................................................................................4
1.15. Legal Requirement..............................................................................4
1.16. Liability......................................................................................4
1.17. Material.......................................................................................4
1.18. Material Seller Contracts......................................................................4
1.19. Net Working Capital............................................................................4
1.20. Order. ......................................................................................4
1.21. Ordinary Course of Business....................................................................5
1.22. Permitted Distribution.........................................................................6
1.23. Person. ......................................................................................6
1.24. Proceeding.....................................................................................6
1.25. Proprietary Asset..............................................................................6
1.26. Purchaser Group................................................................................6
1.27. Seller Contracts...............................................................................6
1.28. Supply Agreement...............................................................................6
1.29. Tax. ......................................................................................6
1.30. Tax Return.....................................................................................7
1.31. Transaction Documents..........................................................................7
1.32. Transactions...................................................................................7
2. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED LIABILITIES..........................................8
2.1. Sale and Purchase of Assets....................................................................8
2.2. Excluded Assets................................................................................9
2.3. No Encumbrances...............................................................................10
2.4. Passage of Title..............................................................................10
2.5. Transfer Taxes................................................................................10
2.6. Assumed Liabilities...........................................................................10
2.7. Excluded Liabilities..........................................................................10
2.8. Employees.....................................................................................11
2.9. Consideration Paid by Purchaser...............................................................11
2.10. Closing.......................................................................................14

3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDER...........................................16
3.1. Due Organization; No Subsidiaries; Etc........................................................16
3.2. Certificate of Incorporation and Bylaws; Records..............................................16
3.3. Capitalization, Etc...........................................................................17
3.4. Financial Statements..........................................................................17
3.5. Absence of Material Changes...................................................................18
3.6. Title to Assets...............................................................................18
3.7. Inventories...................................................................................19
3.8. Receivables...................................................................................19
3.9. Fixed Assets..................................................................................19
3.10. Real Property.................................................................................19
3.11. Proprietary Assets............................................................................19
3.12. Contracts.....................................................................................20
3.13. Liabilities...................................................................................21
3.14. Compliance With Legal Requirements............................................................22
3.15. Governmental Authorizations...................................................................22
3.16. Tax Matters...................................................................................23
3.17. Employee and Labor Matters....................................................................23
3.18. Company Plans.................................................................................25
3.19. Environmental Matters.........................................................................25
3.20. Proceedings; Orders...........................................................................25
3.21. Authority; Binding Nature of Agreements.......................................................26
3.22. Non-Contravention Consents....................................................................26
3.23. Brokers.......................................................................................27
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.................................................27
4.1. Due Organization..............................................................................27
4.2. Authority; Binding Nature of Agreement........................................................27
4.3. Employees.....................................................................................28
4.4. Brokers.......................................................................................28
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE................................................28
5.1. Accuracy of Representations...................................................................28
5.2. Performance of Obligations....................................................................28
5.3. Consents......................................................................................28
5.4. No Material Adverse Change....................................................................28
5.5. Additional Documents..........................................................................28
5.6. No Claim Regarding the Purchased Assets or Sale Proceeds......................................29
5.7. No Prohibition................................................................................29
5.8. No Actions Outside of the Ordinary Course of Business.........................................29
5.9. Compliance with Legal Requirements............................................................29
5.10. 2004 EBITDA Target............................................................................29
5.11. No Injunction.................................................................................29
6. CONDITIONS PRECEDENT TO THE SELLER AND SHAREHOLDER'S OBLIGATION TO CLOSE...............................29
6.1. Accuracy of Representations...................................................................30
6.2. Purchaser's Performance.......................................................................30
6.3. No Injunction.................................................................................30
6.4. No Prohibition................................................................................30

7. INDEMNIFICATION, ETC...................................................................................30
7.1. Survival of Representations and Covenants.....................................................30
7.2. Indemnification by the Seller and Shareholder.................................................31
7.3. Remediation Obligation........................................................................32
7.4. Setoff........................................................................................32
7.5. Defense of Third Party Claims.................................................................32
7.6. Exercise of Remedies by Purchaser Indemnitees Other Than Purchaser............................33
7.7. Indemnification by Parent and Purchaser.......................................................33
7.8. Threshold for Indemnification by the Seller and Shareholder...................................33
7.9. Threshold for Indemnification by Parent and Purchaser.........................................34
7.10. Limitation on Indemnification.................................................................34
7.11. Exclusivity of Indemnification Remedies.......................................................34
8. OTHER AGREEMENTS.......................................................................................34
8.1. Non-Compete...................................................................................34
8.2. Nonsolicitation...............................................................................35
8.3. Confidentiality.....................................................ERROR! BOOKMARK NOT DEFINED.
8.4. Severability..................................................................................36
8.5. Judicial Modification.........................................................................36
8.6. Specific Enforcement..........................................................................36
8.7. Tolling of Time Periods.......................................................................37
8.8. Confirmation as to Scope......................................................................37
8.9. Access to Records.............................................................................37
8.10. No Resale of Purchased Assets.................................................................37
8.11. Post-Audit Closing Cooperation................................................................38
8.12. Transitional Services.........................................................................38
9. MISCELLANEOUS..........................................................................................38
9.1. Counterparts; Interpretation..................................................................38
9.2. Governing Law.................................................................................38
9.3. Successors and Assigns; Assignment............................................................38
9.4. Partial Invalidity and Severability...........................................................38
9.5. Waiver........................................................................................39
9.6. Headings......................................................................................39
9.7. Acceptance by Fax.............................................................................39
9.8. Expenses......................................................................................39
9.9. Attorneys' Fees...............................................................................39
9.10. Specific Performance..........................................................................39
9.11. Further Assurances............................................................................39
9.12. Notices...................................................................................... 40
9.13. NO JURY TRIAL.................................................................................41

iii

ASSET PURCHASE AGREEMENT

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

RECITALS

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

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

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

AGREEMENT:

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

1. DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

1.11. Governmental Authorization. "Governmental Authorization" shall mean
any permit, license, certificate, franchise, concession, approval, Consent,
ratification, permission, clearance, confirmation, endorsement, route authority,
waiver, certification, designation, rating, registration, qualification or
authorization that is, has been or may in the future be issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement or under any Contract with any Governmental
Body.

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

(a) Nation, principality, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature;

(b) Federal, state, local, municipal, foreign or other government;

(c) Governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department,
agency, bureau, branch, office, commission, council, boars,
instrumentality, officer, official, representative, organization,
unit, body or Entity and any court or other tribunal);

(d) Multi-national organization or body; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.20. Order. "Order" shall mean any,

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

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

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

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

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

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

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

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

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

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

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

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

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

(a) To which the Seller is a party;

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

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

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

1.30. Tax Return. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is or has been filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

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

(a) The Agreement including the Disclosure Schedules; and

(b) The Bills of Sale;

(d) The Assignment;

(e) The Seller Note;

(f) The Supply Agreement;

(g) The Employment Agreement;

(h) The Guaranty; and

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

1.32. Transactions. "Transactions" shall mean:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.10. Closing.

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

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

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

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

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

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

(v) the Supply Agreement executed by the Shareholder;

(vi) the Employment Agreement executed by Xxx Xxxx; and

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

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

(i) the Seller Note;

(ii) the Bills of Sale executed by Purchaser;

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

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

(v) the Employment Agreement executed by the Purchaser;

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

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

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

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

3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDER

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

3.1. Due Organization; No Subsidiaries; Etc.

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

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

(ii) to own and use its assets in the manner in which its assets
are currently owned and used; and

(iii) to perform its obligations under the Seller Contracts.

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

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

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

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

3.2. Certificate of Incorporation and Bylaws; Records.

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

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

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

(iii) stock records of the Seller; and

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

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

3.3. Capitalization, Etc.

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

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

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

3.4. Financial Statements.

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

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

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

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

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

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

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

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

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

3.6. Title to Assets.

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

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

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

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

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

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

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

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

3.8. Receivables.

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

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

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

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

3.11. Proprietary Assets.

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

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

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

3.12. Contracts.

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

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

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

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

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

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

3.13. Liabilities.

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

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

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

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

(iv) the liabilities identified on Schedule 3.13.

(b) Schedule 3.13

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

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

3.14. Compliance With Legal Requirements.

Except as set forth in Schedule 3.14

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

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

3.15. Governmental Authorizations.

(a) Schedule 3.15 identifies:

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

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

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

(b) Except as set forth in Schedule 3.15:

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

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

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

3.16. Tax Matters.

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

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

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

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

3.17. Employee and Labor Matters.

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

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

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

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

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

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

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

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

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

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

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

3.20. Proceedings; Orders.

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

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

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

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

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

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

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

3.21. Authority; Binding Nature of Agreements.

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

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

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

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

(b) Contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which the Seller or
Shareholder, or any of the assets owned or used by the Seller, is
subject;

(c) Contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by the Seller or any of
their employees or that otherwise relates to the Seller's Business
or to any of the Purchased Assets;

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

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

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

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

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

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

4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER

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

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

4.2. AUTHORITY; BINDING NATURE OF AGREEMENT.

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

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

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

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

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

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

The Purchaser's obligation to purchase the Purchased Assets, assume the
Assumed Liabilities, and to take the other actions required to be taken by the
Purchaser at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by the
Purchaser, in whole or in part, in accordance with Section 9.5):

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

5.2. Performance of Obligations.

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

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

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

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

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

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

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

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

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

5.8. NO ACTIONS OUTSIDE OF THE ORDINARY COURSE OF BUSINESS. The Seller
shall be operated only in the Ordinary Course of Business between September 3,
2004 and the Closing Date, except as otherwise permitted herein, including,
without limitation, the declaration and/or payment of any Permitted
Distribution.

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

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

5.11. No Injunction.

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

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

The Seller's and Shareholder's obligation to sell the Purchased Assets and
to take the other actions required to be taken by the Seller and Shareholder at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by the Seller and
Shareholder, in whole or in part, in accordance with Section 9.5):

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

6.2. Purchaser's Performance.

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

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

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

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

7. INDEMNIFICATION, ETC.

7.1. Survival of Representations and Covenants.

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

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

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

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

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

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

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

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

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

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

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

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

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

7.3. Remediation Obligation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8. OTHER AGREEMENTS

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

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

8.2. Nonsolicitation.

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

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

8.3. CONFIDENTIALITY

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

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

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

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

8.6. Specific Enforcement. The restrictive covenants contained in this
Section 8 are covenants independent of any other provision of this Agreement and
the existence of any claim that any Party may allege against any other Party,
whether based on this Agreement or otherwise, shall not prevent the enforcement
of these covenants. The Parties acknowledge that the restrictions on their
activities as contained in this Section 8 are required for the reasonable
protection of the interests of the Parties as a result of the Transactions.
Therefore, the Parties hereby agree that, in the event of a violation of any
provision of this Section 8, each Party will be entitled, if it so elects, to
institute and prosecute proceedings at law or in equity to obtain damages with
respect to such violation or to enforce specific performance of this Section 8
against the other Parties or to enjoin the other Parties from engaging in any
activity in violation hereof without the posting of any bond in addition to any
other remedies which such Party may have.

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

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

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

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

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

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

9. MISCELLANEOUS

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

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

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

9.4. Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any terms of this Agreement not essential to the commercial
purpose of this Agreement shall be held to be illegal, invalid or unenforceable
by a court of competent jurisdiction, it is the intention of the Parties that
the remaining terms hereof shall constitute their agreement with respect to the
subject matter hereof and all such remaining terms shall remain in full force
and effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement shall be replaced by a valid provision
which will implement the commercial purpose of the illegal, invalid or
unenforceable provision.

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

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

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

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

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

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

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

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

If to Shareholder: Jaco Electronics, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

With a copy to: Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

If to Seller: Nexus Custom Electronics, Inc.
c/o Jaco Electronics, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

With a copy to: Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

If to Purchaser NECI Acquisition, Inc.
00 Xxxxx Xxxx Xxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx/ Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

With a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

If to Parent: Sagamore Holdings, Inc.
00 Xxxxx Xxxx Xxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx/ Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

With a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

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

[SIGNATURE BLOCK ON FOLLOWING PAGE]

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

--------------------------------------------------------------------------------
SELLER: PURCHASER:
--------------------------------------------------------------------------------

NEXUS CUSTOM ELECTRONICS, INC., NECI ACQUISITION, INC.,
A DELAWARE CORPORATION A FLORIDA CORPORATION

By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxx Xxxxxxx
------------------------- -------------------------
Xxxxxxx Xxxx Xxxxxx Xxxxxxx
Vice President President

--------------------------------------------------------------------------------
SHAREHOLDER: PARENT:
--------------------------------------------------------------------------------

JACO ELECTRONICS, INC., SAGAMORE HOLDINGS, INC.,
A NEW YORK CORPORATION A FLORIDA CORPORATION

By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxx Xxxxxxx
------------------------- -------------------------
Xxxxxxx Xxxx Xxxxxx Xxxxxxx
Vice President President

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Table of Contents

EXHIBIT 10.19

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