SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OF 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                                December 31, 1998
                                 Date of report
                        (Date of earliest event reported)


                            ZEVEX INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in Its Charter)


              Delaware             33-19583                     87-0462807   
   (State of Incorporation)    (Commission File Number)      (I.R.S.Employer
                                                            Identification No.)


                             4314 Zevex Park Lane, 
                           Salt Lake City, Utah 84123
                    (Address of Principal Executive Offices)


         Issuer's Telephone Number, Including Area Code: (801) 264-1001


                                      None
          (Former Name of Former Address, if Changed Since Last Report)



<PAGE>


Item 2. Acquisition of Disposition of Assets

On December 31, 1998, ZEVEX International,  Inc. (ZVXI) acquired from Len Smith,
Tracy  Livingston and David Bernardi all of the issued and  outstanding  capital
stock of JTech Medical Industries, Inc. Consideration for the transaction, which
could  total a maximum of $7.25  million,  consists  of $3.1  million of Company
cash, $3 million in convertible  debentures and a two-year earn-out amount of up
to $575,000  in cash and  $575,000 in  convertible  debentures  based on certain
sales and pre-tax  earning  targets.  Multi-year  employment  agreement has been
signed with three JTech executives.

JTech will be  consolidated  into the ZEVX  facility  in Salt Lake City and will
operate as a  wholly-owned  subsidiary of ZEVEX  International,  Inc.  under its
current name.

JTech  Medical  is  a  manufacturer   and  marketer  of  both   stand-alone  and
computerized  musculoskeletal  evaluation  products that measure isolated muscle
strength,  joint ranges of motion and sensation to document the effectiveness of
treatment or extent of injury.

JTech Medical  Industries is an  internationally  recognized  leader in physical
medicine measurement products,  providing both hardware and Windows95-compatible
software.  JTech provides equipment for musculoskeletal  evaluation,  functional
capacity evaluation, upper extremity and hand testing and pain evaluation. These
products  are  used by  chiropractors,  physical  therapists,  and  occupational
therapists  for  outcome   assessment   during   rehabilitation,   medical-legal
evaluations  for  personal  injury  and  workers   compensation,   and  clinical
documentation.

Also,  on December 31, 1998,  ZEVEX  acquired from Vijay Lumba all of the issued
and outstanding capital stock of Aborn Electronics,  Inc.  Consideration for the
transaction,  which  could  total a maximum of $5.1  million,  consists of $1.85
million in Company cash, $1.35 million in a convertible debenture and a one-year
earn-out  amount  of up to  $950,000  in  cash  and  $950,000  in a  convertible
debenture  based on certain  sales and pre-tax  earning  targets.  A  multi-year
employment agreement has been signed with Aborn's president.

Aborn will  maintain  operations in San Jose,  California  and will operate as a
wholly-owned subsidiary of ZEVEX International, Inc. under its current name.

Aborn is a  manufacturer  and developer of optical  sensors and custom  computer
chips used in both medical and  industrial  devices.  Aborn's  products  include
fiber  optic  links,  integrated  optoisolators,  high-speed  sensor  integrated
circuits, custom chips application specific integrated circuits (ASIC) chips and
solid state relays.  Medical  applications for these technology products include
diagnostic  and  therapeutic  equipment,  such as blood  analyzers  and dialysis
machines.


Item 7. Financial Statements and Exhibits

The audited financial statements of JTech Medical Industries, Inc.  and Aborn 
Electronics, Inc. will be filed not later than 60 days after the date of the 
filing of this report.  The following exhibits are included for the transactions
described in Item 2, above.


                                Index To Exhibits

Number                     Exhibits
10.1         Stock Purchase Agreement - JTech Medical  Industries,  Inc., dated
             December 31, 1998, with certain material exhibits. 
10.2         Stock Purchase Agreement - Aborn Electronics, Inc., dated 
             December 31, 1998, with certain material exhibits.






SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the Registrant  has duly caused this  Registration  Statement to be
signed on its behalf by the Undersigned, thereunto duly authorized.


ZEVEX International, Inc.



By /s/ Dean G. Constantine
Dean G. Constantine, President
Principal Executive Officer


Dated: January 14, 1999









                            STOCK PURCHASE AGREEMENT



                                      AMONG


                            ZEVEX INTERNATIONAL, INC.

                                       AND

             LEONARD C. SMITH, J. TRACY LIVINGSTON, DAVE W. BERNARDI

                                       AND
                   CORPORATION OF THE PRESIDENT OF THE CHURCH
                      OF JESUS CHRIST OF LATTER-DAY SAINTS


                                December 31, 1998


<PAGE>






                                TABLE OF CONTENTS

                                                                            PAGE

1.       Definitions...........................................................1

2.       Purchase and Sale of Company Shares...................................5
         (a)      Basic Transaction. ..         ...............................5
         (b)      Purchase Price...............................................5
         (c)      Terms of Debentures..........................................6
         (d)      The Hold-Back................................................6
         (e)      The Closing..................................................7
         (f)      Deliveries at the Closing....................................7

3.       Representations and Warranties Concerning the Transaction.............7
         (a)      Representations and Warranties of the Sellers................7
         (b)      Representations and Warranties of the Buyer..................9
         (c)      Representations and Warranties of the Church................11

4.       Representations and Warranties Concerning the Company................12
         (a)      Organization, Qualification, and Corporate Power............12
         (b)      Capitalization..............................................13
         (c)      Noncontravention............................................13
         (d)      Brokers' Fees...............................................13
         (e)      Title to Assets.............................................14
         (f)      Financial Statements........................................14
         (g)      Events Subsequent to Most Recent Fiscal Year End............14
         (h)      Undisclosed Liabilities.....................................15
         (i)      Legal Compliance............................................16
         (j)      Tax Matters.................................................16
         (k)      Intellectual Property.......................................17
         (l)      Tangible Assets.............................................19
         (m)      Inventory...................................................19
         (n)      Contracts...................................................19
         (o)      Notes and Accounts Receivable...............................20
         (p)      Powers of Attorney..........................................20
         (q)      Insurance...................................................20
         (r)      Litigation..................................................20
         (s)      Product Warranty............................................20
         (t)      Product Liability...........................................21
         (u)      Employees...................................................21
         (v)      Employee Benefits...........................................21
         (w)      Guaranties..................................................23
         (x)      Environmental, Health, and Safety Matters...................23
         (y)      Certain Business Relationships with the Company.............24
         (z)      Year 2000 Items.............................................24
         (aa)     Disclosure..................................................24

5.       Pre-Closing Covenants................................................24
         (a)      General.....................................................24
         (b)      Notices and Consents........................................24
         (c)      Operation of Business.......................................25
         (d)      Preservation of Business....................................25
         (e)      Full Access.................................................25
         (f)      Notice of Developments......................................25
         (g)      Exclusivity.................................................25

6.       Post-Closing Covenants...............................................26
         (a)      General.....................................................26
         (b)      Litigation Support..........................................26
         (c)      Transition..................................................26
         (d)      Confidentiality.............................................26
         (e)      Covenant Not to Compete.....................................27

7.       Conditions to Obligation to Close....................................28
         (a)      Conditions to Obligation of the Buyer.......................28
         (b)      Conditions to Obligation of the Sellers.....................29

8.       Remedies for Breaches of This Agreement..............................30
         (a)      Survival of Representations and Warranties..................30
         (b)      Indemnification Provisions for Benefit of the Buyer.........30
         (c)      Indemnification Provisions for Benefit of the Sellers.......31
         (d)      Matters Involving Third Parties.............................32
         (e)      Determination of Adverse Consequences.......................33
         (f)      Recoupment Under the Hold-back and Debentures...............33
         (g)      Other Indemnification Provisions............................33

9.       Tax Matters..........................................................33
         (a)      Tax Periods Ending on or Before the Closing Date............33
         (b)      Tax Periods Beginning Before and Ending After the Closing 
                  Date........................................................34
         (c)      Cooperation on Tax Matters..................................34
         (d)      Certain Taxes...............................................34

10.      Termination..........................................................35
         (a)      Termination of Agreement....................................35
         (b)      Effect of Termination.......................................35

11.      Miscellaneous........................................................36
         (a)      Nature of Certain Obligations...............................36
         (b)      Termination of Shareholders Agreement.......................36
         (c)      Press Releases and Public Announcements.....................36
         (d)      No Third-Party Beneficiaries................................36
         (e)      Entire Agreement............................................36
         (f)      Succession and Assignment...................................36
         (g)      Counterparts................................................37
         (h)      Headings....................................................37
         (i)      Notices.....................................................37
         (j)      Governing Law...............................................38
         (k)      Amendments and Waivers......................................38
         (l)      Severability................................................38
         (m)      Expenses....................................................38
         (n)      Construction................................................38
         (o)      Incorporation of Exhibits, Annexes, and Schedules...........39
         (p)      Specific Performance........................................39
         (q)      Submission to Jurisdiction..................................39
         (r)      Limitation on Obligations of the Church.....................39

Exhibit A--Form of Convertible Debenture
Exhibit B--Pledge Agreement
Exhibit C--Formula for Calculating Earn-Out Payments
Exhibit D--Historical Financial Statements
Exhibit E--Forms of Employment Agreements
Exhibit F--Allocation of Purchase Price Among Sellers
Exhibit G--Amendment to Lease
Exhibit H--Voice Technology Project Agreement

Annex I--Exceptions to the Sellers' Representations and Warranties Concerning
         the Transaction

Annex II--Exceptions to the Buyer's Representations and Warranties Concerning  
          the Transaction

Annex III--Exceptions to Representations and Warranties Concerning the Company












                            STOCK PURCHASE AGREEMENT
         This Stock  Purchase  Agreement  ("Agreement")  is  entered  into as of
December  31,  1998,  by  and  among  ZEVEX  International,   Inc.,  a  Delaware
corporation  ("Buyer"),  and Len Smith,  James T.  Livingston and Dave Bernardi,
(collectively the "Sellers"),  and Corporation of the President of The Church of
Jesus Christ of Latter-day Saints, a Utah non-profit corporation (the "Church").
The Buyer and the Sellers are referred to collectively herein as the "Parties."

         The Sellers and the Church in the aggregate own all of the  outstanding
capital  stock  of JTech  Medical  Industries,  Inc.,  a Utah  corporation  (the
"Company").

         This  Agreement  contemplates  a  transaction  in which the Buyer  will
purchase  from the Sellers  and the Church,  and the Sellers and the Church will
sell to the Buyer, all of the outstanding capital stock of the Company in return
for cash and certain other consideration.

         Now,  therefore,  in  consideration  of the  premises  and  the  mutual
promises herein made, and in consideration of the  representations,  warranties,
and covenants herein contained, the Parties agree as follows.


<PAGE>



1.       Definitions.

         "Accredited  Investor"  has the  meaning  set  forth  in  Regulation  D
promulgated under the Securities Act.

         "Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders, decrees, rulings,  damages, dues, penalties,  fines, costs, amounts paid
in settlement,  Liabilities,  obligations,  Taxes, liens, losses,  expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

         "Affiliate"  has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

         "Applicable  Rate" means the prime rate as  published in the Money Rate
Section of the Wall Street Journal, plus two percent (2%) per annum.

         "Basis"  means  any  past or  present  fact,  situation,  circumstance,
status,  condition,  activity,  practice,  plan,  occurrence,  event,  incident,
action,  failure to act, or  transaction  that forms or could form the basis for
any specified consequence.

         "Buyer Confidential Information" has the meaning set forth in '6(d)(i) 
          below.

         "Buyer Shares" has the meaning set forth in '2(c) below.

         "Closing" has the meaning set forth in '2(e) below.

         "Closing Date" has the meaning set forth in '2(e) below.

         "COBRA"  means the  requirements  of Part 6 of Subtitle B of Title I of
          ERISA and Code '4980B.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company Confidential Information" has the meaning set forth in '6(d)
          (ii) below.

         "Company Share" means any share of the Common Stock, par value $.001 of
          the Company.

         "Debenture" has the meaning set forth in '2(b)(i) below.

         "Deferred Intercompany Transaction" has the meaning set forth in 
          Reg. ' 1.1502-13.

         "Earn-Out  Payment"  means  either  the First  Earn-Out  Payment or the
          Second Earn-Out Payment, as the case may be.

         "Employee   Benefit   Plan"   means  any  (a)   nonqualified   deferred
compensation  or  retirement  plan  or   arrangement,   (b)  qualified   defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified  defined benefit  retirement plan or arrangement which is an
Employee  Pension  Benefit  Plan  (including  any  Multiemployer  Plan),  or (d)
Employee  Welfare Benefit Plan or material  fringe benefit or other  retirement,
bonus, or incentive plan or program.

         "Employee Pension Benefit Plan" has the meaning set forth in
          ERISA '3(2).

         "Employee Welfare Benefit Plan" has the meaning set forth in 
          ERISA '3(1).

         "Environmental,   Health,  and  Safety  Requirements"  shall  mean  all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

         "ERISA" means the Employee Retirement Income Security Act of 1974,
          as amended.

         "ERISA  Affiliate"  means  each  entity  which is  treated  as a single
          employer with Seller for purposes of Code '414.

         "Fiduciary" has the meaning set forth in ERISA '3(21).

         "Financial Statements" has the meaning set forth in '4(f) below.

         "First Earn-Out Payment" has the meaning set forth in '2(b)(ii) below.

         "GAAP" means United States generally accepted accounting  principles as
          in effect from time to time.

         "Hold-Back" has the meaning set forth in '2(d) below.

         "Indemnified Party" has the meaning set forth in '8(d) below.

         "Indemnifying Party" has the meaning set forth in '8(d) below.

         "Information  Technology" means computer  software,  computer firmware,
          computer  hardware  (whether  general or specific  purpose) and other 
          similar or related items of automated, computerized or software 
          systems.

         "Initial Payment" has the meaning set forth in '2(b)(ii) below.

         "Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
reissuances,  continuations,  continuations-in-part,  revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

         "Knowledge" means actual knowledge after reasonable investigation.

         "Liability"  means any  liability  (whether  known or unknown,  whether
          asserted or  unasserted,  whether  absolute or  contingent,  whether 
          accrued or unaccrued,  whether  liquidated  or  unliquidated,  and 
          whether due or to become due), including any liability for Taxes.

         "Most Recent Balance Sheet" means the balance sheet contained within 
          the Most Recent Financial Statements.

         "Most Recent Financial Statements" has the meaning set forth in '4(f) 
          below.

         "Most Recent Fiscal Month End" has the meaning set forth in '4(f) 
          below.

         "Most Recent Fiscal Year End" has the meaning set forth in '4(f) below.

         "Multiemployer Plan" has the meaning set forth in ERISA '3(37).

         "Ordinary  Course of Business"  means the  ordinary  course of business
          consistent with past custom and practice (including with respect to
          quantity and frequency).

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Person"  means  an  individual,  a  partnership,  a  corporation, an
          association,  a joint stock company, a trust, a joint venture, an
          unincorporated organization, or a governmental entity.

         "Prohibited Transaction" has the meaning set forth in ERISA '406 and
          Code '4975.

         "Purchase Price" has the meaning set forth in '2(b) below.

         "Reportable Event" has the meaning set forth in ERISA '4043.

         "Second Earn-Out Payment" has the meaning set forth in '2(b)(iii)
          below.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Securities Exchange Act" means the Securities Exchange Act of 1934, 
          as amended.

         "Security  Interest"  means any mortgage,  pledge,  lien,  encumbrance,
charge, or other security  interest,  other than (a) mechanic's,  materialmen's,
and similar  liens,  (b) liens for Taxes not yet due and  payable,  (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary  Course of Business and not incurred
in connection with the borrowing of money.

         "Tax"  means any  federal,  state,  local,  or  foreign  income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental  (including  taxes under Code '59A),
customs duties, capital stock, franchise, profits, withholding,  social security
(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

         "Tax Return" means any return,  declaration,  report, claim for refund,
or information return or statement relating to Taxes,  including any schedule or
attachment thereto, and including any amendment thereof.

         "Third Party Claim" has the meaning set forth in '8(d) below.

         "Year 2000 Compliant"  means,  with respect to Information  Technology,
the  Information  Technology is fully  functional and compatible with use during
and after the  calendar  year 2000 A.D.,  and the  Information  Technology  used
during  each such time  period  will  accurately  receive,  provide  and process
date/time  data,  (including,  but not limited to,  calculating,  comparing  and
sequencing)  from, into and between the 20th and 21st  centuries,  including the
years 1999 and 2000, and leap year calculations and will not malfunction,  cease
to function,  or provide  invalid or incorrect  results as a result of date/time
data.

2.       Purchase and Sale of Company Shares.

         (a) Basic  Transaction.  On and subject to the terms and  conditions of
this  Agreement,  the Buyer agrees to purchase  from each of the Sellers and the
Church,  and each of the Sellers and the Church agrees to sell to the Buyer, all
of such Seller's and the Church's Company Shares for the consideration specified
below in this '2.

         (b)  Purchase  Price.  The Buyer  agrees to pay to the  Sellers and the
Church a purchase price of up to, but not  exceeding,  Seven Million Two Hundred
Fifty Thousand Dollars  ($7,250,000) (the "Purchase Price"),  described below in
this '2(b).  The  Purchase  Price shall be  allocated  among the Sellers and the
Church as set forth in Exhibit F attached  hereto.  The  Purchase  Price will be
paid in the following manner:

                  (i) Payment at Closing. At Closing,  the Buyer will pay to the
         Sellers Three Thousand Dollars in cash by bank check.

                  (ii) Payment by January 6, 1999. On January 6, 1999, the Buyer
         will pay to Sellers and the Church Six Million  Ninety  Seven  Thousand
         Dollars  ($6,097,000)  comprised  of: (A) Three  Million  Ninety  Seven
         Thousand Dollars ($3,097,000) in cash payable by wire transfer or other
         immediately  available  funds;  and (B)  convertible  debentures of the
         Buyer in the form  attached  hereto as Exhibit A  ("Debenture")  in the
         aggregate principal amount of Three Million Dollars  ($3,000,000).  The
         cash portion of the foregoing payment (the "Initial  Payment") shall be
         subject to the hold-back  provisions of '2(d). The Debenture is secured
         by the pledge of stock pursuant to the Pledge Agreement attached hereto
         as Exhibit B.

                  (iii)  First  Earn-Out   Payment.   Within  ninety  (90)  days
         following  December  31,  1999,  the Buyer  will pay to the  Sellers an
         additional  amount of cash and Debentures in an amount to be calculated
         in accordance with the formula and example  described in Exhibit C (the
         "First Earn-Out Payment").  The First Earn-Out Payment shall not exceed
         (A) Three Hundred Seventy Five Thousand Dollars ($375,000) in cash, and
         (B) a Debenture  in the  aggregate  principal  amount of Three  Hundred
         Seventy Five Thousand Dollars ($375,000). The First Earn-Out Payment is
         subject to  adjustment  upon  certain  terminations  of the  Employment
         Agreement  attached  hereto as Exhibit E and as described in Section 10
         therein.

                  (iv)  Second  Earn-Out   Payment.   Within  ninety  (90)  days
         following  December  31,  2000,  the Buyer  will pay to the  Sellers an
         additional  amount of cash and Debentures in an amount to be calculated
         in accordance with the formula and example  described in Exhibit C (the
         "Second  Earn-Out  Payment").  The Second  Earn-Out  Payment  shall not
         exceed (A) Two Hundred Thousand  Dollars  ($200,000) in cash, and (B) a
         Debenture in the  aggregate  principal  amount of Two Hundred  Thousand
         Dollars   ($200,000).   The  Second  Earn-Out  Payment  is  subject  to
         adjustment  upon  certain  terminations  of  the  Employment  Agreement
         attached hereto as Exhibit E and as described in Section 10 therein.

         (c) Terms of  Debentures.  In  addition  to the  terms  and  conditions
contained in the form of Debenture in Exhibit A, each Debenture may be converted
by its holder,  in whole or in part,  into the common stock of the Buyer ("Buyer
Shares") at a rate of Eleven Dollars  ($11.00) per share as follows:  (i) at any
time after one (1) year and before  three (3) years,  measured  from the date of
issuance,  for Debentures issued as part of the Initial Purchase Price; and (ii)
at any time after one (1) year and before two (2) years,  measured from the date
of issuance, for Debentures issued as part of an Earn-Out Payment.

         (d) The Hold-Back. The Buyer will hold and not deliver at Closing (four
hundred sixty five thousand  dollars  ($465,000)  from the Initial  Payment (the
"Hold-Back").  The Parties agree that  two-thirds  of the  Hold-Back  ($310,000)
shall  be held by the  Buyer  and  paid to the  Sellers  (in  proportion  to the
allocation set forth on Exhibit F) on a deferred  basis  promptly  following the
post-Closing  completion of the audit  requirements  of the Buyer,  less amounts
applied by the Buyer to cover unknown audit  contingencies  which occurred prior
to the Closing  Date.  The Parties  agree that the  remaining  one-third  of the
Hold-Back  ($155,000)  shall be held by the  Buyer and paid to the  Sellers  (in
proportion  to the  allocation  set forth on Exhibit F) on a deferred  basis one
hundred  eighty (180) days after Closing,  less amounts  applied by the Buyer to
cover unknown  contingencies that occur prior to Closing,  including amounts due
to Buyer  under  '8(b).  Buyer  agrees  to add to the  amount  of the  Hold-Back
actually paid to the Sellers an additional  amount equal to eight (8%) per annum
simple  interest on such amount paid,  accruing  from the Closing Date until the
date of payment.

         (e) The Closing.  The closing of the transactions  contemplated by this
Agreement (the "Closing")  shall take place at the offices of Buyer in Salt Lake
City,  Utah,  commencing  at 9:00 a.m.  local  time on the second  business  day
following the satisfaction or waiver of all conditions to the obligations of the
Parties  to  consummate  the  transactions   contemplated   hereby  (other  than
conditions  with  respect to actions  the  respective  Parties  will take at the
Closing  itself) or such other date as the Buyer and the  Sellers  may  mutually
determine (the "Closing Date").

         (f)  Deliveries  at the Closing.  At the Closing,  (i) the Sellers will
deliver  to the Buyer  the  various  certificates,  instruments,  and  documents
referred  to in '7(a)  below,  (ii) the Buyer will  deliver to the  Sellers  the
various  certificates,  instruments,  and documents  referred to in '7(b) below,
(iii)  each of the  Sellers  and the  Church  will  deliver  to the Buyer  stock
certificates representing all of his or its Company Shares, endorsed in blank or
accompanied by duly executed blank stock powers, and (iv) the Buyer will deliver
to each of the Sellers the consideration specified in '2(b) above.

3.       Representations and Warranties Concerning the Transaction.

         (a) Representations and Warranties of the Sellers.  Each of the Sellers
represents and warrants to the Buyer that the statements contained in this '3(a)
are correct and  complete as of the date of this  Agreement  and will be correct
and  complete  as of the  Closing  Date (as  though  made then and as though the
Closing Date were  substituted  for the date of this Agreement  throughout  this
'3(a)) with respect to himself, except as set forth in Annex I attached hereto.

                  (i)  Authorization  of Transaction.  The Seller has full power
         and  authority  to execute and deliver  this  Agreement  and to perform
         Seller's obligations  hereunder.  This Agreement  constitutes the valid
         and legally binding obligation of the Seller, enforceable in accordance
         with its terms and conditions.  The Seller need not give any notice to,
         make any filing with, or obtain any authorization, consent, or approval
         of any government or governmental agency or any third party in order to
         consummate the transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Seller is subject.

                  (iii) Brokers' Fees. The Seller has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         the Buyer could become liable or obligated.

                  (iv) Absence of Indebtedness  and Claims.  Except as set forth
         on Annex I, Seller is not  indebted to Company,  and the Company is not
         indebted to Seller and the Seller has no claims against the Company.

                  (v)  Company  Shares.  The  Seller  holds of  record  and owns
         beneficially the number of Company Shares set forth next to his name in
         '4(b) of Annex  III,  free and clear of any  restrictions  on  transfer
         (other  than  any  restrictions  under  the  Securities  Act and  state
         securities  laws),  Taxes,  Security  Interests,   options,   warrants,
         purchase rights, contracts, commitments, equities, claims, and demands.
         The Seller is not a party to any option,  warrant,  purchase  right, or
         other  contract or  commitment  that could  require the Seller to sell,
         transfer,  or  otherwise  dispose of any  capital  stock of the Company
         (other  than this  Agreement).  The Seller is not a party to any voting
         trust,  proxy, or other agreement or understanding  with respect to the
         voting of any capital stock of the Company.

                  (vi)   Investment.   The  Seller  (A)  understands   that  the
         Debentures and Buyer Shares have not been, and will not be,  registered
         under the Securities Act, or under any state  securities  laws, and are
         being  offered and sold in reliance  upon federal and state  exemptions
         for transactions  not involving any public  offering,  (B) is acquiring
         the Debentures solely for Seller's own account for investment purposes,
         and  not  with a view to the  distribution  thereof,  (C) has  received
         copies of all of Buyer's  filings  with the SEC during 1998 and has had
         the opportunity to obtain additional information as desired in order to
         evaluate  the merits and the risks  inherent in holding the  Debentures
         and/or Buyer Shares,  (D) is able to bear the economic risk and lack of
         liquidity  inherent in holding the Debentures and/or Buyer Shares,  and
         (E) understands that Buyer has not agreed to, and has no obligation to,
         file a registration statement to permit sale of the Debentures or Buyer
         Shares received under or in connection with this Agreement.

                  (vii)  Restrictions on Shares. The Seller understands that the
         Debentures  and Buyer Shares may not be  transferred  or resold without
         (A)  registration  under the  Securities  Act or any  applicable  state
         securities law, or (B) an exemption from the registration  requirements
         of the Securities  Act and applicable  state  securities  laws.  Seller
         understands that the  certificates  evidencing the Debentures and Buyer
         Shares may bear the following (or similar)  legend and any other legend
         required by applicable state law:

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND MAY NOT BE SOLD,  PLEDGED,  OR TRANSFERRED WITHIN IN THE
         UNITED STATES UNLESS THE SAME ARE  REGISTERED  UNDER THE SECURITIES ACT
         OF 1933, OR THE COMPANY  RECEIVES AN OPINION FROM COUNSEL  SATISFACTORY
         TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

         (b)  Representations  and Warranties of the Buyer. The Buyer represents
and  warrants to the Sellers  (and the  Church,  solely with  respect to clauses
(i)-(iii) of this '3(b)) that the statements contained in this '3(b) are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this '3(b)), except as set
forth in Annex II attached hereto.

                  (i) Organization, Qualification and Corporate Power. The Buyer
         is a corporation duly organized, validly existing, and in good standing
         under the laws of the jurisdiction of its  incorporation.  The Buyer is
         duly  qualified to conduct  business and is in good standing  under the
         laws of each jurisdiction where such qualification is required,  except
         where the lack of such qualification  would not have a material adverse
         effect  on the  business,  financial  condition,  operations  or future
         prospects  of the  Buyer.  The  Buyer  has  full  corporate  power  and
         authority and all  licenses,  permits and  authorizations  necessary to
         carry on the  business in which it is engaged and in which it presently
         proposes to engage and to own and use the properties  owned and used by
         it. The Buyer has delivered to the Sellers  correct and complete copies
         of the charter and bylaws of the Buyer (as amended to date). The minute
         books  (containing the records of meetings of the  stockholders and the
         board of directors),  the stock certificate books, and the stock record
         books of the  Buyer  are  correct  and  complete.  The  Buyer is not in
         default  under or in  violation  of any  provision  of its  charter  or
         bylaws.

                  (ii)  Authorization  of Transaction.  The Buyer has full power
         and authority (including full corporate power and authority) to execute
         and deliver this  Agreement and to perform its  obligations  hereunder.
         The execution and delivery of this  Agreement and the  consummation  of
         the  transactions  contemplated  hereby  and  thereby  have  been  duly
         authorized by all necessary  corporate action on the part of the Buyer.
         This Agreement  constitutes the valid and legally binding obligation of
         the Buyer, enforceable in accordance with its terms and conditions. The
         Buyer need not give any notice to, make any filing with,  or obtain any
         authorization,  consent,  or approval of any government or governmental
         agency  or any  third  party in order to  consummate  the  transactions
         contemplated by this Agreement.

                  (iii) Noncontravention. Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated  hereby,  will  (A)  violate  any  constitution,  statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Buyer is subject or any provision of its charter or bylaws
         or (B)  conflict  with,  result in a breach  of,  constitute  a default
         under,  result in the acceleration of, create in any party the right to
         accelerate,  terminate,  modify, or cancel, or require any notice under
         any  agreement,   contract,   lease,  license,   instrument,  or  other
         arrangement to which the Buyer is a party or by which it is bound or to
         which any of its assets is subject.

                  (iv) Brokers'  Fees.  The Buyer has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         any Seller could become liable or obligated.

                  (v) Validity of Buyer Shares.  The Buyer  Shares,  when issued
         and  delivered  by the  Company  in  accordance  with the terms of this
         Agreement  and the terms of the  Debentures,  shall be duly and validly
         issued, fully paid, and non-assessable and will be free of any liens or
         encumbrances.

                  (vi) Financial Statements.  Buyer has provided to Sellers: (1)
         the  Company's  Form 10-K for the fiscal year ended  December  31, 1997
         (the "Most Recent Audited Balance  Sheet");  and (2) the Company's Form
         10-Q for the fiscal  quarters ended March 31, 1998,  June 30, 1998, and
         September  30,  1998.  The  foregoing  financial  statements  are true,
         correct, and complete in all material respects,  and have been prepared
         in accordance with generally accepted  accounting  principles  ("GAAP")
         applied on a consistent  basis  throughout  the periods  involved,  and
         fairly  present the financial  condition of the Company as of the dates
         set forth in such financial statements and the results of operations of
         the Buyer for the period  covered  thereby.  The  Buyer's  most  recent
         balance  sheet,  included in the  foregoing  financial  statements  are
         hereinafter referred to as "Buyer Balance Sheet."

                  (vii)  Investment.  The  Buyer is not  acquiring  the  Company
         Shares with a view to or for sale in connection  with any  distribution
         thereof within the meaning of the Securities Act.

                  (viii) SEC  Filings.  Buyer has filed all forms,  reports  and
         documents,  together with all  exhibits,  required to be filed with the
         U.S.  Securities  and Exchange  Commission  ("SEC") since  December 31,
         1993. All such required forms,  reports and documents  (including those
         that Buyer may file  subsequent  to the date  hereof)  are  referred to
         herein as the "SEC Reports." The SEC Reports (i) as of their respective
         dates  were  prepared  in  accordance  with  the  requirements  of  the
         Securities  Act or the  Securities and Exchange Act of 1934, as amended
         (the "Exchange  Act") as the case may be, and the rules and regulations
         of the SEC thereunder  applicable to such SEC Reports, and (ii) did not
         at the time they were filed (or if amended  or  superseded  by a filing
         prior to the date of this  Agreement,  then on the date of such filing)
         or, in the case of the SEC Reports filed under the Securities Act, when
         such  filing  became  effective,  contain  any  untrue  statement  of a
         material  fact or omit a  statement  of  material  fact  required to be
         stated therein or necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading.

                  (ix)  Capitalization.  The entire authorized  capital stock of
         the Buyer  consists  of  10,000,000  shares of common  stock,  of which
         3,419,126  shares are issued and  outstanding as of the date hereof and
         2,000,000  shares of preferred stock, no shares of which are issued and
         outstanding  as of the date hereof.  All of the issues and  outstanding
         shares of common stock of Buyer have been duly authorized,  are validly
         issued, fully paid, and nonassessable.

                  (x)  Undisclosed  Liabilities.  To the Knowledge of the Buyer,
         the  Buyer has no  material  Liability  (and  there is no Basis for any
         present or future action,  suit,  proceeding,  hearing,  investigation,
         charge,  complaint,  claim,  or demand  against  it giving  rise to any
         Liability),  except  for (i)  Liabilities  set forth on the face of the
         Buyers  Balance  Sheet  (rather  than in any  notes  thereto)  and (ii)
         Liabilities  which have arisen after September 30, 1998 in the Ordinary
         Course of Business (none of which results from,  arises out of, relates
         to, is in the  nature  of, or was  caused  by any  breach of  contract,
         breach of warranty, tort, infringement, or violation of law).

                  (xi) Legal Compliance.  To the Knowledge of the Buyer, each of
         the Buyer and its respective  predecessors  and Affiliates has complied
         with all applicable laws (including rules,  regulations,  codes, plans,
         injunctions,   judgments,   orders,   decrees,   rulings,  and  charges
         thereunder) of federal,  state, local, and foreign governments (and all
         agencies  thereof),   and  no  action,   suit,   proceeding,   hearing,
         investigation,  charge,  complaint,  claim,  demand, or notice has been
         filed or  commenced  against  any of them  alleging  any  failure so to
         comply,  except  where the failure to comply  would not have a material
         adverse effect on the business,  financial  condition,  operations,  or
         future prospects of the Buyer.

                  (xii) Disclosure. The representations and warranties contained
         in this '3(b) do not contain any untrue statement of a material fact or
         omit to  state  any  material  fact  necessary  in  order  to make  the
         statements and information contained in this '3(b) not misleading.

         (c) Representations and Warranties of the Church. The Church represents
and  warrants  to the Buyer  that the  statements  contained  in this  '3(c) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this '3(c)) with
respect to itself.

                  (i)  Authorization  of Transaction.  The Church has full power
         and authority to execute and deliver this  Agreement and to perform its
         obligations hereunder. This Agreement constitutes the valid and legally
         binding  obligation of the Church  enforceable  in accordance  with its
         terms and conditions.  The Church need not give any notice to, make any
         filing with, or obtain any authorization,  consent,  or approval of any
         government  or  governmental  agency  or any  third  party  in order to
         consummate the transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Church is subject.

                  (iii)  Company  Shares.  The  Church  holds of record and owns
         beneficially the number of Company Shares set forth next to its name in
         '4(b) of Annex  III,  free and clear of any  restrictions  on  transfer
         (other  than  any  restrictions  under  the  Securities  Act and  state
         securities  laws),  Taxes,  Security  Interests,   options,   warrants,
         purchase rights, contracts, commitments, equities, claims, and demands.
         The Church is not a party to any option,  warrant,  purchase  right, or
         other  contract or  commitment  that could  require the Church to sell,
         transfer,  or  otherwise  dispose of any  capital  stock of the Company
         (other  than this  Agreement).  The Church is not a party to any voting
         trust,  proxy, or other agreement or understanding  with respect to the
         voting of any capital stock of the Company.

4. Representations and Warranties  Concerning the Company. The Sellers represent
and warrant to the Buyer that the  statements  contained  in this '4 are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted  for the date of this Agreement  throughout  this '4), except as set
forth in Annex III  delivered by the Sellers to the Buyer on the date hereof and
initialed  by the  Parties.  Nothing in any Annex  shall be deemed  adequate  to
disclose an exception to a  representation  or warranty made herein,  unless the
Annex  discloses  the  exception  in  reasonable  detail.  Without  limiting the
generality  of the  foregoing,  the mere  listing (or  inclusion of a copy) of a
document or other item shall not be deemed  adequate to disclose an exception to
a representation or warranty made herein (unless the  representation or warranty
has to do with the  existence of the document or other item  itself).  Annex III
will be  arranged in  paragraphs  corresponding  to the  lettered  and  numbered
paragraphs contained in this '4.

         (a) Organization,  Qualification, and Corporate Power. The Company is a
corporation  duly organized,  validly  existing,  and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct  business and is in good  standing  under the laws of each  jurisdiction
where  such   qualification   is  required,   except  where  the  lack  of  such
qualification  would  not  have a  material  adverse  effect  on  the  business,
financial condition,  operations or future prospects of the Company. The Company
has  full  corporate  power  and  authority  and  all  licenses,   permits,  and
authorizations  necessary to carry on the  businesses in which it is engaged and
in which it presently proposes to engage and to own and use the properties owned
and used by it.  '4(a) of Annex III  lists the  directors  and  officers  of the
Company.  The Sellers have delivered to the Buyer correct and complete copies of
the charter and bylaws of the  Company  (as amended to date).  The minute  books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the board of directors),  the stock certificate books, and
the stock record books of the Company are correct and  complete.  The Company is
not in default under or in violation of any provision of its charter or bylaws.

         (b) Capitalization.  The entire authorized capital stock of the Company
consists of 1,000,000  Company Shares,  of which 1,000 Company Shares are issued
and outstanding. All of the issued and outstanding Company Shares have been duly
authorized,  are validly issued, fully paid, and nonassessable,  and are held of
record by the  respective  Sellers as set forth in '4(b) of Annex III. There are
no outstanding or authorized options,  warrants,  purchase rights,  subscription
rights,  conversion  rights,  exchange rights, or other contracts or commitments
that could  require the Company to issue,  sell,  or  otherwise  cause to become
outstanding  any of its capital  stock.  There are no  outstanding or authorized
stock appreciation,  phantom stock, profit participation, or similar rights with
respect to the Company. There are no voting trusts, proxies, or other agreements
or  understandings  with  respect  to the  voting  of the  capital  stock of the
Company.

         (c)  Noncontravention.  Neither the  execution and the delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which the Company is subject or any provision
of the  charter or bylaws of the  Company  or (ii)  conflict  with,  result in a
breach of, constitute a default under,  result in the acceleration of, create in
any party the right to accelerate,  terminate, modify, or cancel, or require any
notice under any  agreement,  contract,  lease,  license,  instrument,  or other
arrangement  to which the Company is a party or by which it is bound or to which
any of its  assets is  subject  (or  result in the  imposition  of any  Security
Interest upon any of its assets), except where the violation,  conflict, breach,
default, acceleration, termination, modification,  cancellation, failure to give
notice,  or Securities  Interest would not have a material adverse effect on the
business, financial condition,  operations of future prospects of the Company or
the  Parties'  ability  to  consummate  the  transactions  contemplated  by this
Agreement.  The  Company  does not need to give any notice  to,  make any filing
with, or obtain any  authorization,  consent,  or approval of any  government or
governmental  agency in order for the  Parties to  consummate  the  transactions
contemplated  by this  Agreement  except  where the failure to take such actions
would not have a material  adverse effect on the business,  financial  condition
except where the lack of such  qualification  would not have a material  adverse
effect on the business,  financial condition,  operations of future prospects of
the Company or the Parties' ability to consummate the transactions  contemplated
by this Agreement.

         (d) Brokers'  Fees.  The Company has no Liability or  obligation to pay
any fees or  commissions  to any broker,  finder,  or agent with  respect to the
transactions  contemplated  by this Agreement for which the Company or the Buyer
could become liable or obligated.

         (e) Title to Assets. The Company has good and marketable title to, or a
valid  leasehold  interest in, the  properties and assets used by it, located on
its premises,  or shown on the Most Recent  Balance Sheet or acquired  after the
date thereof,  free and clear of all Security  Interests,  except for properties
and assets  disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet.

         (f)  Financial  Statements.  Attached  hereto  as  Exhibit  D  are  the
following financial statements  (collectively the "Financial  Statements"):  (i)
balance sheets and statements of income,  changes in stockholders'  equity,  and
cash flow as of and for the fiscal years ended  December 31, 1995,  December 31,
1996, and December 31, 1997 (the "Most Recent Fiscal Year End") for the Company;
and (ii) unaudited  consolidated and consolidating balance sheets and statements
of income,  changes in  stockholders'  equity,  and cash flow (the "Most  Recent
Financial  Statements")  as of and for the 8 months  ended  August 31, 1998 (the
"Most  Recent  Fiscal  Month End") for the  Company.  The  Financial  Statements
present  fairly the financial  condition of the Company as of such dates and the
results of operations of the Company for such periods, are correct and complete,
and are  consistent  with the books and records of the Company  (which books and
records are  correct  and  complete);  provided,  however,  that the Most Recent
Financial  Statements are subject to normal year-end adjustments (which will not
be material  individually  or in the  aggregate)  and lack  footnotes  and other
presentation items.

         (g) Events  Subsequent to Most Recent  Fiscal Year End.  Since the Most
Recent Fiscal Year End,  there has not been any material  adverse  change in the
business,  financial  condition,  operations,  results of operations,  or future
prospects of the Company.
Without limiting the generality of the foregoing, since that date:

                  (i) the Company has not sold, leased, transferred, or assigned
         any of its material  assets,  tangible or intangible,  other than for a
         fair consideration in the Ordinary Course of Business;

                  (ii) the Company has not entered into any material  agreement,
         contract, lease, or license outside the Ordinary Course of Business;

                  (iii)  no  party  (including  the  Company)  has  accelerated,
         terminated,  modified,  or canceled any material  agreement,  contract,
         lease,  or  license  to which the  Company is a party or by which it is
         bound;

                  (iv) the Company has not made any material capital expenditure
         outside the Ordinary Course of Business;

                  (v) the Company has not made any  capital  investment  in, any
         loan to, or any  acquisition  of the securities or assets of, any other
         Person;

                  (vi)  the  Company  has not  created,  incurred,  assumed,  or
         guaranteed  more that $10,000 in the  aggregate  any  indebtedness  for
         borrowed money and capitalized lease obligation;

                  (vii) the Company has not delayed or postponed  the payment of
         accounts payable and other  Liabilities  outside the Ordinary Course of
         Business;

                  (viii) the Company has not canceled,  compromised,  waived, or
         released  any right or claim (or series of related  rights and  claims)
         either  involving  more than $10,000 or outside the Ordinary  Course of
         Business;

                  (ix) the  Company  has not  declared,  set aside,  or paid any
         dividend or made any  distribution  with  respect to its capital  stock
         (whether  in cash or in  kind) or  redeemed,  purchased,  or  otherwise
         acquired any of its capital stock;

                  (x) the Company has not experienced  any damage,  destruction,
         or loss (whether or not covered by insurance) to its property;

                  (xi) the Company has not made any loan to, or entered into any
         other transaction with, any of its directors,  officers,  and employees
         outside the Ordinary Course of Business;

                  (xii)  the  Company  has  not  granted  any  increase  in  the
         compensation of any of its directors,  officers,  and employees outside
         the Ordinary Course of Business;

                  (xiii) the  Company has not  adopted,  amended,  modified,  or
         terminated any bonus,  profit-sharing,  incentive,  severance, or other
         plan, contract,  or commitment for the benefit of any of its directors,
         officers,  and  employees (or taken any such action with respect to any
         other Employee Benefit Plan);

                  (xiv)  the  Company  has not  made  or  pledged  to  make  any
         charitable or other capital contribution outside the Ordinary Course of
         Business; and

                  (xv)   the Company has not committed to any of the foregoing.

         (h) Undisclosed  Liabilities.  The Company has no Liability (and to the
Knowledge  of the Sellers,  there is no Basis for any present or future  action,
suit, proceeding,  hearing,  investigation,  charge, complaint, claim, or demand
against it giving rise to any  Liability),  except for (i) Liabilities set forth
on the face of the Most Recent  Balance Sheet (rather than in any notes thereto)
and (ii) Liabilities which have arisen after the Most Recent Fiscal Month End in
the Ordinary  Course of Business  (none of which  results  from,  arises out of,
relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law).

         (i) Legal  Compliance.  To the  Knowledge of the  Sellers,  each of the
Company and its  respective  predecessors  and  Affiliates has complied with all
applicable  laws  (including  rules,  regulations,  codes,  plans,  injunctions,
judgments,  orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof),  and no action, suit,
proceeding, hearing, investigation,  charge, complaint, claim, demand, or notice
has been filed or  commenced  against  any of them  alleging  any  failure so to
comply,  except  where the failure to comply  would not have a material  adverse
effect on the business, financial condition,  operations, or future prospects of
the Company.

         (j)      Tax Matters.

                  (i) The Company has filed all Tax Returns that it was required
         to file on or  before  the  Closing  Date.  All such Tax  Returns  were
         correct and  complete in all material  respects.  All Taxes owed by the
         Company  (whether or not shown on any Tax Return)  have been paid.  The
         Company  currently  is not the  beneficiary  of any  extension  of time
         within  which to file any Tax Return.  There is no material  dispute or
         claim  concerning  any Tax Return  either (A)  claimed or raised by any
         authority  in  writing  or (b) as to  which  any  of  the  Sellers  has
         Knowledge.

                  (ii) The Company has withheld  and paid all Taxes  required to
         have been withheld and paid on or before the Closing Date in connection
         with amounts  paid or owing to any  employee,  independent  contractor,
         creditor, stockholder, or other third party.

                  (iii) The Company has not waived any statute of limitations in
         respect of Taxes or agreed to any  extension  of time with respect to a
         Tax assessment or deficiency.

                  (iv) The  Company has not filed a consent  under Code  '341(f)
         concerning  collapsible  corporations.  The  Company  has not  made any
         material payments, is not obligated to make any material payments,  nor
         is it a party to any agreement that under certain  circumstances  could
         obligate it to make any material  payments  that will not be deductible
         under  Code  '280G.  The  Company  has not  been a United  States  real
         property  holding  corporation  within the  meaning of Code  '897(c)(2)
         during the applicable period specified in Code  '897(c)(1)(A)(ii).  The
         Company is not a party to any Tax allocation or sharing agreement.  The
         Company (A) has not been a member of an  affiliated  group  (within the
         meaning of Code  '1504(a))  filing a  consolidated  federal  income Tax
         Return and (B) has no Liability for the Taxes of any Person (other than
         the Company) under Reg.  '1.1502-6 (or any similar  provision of state,
         local, or foreign law), as a transferee or successor,  by contract,  or
         otherwise.

                  (v) The unpaid  Taxes of the  Company  (A) did not,  as of the
         Most Recent  Fiscal  Month End,  exceed the  reserve for Tax  Liability
         (rather  than any reserve for  deferred  Taxes  established  to reflect
         timing  differences  between book and Tax income) set forth on the face
         of the Most Recent Balance Sheet (rather than in any notes thereto) and
         (B) do not exceed  that  reserve as  adjusted  for the  passage of time
         through  the  Closing  Date in  accordance  with  the past  custom  and
         practice of the Company in filing its Tax Returns.

         (k)      Intellectual Property.

                  (i) The  Company  owns or has the  right  to use  pursuant  to
         license, sublicense, agreement, or permission all Intellectual Property
         necessary  for  the  operation  of the  businesses  of the  Company  as
         presently  conducted and as presently  proposed to be  conducted.  Each
         item of Intellectual  Property owned or used by the Company immediately
         prior to the Closing  hereunder  will be owned or available  for use by
         the Company on identical terms and conditions immediately subsequent to
         the Closing  hereunder.  To the  Knowledge of any of the  Sellers,  the
         Company has taken all  necessary  action to maintain  and protect  each
         material item of Intellectual Property that it owns or uses.

                  (ii) To the  Knowledge of any of the Sellers,  the Company has
         not interfered  with,  infringed  upon,  misappropriated,  or otherwise
         violated any material  Intellectual  Property  rights of third parties,
         and no such  person has ever  received  any charge,  complaint,  claim,
         demand,  or  notice  alleging  any  such  interference,   infringement,
         misappropriation,  or violation  (including  any claim that the Company
         must license or refrain from using any Intellectual  Property rights of
         any third  party).  To the  Knowledge of any of the  Sellers,  no third
         party  has  interfered  with,  infringed  upon,   misappropriated,   or
         otherwise  violated any material  Intellectual  Property  rights of the
         Company.

                  (iii)  '4(k)(iii)  of Annex  III  identifies  each  patent  or
         registration  which has been issued to the Company  with respect to any
         of  its   Intellectual   Property,   identifies   each  pending  patent
         application or application for registration  which the Company has made
         with respect to any of its Intellectual  Property,  and identifies each
         material license,  agreement, or other permission which the Company has
         granted  to any third  party with  respect  to any of its  Intellectual
         Property (together with any exceptions).  The Sellers have delivered to
         the  Buyer   correct  and   complete   copies  of  all  such   patents,
         registrations,  applications, licenses, agreements, and permissions (as
         amended to date). '4(k)(iii) of Annex III also identifies each material
         trade name or unregistered  trademark used by the Company in connection
         with any of its  businesses.  With respect to each item of Intellectual
         Property required to be identified in '4(k)(iii) of Annex III:

                           (A)  the  Company  possess  all  right,   title,  and
                  interest  in and to the item,  free and clear of any  Security
                  Interest, license, or other restriction;

                           (B)  the  item  is not  subject  to  any  outstanding
                  injunction, judgment, order, decree, ruling, or charge;

                           (C)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the  Sellers,  is  threatened
                  which challenges the legality, validity, enforceability,  use,
                  or ownership of the item; and

                           (D) The Company has not ever agreed to indemnify  any
                  Person  for  or  against   any   interference,   infringement,
                  misappropriation, or other conflict with respect to the item.

                  (iv) '4(k)(iv) of Annex III  identifies  each material item of
         Intellectual  Property  that any third  party owns and that the Company
         uses pursuant to license,  sublicense,  agreement,  or permission.  The
         Sellers have delivered to the Buyer correct and complete  copies of all
         such licenses, sublicenses,  agreements, and permissions (as amended to
         date).  With respect to each item of Intellectual  Property required to
         be identified in '4(k)(iv) of Annex III:

                           (A) the license, sublicense, agreement, or permission
                  covering the item is legal, valid, binding,  enforceable,  and
                  in full force and effect in all material respects;

                           (B) the license, sublicense, agreement, or permission
                  will continue to be legal, valid, binding, enforceable, and in
                  full  force  and  effect  on  identical  terms  following  the
                  consummation of the transactions contemplated hereby;

                           (C) no party to the license,  sublicense,  agreement,
                  or  permission  is in  breach  or  default,  and no event  has
                  occurred which with notice or lapse of time would constitute a
                  breach or  default  or permit  termination,  modification,  or
                  acceleration thereunder;

                           (D) no party to the license,  sublicense,  agreement,
                  or permission has repudiated any material provision thereof;

                           (E) with respect to each sublicense, to the Knowledge
                  of any of the Sellers,  the representations and warranties set
                  forth  in  subsections  (A)  through  (D)  above  are true and
                  correct with respect to the underlying license;

                           (F) the underlying item of  Intellectual  Property is
                  not subject to any outstanding  injunction,  judgment,  order,
                  decree, ruling, or charge;

                           (G)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the  Sellers,  is  threatened
                  which challenges the legality,  validity, or enforceability of
                  the underlying item of Intellectual Property; and

                           (H) The Company has not  granted  any  sublicense  or
                  similar  right  with  respect  to  the  license,   sublicense,
                  agreement, or permission.

                  (v) To the  Knowledge of any of the Sellers,  the Company will
         not interfere with,  infringe upon,  misappropriate,  or otherwise come
         into conflict with, any  Intellectual  Property rights of third parties
         as a result of the continued  operation of its  businesses as presently
         conducted and as presently proposed to be conducted.

                  (vi)  None  of the  Sellers  has  any  Knowledge  of  any  new
         products,  inventions,  procedures,  or  methods  of  manufacturing  or
         processing  that any  competitors or other third parties have developed
         which  reasonably  could be expected to supersede or make  obsolete any
         product or process of the Company.

         (l)  Tangible  Assets.  The  Company  owns  or  leases  all  buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
businesses  as presently  conducted  and as presently  proposed to be conducted.
Each such tangible asset is free from material defects (patent and latent),  has
been  maintained  in  accordance  with  normal  industry  practice,  is in  good
operating  condition  and  repair  (subject  to normal  wear and  tear),  and is
suitable  for the  purposes  for which it  presently  is used and  presently  is
proposed to be used.

         (m) Inventory.  The inventory of the Company  consists of raw materials
and supplies,  manufactured and purchased parts, goods in process,  and finished
goods,  all of which is  merchantable  and fit for the  purpose for which it was
procured or manufactured,  and none of which is obsolete, damaged, or defective,
subject only to the reserve for inventory writedown set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company.

         (n) Contracts.  '4(n) of Annex III is a true, correct and complete list
of all the material  contracts of the Company  (including  insurance policies to
which the Company has been a party, a named insured,  or the  beneficiary at any
time within the past five years), and all amendments and modifications  thereto,
and there are no oral or other amendment or modifications  thereto.  The Sellers
have  delivered  to the  Buyer a  correct  and  complete  copy  of each  written
agreement  listed  in '4(n) of Annex  III (as  amended  to date)  and a  written
summary  setting forth the terms and conditions of each oral agreement  referred
to in '4(n) of Annex III. With respect to each such agreement: (A) the agreement
is legal,  valid,  binding,  enforceable,  and in full force and effect; (B) the
agreement will continue to be legal, valid,  binding,  enforceable,  and in full
force  and  effect  on  identical  terms  following  the   consummation  of  the
transactions  contemplated  hereby;  and  (C)  to  the  Knowledge  of any of the
Sellers, no party is in breach or default,  and no event has occurred which with
notice  or  lapse of time  would  constitute  a breach  or  default,  or  permit
termination, modification, or acceleration, under the agreement and no party has
repudiated any provision of the agreement.

         (o) Notes and Accounts Receivable. All notes and accounts receivable of
the  Company  are  reflected  properly  on its  books  and  records,  are  valid
receivables  subject to no setoffs or  counterclaims,  are  current  and, to the
Knowledge of each Seller, collectible,  and will be collected in accordance with
their terms at their recorded amounts, subject only to the reserve for bad debts
set forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto)  as  adjusted  for the  passage of time  through  the  Closing  Date in
accordance with the past custom and practice of the Company.

         (p) Powers of  Attorney.  There are no  outstanding  powers of attorney
executed on behalf of the Company.

         (q) Insurance. The Company has been covered during the past 10 years by
insurance in scope and amount  customary and  reasonable  for the  businesses in
which it has engaged during the aforementioned period.

         (r)  Litigation.  '4(r) of Annex III sets forth each  instance in which
the  Company  (i) is subject to any  outstanding  injunction,  judgment,  order,
decree,  ruling, or charge or (ii) is a party or, to the Knowledge of any of the
Sellers,  is  threatened  to be made a party to any  action,  suit,  proceeding,
hearing,  or  investigation  of,  in, or before any court or  quasi-judicial  or
administrative  agency of any federal,  state, local, or foreign jurisdiction or
before any arbitrator.  None of the actions, suits,  proceedings,  hearings, and
investigations  set forth in '4(r) of Annex III could  reasonably be expected to
result in any material  adverse  change in the  business,  financial  condition,
operations,  results of operations,  or future prospects of the Company. None of
the  Sellers  and the  directors  and  officers of the Company has any reason to
believe that any such action, suit, proceeding, hearing, or investigation may be
brought or threatened against the Company.

         (s) Product  Warranty.  Each product  manufactured,  sold,  leased,  or
delivered by the Company has been in conformity with all applicable  contractual
commitments  and all  express  and  implied  warranties,  and the Company has no
material Liability (and, to the Knowledge of the Sellers,  there is no Basis for
any present or future action, suit, proceeding, hearing, investigation,  charge,
complaint,  claim,  or demand  against  it  giving  rise to any  Liability)  for
replacement or repair thereof or other damages in connection therewith,  subject
only to the  reserve for  product  warranty  claims set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company. No product manufactured,  sold, leased, or delivered by
the Company is subject to any guaranty,  warranty, or other indemnity beyond the
applicable  standard terms and  conditions of sale or lease.  '4(s) of Annex III
includes  copies of the standard  terms and  conditions of sale or lease for the
Company (containing applicable guaranty, warranty, and indemnity provisions).

         (t) Product  Liability.  The Company has no material Liability (and, to
the  Knowledge  of the  Sellers,  there is no Basis  for any  present  or future
action, suit, proceeding, hearing,  investigation,  charge, complaint, claim, or
demand  against it giving  rise to any  Liability)  arising out of any injury to
individuals or property as a result of the ownership,  possession, or use of any
product manufactured, sold, leased, or delivered by the Company.

         (u)  Employees.  To the Knowledge of any of the Sellers,  no executive,
key employee,  or group of employees has any plans to terminate  employment with
the Company. The Company is not a party to or bound by any collective bargaining
agreement,  nor has it  experienced  any strikes,  grievances,  claims of unfair
labor practices,  or other collective  bargaining disputes.  To the Knowledge of
Sellers,  the Company has not committed any unfair labor  practice.  None of the
Sellers has any Knowledge of any  organizational  effort presently being made or
threatened  by or on behalf of any labor union with  respect to employees of any
of the Company.

         (v)      Employee Benefits.

                  (i) '4(v) of Annex III lists each  Employee  Benefit Plan that
         the Company  maintains or to which the Company  contributes  or has any
         obligation to contribute.

                           (A) Each such Employee Benefit Plan (and each related
                  trust,  insurance  contract,  or fund) complies in form and in
                  operation with the applicable requirements of ERISA, the Code,
                  and other applicable laws.

                           (B) All required reports and  descriptions  have been
                  timely  filed and  distributed  appropriately  with respect to
                  each such Employee  Benefit Plan.  The  requirements  of COBRA
                  have been met with respect to each such Employee  Benefit Plan
                  which is subject to COBRA.

                           (C) All premiums  and  contributions  (including  all
                  employer   contributions   and   employee   salary   reduction
                  contributions)  which  are due  have  been  paid to each  such
                  Employee Benefit Plan, and all premiums and  contributions for
                  any period  ending on or before the Closing Date which are not
                  yet due have been paid to each such  Employee  Benefit Plan or
                  accrued in accordance with the past custom and practice of the
                  Company.

                           (D)  Each  such  Employee  Benefit  Plan  which is an
                  Employee  Pension  Benefit  Plan meets the  requirements  of a
                  "qualified plan" under Code '401(a), has received,  within the
                  last four  years,  a favorable  determination  letter from the
                  Internal  Revenue  Service that it is a "qualified  plan," and
                  none of the  Sellers  is aware of any  facts or  circumstances
                  that  could  result in the  revocation  of such  determination
                  letter.

                           (E) The  market  value  of  assets  under  each  such
                  Employee  Benefit  Plan which is an Employee  Pension  Benefit
                  Plan (other than any Multiemployer Plan) equals or exceeds the
                  present  value  of  all  vested  and   nonvested   Liabilities
                  thereunder   determined  in  accordance   with  PBGC  methods,
                  factors,  and  assumptions  applicable to an Employee  Pension
                  Benefit Plan terminating on the date for determination.

                           (F) The Sellers have  delivered to the Buyer  correct
                  and  complete  copies of the plan  documents  and summary plan
                  descriptions,  the most recent  determination  letter received
                  from the Internal Revenue  Service,  the most recent Form 5500
                  Annual  Report,  and all related trust  agreements,  insurance
                  contracts,  and other funding  agreements which implement each
                  such Employee Benefit Plan.

                  (ii)  With  respect  to each  Employee  Benefit  Plan that the
         Company and any ERISA Affiliate  maintains or ever has maintained or to
         which any of them contributes,  ever has contributed,  or ever has been
         required to contribute:

                           (A)  No  such  Employee  Benefit  Plan  which  is  an
                  Employee  Pension  Benefit Plan (other than any  Multiemployer
                  Plan) has been completely or partially  terminated or been the
                  subject of a  Reportable  Event as to which  notices  would be
                  required to be filed with the PBGC.  No proceeding by the PBGC
                  to terminate  any such  Employee  Pension  Benefit Plan (other
                  than any  Multiemployer  Plan) has been  instituted or, to the
                  Knowledge of any of the Sellers and the directors and officers
                  of the Company, threatened.

                           (B) There have been no Prohibited  Transactions  with
                  respect to any such  Employee  Benefit  Plan. No Fiduciary has
                  any  Liability  for  breach  of  fiduciary  duty or any  other
                  failure to act or comply in connection with the administration
                  or investment of the assets of any such Employee Benefit Plan.
                  No action,  suit,  proceeding,  hearing, or investigation with
                  respect to the  administration or the investment of the assets
                  of any such Employee  Benefit Plan (other than routine  claims
                  for  benefits)  is pending or, to the  Knowledge of any of the
                  Sellers,  threatened. None of the Sellers has any Knowledge of
                  any Basis for any such action, suit,  proceeding,  hearing, or
                  investigation.

                           (C) The  Company  has not  incurred,  and none of the
                  Sellers has any reason to expect  that the Company  will incur
                  any  Liability to the PBGC (other than PBGC premium  payments)
                  or otherwise under Title IV of ERISA (including any withdrawal
                  liability  as defined  in ERISA  '4201) or under the Code with
                  respect to any such Employee Benefit Plan which is an Employee
                  Pension Benefit Plan.

                  (iii)  The  Company   does  not   contribute   to,  never  has
         contributed  to,  and  never has been  required  to  contribute  to any
         Multiemployer Plan or has any material Liability (including  withdrawal
         liability as defined in ERISA '4201) under any Multiemployer Plan.

                  (iv) The Company does not maintain and never has maintained or
         contributed, and never has been required to contribute, to any Employee
         Welfare Benefit Plan providing  medical,  health,  or life insurance or
         other  welfare-type  benefits for current  retirees,  future  retirees,
         retired or terminated  employees,  their spouses,  or their  dependents
         (other than in accordance with COBRA).

         (w)  Guaranties.  The Company is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.

         (x)      Environmental, Health, and Safety Matters.

                  (i)  each of the Company and its predecessors has complied and
         is in compliance with all Environmental, Health, and Safety 
         Requirements;

                  (ii) without  limiting the  generality of the  foregoing,  the
         Company has obtained and complied with, and is in compliance  with, all
         permits,  licenses and other  authorizations that are required pursuant
         to Environmental, Health, and Safety Requirements for the occupation of
         its  facilities  and the operation of its business;  a list of all such
         permits,  licenses  and other  authorizations  is set forth on '4(x) of
         Annex III;

                  (iii)  neither the Company nor its  predecessors  has received
         any written or oral notice,  report or other information  regarding any
         actual or  alleged  violation  of  Environmental,  Health,  and  Safety
         Requirements,  or any  liabilities  or potential  liabilities  (whether
         accrued, absolute,  contingent,  unliquidated or otherwise),  including
         any investigatory,  remedial or corrective obligations, relating to any
         of them or its  facilities  arising under  Environmental,  Health,  and
         Safety Requirements;

                  (iv) none of the following  exists at any property or facility
         owned or operated by the Company:  (1) underground  storage tanks,  (2)
         asbestos-containing material in any form or condition, (3) materials or
         equipment  containing  polychlorinated  biphenyls,  or  (4)  landfills,
         surface impoundments, or disposal areas;

                  (v)  none of the  Company  or its  predecessors  has  treated,
         stored,  disposed  of,  arranged  for or  permitted  the  disposal  of,
         transported,  handled,  or released any  substance,  including  without
         limitation any hazardous  substance,  or owned or operated any property
         or facility  (and no such property or facility is  contaminated  by any
         such  substance)  in a manner  that has  given  or would  give  rise to
         liabilities,  including any liability  for response  costs,  corrective
         action costs,  personal  injury,  property  damage,  natural  resources
         damages or attorney fees,  pursuant to any  Environmental,  Health, and
         Safety Requirements; and

                  (vi)  to  the  Knowledge  of  Sellers,  no  facts,  events  or
         conditions  relating to the past or present  facilities,  properties or
         operations of the Company or any of its predecessors  will give rise to
         any  investigatory,  remedial  or  corrective  obligations  pursuant to
         Environmental,  Health,  and Safety  Requirements,  or give rise to any
         other liabilities  including without  limitation any relating to onsite
         or offsite  releases or  threatened  releases of  hazardous  materials,
         substances  or  wastes,  personal  injury,  property  damage or natural
         resources damage.

         (y)  Certain  Business  Relationships  with  the  Company.  None of the
Sellers  and  their  Affiliates  has  been  involved  in any  material  business
arrangement or relationship with the Company within the past 12 months, and none
of the  Sellers  and their  Affiliates  owns any  material  asset,  tangible  or
intangible, which is used in the business of the Company.

         (z) Year 2000 Items. All Information  Technology that is relied upon by
the  Company  in its  internal  operations  or is  included  as  part of the any
products  produced by the Company,  currently and during the past two years,  is
Year 2000 Compliant.  Additionally, to the Knowledge of each Seller, the Company
has  received  no  notice of any  material  vendor or  customer  of the  Company
indicating  that such  vendor or  customer  may be unable to continue to conduct
business in the ordinary course due to difficulties  with its own business being
Year 2000 Compliant.

         (aa) Disclosure.  The representations and warranties  contained in this
'4 do not contain any untrue  statement of a material  fact or omit to state any
material  fact  necessary  in  order  to make  the  statements  and  information
contained in this '4 not misleading.

5.  Pre-Closing  Covenants.  The Parties  agree as follows  with  respect to the
period between the execution of this Agreement and the Closing.

         (a) General.  Each of the Parties will use his reasonable  best efforts
to take all action  and to do all  things  necessary  or  advisable  in order to
consummate and make effective the  transactions  contemplated  by this Agreement
(including satisfaction,  but not waiver, of the closing conditions set forth in
'7 below).

         (b) Notices and  Consents.  The Sellers  will cause the Company to give
any notices to third parties, and will cause the Company to use its best efforts
to obtain any third party  consents,  that the Buyer may  request in  connection
with the matters  referred to in '4(c) above.  Each of the Parties will (and the
Sellers  will cause the Company to) give any notices to, make any filings  with,
and use its best efforts to obtain any authorizations,  consents,  and approvals
of governments and governmental agencies in connection with the matters referred
to in '3(a)(ii), '3(b)(ii), and '4(c) above.

         (c)  Operation  of  Business.  The Sellers will not cause or permit the
Company  to  engage  in any  practice,  take  any  action,  or  enter  into  any
transaction  outside the  Ordinary  Course of  Business.  Without  limiting  the
generality of the foregoing, the Sellers will not cause or permit the Company to
(i)  declare,  set aside,  or pay any  dividend  or make any  distribution  with
respect to its capital stock or redeem,  purchase,  or otherwise  acquire any of
its  capital  stock,  (ii)  materially  increase or modify the  compensation  or
benefits to any of its employees; (iii) issue any equity securities or rights to
acquire  such  securities;  (iv)  dispose of any assets,  except in the Ordinary
Course of  Business;  (v) take any other  action or fail to take any action that
would result in a material decline in the value of the Company's  business as of
the date of this Agreement;  or (vi) otherwise engage in any practice,  take any
action, or enter into any transaction of the sort described in '4(g) above.

         (d)  Preservation  of  Business.  The Sellers will cause the Company to
keep its business and  properties  substantially  intact,  including its present
operations,  physical  facilities,  working  conditions,  and relationships with
lessors, licensors, suppliers, customers, and employees.

         (e) Full Access.  Each of the Sellers will permit, and the Sellers will
cause the Company to permit, representatives of the Buyer to have full access at
all  reasonable  times,  and in a manner so as not to interfere  with the normal
business  operations  of the Company,  to all premises,  properties,  personnel,
books,  records  (including  Tax  records),   contracts,  and  documents  of  or
pertaining to the Company.

         (f) Notice of Developments. The Sellers will give prompt written notice
to the Buyer of any material adverse  development causing a breach of any of the
representations  and warranties in '4 above. Each Party will give prompt written
notice to the others of any material adverse development causing a breach of any
of his or its own  representations  and warranties in '3 above. No disclosure by
any  Party  pursuant  to this  '5(f),  however,  shall  be  deemed  to  amend or
supplement  Annex  I,  Annex  II,  or  Annex  III  or to  prevent  or  cure  any
misrepresentation, breach of warranty, or breach of covenant.

         (g)  Exclusivity.  None of the Sellers  will (and the Sellers  will not
cause or  permit  the  Company  to) (i)  solicit,  initiate,  or  encourage  the
submission of any proposal or offer from any Person  relating to the acquisition
of any capital stock or other voting securities,  or any substantial  portion of
the assets,  of the Company  (including any acquisition  structured as a merger,
consolidation,  or share  exchange) or (ii)  participate  in any  discussions or
negotiations  regarding,  furnish any  information  with  respect to,  assist or
participate  in, or  facilitate in any other manner any effort or attempt by any
Person to do or seek any of the  foregoing.  None of the Sellers will vote their
Company  Shares  in  favor  of any  such  acquisition  structured  as a  merger,
consolidation,  or share exchange. The Sellers will notify the Buyer immediately
if any Person makes any proposal, offer, inquiry, or contact with respect to any
of the foregoing.

6.  Post-Closing  Covenants.  The Parties  agree as follows  with respect to the
period following the Closing.

         (a) General.  In case at any time after the Closing any further  action
is necessary or desirable to carry out the purposes of this  Agreement,  each of
the Parties will take such further action  (including the execution and delivery
of such further  instruments  and  documents) as any other Party  reasonably may
request,  all at the sole cost and expense of the  requesting  Party (unless the
requesting Party is entitled to  indemnification  therefor under '8 below).  The
Sellers  acknowledge and agree that from and after the Closing the Buyer will be
entitled to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.

         (b)  Litigation  Support.  In the  event  and for so long as any  Party
actively is  contesting  or  defending  against any  action,  suit,  proceeding,
hearing,  investigation,  charge, complaint, claim, or demand in connection with
(i)  any  transaction  contemplated  under  this  Agreement  or (ii)  any  fact,
situation,   circumstance,   status,   condition,   activity,   practice,  plan,
occurrence,  event, incident, action, failure to act, or transaction on or prior
to the Closing  Date  involving  the  Company,  each of the other  Parties  will
cooperate with him or it and his or its counsel in the contest or defense,  make
available their personnel,  and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the  contesting  or defending  Party (unless the
contesting or defending Party is entitled to  indemnification  therefor under '8
below).

         (c)  Transition.  None of the  Sellers  will  take any  action  that is
designed or intended to have the effect of  discouraging  any lessor,  licensor,
customer,  supplier,  or other  business  associate  of the  Company on the date
hereof from maintaining the same business  relationships  with the Company after
the Closing as it maintained with the Company prior to the Closing.  Each of the
Sellers  will refer all customer  inquiries  relating to the  businesses  of the
Company  to the Buyer  from and  after  the  Closing  until  the  expiration  or
termination of any employment agreement between such Seller and the Company.

         (d)      Confidentiality.

                  (i) Confidential Information of the Buyer. Each of the Sellers
         acknowledges that in the course of performing this Agreement, Buyer may
         provide  to a  Seller  or  the  Company  confidential  and  proprietary
         information about its business which is not generally  available to the
         public ("Buyer Confidential  Information"),  the disclosure of which to
         third  parties  without  the express  authorization  of the Buyer would
         result in economic losses to the Buyer. Accordingly,  regardless of the
         means of  communication  of the Buyer  Confidential  Information,  each
         Seller receiving Buyer Confidential Information (the "Receiving Party")
         agrees to (and will cause the Company  to) hold the Buyer  Confidential
         Information  in  strict  confidence  and,  without  the  prior  written
         permission from the Buyer, or as set forth in '6(d)(iii)  below, not to
         disclose the Buyer  Confidential  Information to any third parties,  or
         use it for  any  commercial  purposes  except  in  performance  of this
         Agreement.

                  (ii)  Confidential  Information  of the  Company.  Each of the
         Sellers will treat and hold as such all of the confidential information
         of the Company ("Company Confidential  Information"),  and refrain from
         using Company  Confidential  Information except in connection with this
         Agreement  or in the  course  of their  continued  employment  with the
         Company.

                  (iii) General.  Each Seller shall promptly notify the Buyer of
         any breach of the  foregoing  obligations  of  confidentiality.  In the
         event that any of the Sellers or the Company is  requested  or required
         (by oral question or request for  information or documents in any legal
         proceeding,  interrogatory,  subpoena,  civil investigative  demand, or
         similar process) to disclose any Confidential Information,  that Seller
         or the  Company  will  notify  the Buyer  promptly  of the  request  or
         requirement so that the Buyer may seek an appropriate  protective order
         or waive  compliance  with the  provisions  of this  '6(d).  If, in the
         absence of a protective order or the receipt of a waiver hereunder, any
         of the Sellers or the  Company is, on the advice of counsel,  compelled
         to disclose any Confidential  Information to any tribunal or else stand
         liable for  contempt,  that  Seller or the  Company  may  disclose  the
         Confidential Information to the tribunal;  provided,  however, that the
         disclosing  Seller shall use (and cause the Company to use)  reasonable
         efforts to obtain, at the request and expense of the Buyer, an order or
         other  assurance that  confidential  treatment will be accorded to such
         portion of the Confidential Information required to be disclosed as the
         Buyer shall designate.  The foregoing provisions shall not apply to any
         Confidential  Information  which is  generally  available to the public
         immediately prior to the time of disclosure.

         (e) Covenant Not to Compete. For a period of three years from and after
the Closing Date,  none of the Sellers will engage directly or indirectly in any
business that the Company conducts as of the Closing Date in any geographic area
in which the Company now or hereafter  conducts that business if such conduct on
the part of such Seller  would have a negative  economic  impact on the Company;
provided, however, that any Seller may own less than 3% of any outstanding class
of securities registered pursuant to the Exchange Act of an issuer that competes
with the Buyer or the  Company.  If the final  judgment of a court of  competent
jurisdiction  declares  that any term or  provision  of this '6(e) is invalid or
unenforceable,  the Parties  agree that the court  making the  determination  of
invalidity  or  unenforceability  shall  have the  power to  reduce  the  scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace  any invalid or  unenforceable  term or  provision  with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision,  and this Agreement
shall be  enforceable  as so modified  after the  expiration  of the time within
which the judgment may be appealed.

7.       Conditions to Obligation to Close.

         (a) Conditions to Obligation of the Buyer.  The obligation of the Buyer
to consummate  the  transactions  to be performed by it in  connection  with the
Closing is subject to satisfaction of the following conditions:

                  (i) the  representations and warranties set forth in '3(a) and
         '4 above shall be true and correct in all  material  respects at and as
         of the Closing Date;

                  (ii) the Sellers shall have performed and complied with all of
         their covenants hereunder in all material respects through the Closing;

                  (iii) the Company  shall have  procured all of the third party
         consents specified in '5(b) above;

                  (iv) no action,  suit, or  proceeding  shall be pending or, to
         the  Knowledge  of  the  Sellers,   threatened   before  any  court  or
         quasi-judicial or administrative  agency of any federal,  state, local,
         or foreign jurisdiction or before any arbitrator wherein an unfavorable
         injunction,  judgment,  order,  decree,  ruling,  or  charge  would (A)
         prevent  consummation of any of the  transactions  contemplated by this
         Agreement,  (B)  cause  any of the  transactions  contemplated  by this
         Agreement to be rescinded following consummation,  (C) affect adversely
         the right of the Buyer to own the  Company  Shares and to  control  the
         Company,  or (D) affect  adversely  the right of the Company to own its
         assets and to operate its businesses (and no such injunction, judgment,
         order, decree, ruling, or charge shall be in effect);

                  (v)  the  Sellers   shall  have   delivered  to  the  Buyer  a
         certificate to the effect that each of the conditions  specified  above
         in '7(a)(i)-(iv) is satisfied in all respects;

                  (vi) Buyer and each of the Sellers shall enter into employment
         agreements  in form and  substance  as set forth in  Exhibit E attached
         hereto and the same shall be in full force and effect;

                  (vii) the Company and Pine Mountain  Properties,  L.L.C. shall
         have entered into an Amendment to Lease in the form attached  hereto as
         Exhibit G;

                  (viii) Buyer and J. Tracy Livingston shall have entered into a
         Voice Technology  Project  Agreement in form and substance as set forth
         in  Exhibit H  attached  hereto and the same shall be in full force and
         effect;

                  (ix) the Buyer shall have received the resignations, effective
         as of the Closing,  of each  director and officer of the Company  other
         than those whom the Buyer shall have specified in writing at least five
         business days prior to the Closing;

                  (x) no material  adverse change in the financial  condition or
         results of operation of the  Company,  or in the  condition or value of
         its material assets,  taken as a whole, shall have occurred between the
         date of this Agreement and the Closing Date;

                  (xi) Buyer shall be satisfied  with its  continuing  business,
         legal, environmental, and accounting due diligence investigation of the
         Company in all respects; and

                  (xii) all  actions to be taken by the  Sellers  in  connection
         with  consummation  of the  transactions  contemplated  hereby  and all
         certificates,  instruments,  and other documents required to effect the
         transactions  contemplated  hereby will be reasonably  satisfactory  in
         form and substance to the Buyer.

The Buyer may waive any  condition  specified  in this  '7(a) if it  executes  a
writing so stating at or prior to the Closing.

         (b)  Conditions  to Obligation  of the Sellers.  The  obligation of the
Sellers and the Church to consummate the transactions to be performed by them in
connection  with  the  Closing  is  subject  to  satisfaction  of the  following
conditions; provided that clause (v) below shall not apply to the Church:

                  (i)  the representations and warranties set forth in '3(b) 
         above shall be true and correct in all material respects at and as of 
         the Closing Date;

                  (ii) the Buyer shall have  performed  and complied with all of
         its covenants hereunder in all material respects through the Closing;

                  (iii) no action,  suit, or proceeding  shall be pending or, to
         the Knowledge of Buyer,  threatened  before any court or quasi-judicial
         or  administrative  agency of any  federal,  state,  local,  or foreign
         jurisdiction   or  before  any   arbitrator   wherein  an   unfavorable
         injunction,  judgment,  order,  decree,  ruling,  or  charge  would (A)
         prevent  consummation of any of the  transactions  contemplated by this
         Agreement  or (B) cause any of the  transactions  contemplated  by this
         Agreement  to  be  rescinded   following   consummation  (and  no  such
         injunction,  judgment,  order,  decree,  ruling,  or charge shall be in
         effect);

                  (iv)  the  Buyer  shall  have   delivered  to  the  Sellers  a
         certificate to the effect that each of the conditions  specified  above
         in '7(b)(i)-(iii) is satisfied in all respects;

                  (v) Buyer and each of the Sellers shall enter into  employment
         agreements  in form and  substance  as set forth in  Exhibit E attached
         hereto and the same shall be in full force and effect;

                  (vi) all actions to be taken by the Buyer in  connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Sellers.

The Sellers may waive any  condition  specified  in this '7(b) if they execute a
writing so stating at or prior to the Closing.

8.       Remedies for Breaches of This Agreement.

         (a)   Survival  of   Representations   and   Warranties.   All  of  the
representations  and warranties of the Parties contained in this Agreement shall
survive the Closing  hereunder  (even if the damaged Party knew or had reason to
know of any  misrepresentation  or breach of warranty or covenant at the time of
Closing) and continue in full force and effect  forever  thereafter for a period
of 4 years  (subject  to any  applicable  statutes  of  limitations);  provided,
however,  the  representations  and warranties  contained in "4(j) and (x) shall
survive Closing subject only to applicable statutes of limitations.

         (b)      Indemnification Provisions for Benefit of the Buyer.

                  (i) In the event any of the Sellers  breaches (or in the event
         any third  party  alleges  facts that,  if true,  would mean any of the
         Sellers has breached)  any of their  representations,  warranties,  and
         covenants contained herein (other than the covenants in '2(a) above and
         the  representations  and warranties in '3(a) above),  then each of the
         Sellers  agrees to indemnify the Buyer from and against the entirety of
         any  Adverse  Consequences  the Buyer may suffer  through and after the
         date of the claim for  indemnification  resulting from, arising out of,
         relating  to, in the nature of, or caused by the breach (or the alleged
         breach); provided, that any such claim for indemnification must be made
         by the Buyer against the Sellers before the expiration of the four year
         period  beginning  on the Closing  Date;  provided,  further,  that the
         aggregate  amount of all  indemnification  obligations  of the  Sellers
         hereunder shall not exceed  $3,575,000.00 minus the total amount of all
         indemnification obligations borne by the Sellers pursuant to '8(b)(ii);
         and provided,  further,  that in the event the aggregate  amount of all
         indemnification  obligations  of the  Sellers  hereunder  is less  than
         $25,000.00,  the Buyer  shall  not make any  claim for  indemnification
         against the Sellers hereunder.

                  (ii) In the event any of the Sellers breaches (or in the event
         any third  party  alleges  facts that,  if true,  would mean any of the
         Sellers has breached) any of his covenants in '2(a) above or any of his
         representations  and warranties in '3(a) above,  then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification  resulting from, arising out of, relating to,
         in the  nature of, or caused by the  breach  (or the  alleged  breach);
         provided,  that any such claim for indemnification  must be made by the
         Buyer against the Sellers before the expiration of the four year period
         beginning on the Closing Date;  provided,  further,  that the aggregate
         amount of all  indemnification  obligations  of the  Sellers  hereunder
         shall  not  exceed   $3,575,000.00   minus  the  total  amount  of  all
         indemnification  obligations borne by the Sellers pursuant to '8(b)(i);
         and provided,  further,  that in the event the aggregate  amount of all
         indemnification  obligations  of the  Sellers  hereunder  is less  than
         $25,000.00,  the Buyer  shall  not make any  claim for  indemnification
         against the Sellers hereunder.

                  (iii) Each of the Sellers  agrees to indemnify  the Buyer from
         and against the  entirety  of any  Adverse  Consequences  the Buyer may
         suffer  resulting from,  arising out of, relating to, in the nature of,
         or  caused by any  Liability  of the  Company  (x) for any Taxes of the
         Company  with respect to any Tax year or portion  thereof  ending on or
         before  the  Closing  Date (or for any Tax year  beginning  before  and
         ending after the Closing Date to the extent allocable  (determined in a
         manner  consistent with '9(c)) to the portion of such period  beginning
         before and ending on the  Closing  Date),  to the extent such Taxes are
         not reflected in the reserve for Tax Liability (rather than any reserve
         for deferred Taxes  established to reflect timing  differences  between
         book and Tax income)  shown on the face of the Closing  Balance  Sheet,
         and (y) for the unpaid  Taxes of any Person  (other  than the  Company)
         under Reg.  '1.1502-6  (or any similar  provision of state,  local,  or
         foreign law), as a transferee or successor, by contract, or otherwise.

         (c) Indemnification Provisions for Benefit of the Sellers. In the event
the Buyer breaches (or in the event any third party alleges facts that, if true,
would mean the Buyer has breached) any of its representations,  warranties,  and
covenants  contained  herein,  then the Buyer  agrees to  indemnify  each of the
Sellers from and against the entirety of any Adverse Consequences the Seller may
suffer  through  and after the date of the claim for  indemnification  resulting
from, arising out of, relating to, in the nature of, or caused by the breach (or
the alleged breach);  provided,  that any such claim for indemnification must be
made by the Seller  against  the Buyer  before the  expiration  of the four year
period  beginning on the Closing  Date;  provided,  further,  that the aggregate
amount of any indemnification obligation of the Buyer hereunder shall not exceed
$3,575,000.00;  provided, further, that in the event the aggregate amount of all
indemnification  obligations of the Buyer hereunder is less than $25,000.00, the
Sellers  shall  not  make  any  claim  for  indemnification  against  the  Buyer
hereunder.

         (d)      Matters Involving Third Parties.

                  (i)  If  any  third   party   shall   notify  any  Party  (the
         "Indemnified Party") with respect to any matter (a "Third Party Claim")
         which may give rise to a claim for  indemnification  against  any other
         Party (the  "Indemnifying  Party") under this '8, then the  Indemnified
         Party shall promptly notify each Indemnifying Party thereof in writing;
         provided,  however,  that no delay on the part of the Indemnified Party
         in notifying  any  Indemnifying  Party shall  relieve the  Indemnifying
         Party from any  obligation  hereunder  unless  (and then  solely to the
         extent) the Indemnifying Party thereby is prejudiced.

                  (ii) Any Indemnifying  Party will have the right to defend the
         Indemnified  Party  against the Third  Party Claim with  counsel of its
         choice reasonably  satisfactory to the Indemnified Party so long as (A)
         the Indemnifying Party notifies the Indemnified Party in writing within
         20 days after the Indemnified Party has given notice of the Third Party
         Claim that the Indemnifying  Party will indemnify the Indemnified Party
         from  and  against  the  entirety  of  any  Adverse   Consequences  the
         Indemnified  Party may suffer resulting from,  arising out of, relating
         to, in the nature of, or caused by the Third  Party  Claim,  subject to
         the  terms  of  this  '8,  (B)  the  Indemnifying  Party  provides  the
         Indemnified   Party  with   evidence   reasonably   acceptable  to  the
         Indemnified  Party that the Indemnifying  Party will have the financial
         resources  to defend  against  the Third  Party  Claim and  fulfill its
         indemnification  obligations  hereunder,  (C)  the  Third  Party  Claim
         involves  only money  damages and does not seek an  injunction or other
         equitable  relief,  (D)  settlement  of, or an  adverse  judgment  with
         respect to, the Third Party Claim is not, in the good faith judgment of
         the  Indemnified  Party,  likely to establish a precedential  custom or
         practice materially adverse to the continuing business interests of the
         Indemnified  Party, and (E) the Indemnifying Party conducts the defense
         of the Third Party Claim actively and diligently.

                  (iii)  So long as the  Indemnifying  Party is  conducting  the
         defense of the Third Party Claim in accordance  with  '8(d)(ii)  above,
         (A) the Indemnified  Party may retain  separate  co-counsel at its sole
         cost and  expense  and  participate  in the  defense of the Third Party
         Claim,  (B) the Indemnified  Party will not consent to the entry of any
         judgment or enter into any  settlement  with respect to the Third Party
         Claim without the prior written consent of the Indemnifying  Party (not
         to be withheld  unreasonably),  and (C) the Indemnifying Party will not
         consent to the entry of any judgment or enter into any settlement  with
         respect to the Third Party Claim without the prior  written  consent of
         the Indemnified Party (not to be withheld unreasonably).

                  (iv) In the event any of the conditions in '8(d)(ii)  above is
         or becomes  unsatisfied,  however, (A) the Indemnified Party may defend
         against,  and  consent to the entry of any  judgment  or enter into any
         settlement  with  respect  to, the Third  Party  Claim in any manner it
         reasonably may deem  appropriate  (and the  Indemnified  Party need not
         consult  with, or obtain any consent from,  any  Indemnifying  Party in
         connection therewith),  (B) the Indemnifying Parties will reimburse the
         Indemnified Party promptly and periodically for the reasonable costs of
         defending   against  the  Third  Party  Claim   (including   reasonable
         attorneys' fees and expenses),  and (C) the  Indemnifying  Parties will
         remain  responsible for any Adverse  Consequences the Indemnified Party
         may suffer  resulting from,  arising out of, relating to, in the nature
         of, or caused by the Third Party Claim to the fullest  extent  provided
         in this '8.

         (e) Determination of Adverse Consequences. All indemnification payments
under this '8 shall be deemed adjustments to the Purchase Price.

         (f) Recoupment Under the Hold-back and Debentures. The Buyer shall have
the  option of  recouping  all or any part of any  Adverse  Consequences  it may
suffer (in addition to seeking any indemnification to which it is entitled under
this '8) by notifying any Seller that the Buyer is reducing the Hold-back and/or
the principal amount outstanding under Debentures.  This shall affect the timing
and amount of payments  required  under the  Debentures in the same manner as if
the  Buyer  had  made  a  permitted  prepayment  (without  premium  or  penalty)
thereunder.

         (g) Other  Indemnification  Provisions.  The foregoing  indemnification
provisions  are in  addition  to,  and  not in  derogation  of,  any  statutory,
equitable,  or common law remedy (including  without  limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the Company or the transactions  contemplated by this Agreement.
Each  of the  Sellers  hereby  agrees  that he  will  not  make  any  claim  for
indemnification  against  the  Company  by reason of the fact that  Seller was a
director,  officer,  employee, or agent of any such entity or was serving at the
request of any such entity as a partner, trustee,  director,  officer, employee,
or agent of  another  entity  (whether  such  claim is for  judgments,  damages,
penalties,  fines,  costs,  amounts paid in  settlement,  losses,  expenses,  or
otherwise and whether such claim is pursuant to any statute,  charter  document,
bylaw,  agreement,  or otherwise) with respect to any action, suit,  proceeding,
complaint,  claim,  or demand brought by the Buyer against such Seller  (whether
such action, suit, proceeding,  complaint,  claim, or demand is pursuant to this
Agreement,  applicable law, or otherwise)  which in the aggregate (under any and
all such claims made at any time by any of the Sellers)  exceeds fifty  thousand
dollars ($50,000).

9. Tax  Matters.  The  following  provisions  shall  govern  the  allocation  of
responsibility  as between  Buyer and Sellers for certain tax matters  following
the Closing Date:

         (a) Tax  Periods  Ending on or Before the  Closing  Date.  Buyer  shall
prepare or cause to be  prepared  and file or cause to be filed all Tax  Returns
for the Company for all periods ending on or prior to the Closing Date which are
filed after the Closing Date.  Buyer shall permit  Sellers to review and comment
on each such Tax Return  described in the  preceding  sentence  prior to filing.
Subject to the provisions of '8(b)(ii) hereof, Sellers shall reimburse Buyer for
Taxes of the Company with respect to such periods within fifteen (15) days after
payment by Buyer or the Company of such Taxes  (whether in  connection  with the
filing of such Tax Return or as the result of an audit) to the extent such Taxes
are not reflected in the reserve for Tax Liability  (rather than any reserve for
deferred Taxes  established to reflect timing  differences  between book and Tax
income) shown on the face of the Closing Balance Sheet.

         (b) Tax Periods  Beginning  Before and Ending  After the Closing  Date.
Buyer shall  prepare or cause to be  prepared  and file or cause to be filed any
Tax Returns of the Company for Tax periods  which begin  before the Closing Date
and end after the Closing Date.  Sellers shall pay to Buyer within  fifteen (15)
days  after the date on which  Taxes are paid with  respect  to such  periods an
amount  equal to the portion of such Taxes which  relates to the portion of such
Taxable  period  ending on the  Closing  Date to the  extent  such Taxes are not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes  established  to reflect timing  differences  between book and Tax income)
shown on the face of the Closing Balance Sheet. For purposes of this Section, in
the case of any Taxes that are imposed on a periodic basis and are payable for a
Taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which  relates to the portion of such Taxable  period  ending on the
Closing  Date shall (x) in the case of any Taxes  other than Taxes based upon or
related  to income or  receipts,  be deemed to be the amount of such Tax for the
entire  Taxable  period  multiplied  by a fraction the numerator of which is the
number  of days  in the  Taxable  period  ending  on the  Closing  Date  and the
denominator of which is the number of days in the entire Taxable period, and (y)
in the case of any Tax based  upon or related  to income or  receipts  be deemed
equal to the amount which would be payable if the relevant  Taxable period ended
on the Closing Date. Any credits relating to a Taxable period that begins before
and ends  after the  Closing  Date  shall be taken  into  account  as though the
relevant Taxable period ended on the Closing Date. All determinations  necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior  practice of the  Company.  This '9(b) shall be construed so as to be
consistent with the provisions of '8(b)(ii).

         (c)  Cooperation on Tax Matters.  Buyer,  the Company and Sellers shall
cooperate fully, as and to the extent  reasonably  requested by the other party,
in  connection  with the filing of Tax Returns  pursuant to this Section and any
audit,  litigation or other  proceeding  with respect to Taxes.  The Company and
Sellers  agree to retain  all books and  records  with  respect  to Tax  matters
pertinent to the Company  relating to any taxable  period  beginning  before the
Closing Date until the  expiration  of the statute of  limitations  (and, to the
extent notified by Buyer or Sellers,  any extensions  thereof) of the respective
taxable periods.

         (d) Certain Taxes.  Subject to the provisions of '8(b)(ii) hereof,  all
transfer,  documentary, sales, use, stamp, registration and other such Taxes and
fees  (including  any penalties and interest)  incurred in connection  with this
Agreement  shall be paid by Sellers  when due,  and Sellers  will,  at their own
expense,  file all necessary Tax Returns and other documentation with respect to
all such transfer,  documentary, sales, use, stamp, registration and other Taxes
and fees,  and, if required by applicable  law,  Buyer will,  and will cause its
affiliates  to,  join  in the  execution  of any  such  Tax  Returns  and  other
documentation.

         (e) Code ' 338 Election.  Notwithstanding  any other  provision of this
Agreement, if Buyer elects to make a Code ' 338 election in connection with this
transaction,  Sellers  each  agree to pay up to $5,000 to the  extent  that such
election  results in Tax  Liability  to the Company in excess of such  Liability
without such election.  If the Tax Liability for any Seller  resulting from such
election  exceeds $5,000,  then Buyer shall pay the amount of such Tax Liability
for such Seller in excess of $5,000 per Seller.

10.      Termination.

         (a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

                  (i)  the Buyer and the Sellers may terminate this Agreement by
         mutual written consent at any time prior to the Closing;

                  (ii) the Buyer may terminate  this Agreement by giving written
         notice to the Sellers at any time prior to the Closing (A) in the event
         any of the Sellers has breached any material representation,  warranty,
         or covenant  contained in this Agreement in any material  respect,  the
         Buyer has  notified  the  Sellers  of the  breach,  and the  breach has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under '7(a) hereof (unless the failure results primarily from the Buyer
         itself breaching any representation, warranty, or covenant contained in
         this Agreement); and

                  (iii) the  Sellers  may  terminate  this  Agreement  by giving
         written notice to the Buyer at any time prior to the Closing (A) in the
         event the Buyer has breached any material representation,  warranty, or
         covenant  contained in this Agreement in any material  respect,  any of
         the Sellers has  notified  the Buyer of the breach,  and the breach has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under '7(b) hereof  (unless the failure  results  primarily from any of
         the Sellers  themselves  breaching  any  representation,  warranty,  or
         covenant contained in this Agreement).

         (b)  Effect of  Termination.  If any Party  terminates  this  Agreement
pursuant to '10(a) above,  all rights and  obligations of the Parties  hereunder
shall  terminate  without any  Liability of any Party to any other Party (except
for any Liability of any Party then in breach).

11.      Miscellaneous.

         (a)      Nature of Certain Obligations.

                  (i) The  covenants  of  each of the  Sellers  in  '2(a)  above
         concerning  the  sale  of his  Company  Shares  to the  Buyer  and  the
         representations  and  warranties  of each of the Sellers in '3(a) above
         concerning the transaction are several obligations. This means that the
         particular Seller making the representation, warranty, or covenant will
         be  solely  responsible  to the  extent  provided  in '8 above  for any
         Adverse  Consequences  the Buyer may  suffer as a result of any  breach
         thereof.

                  (ii) The  remainder of the  representations,  warranties,  and
         covenants in this  Agreement  are joint and several  obligations.  This
         means that each Seller will be responsible to the extent provided in '8
         above for the entirety of any Adverse Consequences the Buyer may suffer
         as a result of any breach thereof.

         (b) Termination of Shareholders Agreement.  Effective upon Closing, the
Shareholders agree to terminate that certain Shareholders  Agreement Pursuant to
Section 732 of the Utah Revised  Business  Corporation  Act,  dated  October 30,
1995,  among the Sellers and the  Company.  The Company  shall  acknowledge  the
agreement  contained in this subsection by acknowledging such termination at the
end of this Agreement.

         (c) Press Releases and Public  Announcements.  No Party shall issue any
press release or make any public announcement  relating to the subject matter of
this Agreement  without the prior written approval of the Buyer and the Sellers;
provided,  however, that any Party may make any public disclosure it believes in
good faith is required  by  applicable  law or any listing or trading  agreement
concerning its  publicly-traded  securities (in which case the disclosing  Party
will use its reasonable best efforts to advise the other Parties prior to making
the disclosure).

         (d) No Third-Party  Beneficiaries.  This Agreement shall not confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

         (e) Entire Agreement.  This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior  understandings,  agreements,  or representations by or among the Parties,
written or oral,  to the extent they  related in any way to the  subject  matter
hereof,  including  that certain  Letter of Intent  between the  Parties,  dated
November 4, 1998.

         (f) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of his
or its rights,  interests,  or obligations  hereunder  without the prior written
approval of the Buyer and the Sellers; provided, however, that the Buyer may (i)
assign any or all of its rights and  interests  hereunder  to one or more of its
Affiliates  and (ii)  designate  one or more of its  Affiliates  to perform  its
obligations  hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder).

         (g)  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

         (h)  Headings.  The section  headings  contained in this  Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

         (i)  Notices.  All  notices,  requests,   demands,  claims,  and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder  shall be deemed  duly given if (and then two
business days after) it is sent by registered or certified mail,  return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to the Sellers:         .........        Copy to:

ZEVEX International, Inc.  .........Stoel Rives LLP
4314 ZEVEX Park Lane       .........201 S. Main Street, Suite 1100
Salt Lake City, UT 84123   .........Salt Lake City, UT 84111-4904
Attn: Len Smith            .........Attn: Clint M. Hanni

ZEVEX International, Inc.
4314 ZEVEX Park Lane
Salt Lake City, UT 84123
Attn: J. Tracy Livingston

ZEVEX International, Inc.
4314 ZEVEX Park Lane
Salt Lake City, UT 84123
Attn: Dave Bernardi

If to the Buyer:           .........Copy to:
----------------                    --------

ZEVEX International, Inc.  .........Jones, Waldo, Holbrook & McDonough
4314 ZEVEX Park Lane       .........170 S. Main Street, Suite 1500
Salt Lake City, UT 84123   .........Salt Lake City, UT 84101
Attn: Phillip McStotts     .........Attn: Ronald Poelman

Any Party may send any notice,  request,  demand,  claim, or other communication
hereunder  to the  intended  recipient  at the address set forth above using any
other means (including personal delivery,  expedited courier, messenger service,
telecopy,  telex,  ordinary  mail,  or  electronic  mail),  but no such  notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received by the intended  recipient.  Any
Party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.

         (j) Governing Law. This Agreement shall be governed by and construed in
accordance  with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule (whether of the State of Utah or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction other than the State of Utah.

         (k)  Amendments  and Waivers.  No  amendment  of any  provision of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant  hereunder,  whether intentional or not, shall
be deemed to extend to any prior or subsequent  default,  misrepresentation,  or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

         (l)  Severability.  Any term or  provision  of this  Agreement  that is
invalid or unenforceable  in any situation in any jurisdiction  shall not affect
the validity or  enforceability  of the remaining terms and provisions hereof or
the validity or  enforceability  of the offending term or provision in any other
situation or in any other jurisdiction.

         (m)  Expenses.  The Buyer  agrees that the Company will bear all of the
Sellers' costs and expenses  (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby.

         (n)  Construction.   The  Parties  have  participated  jointly  in  the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any Party by virtue of the authorship of any of
the provisions of this Agreement.  The Parties intend that each  representation,
warranty, and covenant contained herein shall have independent significance.  If
any Party has  breached  any  representation,  warranty,  or covenant  contained
herein  in any  respect,  the fact that  there  exists  another  representation,
warranty,  or covenant  relating to the same subject  matter  (regardless of the
relative  levels of  specificity)  which the  Party has not  breached  shall not
detract  from or  mitigate  the fact  that the  Party is in  breach of the first
representation, warranty, or covenant.

         (o) Incorporation of Exhibits,  Annexes,  and Schedules.  The Exhibits,
Annexes,  and Schedules  identified in this Agreement are incorporated herein by
reference and made a part hereof.

         (p) Specific  Performance.  Each of the Parties acknowledges and agrees
that the other  Parties  would be  damaged  irreparably  in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly,  each of the Parties  agrees that
the other Parties shall be entitled to an injunction or  injunctions  to prevent
breaches of the  provisions of this Agreement and to enforce  specifically  this
Agreement and the terms and  provisions  hereof in any action  instituted in any
court of the United States or any state  thereof  having  jurisdiction  over the
Parties and the matter (subject to the provisions set forth in '10(p) below), in
addition to any other remedy to which they may be entitled, at law or in equity.

         (q)  Submission  to  Jurisdiction.  Each of the Parties  submits to the
jurisdiction of any state or federal court sitting in Salt Lake County, Utah, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all  claims  in  respect  of the  action  or  proceeding  may be heard  and
determined in any such court.  Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of  inconvenient  forum to the  maintenance of
any action or  proceeding  so brought  and  waives  any bond,  surety,  or other
security  that might be required of any other Party with respect  thereto.  Each
Party agrees that a final  judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

         (r)  Limitation  on  Obligations  of the  Church.  Except as  expressly
provided  in  this  Agreement,  the  Church  shall  have  no  obligation,  duty,
liability,  or  responsibility  under this Agreement or under any instruments or
agreements  delivered pursuant to this Agreement,  except to transfer and convey
to the Buyer the Company  Shares  identified in Section 4(b) of Annex III hereto
as being owned by the Church,  free and clear of all liens,  security  interest,
encumbrances, pledges and claims arising by, through, or under the Church.

                                                        

<PAGE>




         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.

ZEVEX INTERNATIONAL, INC.


By:      /s/Phillip L. McStotts.....        
         Philip L. McStotts
         Chief Financial Officer


/s/ Leonard C. Smith       .........        
LEONARD C. SMITH


/s/ James T. Livingston    .........
JAMES T. LIVINGSTON


/s/ David W. Bernardi      .........        
DAVID W. BERNARDI

THE CORPORATION OF THE PRESIDENT
OF THE CHURCH OF JESUS CHRIST OF
LATTER-DAY SAINTS


By:      /s/ Ray Anderson  .........
Its:     Authorize Agent   .........

Acknowledgement and Agreement of JTech Medical Industries, Inc. for purposes of
Section 10(b).

JTECH MEDICAL INDUSTRIES, INC.


By:      /s/ Leonard C. Smith.......        
         Leonard C. Smith,
         President


<PAGE>


                                    EXHIBIT A
                                FORM OF DEBENTURE









         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE  STATE LAW AND MAY NOT
         BE OFFERED,  SOLD, OR OTHERWISE  TRANSFERRED,  PLEDGED, OR HYPOTHECATED
         UNLESS  AND  UNTIL  REGISTERED  UNDER  THE ACT OR STATE  LAW OR, IN THE
         OPINION OF COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE ISSUER OF
         THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION
         IS IN COMPLIANCE THEREWITH.


                                                CONVERTIBLE DEBENTURE

                                               (Due _________________)

______________, 199___                                 
(the "Issuance Date")

         The undersigned, ZEVEX INTERNATIONAL, INC., a Delaware corporation (the
"Company"),  for  value  received,  hereby  promises  to  pay to  the  order  of
_____________________________________  (the  "Holder") the  principal  amount of
_________________________________________   ($________________)   together  with
interest  on such  principal  amount  and  any  other  amounts  due  under  this
Debenture.

         This Debenture  (the  "Debenture")  is issued  pursuant to that certain
Stock  Purchase  Agreement,  dated  December __, 1998,  entered into between the
Company and the Holder of this  Debenture (the  "Agreement").  This Debenture is
also subject to the following additional terms and conditions:


<PAGE>




1. Interest.  Commencing on the date of this Debenture and continuing  until all
principal  and  interest  due  under  this  Debenture  are  paid  in  full,  the
outstanding  principal balance of this Debenture shall bear interest at the rate
of eight  percent (8%) per annum,  compounded  annually.  Interest  shall accrue
daily and be calculated on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed in any partial calendar month.

2. Payment.  Accrued interest shall be due and payable beginning April, 1, 1999,
and on each July 1,  October  1,  January 1, and April 1  thereafter  until this
Debenture  is paid in full.  The unpaid  principal  balance  of this  Debenture,
together with any and all accrued but unpaid interest,  shall be due and payable
in full three (3) years from the Issuance  Date.  All payments of principal  and
interest  shall be made in lawful  money of the United  States of America at the
address of the holder set forth in Section  8.1 below.  Unless the Holder  shall
elect  otherwise,  each payment made under this Debenture shall be applied first
to interest due under this  Debenture and any balance shall be applied to reduce
the principal balance of this Debenture.

3.       Right of Conversion

         3.1 Conversion  Into Company  Securities.  At any time after a date one
(1) year from the Issuance  Date until a date three (3) years after the Issuance
Date, and from time to time during such period,  the Holder may elect to convert
all or a portion  of the unpaid  principal  amount  and all  accrued  but unpaid
interest of this Debenture into fully paid and  nonassessable  shares of Company
Common Stock, $0.001 par value (the "Conversion Shares") at the conversion price
of eleven dollars ($11.00) per share (the "Conversion Price"); provided that any
partial  conversion of less than the entire remaining  principal balance of this
Debenture  may not be less than  $25,000 in  principal  and  accrued  and unpaid
interest.

         3.2  Mechanics of  Conversion.  Upon the  Holder's  election to convert
pursuant  to Section  3.1 above,  the Holder  shall send  written  notice of its
election to the Company and shall surrender this Debenture to the Company at its
principal office. The written election shall specify the amount of principal and
accrued and unpaid interest that is to be converted.  Each  conversion  shall be
deemed to have been  effected  as of the  close of the  business  on the date on
which the notice is  delivered  to the  Company  and the  outstanding  principal
balance and accrued and unpaid interest shall be reduced by the amount converted
as set forth in the notice.  Within a reasonable  time  thereafter,  the Company
shall  cancel the  designated  portion of the  unpaid  principal  amount of this
Debenture  converted by the Holder and issue a certificate or certificates  (the
"Conversion  Certificates"),  registered  in the  name of such  Holder,  for the
number of full shares of the Conversion Shares issuable at the Conversion Price,
bearing  such  restrictive  legends  as may be  required  by  federal  and state
securities laws. In the event of a Partial Conversion,  the Company shall return
with the Conversion  Certificates  this Debenture,  bearing a proper notation of
the  principal  amount  that  remains  due and payable  after  Holder's  partial
conversion,  but otherwise unaltered.  Conversion Certificates will be delivered
promptly to the Holder after  issuance by the Company;  provided,  however,  the
Company may, in its discretion,  hold in its possession Conversion  Certificates
for that  number  of  Conversion  Shares  which are  subject  to  forfeiture  as
described in Section 7 below. Each Conversion Certificate shall bear a legend to
the extent it is subject to forfeiture.

         3.3 Effects of  Conversion.  Upon  conversion  of the entire  amount of
principal and unpaid interest of this Debenture, the rights of the Holder of the
Debenture as such shall cease.  The person or persons in whose name or names the
Conversion  Certificates are issued shall be deemed to have become the holder or
holders of record of the Conversion Shares represented thereby.

         3.4 No Fractional  Shares. No fractional share of the Conversion Shares
will be issued in  connection  with any  conversion  hereunder.  Instead  of any
fractional  share the  Company  shall pay a cash  adjustment  in respect of such
fractional interest as determined by reference to the Conversion Price.

         3.5 No Rights as  Stockholders.  Prior to the  conversion of all or any
portion of this  Debenture,  the Holder  shall not be entitled to any right as a
stockholder,  including  without  limitation  the  right  to vote or to  receive
dividends or other distribution, and shall not be entitled to receive any notice
of any proceeding of the Company, except as provided herein.

         3.6  Taxes on  Conversion.  Any taxes  required  upon the  issuance  of
Conversion  Certificates  on conversion of this  Debenture  shall be paid by the
Holder.

         3.7  Adjustments.  In the  event  of any  Company  stock  split,  stock
combination,  merger,  consolidation  or  recapitalization  affecting the Common
Stock of the Company prior to repayment or conversion under this Debenture,  the
Company shall make  appropriate,  proportionate  adjustments  to the  Conversion
Shares issued to Holder under Holder's conversion right.

         3.8  Notices  of Record  Date.  In the  event of (i) any  taking by the
Company of a record of the holders of securities  for the purpose of determining
the  holders  thereof  who  are  entitled  to  receive  any  dividend  or  other
distribution or (ii) any  reclassification  or  recapitalization  of the capital
stock of the  Company,  any  merger  or  consolidation  of the  Company,  or any
transfer of all or  substantially  all of the assets of the Company to any other
corporation,  entity,  or person,  or any voluntary or involuntary  dissolution,
liquidation,  or a winding-up of the Company, which occurs during the conversion
period, the Company shall mail to the Holder of the Debenture,  at least fifteen
(15) days prior to the record date specified  therein,  a notice  specifying (A)
the date on which  any  such  record  is to be  taken  for the  purpose  of such
dividend or distribution and a description of such dividend or distribution, (B)
the  date  on  which  any  such  reorganization,   reclassification,   transfer,
consolidation,  merger,  dissolution,  liquidation, or winding-up is expected to
become effective,  and (C) the time, if any is to be set, as to when the holders
of record of such  security  shall be  entitled  to  exchange  their  shares for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  transfer, consolidation, merger, dissolution, liquidation, or
winding-up.

4.       Events of Default; Acceleration

         4.1  Events,  Remedy.  If any of the  following  conditions  or  events
("Events of Default") shall occur:

                  (a)  if the  Company  shall  default  in  the  payment  of the
principal or interest on the Debenture when due and such default continues for a
period of 30 days after written notice thereof to the Company from Holder; or

                  (b) if the  Company  shall  default in the  performance  of or
compliance with any term or covenant contained in this Debenture, the Agreement,
or the Pledge  Agreement and such default shall not have been remedied within 30
days after written notice thereof shall have been given to the Company by Holder
(provided,  however,  if such default is not cured within such 30-day period and
the  Company  is  diligently  pursuing  such  cure,  the  Company  shall have an
additional  period of time not to exceed  ninety (90) days in which to cure such
default); or

                  (c) if the Company shall make an assignment for the benefit of
creditors,  or shall  admit in writing  its  inability  to pay its debts as they
become  due,  or shall file a  voluntary  petition  in  bankruptcy,  or shall be
adjudicated  a  bankrupt  or  insolvent,  or shall file any  petition  or answer
seeking for itself any reorganization,  arrangement, composition,  readjustment,
liquidation, dissolution, or similar relief under any present or future statute,
law or  regulation,  or shall file any answer  admitting or not  contesting  the
material  allegations  of a  petition  filed  against  the  Company  in any such
proceeding,  or shall seek or consent to or acquiesce in the  appointment of any
trustee, receiver or liquidator of the Company or of all or any substantial part
of the properties of the Company, or if the Company or its directors or majority
stockholders  shall take any action looking to the dissolution or liquidation of
the Company; or

                  (d) if, within 60 days after the service of process on Company
following   commencement   of  an  action   against  the  Company   seeking  any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute,  law or regulation,  such
action  shall  not have  been  dismissed  or if,  alternatively,  all  orders or
proceedings  thereunder  affecting the operations or the business of the Company
stayed,  or if the stay of any such order or proceeding  shall thereafter be set
aside,  or if,  within 60 days  after the  appointment  without  the  consent or
acquiescence  of the  Company of any  trustee,  receiver  or  liquidator  of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;

then and in any such event  Holder may at any time  (unless all  defaults  shall
theretofore have been remedied) at his option, by written notice to the Company,
declare the entire principal and interest of the Debenture then remaining unpaid
to be due and payable immediately. Notwithstanding the foregoing, this Debenture
shall not be in default to the extent that the Company has  exercised its rights
of recoupment under Section 8(f) of the Agreement.

         4.2 Other  Remedies on Default,  Etc. In case any one or more Events of
Default shall occur, be continuing, and not have been waived, Holder may proceed
to protect and  enforce  the rights of such Holder by an action at law,  suit in
equity, or other appropriate proceeding, whether for the specific performance of
any  agreement  contained  herein  or  under  terms of the  Agreement  or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power  granted  hereby or thereby or by law. In case of a
default in the payment of  principal or interest on the  Debenture,  the Company
will pay to the Holder  thereof such further  amount as shall be  sufficient  to
cover the costs and  expenses  of  collection,  including,  without  limitation,
reasonable attorneys' fees. No course of dealing and no delay on the part of any
Holder in exercising  any right shall  operate as a waiver  thereof or otherwise
prejudice such Holder's  rights.  No right conferred  hereby or by the Agreement
upon any Holder  shall be  exclusive  of any other  right  referred to herein or
therein  or now or  hereafter  available  at  law,  in  equity,  by  statute  or
otherwise.

5.       Prepayment

         This  Debenture  may be prepaid  (including a deemed  prepayment  under
Section 8(f) of the Purchase  Agreement)  without  penalty upon thirty (30) days
prior written  notice by the Company to Holder.  Except in the event of a deemed
prepayment in  accordance  with Section 8(f) of the Purchase  Agreement,  Holder
shall have the right  within  such  thirty day period to convert  all or part of
this Debenture at Holder's election pursuant to Section 3 above.

6.       Security for Debenture

         This  Debenture  is secured by a Stock  Pledge  Agreement  of even date
herewith by and between the Company and Holder.

7.       Forfeiture of Debenture/Conversion Shares

         Holder  acknowledges  and agrees that this Debenture and any Conversion
Shares issued upon  conversion of this  Debenture are subject to the  forfeiture
provisions of Section  10.1(iii) of that certain  Employment  Agreement  between
Holder and JTech Medical  Industries,  Inc., dated as of the date hereof. In the
event of a forfeiture  of this  Debenture in  accordance  with the terms of such
Section 10.1(iii), Holder shall promptly surrender this Debenture to the Company
at its principal  office.  The Company  shall  promptly  thereafter  return this
Debenture  to Holder,  bearing a proper  notation of the  principal  amount that
remains due and payable after such forfeiture,  but otherwise unaltered.  In the
event of a  forfeiture  of  Conversion  Shares in  accordance  with the terms of
Section 10.1(iii) of the Employment Agreement, the Company shall promptly cancel
the Conversion  Certificates  applicable to the forfeited  Conversion Shares and
issue and deliver to Holder new certificates for any Conversion Shares that were
not forfeited by Holder.

8.       Miscellaneous Provisions

         8.1 Notices.  Any notice herein required or payment required  hereunder
shall  be made or  given to the  address  of the  parties  as  specified  in the
Agreement.

         8.2  Amendments  or Waivers.  Any  provision of this  Debenture  may be
amended,  waived, or modified,  but only upon the written consent of the Company
and the Holder.

         8.3  Governing  Law.  This  Debenture has been executed in and shall be
governed by the laws of the State of Utah  excluding that body of law pertaining
to conflicts of law.

         8.4 Miscellaneous.  The unenforceability or invalidity of any provision
of this Debenture shall not affect the  enforceability  or validity of any other
provision  of this  Debenture.  The  terms  of this  Debenture  shall  bind  the
undersigned  and inure to the  benefit  of Holder  and their  respective  heirs,
successors,  assigns and legal  representatives.  The Holder may, in  accordance
with the terms of the Agreement,  assign all or part of Holder's  interest under
this Debenture upon prior written notice to the Company.

         IN WITNESS WHEREOF,  the Company has caused this Debenture to be issued
this ____ day of _________________, 1998.


                            ZEVEX INTERNATIONAL, INC.



                              Phillip L. McStotts,
                             Chief Financial Officer


<PAGE>


                                    EXHIBIT C
                    CALCULATION OF POSSIBLE EARN OUT PAYMENT


The formula for calculating the possible First Earn Out Payment will be:

         A + B x ($375,000.00) = Cash portion of possible First Earn Out Payment

         A + B x  ($375,000.00)  = Debenture  portion of possible First Earn Out
Payment

Where:

         A        = 1999  Actual  Revenue - 1998  Projected  Revenue x 0.50 1999
                  Projected Revenue - 1998 Projected Revenue

         B        = 1999 Actual Pre Tax Income - 1998 Projected Pre Tax Income x
                  0.50 1999  Projected  Pre Tax Income - 1998  Projected Pre Tax
                  Income

And:

         "1998 Projected Revenue" is $4,000,000.

         "1999  Actual  Revenue" is the total  gross  revenue for J-Tech for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Revenue" is $6,200,000.00

         "1998 Projected Pre Tax Income" is $600,000

         "1999  Actual Pre Tax  Income" is the pre tax income for J-Tech for the
period from January 1, 1999 to December 31, 1999

         "1999 Projected Pre Tax Income" is $930,000

The formula for calculating the possible Second Earn Out Payment will be:

         A + B x  ($200,000.00)  = Cash  portion  of  possible  Second  Earn Out
Payment

         A + B x ($200,000.00)  = Debenture  portion of possible Second Earn Out
Payment



<PAGE>


Where:

         A        = 2000  Actual  Revenue - 1999  Projected  Revenue x 0.50 2000
                  Projected Revenue - 1999 Projected Revenue

         B        = 2000 Actual Pre Tax Income - 1999 Projected Pre Tax Income x
                  0.50 2000  Projected  Pre Tax Income - 1999  Projected Pre Tax
                  Income

And:

         "1999 Projected Revenue" is $6,200,000.00

         "2000  Actual  Revenue" is the total  gross  revenue for J-Tech for the
period from January 1, 2000 to December 31, 2000.

         "2000 Projected Revenue" is $9,500,000.

         "1999 Projected Pre Tax Income" is $930,000

         "2000  Actual Pre Tax  Income" is the pre tax income for J-Tech for the
period from January 1, 2000 to December 31, 2000.

         "2000 Projected Pre Tax Income" is $1,577,000.

Example

         Assuming that "1999 Actual  Revenue" is $5,000,000 and "1999 Actual Pre
Tax Income" is $800,000,  the possible  First Earn Out Payment is  calculated as
follows:

         5,000,000 - 4,000,000 x .50 = 0.2273
         6,200,000 - 4,000,000

         800,000 - 600,000 x .50 = 0.3030
         930,000 - 600,000

         0.2273 + 0.3030 = 0.5303

         0.5303 x  $375,000 = $198,863  cash  portion of First Earn Out  Payment
         0.5303 x  $375,000  =  $198,863  Debenture  portion  of First  Earn Out
         Payment


<PAGE>


                                    EXHIBIT E
                         FORMS OF EMPLOYMENT AGREEMENTS





                                    EXHIBIT F
                          ALLOCATION OF PURCHASE PRICE

Cash portion of the Purchase Price paid at Closing:

Leonard C. Smith           .........$       1,000.00

J. Tracy Livingston        .........$       1,000.00

David W. Bernardi          .........$       1,000.00
                                    ----------------

TOTAL                      .........$       3,000.00

Cash portion of the Purchase Price paid on January 6, 1999:

                           .........Price Before Holdback Payment After Holdback

Leonard C. Smith           .........$1,256,900.55             $1,056,950.55

J. Tracy Livingston        .........$1,288,550.44             $1,088,600.44

David W. Bernardi          .........$  408,549.01             $  343,449.01

Corporation of the President
of The Church of Jesus Christ
of Latter-day Saints       .........$  143,000.00              $  143,000.00
                                     -------------              -------------

TOTAL                      .........$3,097,000.00              $2,632,000.00

Debenture portion of the Purchase Price paid on January 6, 1999:

Leonard C. Smith           .........$1,290,000.00

J. Tracy Livingston        .........$1,290,000.00

David W. Bernardi          .........$  420,000.00

Holdback  Amounts Paid  Following  Closing are allocated in accordance  with the
following percentages:

Leonard C. Smith           .........43%
J. Tracy Livingston        .........43%
David W. Bernardi          .........14%

The First and Second  Earn-Out  Payments are  allocated in  accordance  with the
following percentages:

Leonard C. Smith           .........50%
J. Tracy Livingston        .........25%
David W. Bernardi          .........25%





<PAGE>




                            STOCK PURCHASE AGREEMENT


                                     BETWEEN


                            ZEVEX INTERNATIONAL, INC.


                                       AND


                                   VIJAY LUMBA



                                December 31, 1998









                                TABLE OF CONTENTS
                                                                           PAGE


1.       Definitions...........................................................1

2.       Purchase and Sale of Company Shares...................................5
         (a)      Basic Transaction............................................5
         (b)      Purchase Price...............................................5
         (c)      Terms of Debentures..........................................6
         (d)      The Hold-Back................................................6
         (e)      Purchase Price Adjustment....................................6
         (g)      The Closing..................................................7
         (h)      Deliveries at the Closing....................................7
3.       Representations and Warranties Concerning the Transaction.............7
         (a)      Representations and Warranties of the Seller.................7
         (b)      Representations and Warranties of the Buyer..................9

4.       Representations and Warranties Concerning the Company................10
         (a)      Organization, Qualification, and Corporate Power............10
         (b)      Capitalization..............................................11
         (c)      Noncontravention............................................11
         (d)      Brokers' Fees...............................................11
         (e)      Title to Assets.............................................11
         (f)      Financial Statements........................................12
         (g)      Events Subsequent to Most Recent Fiscal Year End............12
         (h)      Undisclosed Liabilities.....................................13
         (i)      Legal Compliance............................................13
         (j)      Tax Matters.................................................14
         (k)      Intellectual Property.......................................15
         (l)      Tangible Assets.............................................17
         (m)      Inventory...................................................17
         (n)      Contracts...................................................17
         (o)      Notes and Accounts Receivable...............................18
         (p)      Powers of Attorney..........................................18
         (q)      Insurance...................................................18
         (r)      Litigation..................................................18
         (s)      Product Warranty............................................18
         (t)      Product Liability...........................................19
         (u)      Employees...................................................19
         (v)      Employee Benefits...........................................19
         (w)      Guaranties..................................................21
         (x)      Environmental, Health, and Safety Matters...................21
         (y)      Certain Business Relationships with the Company.............22
         (z)      Year 2000 Items.............................................22
         (aa)     Disclosure..................................................22
5.       Pre-Closing Covenants................................................22
         (a)      General.....................................................23
         (b)      Notices and Consents........................................23
         (c)      Operation of Business.......................................23
         (d)      Preservation of Business....................................23
         (e)      Full Access.................................................23
         (f)      Notice of Developments......................................23
         (g)      Exclusivity.................................................24

6.       Post-Closing Covenants...............................................24
         (a)      General.....................................................24
         (b)      Litigation Support..........................................24
         (c)      Transition..................................................24
         (d)      Confidentiality.............................................25
         (e)      Covenant Not to Compete.....................................25

7.       Conditions to Obligation to Close....................................26
         (a)      Conditions to Obligation of the Buyer.......................26
         (b)      Conditions to Obligation of the Seller......................27

8.       Remedies for Breaches of This Agreement..............................28
         (a)      Survival of Representations and Warranties..................28
         (b)      Indemnification Provisions for Benefit of the Buyer.........28
         (c)      Indemnification Provisions for Benefit of the Seller........29
         (d)      Matters Involving Third Parties.............................29
         (e)      Determination of Adverse Consequences.......................30
         (f)      Recoupment Under the Hold-Back and Debentures...............30
         (g)      Limitation On Amount........................................31
         (h)      Other Indemnification Provisions............................31

9.       Tax Matters..........................................................31
         (a)      Tax Periods Ending on or Before the Closing Date............31
         (b)      Tax Periods Beginning Before and Ending After the Closing 
                  Date........................................................31
         (c)      Cooperation on Tax Matters..................................32
         (d)      Certain Taxes...............................................32

10.      Termination..........................................................32
         (a)      Termination of Agreement....................................32
         (b)      Effect of Termination.......................................33

11.      Miscellaneous........................................................33
         (a)      Press Releases and Public Announcements.....................33
         (b)      No Third-Party Beneficiaries................................33
         (c)      Entire Agreement............................................33
         (d)      Succession and Assignment...................................33
         (e)      Counterparts................................................34
         (f)      Headings....................................................34
         (g)      Notices.....................................................34
         (h)      Governing Law...............................................34
         (i)      Dispute Resolution..........................................35
         (j)      Amendments and Waivers......................................36
         (k)      Severability................................................36
         (l)      Expenses....................................................36
         (m)      Construction................................................36
         (n)      Incorporation of Exhibits, Annexes, and Schedules...........37
         (o)      Specific Performance........................................37
         (p)      Submission to Jurisdiction..................................37

Exhibit A--Form of Convertible Debenture
Exhibit B--Formula for Calculating Earn-Out Payment
Exhibit C--Historical Financial Statements

Annex I--Exceptions to the Seller's Representations and Warranties Concerning
         the Transaction

Annex II--Exceptions to the Buyer's Representations and Warranties Concerning
          the Transaction

Disclosure Schedule--Exceptions to Representations and Warranties Concerning the
                     Company



<PAGE>






                            STOCK PURCHASE AGREEMENT

         This Stock  Purchase  Agreement  ("Agreement")  is  entered  into as of
December  31,  1998,  by  and  among  ZEVEX  International,   Inc.,  a  Delaware
corporation  ("Buyer") and Vijay Lumba ("Seller").  The Buyer and the Seller are
referred to collectively herein as the "Parties."

         The  Seller  owns  all  of  the  outstanding  capital  stock  of  Aborn
Electronics, Inc, a California corporation (the "Company").

         This  Agreement  contemplates  a  transaction  in which the Buyer  will
purchase  from the  Seller,  and the Seller  will sell to the Buyer,  all of the
outstanding  capital  stock of the Company in return for cash and certain  other
consideration.

         Now,  therefore,  in  consideration  of the  premises  and  the  mutual
promises herein made, and in consideration of the  representations,  warranties,
and covenants herein contained, the Parties agree as follows.


<PAGE>



1.       Definitions.

         "Accredited  Investor"  has the  meaning  set  forth  in  Regulation  D
promulgated under the Securities Act.

         "Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders, decrees, rulings,  damages, dues, penalties,  fines, costs, amounts paid
in settlement,  Liabilities,  obligations,  Taxes, liens, losses,  expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

         "Affiliate"  has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

         "Basis"  means  any  past or  present  fact,  situation,  circumstance,
status,  condition,  activity,  practice,  plan,  occurrence,  event,  incident,
action,  failure to act, or  transaction  that forms or could form the basis for
any specified consequence.

         "Buyer Confidential Information" has the meaning set forth in '6(d)(i) 
below.

         "Buyer Shares" has the meaning set forth in '2(c) below.

         "Closing" has the meaning set forth in '2(g) below.

         "Closing Date" has the meaning set forth in '2(g) below.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "COBRA"  means the  requirements  of Part 6 of Subtitle B of Title I of
ERISA and Code '4980B.

         "Company Confidential Information" has the meaning set forth in '6(d) 
(ii) below.

         "Company Share" means any share of the Common Stock, par value $.01 per
share, of the Company.

         "Debenture" has the meaning set forth in '2(b)(i) below.

         "Disclosure Schedule" has the meaning set forth in '4 below.

         "Earn-Out Payment" has the meaning set forth in '2(b)(ii) below.

         "Employee   Benefit   Plan"   means  any  (a)   nonqualified   deferred
compensation  or  retirement  plan  or   arrangement,   (b)  qualified   defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified  defined benefit  retirement plan or arrangement which is an
Employee  Pension  Benefit  Plan  (including  any  Multiemployer  Plan),  or (d)
Employee  Welfare Benefit Plan or material  fringe benefit or other  retirement,
bonus, or incentive plan or program.

         "Employee Pension Benefit Plan" has the meaning set forth in 
ERISA '3(2).

         "Employee Welfare Benefit Plan" has the meaning set forth in 
ERISA '3(1).

         "Environmental,   Health,  and  Safety  Requirements"  shall  mean  all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended.

         "ERISA  Affiliate"  means  each  entity  which is  treated  as a single
employer with Seller for purposes of Code '414.

         "Estimated Net Asset Amount" has the meaning set forth in '2(b)(i) 
below.

         "Fiduciary" has the meaning set forth in ERISA '3(21).

         "Final Net Asset Amount" has the meaning set forth in '2(e) below.

         "Financial Statement" has the meaning set forth in '4(f) below.

         "GAAP" means United States generally accepted accounting  principles as
in effect from time to time.

         "Hold-Back" has the meaning set forth in '2(d) below.

         "Indemnified Party" has the meaning set forth in '8(d) below.

         "Indemnifying Party" has the meaning set forth in '8(d) below.

         "Information  Technology" means computer  software,  computer firmware,
computer  hardware  (whether  general or specific  purpose) and other similar or
related items of automated, computerized or software systems.

         "Initial Payment" has the meaning set forth in '2(b)(i) below.

         "Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
reissuances,  continuations,  continuations-in-part,  revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

         "Knowledge" means actual knowledge after reasonable investigation.

         "Liability"  means any  liability  (whether  known or unknown,  whether
asserted or  unasserted,  whether  absolute or  contingent,  whether  accrued or
unaccrued,  whether  liquidated  or  unliquidated,  and whether due or to become
due), including any liability for Taxes.

         "Most Recent  Balance Sheet" means the balance sheet  contained  within
the Financial Statements for the Most Recent Fiscal Year End.

         "Most Recent Fiscal Year End" has the meaning set forth in '4(f) below.

         "Multiemployer Plan" has the meaning set forth in ERISA '3(37).

         "Ordinary  Course of Business"  means the  ordinary  course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Person"  means  an  individual,  a  partnership,  a  corporation,   an
association,  a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity.

         "Prohibited Transaction" has the meaning set forth in ERISA '406 and 
Code '4975.

         "Purchase Price" has the meaning set forth in '2(b) below.

         "Reportable Event" has the meaning set forth in ERISA '4043.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         "Security  Interest"  means any mortgage,  pledge,  lien,  encumbrance,
charge, or other security  interest,  other than (a) mechanic's,  materialmen's,
and similar  liens,  (b) liens for Taxes not yet due and  payable,  (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary  Course of Business and not incurred
in connection with the borrowing of money.

         "Tax"  means any  federal,  state,  local,  or  foreign  income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental  (including  taxes under Code '59A),
customs duties, capital stock, franchise, profits, withholding,  social security
(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

         "Tax Return" means any return,  declaration,  report, claim for refund,
or information return or statement relating to Taxes,  including any schedule or
attachment thereto, and including any amendment thereof.

         "Third Party Claim" has the meaning set forth in '8(d) below.

         "Year 2000 Compliant"  means,  with respect to Information  Technology,
the  Information  Technology is fully  functional and compatible with use during
and after the  calendar  year 2000 A.D.,  and the  Information  Technology  used
during  each such time  period  will  accurately  receive,  provide  and process
date/time  data,  (including,  but not limited to,  calculating,  comparing  and
sequencing)  from, into and between the 20th and 21st  centuries,  including the
years 1999 and 2000, and leap year calculations and will not malfunction,  cease
to function,  or provide  invalid or incorrect  results as a result of date/time
data.

2.       Purchase and Sale of Company Shares.

         (a) Basic  Transaction.  On and subject to the terms and  conditions of
this  Agreement,  the Buyer agrees to purchase  from the Seller,  and the Seller
agrees  to  sell  to  the  Buyer,   all  of  Seller's  Company  Shares  for  the
consideration specified below in this '2.

         (b)  Purchase  Price.  The Buyer agrees to pay to the Seller a purchase
price of up to, but not  exceeding,  Five Million One Hundred  Thousand  Dollars
($5,100,000) (the "Purchase Price"),  subject to the reductions  described below
in this '2(b). The Purchase Price will be paid in the following manner:

                  (i)  Payment at  Closing.  At  Closing,  the Buyer will pay to
Seller Five Thousand Dollars in cash by bank check.

                  (ii) Payment by January 6, 1998. On January 6, 1998, the Buyer
         will pay to Seller:  (A) One Million  Three Hundred Forty Five Thousand
         Dollars  ($1,345,000)  in  cash  payable  by  wire  transfer  or  other
         immediately  available  funds; (B) an estimated amount in cash equal to
         the  difference  between  the  current  assets  of  cash  and  accounts
         receivables  less current  liabilities  ("Estimated Net Asset Amount"),
         which amount will not exceed Five Hundred Thousand Dollars  ($500,000),
         and (C) a convertible  debenture in the form attached hereto as Exhibit
         A ("Debenture") in the aggregate  principal amount of One Million Three
         Hundred Fifty Thousand  Dollars  ($1,350,000).  The cash portion of the
         foregoing  payment  (the  "Initial  Payment")  shall be  subject to the
         hold-back provisions of '2(d) and the adjustment provisions of '2(e)

                  (iii)  Earn-Out  Payment.  Within  sixty  (60) days  following
         receipt of acceptable  financial  statements  for the fiscal year ended
         December  31,  1999,  the Buyer  will pay to the  Seller an  additional
         amount  of  cash  and  Debentures  in an  amount  to be  calculated  in
         accordance  with the formula and  example  described  in Exhibit B (the
         "Earn-Out  Payment").  The Earn-Out  Payment  shall not exceed (A) Nine
         Hundred Fifty Thousand Dollars  ($950,000) in cash, and (B) a Debenture
         in the  aggregate  principal  amount  of Nine  Hundred  Fifty  Thousand
         Dollars  ($950,000).  As  provided  in Exhibit B, in the event that the
         1999  Actual  Pretax  Income of the  Company  (as defined in Exhibit B)
         equals or exceeds $1,176,500,  Seller shall receive one hundred percent
         of foregoing maximum the Earn-Out Payment.


<PAGE>



         (c) Terms of  Debentures.  In  addition  to the  terms  and  conditions
contained in the form of Debenture in Exhibit A, each Debenture may be converted
by its holder,  in whole or in part,  into the common stock of the Buyer ("Buyer
Shares") at a rate of Eleven  Dollars  ($11.00)  per share at any time after one
(1) year and before three (3) years, measured from the date of issuance.

         (d) The  Hold-Back.  The Buyer will hold and not deliver at Closing Two
Hundred  Seventy  Seven  Thousand  Five Hundred  Dollars  ($277,500) of the cash
portion  of the  Purchase  Price  (the  "Hold-Back").  The  Parties  agree  that
two-thirds  of the Hold-Back  ($185,000)  shall be held by the Buyer and paid to
the Seller on a deferred basis promptly following the post-Closing completion of
the audit  requirements of the Buyer, less amounts applied by the Buyer to cover
unknown audit  contingencies which occur following the Closing Date. The Parties
agree that the remaining  one-third of the Hold-Back  ($92,500) shall be held by
the Buyer and paid to the Seller on a deferred  basis one hundred  eighty  (180)
days  after  Closing,  less  amounts  applied  by the  Buyer  to  cover  unknown
contingencies that occur following Closing, including amounts due to Buyer under
'8(b).  Buyer shall also pay to Seller the interest  actually earned by Buyer on
Hold-Back amounts paid to Seller during the time such amounts are held by Buyer.

         (e)  Purchase  Price  Adjustment.  Within  thirty  (30) days  following
Closing,  the Company shall produce a definitive balance sheet as of the Closing
Date (the "Closing  Balance  Sheet") and  accounting  for the Company's  current
assets of cash and accounts receivables less current liabilities (the "Final Net
Asset  Amount").  The Final Net Asset  Amount  shall  not  exceed  Five  Hundred
Thousand Dollars  ($500,000).  Upon notice from the Buyer that the Buyer, in its
discretion,  accepts such  accounting,  the Purchase Price shall be increased by
the amount,  if any, by which the Final Net Asset Amount  exceeds the  Estimated
Net Asset Amount,  or  conversely,  the Purchase Price shall be decreased by the
amount,  if any, by which the Final Net Asset Amount is less than the  Estimated
Net Asset  Amount.  The Buyer  shall pay to the Seller any such  increase in the
Purchase  Price and the Seller shall repay to the Buyer any such decrease in the
Purchase  Price within ten (10) days  following  the notice of acceptance of the
Buyer.

         (f) Partial  Assignment of  Debentures.  The Parties  acknowledge  that
Seller has agreed to  compensate  Harry  Parmar as a finder for the  Company and
Seller with regard to this transaction. As compensation in full for the services
of Mr.  Parmar,  Seller is making,  upon Closing and at the time of the Earn-Out
Payment, a partial assignment of the Debentures as follows: (i) an assignment of
Seller's rights and interests under the Initial Payment  Debenture in the amount
of eight percent (8%) of the total Initial Payment  debenture  value  ($216,000)
and (ii) an assignment of Seller's rights and interests under the


<PAGE>


 Earn-Out  Payment  Debenture  in the amount of eight  percent (8%) of the total
Earn-Out Payment Debenture value (up to a maximum of $152,000, if any).

         (g) The Closing.  The closing of the transactions  contemplated by this
Agreement (the "Closing")  shall take place at the offices of Buyer in Salt Lake
City,  Utah,  commencing  at 9:00 a.m.  local  time on the second  business  day
following the satisfaction or waiver of all conditions to the obligations of the
Parties  to  consummate  the  transactions   contemplated   hereby  (other  than
conditions  with  respect to actions  the  respective  Parties  will take at the
Closing  itself)  or such  other  date as the  Buyer  and  Seller  may  mutually
determine (the "Closing Date").

         (h)  Deliveries  at the Closing.  At the  Closing,  (i) the Seller will
deliver  to the Buyer  the  various  certificates,  instruments,  and  documents
referred  to in '7(a)  below,  (ii) the Buyer  will  deliver  to the  Seller the
various  certificates,  instruments,  and documents  referred to in '7(b) below,
(iii) the Seller will deliver to the Buyer stock  certificates  representing all
of his  Company  Shares,  endorsed  in blank  or  accompanied  by duly  executed
assignment  documents,  and  (iv) the  Buyer  will  deliver  to the  Seller  the
consideration specified in '2(b) above.

3.       Representations and Warranties Concerning the Transaction.

         (a) Representations and Warranties of the Seller. The Seller represents
and  warrants  to the Buyer  that the  statements  contained  in this  '3(a) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this '3(a)) with
respect to himself, except as set forth in Annex I attached hereto.

                  (i)  Authorization  of Transaction.  The Seller has full power
         and  authority  to execute and deliver  this  Agreement  and to perform
         Seller's obligations  hereunder.  This Agreement  constitutes the valid
         and legally binding obligation of the Seller, enforceable in accordance
         with its terms and conditions.  The Seller need not give any notice to,
         make any filing with, or obtain any authorization, consent, or approval
         of any  government or  governmental  agency in order to consummate  the
         transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Seller is subject.

                  (iii) Brokers'  Fees.  Except at provided in Section 2(f), the
         Seller has no Liability or obligation to pay any fees or commissions to
         any  broker,   finder,  or  agent  with  respect  to  the  transactions
         contemplated  by this Agreement for which the Buyer could become liable
         or obligated.

                  (iv) Absence of Indebtedness  and Claims.  Except as set forth
         on Annex I, Seller is not  indebted to Company,  and the Company is not
         indebted to Seller and the Seller has no claims against the Company.

                  (v)  Company  Shares.  The  Seller  holds of  record  and owns
         beneficially  all  of  the  Company  Shares,  free  and  clear  of  any
         restrictions  on  transfer  (other  than  any  restrictions  under  the
         Securities Act and state securities laws),  Taxes,  Security Interests,
         options, warrants, purchase rights, contracts,  commitments,  equities,
         claims, and demands. The Seller is not a party to any option,  warrant,
         purchase  right, or other contract or commitment that could require the
         Seller to sell, transfer,  or otherwise dispose of any capital stock of
         the Company (other than this  Agreement).  The Seller is not a party to
         any voting  trust,  proxy,  or other  agreement or  understanding  with
         respect to the voting of any capital stock of the Company.

                  (vi)   Investment.   The  Seller  (A)  understands   that  the
         Debentures and Buyer Shares have not been, and will not be,  registered
         under the Securities Act, or under any state  securities  laws, and are
         being  offered and sold in reliance  upon federal and state  exemptions
         for transactions  not involving any public  offering,  (B) is acquiring
         the Debentures solely for Seller's own account for investment purposes,
         and  not  with a view to the  distribution  thereof,  (C) has  received
         copies of all of Buyer's  filings  with the SEC during 1998 and has had
         the opportunity to obtain additional information as desired in order to
         evaluate  the merits and the risks  inherent in holding the  Debentures
         and/or Buyer Shares,  (D) is able to bear the economic risk and lack of
         liquidity  inherent in holding the Debentures and/or Buyer Shares,  (E)
         understands  that Buyer has not agreed  to, and has no  obligation  to,
         file a registration statement to permit sale of the Debentures or Buyer
         Shares  received under or in connection  with this  Agreement,  and (F)
         represents that Seller is an Accredited Investor.

                  (vii)  Restrictions on Shares. The Seller understands that the
         Debentures  and Buyer Shares may not be  transferred  or resold without
         (A)  registration  under the  Securities  Act or any  applicable  state
         securities law, or (B) an exemption from the registration  requirements
         of the Securities  Act and applicable  state  securities  laws.  Seller
         understands that the  certificates  evidencing the Debentures and Buyer
         Shares may bear the following (or similar)  legend and any other legend
         required by applicable state law:

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND MAY NOT BE SOLD,  PLEDGED,  OR TRANSFERRED WITHIN IN THE
         UNITED STATES UNLESS THE SAME ARE  REGISTERED  UNDER THE SECURITIES ACT
         OF 1933, OR THE COMPANY  RECEIVES AN OPINION FROM COUNSEL  SATISFACTORY
         TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

         (b)  Representations  and Warranties of the Buyer. The Buyer represents
and  warrants  to the Seller  that the  statements  contained  in this '3(b) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were  substituted  for the date of this Agreement  throughout  this '3(b)),
except as set forth in Annex II attached hereto.

                  (i) Organization of the Buyer. The Buyer is a corporation duly
         organized, validly existing, and in good standing under the laws of the
         jurisdiction of its incorporation.

                  (ii)  Authorization  of Transaction.  The Buyer has full power
         and authority (including full corporate power and authority) to execute
         and deliver this  Agreement and to perform its  obligations  hereunder.
         This Agreement  constitutes the valid and legally binding obligation of
         the Buyer, enforceable in accordance with its terms and conditions. The
         Buyer need not give any notice to, make any filing with,  or obtain any
         authorization,  consent,  or approval of any government or governmental
         agency in order to consummate  the  transactions  contemplated  by this
         Agreement.

                  (iii) Noncontravention. Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated  hereby,  will  (A)  violate  any  constitution,  statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Buyer is subject or any provision of its charter or bylaws
         or (B)  conflict  with,  result in a breach  of,  constitute  a default
         under,  result in the acceleration of, create in any party the right to
         accelerate,  terminate,  modify, or cancel, or require any notice under
         any  agreement,   contract,   lease,  license,   instrument,  or  other
         arrangement to which the Buyer is a party or by which it is bound or to
         which any of its assets is subject.

                  (iv) Brokers'  Fees.  The Buyer has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         Seller could become liable or obligated.

                  (v) Validity of Buyer Shares.  The Buyer  Shares,  when issued
         and  delivered  by the  Company  in  accordance  with the terms of this
         Agreement  and the terms of the  Debentures,  shall be duly and validly
         issued, fully paid, and non-assessable and will be free of any liens or
         encumbrances.

                  (vi) Financial  Statements.  Buyer has provided to Seller: (1)
         the  Company's  Form 10-K for the fiscal year ended  December 31, 1997;
         and (2) the Company's Form 10-Q for the fiscal quarters ended March 31,
         1998,  June 30, 1998 and  September 30, 1998.  The foregoing  financial
         statements are true,  correct,  and complete in all material  respects,
         and has been prepared in accordance with generally accepted  accounting
         principles  ("GAAP")  applied  on a  consistent  basis  throughout  the
         periods  involved,  and fairly  present the financial  condition of the
         Company as of the dates set forth in such financial  statements and the
         results of operations of the Buyer for the period covered thereby.

                  (vii)  Investment.  The  Buyer is not  acquiring  the  Company
         Shares with a view to or for sale in connection  with any  distribution
         thereof within the meaning of the Securities Act.

                  (viii)   Disclosure.   The   representations   and  warranties
         contained  in this  '3(b) do not  contain  any  untrue  statement  of a
         material fact or omit to state any material fact  necessary in order to
         make  the  statements  and  information  contained  in this  '3(b)  not
         misleading.

4. Representations and Warranties  Concerning the Company. The Seller represents
and warrants to the Buyer that the  statements  contained in this '4 are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted  for the date of this Agreement  throughout  this '4), except as set
forth in the  disclosure  schedule  delivered  by the Seller to the Buyer on the
date hereof and initialed by the Parties (the "Disclosure Schedule"). Nothing in
the Disclosure  Schedule shall be deemed  adequate to disclose an exception to a
representation or warranty made herein,  however, unless the Disclosure Schedule
identifies the exception with  particularity and describes the relevant facts in
reasonable  detail.  Without limiting the generality of the foregoing,  the mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a  representation  or warranty  made herein
(unless the  representation  or  warranty  has to do with the  existence  of the
document or other item  itself).  The  Disclosure  Schedule  will be arranged in
paragraphs  corresponding to the lettered and numbered  paragraphs  contained in
this '4.

         (a) Organization,  Qualification, and Corporate Power. The Company is a
corporation  duly organized,  validly  existing,  and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct  business and is in good  standing  under the laws of each  jurisdiction
where  such   qualification   is  required,   except  where  the  lack  of  such
qualification  would  not  have a  material  adverse  effect  on  the  business,
financial condition,  operations or future prospects of the Company. The Company
has  full  corporate  power  and  authority  and  all  licenses,   permits,  and
authorizations  necessary to carry on the  businesses in which it is engaged and
in which it presently proposes to engage and to own and use the properties owned
and  used by it.  '4(a) of the  Disclosure  Schedule  lists  the  directors  and
officers  of the  Company.  The Seller has  delivered  to the Buyer  correct and
complete  copies of the  charter and bylaws of the Company (as amended to date).
The minute books  (containing the records of meetings of the  stockholders,  the
board of directors,  and any  committees of the board of  directors),  the stock
certificate  books,  and the stock  record  books of the Company are correct and
complete.  The Company is not in default  under or in violation of any provision
of its charter or bylaws.

         (b) Capitalization.  The entire authorized capital stock of the Company
consists of 6,400,000 Company Shares, of which 285,000 Company Shares are issued
and outstanding. All of the issued and outstanding Company Shares have been duly
authorized,  are validly issued, fully paid, and nonassessable,  and are held of
record by the Seller. There are no outstanding or authorized options,  warrants,
purchase rights,  subscription  rights,  conversion rights,  exchange rights, or
other contracts or commitments that could require the Company to issue, sell, or
otherwise  cause to become  outstanding  any of its capital stock.  There are no
outstanding   or  authorized   stock   appreciation,   phantom   stock,   profit
participation,  or similar  rights  with  respect to the  Company.  There are no
voting trusts,  proxies,  or other agreements or understandings  with respect to
the voting of the capital stock of the Company.

         (c)  Noncontravention.  Neither the  execution and the delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which the Company is subject or any provision
of the  charter or bylaws of the  Company  or (ii)  conflict  with,  result in a
breach of, constitute a default under,  result in the acceleration of, create in
any party the right to accelerate,  terminate, modify, or cancel, or require any
notice under any  agreement,  contract,  lease,  license,  instrument,  or other
arrangement  to which the Company is a party or by which it is bound or to which
any of its  assets is  subject  (or  result in the  imposition  of any  Security
Interest upon any of its assets), except where the violation,  conflict, breach,
default, acceleration, termination, modification,  cancellation, failure to give
notice,  or Securities  Interest would not have a material adverse effect on the
business, financial condition,  operations of future prospects of the Company or
the  Parties'  ability  to  consummate  the  transactions  contemplated  by this
Agreement.  The  Company  does not need to give any notice  to,  make any filing
with, or obtain any  authorization,  consent,  or approval of any  government or
governmental  agency in order for the  Parties to  consummate  the  transactions
contemplated  by this  Agreement  except  where the failure to take such actions
would not have a material  adverse effect on the business,  financial  condition
except where the lack of such  qualification  would not have a material  adverse
effect on the business,  financial condition,  operations of future prospects of
the Company or the Parties' ability to consummate the transactions  contemplated
by this Agreement.

         (d) Brokers' Fees.  Except as provided in Section 2(f), the Company has
no Liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the  transactions  contemplated  by this  Agreement for
which the Company or the Buyer could become liable or obligated.

         (e) Title to Assets. The Company has good and marketable title to, or a
valid  leasehold  interest in, the  properties and assets used by it, located on
its premises,  or shown on the Most Recent  Balance Sheet or acquired  after the
date thereof,  free and clear of all Security  Interests,  except for properties
and assets  disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet.

         (f) Financial Statements.  Attached hereto as Exhibit C are the balance
sheets and statements of income,  changes in stockholders' equity, and cash flow
as of and for the fiscal  years ended June 30,  1997 and 1998 (the "Most  Recent
Fiscal Year End") for the Company (collectively the "Financial Statements"). The
Financial  Statements  (including  the  notes  thereto)  have been  prepared  in
accordance  with GAAP  applied on a  consistent  basis  throughout  the  periods
covered  thereby,  present  fairly the financial  condition of the Company as of
such dates and the results of operations  of the Company for such  periods,  are
correct  and  complete,  and are  consistent  with the books and  records of the
Company (which books and records are correct and complete).

         (g) Events  Subsequent to Most Recent  Fiscal Year End.  Since the Most
Recent Fiscal Year End,  there has not been any material  adverse  change in the
business,  financial  condition,  operations,  results of operations,  or future
prospects of the Company.
Without limiting the generality of the foregoing, since that date:

                  (i) the Company has not sold, leased, transferred, or assigned
         any of its material  assets,  tangible or intangible,  other than for a
         fair consideration in the Ordinary Course of Business;

                  (ii) the Company has not entered into any material  agreement,
         contract, lease, or license outside the Ordinary Course of Business;

                  (iii)  no  party  (including  the  Company)  has  accelerated,
         terminated,  modified,  or cancelled any material agreement,  contract,
         lease,  or  license  to which the  Company is a party or by which it is
         bound;

                  (iv) the Company has not made any material capital expenditure
outside the Ordinary Course of Business;

                  (v) the Company has not made any  capital  investment  in, any
         loan to, or any  acquisition  of the securities or assets of, any other
         Person;

                  (vi)  the  Company  has not  created,  incurred,  assumed,  or
         guaranteed  more that $10,000 in the  aggregate  any  indebtedness  for
         borrowed money and capitalized lease obligation;

                  (vii) the Company has not delayed or postponed  the payment of
         accounts payable and other  Liabilities  outside the Ordinary Course of
         Business;

                  (viii) the Company has not cancelled,  compromised, waived, or
         released  any right or claim (or series of related  rights and  claims)
         either  involving  more than $10,000 or outside the Ordinary  Course of
         Business;

                  (ix) the  Company  has not  declared,  set aside,  or paid any
         dividend or made any  distribution  with  respect to its capital  stock
         (whether  in cash or in  kind) or  redeemed,  purchased,  or  otherwise
         acquired any of its capital stock;

                  (x) the Company has not experienced  any damage,  destruction,
         or loss (whether or not covered by insurance) to its property;

                  (xi) the Company has not made any loan to, or entered into any
         other transaction with, any of its directors,  officers,  and employees
         outside the Ordinary Course of Business;

                  (xii)  the  Company  has  not  granted  any  increase  in  the
         compensation of any of its directors,  officers,  and employees outside
         the Ordinary Course of Business;

                  (xiii) the  Company has not  adopted,  amended,  modified,  or
         terminated any bonus,  profit-sharing,  incentive,  severance, or other
         plan, contract,  or commitment for the benefit of any of its directors,
         officers,  and  employees (or taken any such action with respect to any
         other Employee Benefit Plan);

                  (xiv)  the  Company  has not  made  or  pledged  to  make  any
         charitable or other capital contribution outside the Ordinary Course of
         Business; and

                  (xv)    the Company has not committed to any of the foregoing.

         (h) Undisclosed Liabilities. The Company has no Liability (and there is
no  Basis  for  any  present  or  future  action,  suit,  proceeding,   hearing,
investigation, charge, complaint, claim, or demand against it giving rise to any
Liability),  except for (i) Liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (ii) Liabilities which have
arisen after the Most Recent Fiscal Year End in the Ordinary  Course of Business
(none of which results from,  arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

         (i)  Legal   Compliance.   The  Company  and  each  of  its  respective
predecessors  and Affiliates has complied with all  applicable  laws  (including
rules,  regulations,  codes, plans,  injunctions,  judgments,  orders,  decrees,
rulings,  and  charges  thereunder)  of  federal,   state,  local,  and  foreign
governments  (and  all  agencies  thereof),  and no  action,  suit,  proceeding,
hearing,  investigation,  charge,  complaint,  claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply, except
where the  failure  to comply  would not have a material  adverse  effect on the
business, financial condition, operations, or future prospects of the Company.

         (j)      Tax Matters.

                  (i) The Company has filed all Tax Returns that it was required
         to  file.  All  such Tax  Returns  were  correct  and  complete  in all
         respects.  All Taxes owed by the  Company  (whether or not shown on any
         Tax  Return)  have  been  paid.  The  Company   currently  is  not  the
         beneficiary  of any  extension  of time  within  which  to file any Tax
         Return. There is no material dispute or claim concerning any Tax Return
         either (A) claimed or raised by any  authority  in writing or (b) as to
         which the Seller or the  directors  and  officers  of the  Company  has
         Knowledge.

                  (ii) The Company has withheld  and paid all Taxes  required to
         have been withheld and paid in connection with amounts paid or owing to
         any employee, independent contractor,  creditor,  stockholder, or other
         third party.

                  (iii) The Company has not waived any statute of limitations in
         respect of Taxes or agreed to any  extension  of time with respect to a
         Tax assessment or deficiency.

                  (iv) The  Company has not filed a consent  under Code  '341(f)
         concerning  collapsible  corporations.  The  Company  has not  made any
         material payments, is not obligated to make any material payments,  nor
         is it a party to any agreement that under certain  circumstances  could
         obligate it to make any material  payments  that will not be deductible
         under  Code  '280G.  The  Company  has not  been a United  States  real
         property  holding  corporation  within the  meaning of Code  '897(c)(2)
         during the applicable period specified in Code  '897(c)(1)(A)(ii).  The
         Company is not a party to any Tax allocation or sharing agreement.  The
         Company (A) has not been a member of an  affiliated  group  (within the
         meaning of Code  '1504(a))  filing a  consolidated  federal  income Tax
         Return and (B) has no Liability for the Taxes of any Person (other than
         the Company) under Reg.  '1.1502-6 (or any similar  provision of state,
         local, or foreign law), as a transferee or successor,  by contract,  or
         otherwise.

                  (v) The unpaid  Taxes of the  Company  (A) did not,  as of the
         Most  Recent  Fiscal Year End,  exceed the  reserve  for Tax  Liability
         (rather  than any reserve for  deferred  Taxes  established  to reflect
         timing  differences  between book and Tax income) set forth on the face
         of the Most Recent Balance Sheet (rather than in any notes thereto) and
         (B) do not exceed  that  reserve as  adjusted  for the  passage of time
         through  the  Closing  Date in  accordance  with  the past  custom  and
         practice of the Company in filing its Tax Returns.

         (k)      Intellectual Property.

                  (i) The  Company  owns or has the  right  to use  pursuant  to
         license, sublicense, agreement, or permission all Intellectual Property
         necessary  for  the  operation  of the  businesses  of the  Company  as
         presently  conducted and as presently  proposed to be  conducted.  Each
         item of Intellectual  Property owned or used by the Company immediately
         prior to the Closing  hereunder  will be owned or available  for use by
         the Company on identical terms and conditions immediately subsequent to
         the Closing  hereunder.  To the  Knowledge of any of the Seller and the
         directors   and   officers  of  the   Company   (and   employees   with
         responsibility  for  Intellectual  Property  matters),  the Company has
         taken  all  necessary  action  to  maintain  and  protect  each item of
         Intellectual Property that it owns or uses.

                  (ii) To the  Knowledge of any of the Seller and the  directors
         and  officers of the Company (and  employees  with  responsibility  for
         Intellectual  Property  matters),  the Company has not interfered with,
         infringed  upon,  misappropriated,  or otherwise  violated any material
         Intellectual  Property rights of third parties,  and no such person has
         ever received any charge, complaint,  claim, demand, or notice alleging
         any such  interference,  infringement,  misappropriation,  or violation
         (including  any claim that the  Company  must  license or refrain  from
         using any  Intellectual  Property  rights of any third  party).  To the
         Knowledge  of any of the Seller and the  directors  and officers of the
         Company (and employees with  responsibility  for Intellectual  Property
         matters),   no  third  party  has  interfered  with,   infringed  upon,
         misappropriated,   or  otherwise  violated  any  material  Intellectual
         Property rights of the Company.

                  (iii)  '4(k)(iii) of the Disclosure  Schedule  identifies each
         patent or  registration  which  has been  issued  to the  Company  with
         respect to any of its  Intellectual  Property,  identifies each pending
         patent  application or application for  registration  which the Company
         has  made  with  respect  to  any  of its  Intellectual  Property,  and
         identifies each material license,  agreement, or other permission which
         the Company  has granted to any third party with  respect to any of its
         Intellectual  Property  (together with any exceptions).  The Seller has
         delivered to the Buyer correct and complete copies of all such patents,
         registrations,  applications, licenses, agreements, and permissions (as
         amended to date). '4(k)(iii) of the Disclosure Schedule also identifies
         each material trade name or unregistered  trademark used by the Company
         in connection with any of its businesses.  With respect to each item of
         Intellectual  Property  required to be  identified in '4(k)(iii) of the
         Disclosure Schedule:

                           (A)  the  Company  possess  all  right,   title,  and
                  interest  in and to the item,  free and clear of any  Security
                  Interest, license, or other restriction;

                           (B)  the  item  is not  subject  to  any  outstanding
injunction, judgment, order, decree, ruling, or charge;

                           (C)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the Seller and the  directors
                  and  officers   (and   employees   with   responsibility   for
                  Intellectual  Property matters) of the Company,  is threatened
                  which challenges the legality, validity, enforceability,  use,
                  or ownership of the item; and

                           (D) The Company has not ever agreed to indemnify  any
                  Person  for  or  against   any   interference,   infringement,
                  misappropriation, or other conflict with respect to the item.

                  (iv) '4(k)(iv) of the Disclosure Schedule identifies each item
         of Intellectual Property that any third party owns and that the Company
         uses pursuant to license,  sublicense,  agreement,  or permission.  The
         Seller has  delivered to the Buyer  correct and complete  copies of all
         such licenses, sublicenses,  agreements, and permissions (as amended to
         date).  With respect to each item of Intellectual  Property required to
         be identified in '4(k)(iv) of the Disclosure Schedule:

                           (A) the license, sublicense, agreement, or permission
                  covering the item is legal, valid, binding,  enforceable,  and
                  in full force and effect in all material respects;

                           (B) the license, sublicense, agreement, or permission
                  will continue to be legal, valid, binding, enforceable, and in
                  full  force  and  effect  on  identical  terms  following  the
                  consummation of the transactions contemplated hereby;

                           (C) no party to the license,  sublicense,  agreement,
                  or  permission  is in  breach  or  default,  and no event  has
                  occurred which with notice or lapse of time would constitute a
                  breach or  default  or permit  termination,  modification,  or
                  acceleration thereunder;

                           (D) no party to the license,  sublicense,  agreement,
                  or permission has repudiated any material provision thereof;

                           (E) with respect to each sublicense, to the Knowledge
                  of any of the  Seller  and the  directors  and  officers  (and
                  employees  with   responsibility  for  Intellectual   Property
                  matters) of the Company the representations and warranties set
                  forth  in  subsections  (A)  through  (D)  above  are true and
                  correct with respect to the underlying license;

                           (F) the underlying item of  Intellectual  Property is
                  not subject to any outstanding  injunction,  judgment,  order,
                  decree, ruling, or charge;

                           (G)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the Seller and the  directors
                  and  officers   (and   employees   with   responsibility   for
                  Intellectual  Property matters) of the Company,  is threatened
                  which challenges the legality,  validity, or enforceability of
                  the underlying item of Intellectual Property; and

                           (H) The Company has not  granted  any  sublicense  or
                  similar  right  with  respect  to  the  license,   sublicense,
                  agreement, or permission.

                  (v) To the  Knowledge  of any of the Seller and the  directors
         and  officers  (and  employees  with  responsibility  for  Intellectual
         Property matters) of the Company,  the Company will not interfere with,
         infringe  upon,  misappropriate,  or otherwise come into conflict with,
         any  Intellectual  Property  rights of third parties as a result of the
         continued  operation of its  businesses  as presently  conducted and as
         presently proposed to be conducted.

                  (vi) Neither the Seller nor the  directors  and officers  (and
         employees with responsibility for Intellectual Property matters) of the
         Company has any Knowledge of any new products, inventions,  procedures,
         or methods of manufacturing or processing that any competitors or other
         third  parties have  developed  which  reasonably  could be expected to
         supersede or make obsolete any product or process of the Company.

         (l)  Tangible  Assets.  The  Company  owns  or  leases  all  buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
businesses  as presently  conducted  and as presently  proposed to be conducted.
Each such tangible asset is free from material defects (patent and latent),  has
been  maintained  in  accordance  with  normal  industry  practice,  is in  good
operating  condition  and  repair  (subject  to normal  wear and  tear),  and is
suitable  for the  purposes  for which it  presently  is used and  presently  is
proposed to be used.

         (m) Inventory.  The inventory of the Company  consists of raw materials
and supplies,  manufactured and purchased parts, goods in process,  and finished
goods,  all of which is  merchantable  and fit for the  purpose for which it was
procured or manufactured,  and none of which is slow-moving,  obsolete, damaged,
or defective,  subject only to the reserve for inventory  writedown set forth on
the face of the Most Recent  Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Company.

         (n) Contracts.  '4(n) of the Disclosure Schedule is a true, correct and
complete list of all the material contracts of the Company (including  insurance
policies  to  which  the  Company  has  been a party,  a named  insured,  or the
beneficiary  at any time within the past five  years),  and all  amendments  and
modifications thereto, and there are no oral or other amendment or modifications
thereto.  The Seller has  delivered to the Buyer a correct and complete  copy of
each written agreement listed in '4(n) of the Disclosure Schedule (as amended to
date) and a written  summary setting forth the terms and conditions of each oral
agreement referred to in '4(n) of the Disclosure Schedule.  With respect to each
such agreement: (A) the agreement is legal, valid, binding,  enforceable, and in
full force and effect;  (B) the  agreement  will  continue  to be legal,  valid,
binding,  enforceable, and in full force and effect on identical terms following
the  consummation  of  the  transactions  contemplated  hereby;  and  (C) to the
Knowledge of any of the Seller and the officers and  directors of the Company no
party is in breach or default,  and no event has  occurred  which with notice or
lapse of time  would  constitute  a breach or  default,  or permit  termination,
modification,  or acceleration,  under the agreement and no party has repudiated
any provision of the agreement.

         (o) Notes and Accounts Receivable. All notes and accounts receivable of
the  Company  are  reflected  properly  on its  books  and  records,  are  valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded  amounts,
subject  only to the  reserve  for bad  debts  set forth on the face of the Most
Recent  Balance  Sheet  (rather  than in any notes  thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company.

         (p) Powers of  Attorney.  There are no  outstanding  powers of attorney
executed on behalf of the Company.

         (q) Insurance. the Company has been covered during the past 10 years by
insurance in scope and amount  customary and  reasonable  for the  businesses in
which it has engaged during the aforementioned  period.  '4(q) of the Disclosure
Schedule describes any self-insurance arrangements affecting the Company.

         (r)  Litigation.  '4(r) of the  Disclosure  Schedule  sets  forth  each
instance  in which the  Company  (i) is subject to any  outstanding  injunction,
judgment,  order,  decree,  ruling,  or  charge  or (ii) is a party  or,  to the
Knowledge of any of the Seller and the directors and officers of the Company, is
threatened  to be made a party to any  action,  suit,  proceeding,  hearing,  or
investigation  of, in, or before any court or  quasi-judicial  or administrative
agency of any  federal,  state,  local,  or foreign  jurisdiction  or before any
arbitrator.   None  of  the   actions,   suits,   proceedings,   hearings,   and
investigations set forth in '4(r) of the Disclosure Schedule could result in any
material  adverse  change  in the  business,  financial  condition,  operations,
results of operations,  or future  prospects of the Company.  Neither the Seller
nor the directors and officers of the Company has any reason to believe that any
such action,  suit,  proceeding,  hearing,  or  investigation  may be brought or
threatened against the Company.

         (s) Product  Warranty.  Each product  manufactured,  sold,  leased,  or
delivered by the Company has been in conformity with all applicable  contractual
commitments  and all  express  and  implied  warranties,  and the Company has no
material  Liability  (and there is no Basis for any  present  or future  action,
suit, proceeding,  hearing,  investigation,  charge, complaint, claim, or demand
against it giving rise to any  Liability)  for  replacement or repair thereof or
other damages in connection  therewith,  subject only to the reserve for product
warranty  claims set forth on the face of the Most Recent  Balance Sheet (rather
than in any notes  thereto)  as  adjusted  for the  passage of time  through the
Closing Date in accordance with the past custom and practice of the Company.  No
product  manufactured,  sold,  leased, or delivered by the Company is subject to
any guaranty,  warranty, or other indemnity beyond the applicable standard terms
and  conditions  of sale or lease.  '4(s) of the  Disclosure  Schedule  includes
copies of the  standard  terms and  conditions  of sale or lease for the Company
(containing applicable guaranty, warranty, and indemnity provisions).

         (t) Product  Liability.  The Company has no Liability  (and there is no
Basis  for  any   present  or  future   action,   suit,   proceeding,   hearing,
investigation, charge, complaint, claim, or demand against it giving rise to any
Liability)  arising out of any injury to  individuals or property as a result of
the ownership,  possession, or use of any product manufactured, sold, leased, or
delivered by the Company.

         (u) Employees.  To the Knowledge of any of the Seller and the directors
and officers of the Company, no executive,  key employee,  or group of employees
has any plans to terminate  employment  with the  Company.  The Company is not a
party to or bound by any collective bargaining agreement, nor has it experienced
any strikes,  grievances,  claims of unfair labor practices, or other collective
bargaining  disputes.  The Company has not committed any unfair labor  practice.
Neither  the  Seller nor the  directors  and  officers  of the  Company  has any
Knowledge of any organizational  effort presently being made or threatened by or
on behalf of any labor union with respect to employees of the Company.

         (v)      Employee Benefits.

                  (i)  '4(v) of the  Disclosure  Schedule  lists  each  Employee
         Benefit  Plan  that  the  Company  maintains  or to which  the  Company
         contributes or has any obligation to contribute.

                           (A) Each such Employee Benefit Plan (and each related
                  trust,  insurance  contract,  or fund) complies in form and in
                  operation in all respects with the applicable  requirements of
                  ERISA, the Code, and other applicable laws.

                           (B) All required reports and  descriptions  have been
                  timely  filed and  distributed  appropriately  with respect to
                  each such Employee  Benefit Plan.  The  requirements  of COBRA
                  have been met with respect to each such Employee  Benefit Plan
                  which is subject to COBRA.

                           (C) All premiums  and  contributions  (including  all
                  employer   contributions   and   employee   salary   reduction
                  contributions)  which  are due  have  been  paid to each  such
                  Employee Benefit Plan and all premiums and  contributions  for
                  any period  ending on or before the Closing Date which are not
                  yet due have been paid to each such  Employee  Benefit Plan or
                  accrued in accordance with the past custom and practice of the
                  Company.

                           (D)  Each  such  Employee  Benefit  Plan  which is an
                  Employee  Pension  Benefit  Plan meets the  requirements  of a
                  "qualified plan" under Code '401(a), has received,  within the
                  last four  years,  a favorable  determination  letter from the
                  Internal  Revenue  Service that it is a "qualified  plan," and
                  Seller is not aware of any facts or  circumstances  that could
                  result in the revocation of such determination letter.

                           (E) The  market  value  of  assets  under  each  such
                  Employee  Benefit  Plan which is an Employee  Pension  Benefit
                  Plan (other than any Multiemployer Plan) equals or exceeds the
                  present  value  of  all  vested  and   nonvested   Liabilities
                  thereunder   determined  in  accordance   with  PBGC  methods,
                  factors,  and  assumptions  applicable to an Employee  Pension
                  Benefit Plan terminating on the date for determination.

                           (F) The Seller has delivered to the Buyer correct and
                  complete  copies  of  the  plan  documents  and  summary  plan
                  descriptions,  the most recent  determination  letter received
                  from the Internal Revenue  Service,  the most recent Form 5500
                  Annual  Report,  and all related trust  agreements,  insurance
                  contracts,  and other funding  agreements which implement each
                  such Employee Benefit Plan.

                  (ii)  With  respect  to each  Employee  Benefit  Plan that the
         Company and any ERISA Affiliate  maintains or ever has maintained or to
         which any of them contributes,  ever has contributed,  or ever has been
         required to contribute:

                           (A)  No  such  Employee  Benefit  Plan  which  is  an
                  Employee  Pension  Benefit Plan (other than any  Multiemployer
                  Plan) has been completely or partially  terminated or been the
                  subject of a  Reportable  Event as to which  notices  would be
                  required to be filed with the PBGC.  No proceeding by the PBGC
                  to terminate  any such  Employee  Pension  Benefit Plan (other
                  than any  Multiemployer  Plan) has been  instituted or, to the
                  Knowledge of the Seller and the  directors and officers of the
                  Company, threatened.

                           (B) There have been no Prohibited  Transactions  with
                  respect to any such  Employee  Benefit  Plan. No Fiduciary has
                  any  Liability  for  breach  of  fiduciary  duty or any  other
                  failure to act or comply in connection with the administration
                  or investment of the assets of any such Employee Benefit Plan.
                  No action,  suit,  proceeding,  hearing, or investigation with
                  respect to the  administration or the investment of the assets
                  of any such Employee  Benefit Plan (other than routine  claims
                  for  benefits)  is pending or, to the  Knowledge of the Seller
                  and the  directors  and officers of the  Company,  threatened.
                  Neither  the  Seller nor the  directors  and  officers  of the
                  Company has any  Knowledge  of any Basis for any such  action,
                  suit, proceeding, hearing, or investigation.

                           (C) The  Company  has not  incurred,  and neither the
                  Seller nor the  directors  and officers of the Company has any
                  reason to expect that the Company will incur any  Liability to
                  the PBGC (other than PBGC premium payments) or otherwise under
                  Title IV of  ERISA  (including  any  withdrawal  liability  as
                  defined in ERISA  '4201) or under the Code with respect to any
                  such  Employee  Benefit  Plan  which  is an  Employee  Pension
                  Benefit Plan.

                  (iii)  The  Company   does  not   contribute   to,  never  has
         contributed  to,  and  never has been  required  to  contribute  to any
         Multiemployer Plan or has any Liability (including withdrawal liability
         as defined in ERISA '4201) under any Multiemployer Plan.

                  (iv) The Company does not maintain and never has maintained or
         contributed, and never has been required to contribute, to any Employee
         Welfare Benefit Plan providing  medical,  health,  or life insurance or
         other  welfare-type  benefits for current retirees,  future retirees or
         terminated employees, their spouses, or their dependents (other than in
         accordance with COBRA).

         (w)  Guaranties.  The Company is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.

         (x)      Environmental, Health, and Safety Matters.

                  (i) Each of the Company and its  predecessors has complied and
         is  in  compliance   with  all   Environmental,   Health,   and  Safety
         Requirements.

                  (ii) Without  limiting the  generality of the  foregoing,  the
         Company has obtained and complied with, and is in compliance  with, all
         permits,  licenses and other  authorizations that are required pursuant
         to Environmental, Health, and Safety Requirements for the occupation of
         its  facilities  and the operation of its business;  a list of all such
         permits, licenses and other authorizations is set forth on the attached
         "Environmental and Safety Permits Schedule."

                  (iii)  Neither the Company nor its  predecessors  has received
         any written or oral notice,  report or other information  regarding any
         actual or  alleged  violation  of  Environmental,  Health,  and  Safety
         Requirements,  or any  liabilities  or potential  liabilities  (whether
         accrued, absolute,  contingent,  unliquidated or otherwise),  including
         any investigatory,  remedial or corrective obligations, relating to any
         of them or its  facilities  arising under  Environmental,  Health,  and
         Safety Requirements.

                  (iv) None of the following  exists at any property or facility
         owned or operated by the Company:  (1) underground  storage tanks,  (2)
         asbestos-containing material in any form or condition, (3) materials or
         equipment  containing  polychlorinated  biphenyls,  or  (4)  landfills,
         surface impoundments, or disposal areas.

                  (v)  Neither the Company  nor its  predecessors  has  treated,
         stored,  disposed  of,  arranged  for or  permitted  the  disposal  of,
         transported,  handled,  or released any  substance,  including  without
         limitation any hazardous  substance,  or owned or operated any property
         or facility  (and no such property or facility is  contaminated  by any
         such  substance)  in a manner  that has  given  or would  give  rise to
         liabilities,  including any liability  for response  costs,  corrective
         action costs,  personal  injury,  property  damage,  natural  resources
         damages or attorney fees,  pursuant to any  Environmental,  Health, and
         Safety Requirements.

                  (vi) To the  Knowledge  of any of the Seller and the  officers
         and directors of the Company,  no facts,  events or conditions relating
         to the past or present  facilities,  properties  or  operations  of the
         Company or any of its predecessors will give rise to any investigatory,
         remedial or corrective  obligations pursuant to Environmental,  Health,
         and  Safety  Requirements,  or  give  rise  to  any  other  liabilities
         including without limitation any relating to onsite or offsite releases
         or threatened  releases of hazardous  materials,  substances or wastes,
         personal injury, property damage or natural resources damage.

         (y) Certain Business  Relationships with the Company. Other than in his
capacity  as an  shareholder,  officer,  and  director,  the Seller has not been
involved in any material  business  arrangement or relationship with the Company
within the past 12 months,  and does not own any  material  asset,  tangible  or
intangible, which is used in the business of the Company.

         (z) Year 2000 Items. All Information  Technology that is relied upon by
the Company in its  internal  operations  or is included as part of the products
produced by the Company,  currently and during the past two years,  is Year 2000
Compliant.  Additionally,  to the  Knowledge  of the  Seller,  the  Company  has
received no notice of any material vendor or customer of the Company  indicating
that such  vendor or customer  may be unable to continue to conduct  business in
the ordinary  course due to  difficulties  with its own business being Year 2000
Compliant.

         (aa) Disclosure.  The representations and warranties  contained in this
'4 do not contain any untrue  statement of a material  fact or omit to state any
material  fact  necessary  in  order  to make  the  statements  and  information
contained in this '4 not misleading.

5.  Pre-Closing  Covenants.  The Parties  agree as follows  with  respect to the
period between the execution of this Agreement and the Closing.

         (a) General.  Each of the Parties will use his or its  reasonable  best
efforts to take all action and to do all things  necessary or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction,  but not waiver, of the closing conditions set forth in
'7 below).

         (b) Notices and Consents. The Seller will cause the Company to give any
notices to third parties,  and will cause the Company to use its best efforts to
obtain any third party  consents,  that the Buyer may request in connection with
the matters referred to in '4(c) above. Each of the Parties will (and the Seller
will cause the Company to) give any notices to, make any filings  with,  and use
its best  efforts to obtain  any  authorizations,  consents,  and  approvals  of
governments and governmental agencies in connection with the matters referred to
in '3(a)(ii), '3(b)(ii), and '4(c) above.

         (c)  Operation  of  Business.  The Seller  will not cause or permit the
Company  to  engage  in any  practice,  take  any  action,  or  enter  into  any
transaction  outside the  Ordinary  Course of  Business.  Without  limiting  the
generality of the foregoing,  the Seller will not cause or permit the Company to
(i)  declare,  set aside,  or pay any  dividend  or make any  distribution  with
respect to its capital stock or redeem,  purchase,  or otherwise  acquire any of
its  capital  stock,  (ii)  materially  increase or modify the  compensation  or
benefits to any of its employees; (iii) issue any equity securities or rights to
acquire  such  securities;  (iv)  dispose of any assets,  except in the Ordinary
Course of  Business;  (v) take any other  action or fail to take any action that
would result in a material  change in the value of the Company's  business as of
the date of this Agreement;  or (vi) otherwise engage in any practice,  take any
action, or enter into any transaction of the sort described in '4(g) above.

         (d) Preservation of Business. The Seller will cause the Company to keep
its  business  and  properties   substantially  intact,  including  its  present
operations,  physical  facilities,  working  conditions,  and relationships with
lessors, licensors, suppliers, customers, and employees.

         (e) Full Access.  The Seller will permit, and the Seller will cause the
Company  to  permit,  representatives  of the Buyer to have  full  access at all
reasonable  times,  and in a  manner  so as not to  interfere  with  the  normal
business  operations  of the Company,  to all premises,  properties,  personnel,
books,  records  (including  Tax  records),   contracts,  and  documents  of  or
pertaining to the Company.

         (f) Notice of Developments.  The Seller will give prompt written notice
to the Buyer of any material adverse  development causing a breach of any of the
representations  and warranties in '4 above. Each Party will give prompt written
notice to the others of any material adverse development causing a breach of any
of his or its own  representations  and warranties in '3 above. No disclosure by
any  Party  pursuant  to this  '5(f),  however,  shall  be  deemed  to  amend or
supplement  Annex I, Annex II, or the Disclosure  Schedule or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant.

         (g) Exclusivity.  The Seller will not (and will not cause or permit the
Company to) (i) solicit,  initiate,  or encourage the submission of any proposal
or offer from any Person  relating to the  acquisition  of any capital  stock or
other  voting  securities,  or any  substantial  portion of the  assets,  of the
Company  (including any acquisition  structured as a merger,  consolidation,  or
share  exchange)  or  (ii)   participate  in  any  discussions  or  negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the  foregoing.  The Seller will not vote his Company  Shares in favor of
any such acquisition structured as a merger,  consolidation,  or share exchange.
The Seller will notify the Buyer  immediately  if any Person makes any proposal,
offer, inquiry, or contact with respect to any of the foregoing.

6.  Post-Closing  Covenants.  The Parties  agree as follows  with respect to the
period following the Closing.

         (a) General.  In case at any time after the Closing any further  action
is necessary or desirable to carry out the purposes of this  Agreement,  each of
the Parties will take such further action  (including the execution and delivery
of such further  instruments  and  documents) as any other Party  reasonably may
request,  all at the sole cost and expense of the  requesting  Party (unless the
requesting Party is entitled to  indemnification  therefor under '8 below).  The
Seller acknowledges and agrees that from and after the Closing the Buyer will be
entitled to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.

         (b)  Litigation  Support.  In the  event  and for so long as any  Party
actively is  contesting  or  defending  against any  action,  suit,  proceeding,
hearing,  investigation,  charge, complaint, claim, or demand in connection with
(i)  any  transaction  contemplated  under  this  Agreement  or (ii)  any  fact,
situation,   circumstance,   status,   condition,   activity,   practice,  plan,
occurrence,  event, incident, action, failure to act, or transaction on or prior
to the Closing  Date  involving  the  Company,  each of the other  Parties  will
cooperate with him or it and his or its counsel in the contest or defense,  make
available their personnel,  and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the  contesting  or defending  Party (unless the
contesting or defending Party is entitled to  indemnification  therefor under '8
below).

         (c) Transition. The Seller will not take any action that is designed or
intended  to have the effect of  discouraging  any lessor,  licensor,  customer,
supplier,  or other business  associate of the Company from maintaining the same
business  relationships with the Company after the Closing as it maintained with
the Company prior to the Closing.  The Seller will refer all customer  inquiries
relating  to the  businesses  of the  Company  to the  Buyer  from and after the
Closing.

         (d)      Confidentiality.

                  (i)   Confidential   Information  of  the  Buyer.  The  Seller
         acknowledges that in the course of performing this Agreement, Buyer may
         provide  to the  Seller or the  Company  confidential  and  proprietary
         information about its business which is not generally  available to the
         public ("Buyer Confidential  Information"),  the disclosure of which to
         third  parties  without  the express  authorization  of the Buyer would
         result in economic losses to the Buyer. Accordingly,  regardless of the
         means of  communication  of the  Buyer  Confidential  Information,  the
         Seller  agrees to (and  cause the  Company  to agree to) hold the Buyer
         Confidential  Information in strict  confidence and,  without the prior
         written   permission  from  the  Buyer,   not  to  disclose  the  Buyer
         Confidential  Information  to any  third  parties,  or  use it for  any
         commercial purposes except in performance of this Agreement.

                  (ii) Confidential  Information of the Company. The Seller will
         treat  and  hold as such  all of the  confidential  information  of the
         Company ("Company  Confidential  Information"),  and refrain from using
         any of Company Confidential  Information except in connection with this
         Agreement  or in  the  course  of his  continued  employment  with  the
         Company.

                  (iii) General.  The Seller shall promptly  notify the Buyer of
         any breach of the  foregoing  obligations  of  confidentiality.  In the
         event that the Seller or the Company is  requested or required (by oral
         question  or  request  for   information  or  documents  in  any  legal
         proceeding,  interrogatory,  subpoena,  civil investigative  demand, or
         similar process) to disclose any Confidential  Information,  the Seller
         will (or will cause the  Company  to) notify the Buyer  promptly of the
         request  or  requirement  so that the  Buyer  may  seek an  appropriate
         protective order or waive compliance with the provisions of this '6(d).
         If, in the  absence of a  protective  order or the  receipt of a waiver
         hereunder,  the  Seller  or  Company  is,  on the  advice  of  counsel,
         compelled to disclose any  Confidential  Information to any tribunal or
         else stand  liable for  contempt,  the Seller (or Company) may disclose
         the Confidential Information to the tribunal;  provided,  however, that
         the Seller  shall use (and shall cause the  Company to use)  reasonable
         efforts to  obtain,  at the  request  of the  Buyer,  an order or other
         assurance that confidential  treatment will be accorded to such portion
         of the Confidential  Information  required to be disclosed as the Buyer
         shall  designate.  The  foregoing  provisions  shall  not  apply to any
         Confidential  Information  which is  generally  available to the public
         immediately prior to the time of disclosure.

         (e) Covenant Not to Compete. For a period of three years from and after
the Closing  Date,  the Seller will not engage  directly  or  indirectly  in any
business that the Company conducts as of the Closing Date in any geographic area
in which the Company now or hereafter conducts that business; provided, however,
that no owner of less than 1% of the  outstanding  stock of any  publicly-traded
corporation  shall be deemed to engage  solely by reason  thereof  in any of its
businesses.  If the final judgment of a court of competent jurisdiction declares
that any term or  provision  of this  '6(e) is  invalid  or  unenforceable,  the
Parties  agree  that  the  court  making  the  determination  of  invalidity  or
unenforceability  shall have the power to reduce the scope, duration, or area of
the term or provision,  to delete  specific words or phrases,  or to replace any
invalid or  unenforceable  term or provision  with a term or  provision  that is
valid and  enforceable and that comes closest to expressing the intention of the
invalid  or  unenforceable  term or  provision,  and  this  Agreement  shall  be
enforceable  as so modified  after the  expiration  of the time within which the
judgment may be appealed.

7.       Conditions to Obligation to Close.

         (a) Conditions to Obligation of the Buyer.  The obligation of the Buyer
to consummate  the  transactions  to be performed by it in  connection  with the
Closing is subject to satisfaction of the following conditions:

                  (i) the  representations and warranties set forth in '3(a) and
         '4 above shall be true and correct in all  material  respects at and as
         of the Closing Date;

                  (ii) the Seller shall have  performed and complied with all of
         his covenants hereunder in all material respects through the Closing;

                  (iii) the Company  shall have  procured all of the third party
consents specified in '5(b) above;

                  (iv) no  action,  suit,  or  proceeding  shall be  pending  or
         threatened before any court or quasi-judicial or administrative  agency
         of any federal,  state,  local,  or foreign  jurisdiction or before any
         arbitrator wherein an unfavorable injunction,  judgment, order, decree,
         ruling,  or  charge  would  (A)  prevent  consummation  of  any  of the
         transactions  contemplated  by this  Agreement,  (B)  cause  any of the
         transactions  contemplated by this Agreement to be rescinded  following
         consummation,  (C) affect  adversely  the right of the Buyer to own the
         Company Shares and to control the Company,  or (D) affect adversely the
         right of the  Company to own its assets and to operate  its  businesses
         (and no such injunction,  judgment,  order,  decree,  ruling, or charge
         shall be in effect);

                  (v) the Seller shall have delivered to the Buyer a certificate
         to  the  effect  that  each  of  the  conditions   specified  above  in
         '7(a)(i)-(iv) is satisfied in all respects;

                  (vi) Buyer and Seller shall enter into an employment agreement
         in a form mutually  agreeable to Buyer and Seller and the same shall be
         in full force and effect;

                  (vii) Buyer and Seller  shall enter into a mutually  agreeable
         form of Pledge Agreement to secure the Debentures and the same shall be
         in full force and effect;

                  (viii)  the  Buyer  shall  have  received  the   resignations,
         effective  as of the  Closing,  of each  director  and  officer  of the
         Company other than those whom the Buyer shall have specified in writing
         at least five business days prior to the Closing;

                  (ix) no material adverse change in the financial  condition or
         results of operation of the  Company,  or in the  condition or value of
         its material assets,  taken as a whole, shall have occurred between the
         date of this Agreement and the Closing Date;

                  (x) Buyer shall be  satisfied  with its  continuing  business,
         legal, environmental, and accounting due diligence investigation of the
         Company in all respects; and

                  (xi) all actions to be taken by the Seller in connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Buyer.

The Buyer may waive any  condition  specified  in this  '7(a) if it  executes  a
writing so stating at or prior to the Closing.

         (b)  Conditions  to  Obligation  of the Seller.  The  obligation of the
Seller to consummate the  transactions to be performed by him in connection with
the Closing is subject to satisfaction of the following conditions:

                  (i)      the representations and warranties set forth in '3(b)
         above shall be true and correct in all material respects at and as of 
         the Closing Date;

                  (ii) the Buyer shall have  performed  and complied with all of
         its covenants hereunder in all material respects through the Closing;

                  (iii) no  action,  suit,  or  proceeding  shall be  pending or
         threatened before any court or quasi-judicial or administrative  agency
         of any federal,  state,  local,  or foreign  jurisdiction or before any
         arbitrator wherein an unfavorable injunction,  judgment, order, decree,
         ruling,  or  charge  would  (A)  prevent  consummation  of  any  of the
         transactions  contemplated  by this  Agreement  or (B) cause any of the
         transactions  contemplated by this Agreement to be rescinded  following
         consummation (and no such injunction,  judgment, order, decree, ruling,
         or charge shall be in effect);

                  (iv)  the  Buyer  shall  have   delivered   to  the  Seller  a
         certificate to the effect that each of the conditions  specified  above
         in '7(b)(i)-(iii) is satisfied in all respects;

                  (v) Buyer and Seller shall enter into employment agreements in
         form and  substance  as set forth in Exhibit D attached  hereto and the
         same shall be in full force and effect;

                  (vi) Buyer and Seller  shall  enter into a mutually  agreeable
         form of Pledge Agreement to secure the Debentures and the same shall be
         in full force and effect; and

                  (vii) all actions to be taken by the Buyer in connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Seller.

The  Seller may waive any  condition  specified  in this '7(b) if he  executes a
writing so stating at or prior to the Closing.

8.       Remedies for Breaches of This Agreement.

         (a) Survival of Representations and Warranties. Except for '3(a)(v) and
'4(b), (j) and (x), all of the  representations and warranties of Seller and the
Company contained in this Agreement shall survive the Closing (even if Buyer had
reason to know of any  misrepresentation  or breach of  warranty  at the time of
Closing)  and  continue  in full force and effect for a period of four (4) years
thereafter.  The  representations  and warranties in '3(a)(v) and '4(b), (j) and
(x)  shall   survive   Closing  (even  if  Buyer  had  reason  to  know  of  any
misrepresentation  or breach of warranty at the time of Closing) and continue in
full  force  and  effect  thereafter  subject  only to  applicable  statutes  of
limitation.

         (b)      Indemnification Provisions for Benefit of the Buyer.

                  (i) In the  event  the  Seller  breaches  (or in the event any
         third  party  alleges  facts that,  if true,  would mean the Seller has
         breached)  any  of  his  representations,   warranties,  and  covenants
         contained  herein  (other  than the  covenants  in '2(a)  above and the
         representations  and warranties in '3(a) above), then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification  resulting from, arising out of, relating to,
         in the nature of, or caused by the breach (or the alleged breach).

                  (ii) In the event  the  Seller  breaches  (or in the event any
         third  party  alleges  facts that,  if true,  would mean the Seller has
         breached)   any  of  his  covenants  in  '2(a)  above  or  any  of  his
         representations  and warranties in '3(a) above,  then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification (including any Adverse Consequences the Buyer
         may suffer after the end of any applicable  survival period)  resulting
         from,  arising out of,  relating to, in the nature of, or caused by the
         breach (or the alleged breach).

                  (iii) The  Seller  agrees  to  indemnify  the  Buyer  from and
         against the entirety of any Adverse  Consequences  the Buyer may suffer
         resulting  from,  arising  out of,  relating  to, in the  nature of, or
         caused by any Liability of the Company (x) for any Taxes of the Company
         with respect to any Tax year or portion thereof ending on or before the
         Closing Date (or for any Tax year beginning before and ending after the
         Closing Date to the extent allocable (determined in a manner consistent
         with '9(c)) to the portion of such period  beginning  before and ending
         on the Closing Date), to the extent such Taxes are not reflected in the
         reserve for Tax Liability  (rather than any reserve for deferred  Taxes
         established to reflect timing differences  between book and Tax income)
         shown on the face of the Closing Balance Sheet,  and (y) for the unpaid
         Taxes of any Person (other than the Company)  under Reg.  '1.1502-6 (or
         any similar provision of state, local, or foreign law), as a transferee
         or successor, by contract, or otherwise.

         (c) Indemnification  Provisions for Benefit of the Seller. In the event
the Buyer breaches (or in the event any third party alleges facts that, if true,
would mean the Buyer has breached) any of its representations,  warranties,  and
covenants  contained herein,  then the Buyer agrees to indemnify the Seller from
and against  the  entirety  of any  Adverse  Consequences  the Seller may suffer
through  and after the date of the claim  for  indemnification  resulting  from,
arising out of,  relating  to, in the nature of, or caused by the breach (or the
alleged breach).

         (d)      Matters Involving Third Parties.

                  (i)  If  any  third   party   shall   notify  any  Party  (the
         "Indemnified Party") with respect to any matter (a "Third Party Claim")
         which may give rise to a claim for  indemnification  against  any other
         Party (the  "Indemnifying  Party") under this '8, then the  Indemnified
         Party shall promptly notify each Indemnifying Party thereof in writing;
         provided,  however,  that no delay on the part of the Indemnified Party
         in notifying  any  Indemnifying  Party shall  relieve the  Indemnifying
         Party from any  obligation  hereunder  unless  (and then  solely to the
         extent) the Indemnifying Party thereby is prejudiced.

                  (ii) Any Indemnifying  Party will have the right to defend the
         Indemnified  Party  against the Third  Party Claim with  counsel of its
         choice reasonably  satisfactory to the Indemnified Party so long as (A)
         the Indemnifying Party notifies the Indemnified Party in writing within
         20 days after the Indemnified Party has given notice of the Third Party
         Claim that the Indemnifying  Party will indemnify the Indemnified Party
         from  and  against  the  entirety  of  any  Adverse   Consequences  the
         Indemnified  Party may suffer resulting from,  arising out of, relating
         to, in the  nature  of, or caused  by the Third  Party  Claim,  (B) the
         Indemnifying   Party  provides  the  Indemnified  Party  with  evidence
         reasonably  acceptable to the Indemnified  Party that the  Indemnifying
         Party will have the  financial  resources  to defend  against the Third
         Party Claim and fulfill its indemnification  obligations hereunder, (C)
         the Third Party Claim  involves only money damages and does not seek an
         injunction or other equitable relief,  (D) settlement of, or an adverse
         judgment  with  respect  to, the Third  Party Claim is not, in the good
         faith  judgment  of  the  Indemnified  Party,  likely  to  establish  a
         precedential  custom or practice  materially  adverse to the continuing
         business  interests of the Indemnified  Party, and (E) the Indemnifying
         Party  conducts  the  defense of the Third  Party  Claim  actively  and
         diligently.

                  (iii)  So long as the  Indemnifying  Party is  conducting  the
         defense of the Third Party Claim in accordance  with  '8(d)(ii)  above,
         (A) the Indemnified  Party may retain  separate  co-counsel at its sole
         cost and  expense  and  participate  in the  defense of the Third Party
         Claim,  (B) the Indemnified  Party will not consent to the entry of any
         judgment or enter into any  settlement  with respect to the Third Party
         Claim without the prior written consent of the Indemnifying  Party (not
         to be withheld  unreasonably),  and (C) the Indemnifying Party will not
         consent to the entry of any judgment or enter into any settlement  with
         respect to the Third Party Claim without the prior  written  consent of
         the Indemnified Party (not to be withheld unreasonably).

                  (iv) In the event any of the conditions in '8(d)(ii)  above is
         or becomes  unsatisfied,  however, (A) the Indemnified Party may defend
         against,  and  consent to the entry of any  judgment  or enter into any
         settlement  with  respect  to, the Third  Party  Claim in any manner it
         reasonably may deem  appropriate  (and the  Indemnified  Party need not
         consult  with, or obtain any consent from,  any  Indemnifying  Party in
         connection therewith),  (B) the Indemnifying Parties will reimburse the
         Indemnified  Party promptly and periodically for the costs of defending
         against the Third Party Claim (including reasonable attorneys' fees and
         expenses), and (C) the Indemnifying Parties will remain responsible for
         any Adverse  Consequences  the Indemnified  Party may suffer  resulting
         from,  arising out of,  relating to, in the nature of, or caused by the
         Third Party Claim to the fullest extent provided in this '8.

         (e) Determination of Adverse Consequences. All indemnification payments
under this '8 shall be deemed adjustments to the Purchase Price.

         (f) Recoupment Under the Hold-Back and Debentures. The Buyer shall have
the  option of  recouping  all or any part of any  Adverse  Consequences  it may
suffer (in addition to seeking any indemnification to which it is entitled under
this '8) by notifying Seller that the Buyer is reducing the Hold-Back and/or the
principal amount outstanding under the Debentures; provided, however that Seller
shall have the option of making a cash payment of the recoupment  amount in lieu
any reduction in the Debentures,  if such cash payment is made in fully to Buyer
within thirty (30) days of notice of such recoupment  from Buyer.  Recoupment by
reduction of the principal  amount of the debenture  shall affect the timing and
amount of payments  required  under the  Debentures in the same manner as if the
Buyer had made a permitted prepayment (without premium or penalty) thereunder.

         (g)  Limitation On Amount.  In no event shall Seller be liable to Buyer
for amounts owed under Seller's indemnification  obligation under this Section 8
in excess of the Purchase Price.

         (h) Other  Indemnification  Provisions.  The foregoing  indemnification
provisions  are in  addition  to,  and  not in  derogation  of,  any  statutory,
equitable,  or common law remedy (including  without  limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the Company or the transactions  contemplated by this Agreement.
The Seller  hereby  agrees  that he will not make any claim for  indemnification
against the  Company by reason of the fact that Seller was a director,  officer,
employee,  or agent of any such entity or was serving at the request of any such
entity as a partner, trustee,  director,  officer, employee, or agent of another
entity (whether such claim is for judgments,  damages,  penalties, fines, costs,
amounts paid in  settlement,  losses,  expenses,  or otherwise  and whether such
claim is  pursuant  to any  statute,  charter  document,  bylaw,  agreement,  or
otherwise) with respect to any action, suit,  proceeding,  complaint,  claim, or
demand  brought by the Buyer  against such Seller  (whether  such action,  suit,
proceeding,   complaint,  claim,  or  demand  is  pursuant  to  this  Agreement,
applicable law, or otherwise).

9. Tax  Matters.  The  following  provisions  shall  govern  the  allocation  of
responsibility as between Buyer and Seller for certain tax matters following the
Closing Date:

         (a) Tax  Periods  Ending on or Before the  Closing  Date.  Buyer  shall
prepare or cause to be  prepared  and file or cause to be filed all Tax  Returns
for the Company for all periods ending on or prior to the Closing Date which are
filed after the Closing Date. Buyer shall permit Seller to review and comment on
each such Tax Return described in the preceding sentence prior to filing. Seller
shall  reimburse  Buyer for Taxes of the Company  with  respect to such  periods
within  fifteen  (15) days after  payment by Buyer or the  Company of such Taxes
(whether in connection with the filing of such Tax Return or as the result of an
audit)  to the  extent  such  Taxes are not  reflected  in the  reserve  for Tax
Liability  (rather than any reserve for deferred  Taxes  established  to reflect
timing differences between book and Tax income) shown on the face of the Closing
Balance Sheet.

         (b) Tax Periods  Beginning  Before and Ending  After the Closing  Date.
Buyer shall  prepare or cause to be  prepared  and file or cause to be filed any
Tax Returns of the Company for Tax periods  which begin  before the Closing Date
and end after the Closing  Date.  Seller shall pay to Buyer within  fifteen (15)
days  after the date on which  Taxes are paid with  respect  to such  periods an
amount  equal to the portion of such Taxes which  relates to the portion of such
Taxable  period  ending on the  Closing  Date to the  extent  such Taxes are not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes  established  to reflect timing  differences  between book and Tax income)
shown on the face of the Closing Balance Sheet. For purposes of this Section, in
the case of any Taxes that are imposed on a periodic basis and are payable for a
Taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which  relates to the portion of such Taxable  period  ending on the
Closing  Date shall (x) in the case of any Taxes  other than Taxes based upon or
related  to income or  receipts,  be deemed to be the amount of such Tax for the
entire  Taxable  period  multiplied  by a fraction the numerator of which is the
number  of days  in the  Taxable  period  ending  on the  Closing  Date  and the
denominator of which is the number of days in the entire Taxable period, and (y)
in the case of any Tax based  upon or related  to income or  receipts  be deemed
equal to the amount which would be payable if the relevant  Taxable period ended
on the Closing Date. Any credits relating to a Taxable period that begins before
and ends  after the  Closing  Date  shall be taken  into  account  as though the
relevant Taxable period ended on the Closing Date. All determinations  necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior practice of the Company.

         (c) Cooperation on Tax Matters.  The Buyer,  the Company and the Seller
shall cooperate  fully, as and to the extent  reasonably  requested by the other
party, in connection with the filing of Tax Returns pursuant to this Section and
any audit, litigation or other proceeding with respect to Taxes. The Company and
the Seller  agree to retain all books and  records  with  respect to Tax matters
pertinent to the Company  relating to any taxable  period  beginning  before the
Closing Date until the  expiration  of the statute of  limitations  (and, to the
extent  notified by Buyer or Seller,  any extensions  thereof) of the respective
taxable periods.

         (d) Certain  Taxes.  All  transfer,  documentary,  sales,  use,  stamp,
registration  and  other  such  Taxes  and fees  (including  any  penalties  and
interest)  incurred in connection  with this  Agreement  shall be paid by Seller
when due, and Seller will,  at his own expense,  file all  necessary Tax Returns
and other documentation with respect to all such transfer,  documentary,  sales,
use,  stamp,  registration  and other  Taxes  and  fees,  and,  if  required  by
applicable  law,  Buyer  will,  and will cause its  affiliates  to,  join in the
execution of any such Tax Returns and other documentation.

10.      Termination.

         (a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

                  (i)  the Buyer and the Seller may terminate this Agreement by 
         mutual written consent at any time prior to the Closing;

                  (ii) the Buyer may terminate  this Agreement by giving written
         notice to the Seller at any time prior to the  Closing (A) in the event
         the Seller has  breached  any  material  representation,  warranty,  or
         covenant contained in this Agreement in any material respect, the Buyer
         has  notified  the Seller of the breach,  and the breach has  continued
         without  cure for a period of 15 days after the notice of breach or (B)
         if the Closing shall not have occurred on or before  December 31, 1998,
         by reason of the failure of any condition  precedent under '7(a) hereof
         (unless the failure results  primarily from the Buyer itself  breaching
         any representation, warranty, or covenant contained in this Agreement);
         and

                  (iii)  the  Seller  may  terminate  this  Agreement  by giving
         written notice to the Buyer at any time prior to the Closing (A) in the
         event the Buyer has breached any material representation,  warranty, or
         covenant  contained  in this  Agreement in any  material  respect,  the
         Seller  has  notified  the  Buyer of the  breach,  and the  breach  has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under  '7(b)  hereof  (unless the failure  results  primarily  from the
         Seller  himself  breaching any  representation,  warranty,  or covenant
         contained in this Agreement).

         (b)  Effect of  Termination.  If any Party  terminates  this  Agreement
pursuant to '10(a) above,  all rights and  obligations of the Parties  hereunder
shall  terminate  without any  Liability of any Party to any other Party (except
for any Liability of any Party then in breach).

11.      Miscellaneous.

         (a) Press Releases and Public Announcements.  Neither Party shall issue
any press release or make any public announcement relating to the subject matter
of this  Agreement  without  the prior  written  approval  of the  other  Party;
provided,  however,  that either Party may make any public  disclosure  he or it
believes in good faith is required by  applicable  law or any listing or trading
agreement   concerning  its  publicly-traded   securities  (in  which  case  the
disclosing  Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).

         (b) No Third-Party  Beneficiaries.  This Agreement shall not confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

         (c) Entire Agreement.  This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior  understandings,  agreements,  or representations by or among the Parties,
written or oral,  to the extent they  related in any way to the  subject  matter
hereof,  including  that certain  Letter of Intent  between the  Parties,  dated
November 4, 1998.

         (d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of his
or its rights,  interests,  or obligations  hereunder  without the prior written
approval of other Party; provided, however, that the Buyer may (i) assign any or
all of its rights and interests  hereunder to one or more of its  Affiliates and
(ii)  designate  one or  more  of its  Affiliates  to  perform  its  obligations
hereunder  (in any or all of which  cases the  Buyer  nonetheless  shall  remain
responsible for the performance of all of its obligations hereunder).

         (e)  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

         (f)  Headings.  The section  headings  contained in this  Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

         (g)  Notices.  All  notices,  requests,   demands,  claims,  and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder  shall be deemed  duly given if (and then two
business days after) it is sent by registered or certified mail,  return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to the Seller:

Aborn Electronics, Inc.
2108 D Bering Drive
San Jose, CA 95131
Atten: Vijay Lumba         .........

If to the Buyer:           .........Copy to:
----------------                    --------

ZEVEX International, Inc.  .........Jones, Waldo, Holbrook & McDonough
4314 ZEVEX Park Lane       .........170 S. Main Street, Suite 1500
Salt Lake City, UT 84123   .........Salt Lake City, UT 84101
Atten: Phillip McStotts    .........Atten: Ronald Poelman

A Party may send any notice,  request,  demand,  claim,  or other  communication
hereunder  to the  intended  recipient  at the address set forth above using any
other means (including personal delivery,  expedited courier, messenger service,
telecopy,  telex,  ordinary  mail,  or  electronic  mail),  but no such  notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received  by the  intended  recipient.  A
Party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder  are to be  delivered by giving the other Party
notice in the manner herein set forth.

         (h) Governing Law. This Agreement shall be governed by and construed in
accordance  with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule (whether of the State of Utah or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction other than the State of Utah.

         (i)      Dispute Resolution.

                  (i) The Parties desire to resolve disputes arising out of this
Agreement without litigation.  Accordingly, except for actions to seek temporary
restraining orders or injunctions  related to the purposes of this Agreement,  a
dispute  involving the adjudication of the rights of a third party that does not
agree to arbitration, or a suit to compel compliance with the dispute resolution
provision,  the Parties agree to use the following alternative dispute procedure
as their sole remedy with respect to any  controversy or claim arising out of or
relating to this Agreement or its breach.

                  (ii) At the  written  request  of a  Party,  each  Party  will
appoint a  knowledgeable,  responsible  representative  to meet and negotiate in
good faith to resolve  any dispute  arising  under this  Agreement.  The Parties
intend  that  these   negotiations   be   conducted  by   non-lawyer,   business
representatives.  The location,  format,  frequency,  duration and conclusion of
these discussions shall be left to the discretion of the  representatives.  Upon
agreement between the Parties, the representatives may utilize other alternative
dispute  resolution  procedures such as mediation to assist in the negotiations.
Discussions and  correspondence  among the  representatives  for the purposes of
these  negotiations shall be treated as confidential  information  developed for
the purposes of settlement,  exempt from discovery and  production,  which shall
not be admissible in the  arbitration  described below or in any lawsuit without
the concurrence of both Parties.  Documents  identified in or provided with such
communications, which are not prepared for purposes of the negotiations, are not
so exempted  and may, if  otherwise  admissible,  be admitted in evidence in the
arbitration or lawsuit.

                  (iii) If the  negotiations  do not resolve the dispute  within
thirty  (30) days after the  initial  written  request,  the  disputes  shall be
submitted to binding arbitration by a panel of three arbitrators pursuant to the
Commercial  Arbitration  Rules of the American  Arbitration  Association in Salt
Lake  City,  Utah.  A Party may  demand  such  arbitration  in  accordance  with
procedures set out in those rules. Each party shall designate,  as its appointed
arbitrator,  an  impartial  individual  who is  experienced  in the  business of
manufacturing products similar to the products of the Company. Within 20 days of
appointment,  the two  designated  arbitrators  shall then  designate  by mutual
agreement an impartial attorney licensed in the state of the arbitration,  which
attorney shall serve as the panel's  administrative  head. The majority decision
of the panel shall final and conclusive  upon both Parties.  Discovery  shall be
controlled  by the  arbitrators  and shall be permitted to the extent set out in
this  paragraph.  Each Party may  submit in  writing to a Party,  and that Party
shall respond,  to a maximum of any  combination  of  thirty-five  (35) (none of
which may have subplots) of the following:  interrogatories,  demands to produce
documents,  and requests for  admission.  The Parties  shall  contract  with the
arbitrators  to commence the  arbitration  hearing within sixty (60) days of the
demand for  arbitration.  The arbitrators  shall control the scheduling so as to
process the matter  expeditiously.  The Parties may submit written  briefs.  The
Parties  shall  require  the  arbitrators  to rule on the  dispute  by issuing a
written  opinion  within thirty (30) days after the close of the  hearings.  The
times  specified in this paragraph may be extended upon a showing of good cause.
Judgment upon the award rendered by the  arbitrators may be entered in any court
having jurisdiction.

                  (iv) Each Party shall bear its own cost of these procedures. A
Party seeking  discovery  shall  reimburse to the responding  Party the costs of
production of documents (to including search time and reproduction  costs).  The
Parties shall equally split the fees of any mediation, but in any arbitration or
permissible  legal  proceedings,  the  prevailing  Party  shall be  entitled  to
reasonable  attorneys'  fees,  costs and other  disbursements in addition to any
other relief to which such Party may be entitled.

         (j)  Amendments  and Waivers.  No  amendment  of any  provision of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by a Party of any default, misrepresentation, or
breach of warranty or covenant  hereunder,  whether intentional or not, shall be
deemed  to  extend to any prior or  subsequent  default,  misrepresentation,  or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

         (k)  Severability.  Any term or  provision  of this  Agreement  that is
invalid or unenforceable  in any situation in any jurisdiction  shall not affect
the validity or  enforceability  of the remaining terms and provisions hereof or
the validity or  enforceability  of the offending term or provision in any other
situation or in any other jurisdiction.

         (l) Expenses.  Each of the Parties and the Company will bear his or its
own  costs  and  expenses  (including  legal  fees  and  expenses)  incurred  in
connection with this Agreement and the  transactions  contemplated  hereby.  The
Seller  agrees that the  Company has not borne or will bear any of the  Seller's
costs and expenses  (including any of his legal fees and expenses) in connection
with this Agreement or any of the transactions contemplated hereby.

         (m)  Construction.   The  Parties  have  participated  jointly  in  the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any Party by virtue of the authorship of any of
the provisions of this Agreement.  The Parties intend that each  representation,
warranty, and covenant contained herein shall have independent significance.  If
a Party has breached any representation,  warranty, or covenant contained herein
in any respect, the fact that there exists another representation,  warranty, or
covenant relating to the same subject matter  (regardless of the relative levels
of  specificity)  which the Party has not  breached  shall not  detract  from or
mitigate  the fact that the  Party is in  breach  of the  first  representation,
warranty, or covenant.

         (n) Incorporation of Exhibits,  Annexes,  and Schedules.  The Exhibits,
Annexes,  and Schedules  identified in this Agreement are incorporated herein by
reference and made a part hereof.

         (o) Specific  Performance.  Each Party acknowledges and agrees that the
other Party would be damaged  irreparably  in the event any of the provisions of
this  Agreement  are not performed in accordance  with their  specific  terms or
otherwise  are  breached.  Accordingly,  each Party  agrees that the other Party
shall be entitled to an injunction  or  injunctions  to prevent  breaches of the
provisions of this Agreement and to enforce  specifically this Agreement and the
terms and provisions  hereof in any action instituted in any court of the United
States or any state thereof having  jurisdiction over the Parties and the matter
(subject to the provisions set forth in '10(p) below),  in addition to any other
remedy to which they may be entitled, at law or in equity.

         (p) Submission to Jurisdiction.  Each Party submits to the jurisdiction
of any state or federal court  sitting in Salt Lake County,  Utah, in any action
or proceeding arising out of or relating to this Agreement that is allowed under
'10(i) and agrees that all claims in respect of the action or proceeding  may be
heard and determined in any such court.  Each Party also agrees not to bring any
such action or  proceeding  arising out of or relating to this  Agreement in any
other  court.  Each  Party  waives  any  defense  of  inconvenient  forum to the
maintenance of any action or proceeding so brought and waives any bond,  surety,
or other  security  that  might be  required  of any other  Party  with  respect
thereto.  Each Party agrees that a final judgment in any action or proceeding so
brought  shall be  conclusive  and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.

                                                       



<PAGE>


         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.

ZEVEX INTERNATIONAL, INC.


By:/s/Phillip L. McStotts

Title:Chief Financial Officer


/s/Vijay Lumba             
VIJAY LUMBA


<PAGE>




                                       
                                    EXHIBIT A
                          FORM OF CONVERTIBLE DEBENTURE

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE  STATE LAW AND MAY NOT
         BE OFFERED,  SOLD, OR OTHERWISE  TRANSFERRED,  PLEDGED, OR HYPOTHECATED
         UNLESS  AND  UNTIL  REGISTERED  UNDER  THE ACT OR STATE  LAW OR, IN THE
         OPINION OF COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE ISSUER OF
         THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION
         IS IN COMPLIANCE THEREWITH.


                                                CONVERTIBLE DEBENTURE

                                               (Due _________________)

______________, 199___                                                         
(the "Issuance Date")

         The undersigned, ZEVEX INTERNATIONAL, INC., a Delaware corporation (the
"Company"),  for value  received,  hereby  promises to pay to the order of VIJAY
LUMBA        (the         "Holder")         the         principal         amount
of______________________________________________   ($________________)  together
with  interest  on such  principal  amount and any other  amounts due under this
Debenture.

         This Debenture  (the  "Debenture")  is issued  pursuant to that certain
Stock  Purchase  Agreement,  dated  December 31, 1998,  entered into between the
Company and the Holder of this  Debenture (the  "Agreement").  This Debenture is
also subject to the following additional terms and conditions:


<PAGE>



1. Interest.  Commencing on the date of this Debenture and continuing  until all
principal  and  interest  due  under  this  Debenture  are  paid  in  full,  the
outstanding  principal balance of this Debenture shall bear interest at the rate
of seven  percent (7%) per annum,  compounded  annually.  Interest  shall accrue
daily and be calculated on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed in any partial calendar month.

2. Payment.  Accrued  interest shall be due and payable  beginning April 1, 1999
and on each July 1,  October  1,  January 1, and April 1  thereafter  until this
Debenture  is paid in full.  The unpaid  principal  balance  of this  Debenture,
together with any and all accrued but unpaid interest,  shall be due and payable
in full three (3) years from the Issuance  Date.  All payments of principal  and
interest  shall be made in lawful  money of the United  States of America at the
address of the holder set forth in Section  7.1 below.  Unless the Holder  shall
elect  otherwise,  each payment made under this Debenture shall be applied first
to interest due under this  Debenture and any balance shall be applied to reduce
the principal balance of this Debenture.

3.       Right of Conversion

         3.1 Conversion  Into Company  Securities.  At any time after a date one
(1) year from the Issuance  Date until a date three (3) years after the Issuance
Date, and from time to time during such period,  the Holder may elect to convert
all or a portion  of the unpaid  principal  amount  and all  accrued  but unpaid
interest of this Debenture into fully paid and  nonassessable  shares of Company
Common Stock, $0.001 par value (the "Conversion Shares") at the conversion price
of eleven dollars ($11.00) per share (the "Conversion Price"); provided that any
partial  conversion of less than the entire remaining  principal balance of this
Debenture  may not be less than  $25,000 in  principal  and  accrued  and unpaid
interest.

         3.2  Mechanics of  Conversion.  Upon the  Holder's  election to convert
pursuant  to Section  3.1 above,  the Holder  shall send  written  notice of its
election to the Company and shall surrender this Debenture to the Company at its
principal office. The written election shall specify the amount of principal and
accrued and unpaid interest that is to be converted.  Each  conversion  shall be
deemed to have been  effected  as of the  close of the  business  on the date on
which the notice is  delivered  to the  Company  and the  outstanding  principal
balance and accrued and unpaid interest shall be reduced by the amount converted
as set forth in the notice.  Within a reasonable  time  thereafter,  the Company
shall  cancel the  designated  portion of the  unpaid  principal  amount of this
Debenture  converted  by the  Holder  and  issue  and  deliver  to the  Holder a
certificate or certificates (the "Conversion  Certificates"),  registered in the
name of such  Holder,  for the number of full  shares of the  Conversion  Shares
issuable at the Conversion  Price,  bearing such  restrictive  legends as may be
required  by  federal  and  state  securities  laws.  In the  event of a Partial
Conversion,  the Company  shall  return with the  Conversion  Certificates  this
Debenture,  bearing a proper  notation of the principal  amount that remains due
and payable after Holder's partial conversion, but otherwise unaltered.

         3.3 Effects of  Conversion.  Upon  conversion  of the entire  amount of
principal and unpaid interest of this Debenture, the rights of the Holder of the
Debenture as such shall cease.  The person or persons in whose name or names the
Conversion  Certificates are issued shall be deemed to have become the holder or
holders of record of the Conversion Shares represented thereby.

         3.4 No Fractional  Shares. No fractional share of the Conversion Shares
will be issued in  connection  with any  conversion  hereunder.  Instead  of any
fractional  share the  Company  shall pay a cash  adjustment  in respect of such
fractional interest as determined by reference to the Conversion Price.

         3.5 No Rights as  Stockholders.  Prior to the  conversion of all or any
portion of this  Debenture,  the Holder  shall not be entitled to any right as a
stockholder,  including  without  limitation  the  right  to vote or to  receive
dividends or other distribution, and shall not be entitled to receive any notice
of any proceeding of the Company, except as provided herein.

         3.6  Taxes on  Conversion.  Any taxes  required  upon the  issuance  of
Conversion  Certificates  on conversion of this  Debenture  shall be paid by the
Holder.

         3.7  Adjustments.  In the  event  of any  Company  stock  split,  stock
combination,  merger,  consolidation  or  recapitalization  affecting the Common
Stock of the Company prior to repayment or conversion under this Debenture,  the
Company shall make  appropriate,  proportionate  adjustments  to the  Conversion
Shares issued to Holder under Holder's conversion right.

         3.8  Notices  of Record  Date.  In the  event of (i) any  taking by the
Company of a record of the holders of securities  for the purpose of determining
the  holders  thereof  who  are  entitled  to  receive  any  dividend  or  other
distribution or (ii) any  reclassification  or  recapitalization  of the capital
stock of the  Company,  any  merger  or  consolidation  of the  Company,  or any
transfer of all or  substantially  all of the assets of the Company to any other
corporation,  entity,  or person,  or any voluntary or involuntary  dissolution,
liquidation,  or a winding-up of the Company, which occurs during the conversion
period, the Company shall mail to the Holder of the Debenture,  at least fifteen
(15) days prior to the record date specified  therein,  a notice  specifying (A)
the date on which  any  such  record  is to be  taken  for the  purpose  of such
dividend or distribution and a description of such dividend or distribution, (B)
the  date  on  which  any  such  reorganization,   reclassification,   transfer,
consolidation,  merger,  dissolution,  liquidation, or winding-up is expected to
become effective,  and (C) the time, if any is to be set, as to when the holders
of record of such  security  shall be  entitled  to  exchange  their  shares for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  transfer, consolidation, merger, dissolution, liquidation, or
winding-up.

4.       Events of Default; Acceleration

         4.1  Events,  Remedy.  If any of the  following  conditions  or  events
("Events of Default") shall occur:

                  (a)  if the  Company  shall  default  in  the  payment  of the
principal or interest on the Debenture when due and such default continues for a
period of 30 days after written notice thereof to the Company from Holder; or

                  (b) if the  Company  shall  default in the  performance  of or
compliance with any term or covenant contained in this Debenture, the Agreement,
or the Pledge  Agreement and such default shall not have been remedied within 30
days after written notice thereof shall have been given to the Company by Holder
(provided,  however,  if such default is not cured within such 30-day period and
the  Company  is  diligently  pursuing  such  cure,  the  Company  shall have an
additional  period of time not to exceed  ninety (90) days in which to cure such
default); or

                  (c) if the Company shall make an assignment for the benefit of
creditors,  or shall  admit in writing  its  inability  to pay its debts as they
become  due,  or shall file a  voluntary  petition  in  bankruptcy,  or shall be
adjudicated  a  bankrupt  or  insolvent,  or shall file any  petition  or answer
seeking for itself any reorganization,  arrangement, composition,  readjustment,
liquidation, dissolution, or similar relief under any present or future statute,
law or  regulation,  or shall file any answer  admitting or not  contesting  the
material  allegations  of a  petition  filed  against  the  Company  in any such
proceeding,  or shall seek or consent to or acquiesce in the  appointment of any
trustee, receiver or liquidator of the Company or of all or any substantial part
of the properties of the Company, or if the Company or its directors or majority
stockholders  shall take any action looking to the dissolution or liquidation of
the Company; or

                  (d) if, within 60 days after the service of process on Company
following   commencement   of  an  action   against  the  Company   seeking  any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute,  law or regulation,  such
action  shall  not have  been  dismissed  or if,  alternatively,  all  orders or
proceedings  thereunder  affecting the operations or the business of the Company
stayed,  or if the stay of any such order or proceeding  shall thereafter be set
aside,  or if,  within 60 days  after the  appointment  without  the  consent or
acquiescence  of the  Company of any  trustee,  receiver  or  liquidator  of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;

then and in any such event  Holder may at any time  (unless all  defaults  shall
theretofore have been remedied) at his option, by written notice to the Company,
declare the entire principal and interest of the Debenture then remaining unpaid
to be due and payable immediately. Notwithstanding the foregoing, this Debenture
shall not be in default to the extent that the Company has  exercised its rights
of recoupment under Section 8(f) of the Agreement.

         4.2 Other  Remedies on Default,  Etc. In case any one or more Events of
Default shall occur, be continuing, and not have been waived, Holder may proceed
to protect and  enforce  the rights of such Holder by an action at law,  suit in
equity, or other appropriate proceeding, whether for the specific performance of
any  agreement  contained  herein  or  under  terms of the  Agreement  or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power  granted  hereby or thereby or by law. In case of a
default in the payment of  principal or interest on the  Debenture,  the Company
will pay to the Holder  thereof such further  amount as shall be  sufficient  to
cover the costs and  expenses  of  collection,  including,  without  limitation,
reasonable attorneys' fees. No course of dealing and no delay on the part of any
Holder in exercising  any right shall  operate as a waiver  thereof or otherwise
prejudice such Holder's  rights.  No right conferred  hereby or by the Agreement
upon any Holder  shall be  exclusive  of any other  right  referred to herein or
therein  or now or  hereafter  available  at  law,  in  equity,  by  statute  or
otherwise.

5.       Prepayment

         This  Debenture  may be prepaid at any time  without  prior  notice and
without  penalty,  including  any  recoupment  deemed a prepayment  hereof under
Section 8(f) of the Agreement.

6.       Security for Debenture

         This  Debenture  is secured by a Stock  Pledge  Agreement  of even date
herewith by and between the Company and Holder.

7.       Miscellaneous Provisions

         7.1 Notices.  Any notice herein required or payment required  hereunder
shall  be made or  given to the  address  of the  parties  as  specified  in the
Agreement.

         7.2  Amendments  or Waivers.  Any  provision of this  Debenture  may be
amended,  waived, or modified,  but only upon the written consent of the Company
and the Holder.

         7.3  Governing  Law.  This  Debenture has been executed in and shall be
governed by the laws of the State of Utah  excluding that body of law pertaining
to conflicts of law.

         7.4 Miscellaneous.  The unenforceability or invalidity of any provision
of this Debenture shall not affect the  enforceability  or validity of any other
provision  of this  Debenture.  The  terms  of this  Debenture  shall  bind  the
undersigned  and inure to the  benefit  of Holder  and their  respective  heirs,
successors,  assigns and legal  representatives.  The Holder may, in  accordance
with the terms of the Agreement,  assign all or part of Holder's  interest under
this Debenture.

         IN WITNESS WHEREOF,  the Company has caused this Debenture to be issued
this ____ day of _________________, 1998.


                                                       ZEVEX INTERNATIONAL, INC.


                                                       By:   
                                                       Its:  
<PAGE>






                                    EXHIBIT B
                FORMULA FOR CALCULATING POSSIBLE EARN-OUT PAYMENT


The formula for calculating the possible Earn-Out Payment will be:

         A + B x ($950,000.00) = Cash portion of possible Earn-Out Payment

         A + B x ($950,000.00) = Debenture portion of possible Earn-Out Payment

Where:

         A        = 1999  Actual  Revenue  - 1998  Actual  Revenue  x 0.30  1999
                  Projected Revenue - 1998 Actual Revenue

         B        = 1999  Actual Pre Tax  Income - 1998  Actual Pre Tax Income x
                  0.70  1999  Projected  Pre Tax  Income - 1998  Actual  Pre Tax
                  Income

And:

         "1998 Projected Revenue" is $1,310,098 (taken from projection).

         "1999  Actual  Revenue"  is the total  gross  revenue for Aborn for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Revenue" is $2,721,500.00.

         "1998 Projected Pre Tax Income" is $337,078 (taken from projection).

         "1999  Actual  Pre Tax  Income" is the pre tax income for Aborn for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Pre Tax Income" is $1,176,500

Notwithstanding  the foregoing,  in the event that the 1999 Actual Pretax Income
equals  or  exceeds  $1,176,500,   Seller  shall  receive  one  hundred  percent
($950,000) of the Earn-Out Payment.




Example

         Assuming that "1999 Actual  Revenue" is $2,000,000 and "1999 Actual Pre
Tax Income" is $800,000, the possible Earn-Out Payment is calculated as follows:

         2,000,000 - 1,310,098 x .30 = 0.1846
         2,721,500 - 1,310,098

           800,000 - 337,078 x .70 = 0.3862
         1,176,000 - 337,078

         0.1466 + 0.3862 = 0.5384

         0.5384 x $950,000 = $508,060 cash portion of Earn-Out  Payment 0.5384 x
         $950,000 = $508,060 Debenture portion of Earn-Out Payment
[{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 302056}]
{"company-data": {"conformed-name": "ZEVEX INTERNATIONAL INC", "cik": "0000827056", "assigned-sic": "3845", "irs-number": "870462807", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12965", "film-number": "99506546"}, "business-address": {"street1": "4314 ZEVEX PARK LANE", "city": "MURRAY", "state": "UT", "zip": "84123", "phone": "8012641001"}, "mail-address": {"street1": "4314 ZEVEX PARK LANE", "city": "MURRAY", "state": "UT", "zip": "84123"}, "former-company": {"former-conformed-name": "DOWNEY INDUSTRIES INC", "date-changed": "19880811"}}
SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OF 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                December 31, 1998
                                 Date of report
                        (Date of earliest event reported)

                            ZEVEX INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in Its Charter)

              Delaware             33-19583                     87-0462807   
   (State of Incorporation)    (Commission File Number)      (I.R.S.Employer
                                                            Identification No.)

                             4314 Zevex Park Lane, 
                           Salt Lake City, Utah 84123
                    (Address of Principal Executive Offices)

         Issuer's Telephone Number, Including Area Code: (801) 264-1001

                                      None
          (Former Name of Former Address, if Changed Since Last Report)
Item 2. Acquisition of Disposition of Assets

On December 31, 1998, ZEVEX International,  Inc. (ZVXI) acquired from Len Smith,
Tracy  Livingston and David Bernardi all of the issued and  outstanding  capital
stock of JTech Medical Industries, Inc. Consideration for the transaction, which
could  total a maximum of $7.25  million,  consists  of $3.1  million of Company
cash, $3 million in convertible  debentures and a two-year earn-out amount of up
to $575,000  in cash and  $575,000 in  convertible  debentures  based on certain
sales and pre-tax  earning  targets.  Multi-year  employment  agreement has been
signed with three JTech executives.

JTech will be  consolidated  into the ZEVX  facility  in Salt Lake City and will
operate as a  wholly-owned  subsidiary of ZEVEX  International,  Inc.  under its
current name.

JTech  Medical  is  a  manufacturer   and  marketer  of  both   stand-alone  and
computerized  musculoskeletal  evaluation  products that measure isolated muscle
strength,  joint ranges of motion and sensation to document the effectiveness of
treatment or extent of injury.

JTech Medical  Industries is an  internationally  recognized  leader in physical
medicine measurement products,  providing both hardware and Windows95-compatible
software.  JTech provides equipment for musculoskeletal  evaluation,  functional
capacity evaluation, upper extremity and hand testing and pain evaluation. These
products  are  used by  chiropractors,  physical  therapists,  and  occupational
therapists  for  outcome   assessment   during   rehabilitation,   medical-legal
evaluations  for  personal  injury  and  workers   compensation,   and  clinical
documentation.

Also,  on December 31, 1998,  ZEVEX  acquired from Vijay Lumba all of the issued
and outstanding capital stock of Aborn Electronics,  Inc.  Consideration for the
transaction,  which  could  total a maximum of $5.1  million,  consists of $1.85
million in Company cash, $1.35 million in a convertible debenture and a one-year
earn-out  amount  of up to  $950,000  in  cash  and  $950,000  in a  convertible
debenture  based on certain  sales and pre-tax  earning  targets.  A  multi-year
employment agreement has been signed with Aborn's president.

Aborn will  maintain  operations in San Jose,  California  and will operate as a
wholly-owned subsidiary of ZEVEX International, Inc. under its current name.

Aborn is a  manufacturer  and developer of optical  sensors and custom  computer
chips used in both medical and  industrial  devices.  Aborn's  products  include
fiber  optic  links,  integrated  optoisolators,  high-speed  sensor  integrated
circuits, custom chips application specific integrated circuits (ASIC) chips and
solid state relays.  Medical  applications for these technology products include
diagnostic  and  therapeutic  equipment,  such as blood  analyzers  and dialysis
machines.

Item 7. Financial Statements and Exhibits

The audited financial statements of JTech Medical Industries, Inc.  and Aborn 
Electronics, Inc. will be filed not later than 60 days after the date of the 
filing of this report.  The following exhibits are included for the transactions
described in Item 2, above.

                                Index To Exhibits

Number                     Exhibits
10.1         Stock Purchase Agreement - JTech Medical  Industries,  Inc., dated
             December 31, 1998, with certain material exhibits. 
10.2         Stock Purchase Agreement - Aborn Electronics, Inc., dated 
             December 31, 1998, with certain material exhibits.

SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the Registrant  has duly caused this  Registration  Statement to be
signed on its behalf by the Undersigned, thereunto duly authorized.

ZEVEX International, Inc.

By /s/ Dean G. Constantine
Dean G. Constantine, President
Principal Executive Officer

Dated: January 14, 1999

                            STOCK PURCHASE AGREEMENT

                                      AMONG

                            ZEVEX INTERNATIONAL, INC.

                                       AND

             LEONARD C. SMITH, J. TRACY LIVINGSTON, DAVE W. BERNARDI

                                       AND
                   CORPORATION OF THE PRESIDENT OF THE CHURCH
                      OF JESUS CHRIST OF LATTER-DAY SAINTS

                                December 31, 1998
TABLE OF CONTENTS

                                                                            PAGE

1.       Definitions...........................................................1

2.       Purchase and Sale of Company Shares...................................5
         (a)      Basic Transaction. ..         ...............................5
         (b)      Purchase Price...............................................5
         (c)      Terms of Debentures..........................................6
         (d)      The Hold-Back................................................6
         (e)      The Closing..................................................7
         (f)      Deliveries at the Closing....................................7

3.       Representations and Warranties Concerning the Transaction.............7
         (a)      Representations and Warranties of the Sellers................7
         (b)      Representations and Warranties of the Buyer..................9
         (c)      Representations and Warranties of the Church................11

4.       Representations and Warranties Concerning the Company................12
         (a)      Organization, Qualification, and Corporate Power............12
         (b)      Capitalization..............................................13
         (c)      Noncontravention............................................13
         (d)      Brokers' Fees...............................................13
         (e)      Title to Assets.............................................14
         (f)      Financial Statements........................................14
         (g)      Events Subsequent to Most Recent Fiscal Year End............14
         (h)      Undisclosed Liabilities.....................................15
         (i)      Legal Compliance............................................16
         (j)      Tax Matters.................................................16
         (k)      Intellectual Property.......................................17
         (l)      Tangible Assets.............................................19
         (m)      Inventory...................................................19
         (n)      Contracts...................................................19
         (o)      Notes and Accounts Receivable...............................20
         (p)      Powers of Attorney..........................................20
         (q)      Insurance...................................................20
         (r)      Litigation..................................................20
         (s)      Product Warranty............................................20
         (t)      Product Liability...........................................21
         (u)      Employees...................................................21
         (v)      Employee Benefits...........................................21
         (w)      Guaranties..................................................23
         (x)      Environmental, Health, and Safety Matters...................23
         (y)      Certain Business Relationships with the Company.............24
         (z)      Year 2000 Items.............................................24
         (aa)     Disclosure..................................................24

5.       Pre-Closing Covenants................................................24
         (a)      General.....................................................24
         (b)      Notices and Consents........................................24
         (c)      Operation of Business.......................................25
         (d)      Preservation of Business....................................25
         (e)      Full Access.................................................25
         (f)      Notice of Developments......................................25
         (g)      Exclusivity.................................................25

6.       Post-Closing Covenants...............................................26
         (a)      General.....................................................26
         (b)      Litigation Support..........................................26
         (c)      Transition..................................................26
         (d)      Confidentiality.............................................26
         (e)      Covenant Not to Compete.....................................27

7.       Conditions to Obligation to Close....................................28
         (a)      Conditions to Obligation of the Buyer.......................28
         (b)      Conditions to Obligation of the Sellers.....................29

8.       Remedies for Breaches of This Agreement..............................30
         (a)      Survival of Representations and Warranties..................30
         (b)      Indemnification Provisions for Benefit of the Buyer.........30
         (c)      Indemnification Provisions for Benefit of the Sellers.......31
         (d)      Matters Involving Third Parties.............................32
         (e)      Determination of Adverse Consequences.......................33
         (f)      Recoupment Under the Hold-back and Debentures...............33
         (g)      Other Indemnification Provisions............................33

9.       Tax Matters..........................................................33
         (a)      Tax Periods Ending on or Before the Closing Date............33
         (b)      Tax Periods Beginning Before and Ending After the Closing 
                  Date........................................................34
         (c)      Cooperation on Tax Matters..................................34
         (d)      Certain Taxes...............................................34

10.      Termination..........................................................35
         (a)      Termination of Agreement....................................35
         (b)      Effect of Termination.......................................35

11.      Miscellaneous........................................................36
         (a)      Nature of Certain Obligations...............................36
         (b)      Termination of Shareholders Agreement.......................36
         (c)      Press Releases and Public Announcements.....................36
         (d)      No Third-Party Beneficiaries................................36
         (e)      Entire Agreement............................................36
         (f)      Succession and Assignment...................................36
         (g)      Counterparts................................................37
         (h)      Headings....................................................37
         (i)      Notices.....................................................37
         (j)      Governing Law...............................................38
         (k)      Amendments and Waivers......................................38
         (l)      Severability................................................38
         (m)      Expenses....................................................38
         (n)      Construction................................................38
         (o)      Incorporation of Exhibits, Annexes, and Schedules...........39
         (p)      Specific Performance........................................39
         (q)      Submission to Jurisdiction..................................39
         (r)      Limitation on Obligations of the Church.....................39

Exhibit A--Form of Convertible Debenture
Exhibit B--Pledge Agreement
Exhibit C--Formula for Calculating Earn-Out Payments
Exhibit D--Historical Financial Statements
Exhibit E--Forms of Employment Agreements
Exhibit F--Allocation of Purchase Price Among Sellers
Exhibit G--Amendment to Lease
Exhibit H--Voice Technology Project Agreement

Annex I--Exceptions to the Sellers' Representations and Warranties Concerning
         the Transaction

Annex II--Exceptions to the Buyer's Representations and Warranties Concerning  
          the Transaction

Annex III--Exceptions to Representations and Warranties Concerning the Company

                            STOCK PURCHASE AGREEMENT
         This Stock  Purchase  Agreement  ("Agreement")  is  entered  into as of
December  31,  1998,  by  and  among  ZEVEX  International,   Inc.,  a  Delaware
corporation  ("Buyer"),  and Len Smith,  James T.  Livingston and Dave Bernardi,
(collectively the "Sellers"),  and Corporation of the President of The Church of
Jesus Christ of Latter-day Saints, a Utah non-profit corporation (the "Church").
The Buyer and the Sellers are referred to collectively herein as the "Parties."

         The Sellers and the Church in the aggregate own all of the  outstanding
capital  stock  of JTech  Medical  Industries,  Inc.,  a Utah  corporation  (the
"Company").

         This  Agreement  contemplates  a  transaction  in which the Buyer  will
purchase  from the Sellers  and the Church,  and the Sellers and the Church will
sell to the Buyer, all of the outstanding capital stock of the Company in return
for cash and certain other consideration.

         Now,  therefore,  in  consideration  of the  premises  and  the  mutual
promises herein made, and in consideration of the  representations,  warranties,
and covenants herein contained, the Parties agree as follows.
1.       Definitions.

         "Accredited  Investor"  has the  meaning  set  forth  in  Regulation  D
promulgated under the Securities Act.

         "Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders, decrees, rulings,  damages, dues, penalties,  fines, costs, amounts paid
in settlement,  Liabilities,  obligations,  Taxes, liens, losses,  expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

         "Affiliate"  has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

         "Applicable  Rate" means the prime rate as  published in the Money Rate
Section of the Wall Street Journal, plus two percent (2%) per annum.

         "Basis"  means  any  past or  present  fact,  situation,  circumstance,
status,  condition,  activity,  practice,  plan,  occurrence,  event,  incident,
action,  failure to act, or  transaction  that forms or could form the basis for
any specified consequence.

         "Buyer Confidential Information" has the meaning set forth in '6(d)(i) 
          below.

         "Buyer Shares" has the meaning set forth in '2(c) below.

         "Closing" has the meaning set forth in '2(e) below.

         "Closing Date" has the meaning set forth in '2(e) below.

         "COBRA"  means the  requirements  of Part 6 of Subtitle B of Title I of
          ERISA and Code '4980B.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company Confidential Information" has the meaning set forth in '6(d)
          (ii) below.

         "Company Share" means any share of the Common Stock, par value $.001 of
          the Company.

         "Debenture" has the meaning set forth in '2(b)(i) below.

         "Deferred Intercompany Transaction" has the meaning set forth in 
          Reg. ' 1.1502-13.

         "Earn-Out  Payment"  means  either  the First  Earn-Out  Payment or the
          Second Earn-Out Payment, as the case may be.

         "Employee   Benefit   Plan"   means  any  (a)   nonqualified   deferred
compensation  or  retirement  plan  or   arrangement,   (b)  qualified   defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified  defined benefit  retirement plan or arrangement which is an
Employee  Pension  Benefit  Plan  (including  any  Multiemployer  Plan),  or (d)
Employee  Welfare Benefit Plan or material  fringe benefit or other  retirement,
bonus, or incentive plan or program.

         "Employee Pension Benefit Plan" has the meaning set forth in
          ERISA '3(2).

         "Employee Welfare Benefit Plan" has the meaning set forth in 
          ERISA '3(1).

         "Environmental,   Health,  and  Safety  Requirements"  shall  mean  all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

         "ERISA" means the Employee Retirement Income Security Act of 1974,
          as amended.

         "ERISA  Affiliate"  means  each  entity  which is  treated  as a single
          employer with Seller for purposes of Code '414.

         "Fiduciary" has the meaning set forth in ERISA '3(21).

         "Financial Statements" has the meaning set forth in '4(f) below.

         "First Earn-Out Payment" has the meaning set forth in '2(b)(ii) below.

         "GAAP" means United States generally accepted accounting  principles as
          in effect from time to time.

         "Hold-Back" has the meaning set forth in '2(d) below.

         "Indemnified Party" has the meaning set forth in '8(d) below.

         "Indemnifying Party" has the meaning set forth in '8(d) below.

         "Information  Technology" means computer  software,  computer firmware,
          computer  hardware  (whether  general or specific  purpose) and other 
          similar or related items of automated, computerized or software 
          systems.

         "Initial Payment" has the meaning set forth in '2(b)(ii) below.

         "Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
reissuances,  continuations,  continuations-in-part,  revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

         "Knowledge" means actual knowledge after reasonable investigation.

         "Liability"  means any  liability  (whether  known or unknown,  whether
          asserted or  unasserted,  whether  absolute or  contingent,  whether 
          accrued or unaccrued,  whether  liquidated  or  unliquidated,  and 
          whether due or to become due), including any liability for Taxes.

         "Most Recent Balance Sheet" means the balance sheet contained within 
          the Most Recent Financial Statements.

         "Most Recent Financial Statements" has the meaning set forth in '4(f) 
          below.

         "Most Recent Fiscal Month End" has the meaning set forth in '4(f) 
          below.

         "Most Recent Fiscal Year End" has the meaning set forth in '4(f) below.

         "Multiemployer Plan" has the meaning set forth in ERISA '3(37).

         "Ordinary  Course of Business"  means the  ordinary  course of business
          consistent with past custom and practice (including with respect to
          quantity and frequency).

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Person"  means  an  individual,  a  partnership,  a  corporation, an
          association,  a joint stock company, a trust, a joint venture, an
          unincorporated organization, or a governmental entity.

         "Prohibited Transaction" has the meaning set forth in ERISA '406 and
          Code '4975.

         "Purchase Price" has the meaning set forth in '2(b) below.

         "Reportable Event" has the meaning set forth in ERISA '4043.

         "Second Earn-Out Payment" has the meaning set forth in '2(b)(iii)
          below.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Securities Exchange Act" means the Securities Exchange Act of 1934, 
          as amended.

         "Security  Interest"  means any mortgage,  pledge,  lien,  encumbrance,
charge, or other security  interest,  other than (a) mechanic's,  materialmen's,
and similar  liens,  (b) liens for Taxes not yet due and  payable,  (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary  Course of Business and not incurred
in connection with the borrowing of money.

         "Tax"  means any  federal,  state,  local,  or  foreign  income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental  (including  taxes under Code '59A),
customs duties, capital stock, franchise, profits, withholding,  social security
(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

         "Tax Return" means any return,  declaration,  report, claim for refund,
or information return or statement relating to Taxes,  including any schedule or
attachment thereto, and including any amendment thereof.

         "Third Party Claim" has the meaning set forth in '8(d) below.

         "Year 2000 Compliant"  means,  with respect to Information  Technology,
the  Information  Technology is fully  functional and compatible with use during
and after the  calendar  year 2000 A.D.,  and the  Information  Technology  used
during  each such time  period  will  accurately  receive,  provide  and process
date/time  data,  (including,  but not limited to,  calculating,  comparing  and
sequencing)  from, into and between the 20th and 21st  centuries,  including the
years 1999 and 2000, and leap year calculations and will not malfunction,  cease
to function,  or provide  invalid or incorrect  results as a result of date/time
data.

2.       Purchase and Sale of Company Shares.

         (a) Basic  Transaction.  On and subject to the terms and  conditions of
this  Agreement,  the Buyer agrees to purchase  from each of the Sellers and the
Church,  and each of the Sellers and the Church agrees to sell to the Buyer, all
of such Seller's and the Church's Company Shares for the consideration specified
below in this '2.

         (b)  Purchase  Price.  The Buyer  agrees to pay to the  Sellers and the
Church a purchase price of up to, but not  exceeding,  Seven Million Two Hundred
Fifty Thousand Dollars  ($7,250,000) (the "Purchase Price"),  described below in
this '2(b).  The  Purchase  Price shall be  allocated  among the Sellers and the
Church as set forth in Exhibit F attached  hereto.  The  Purchase  Price will be
paid in the following manner:

                  (i) Payment at Closing. At Closing,  the Buyer will pay to the
         Sellers Three Thousand Dollars in cash by bank check.

                  (ii) Payment by January 6, 1999. On January 6, 1999, the Buyer
         will pay to Sellers and the Church Six Million  Ninety  Seven  Thousand
         Dollars  ($6,097,000)  comprised  of: (A) Three  Million  Ninety  Seven
         Thousand Dollars ($3,097,000) in cash payable by wire transfer or other
         immediately  available  funds;  and (B)  convertible  debentures of the
         Buyer in the form  attached  hereto as Exhibit A  ("Debenture")  in the
         aggregate principal amount of Three Million Dollars  ($3,000,000).  The
         cash portion of the foregoing payment (the "Initial  Payment") shall be
         subject to the hold-back  provisions of '2(d). The Debenture is secured
         by the pledge of stock pursuant to the Pledge Agreement attached hereto
         as Exhibit B.

                  (iii)  First  Earn-Out   Payment.   Within  ninety  (90)  days
         following  December  31,  1999,  the Buyer  will pay to the  Sellers an
         additional  amount of cash and Debentures in an amount to be calculated
         in accordance with the formula and example  described in Exhibit C (the
         "First Earn-Out Payment").  The First Earn-Out Payment shall not exceed
         (A) Three Hundred Seventy Five Thousand Dollars ($375,000) in cash, and
         (B) a Debenture  in the  aggregate  principal  amount of Three  Hundred
         Seventy Five Thousand Dollars ($375,000). The First Earn-Out Payment is
         subject to  adjustment  upon  certain  terminations  of the  Employment
         Agreement  attached  hereto as Exhibit E and as described in Section 10
         therein.

                  (iv)  Second  Earn-Out   Payment.   Within  ninety  (90)  days
         following  December  31,  2000,  the Buyer  will pay to the  Sellers an
         additional  amount of cash and Debentures in an amount to be calculated
         in accordance with the formula and example  described in Exhibit C (the
         "Second  Earn-Out  Payment").  The Second  Earn-Out  Payment  shall not
         exceed (A) Two Hundred Thousand  Dollars  ($200,000) in cash, and (B) a
         Debenture in the  aggregate  principal  amount of Two Hundred  Thousand
         Dollars   ($200,000).   The  Second  Earn-Out  Payment  is  subject  to
         adjustment  upon  certain  terminations  of  the  Employment  Agreement
         attached hereto as Exhibit E and as described in Section 10 therein.

         (c) Terms of  Debentures.  In  addition  to the  terms  and  conditions
contained in the form of Debenture in Exhibit A, each Debenture may be converted
by its holder,  in whole or in part,  into the common stock of the Buyer ("Buyer
Shares") at a rate of Eleven Dollars  ($11.00) per share as follows:  (i) at any
time after one (1) year and before  three (3) years,  measured  from the date of
issuance,  for Debentures issued as part of the Initial Purchase Price; and (ii)
at any time after one (1) year and before two (2) years,  measured from the date
of issuance, for Debentures issued as part of an Earn-Out Payment.

         (d) The Hold-Back. The Buyer will hold and not deliver at Closing (four
hundred sixty five thousand  dollars  ($465,000)  from the Initial  Payment (the
"Hold-Back").  The Parties agree that  two-thirds  of the  Hold-Back  ($310,000)
shall  be held by the  Buyer  and  paid to the  Sellers  (in  proportion  to the
allocation set forth on Exhibit F) on a deferred  basis  promptly  following the
post-Closing  completion of the audit  requirements  of the Buyer,  less amounts
applied by the Buyer to cover unknown audit  contingencies  which occurred prior
to the Closing  Date.  The Parties  agree that the  remaining  one-third  of the
Hold-Back  ($155,000)  shall be held by the  Buyer and paid to the  Sellers  (in
proportion  to the  allocation  set forth on Exhibit F) on a deferred  basis one
hundred  eighty (180) days after Closing,  less amounts  applied by the Buyer to
cover unknown  contingencies that occur prior to Closing,  including amounts due
to Buyer  under  '8(b).  Buyer  agrees  to add to the  amount  of the  Hold-Back
actually paid to the Sellers an additional  amount equal to eight (8%) per annum
simple  interest on such amount paid,  accruing  from the Closing Date until the
date of payment.

         (e) The Closing.  The closing of the transactions  contemplated by this
Agreement (the "Closing")  shall take place at the offices of Buyer in Salt Lake
City,  Utah,  commencing  at 9:00 a.m.  local  time on the second  business  day
following the satisfaction or waiver of all conditions to the obligations of the
Parties  to  consummate  the  transactions   contemplated   hereby  (other  than
conditions  with  respect to actions  the  respective  Parties  will take at the
Closing  itself) or such other date as the Buyer and the  Sellers  may  mutually
determine (the "Closing Date").

         (f)  Deliveries  at the Closing.  At the Closing,  (i) the Sellers will
deliver  to the Buyer  the  various  certificates,  instruments,  and  documents
referred  to in '7(a)  below,  (ii) the Buyer will  deliver to the  Sellers  the
various  certificates,  instruments,  and documents  referred to in '7(b) below,
(iii)  each of the  Sellers  and the  Church  will  deliver  to the Buyer  stock
certificates representing all of his or its Company Shares, endorsed in blank or
accompanied by duly executed blank stock powers, and (iv) the Buyer will deliver
to each of the Sellers the consideration specified in '2(b) above.

3.       Representations and Warranties Concerning the Transaction.

         (a) Representations and Warranties of the Sellers.  Each of the Sellers
represents and warrants to the Buyer that the statements contained in this '3(a)
are correct and  complete as of the date of this  Agreement  and will be correct
and  complete  as of the  Closing  Date (as  though  made then and as though the
Closing Date were  substituted  for the date of this Agreement  throughout  this
'3(a)) with respect to himself, except as set forth in Annex I attached hereto.

                  (i)  Authorization  of Transaction.  The Seller has full power
         and  authority  to execute and deliver  this  Agreement  and to perform
         Seller's obligations  hereunder.  This Agreement  constitutes the valid
         and legally binding obligation of the Seller, enforceable in accordance
         with its terms and conditions.  The Seller need not give any notice to,
         make any filing with, or obtain any authorization, consent, or approval
         of any government or governmental agency or any third party in order to
         consummate the transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Seller is subject.

                  (iii) Brokers' Fees. The Seller has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         the Buyer could become liable or obligated.

                  (iv) Absence of Indebtedness  and Claims.  Except as set forth
         on Annex I, Seller is not  indebted to Company,  and the Company is not
         indebted to Seller and the Seller has no claims against the Company.

                  (v)  Company  Shares.  The  Seller  holds of  record  and owns
         beneficially the number of Company Shares set forth next to his name in
         '4(b) of Annex  III,  free and clear of any  restrictions  on  transfer
         (other  than  any  restrictions  under  the  Securities  Act and  state
         securities  laws),  Taxes,  Security  Interests,   options,   warrants,
         purchase rights, contracts, commitments, equities, claims, and demands.
         The Seller is not a party to any option,  warrant,  purchase  right, or
         other  contract or  commitment  that could  require the Seller to sell,
         transfer,  or  otherwise  dispose of any  capital  stock of the Company
         (other  than this  Agreement).  The Seller is not a party to any voting
         trust,  proxy, or other agreement or understanding  with respect to the
         voting of any capital stock of the Company.

                  (vi)   Investment.   The  Seller  (A)  understands   that  the
         Debentures and Buyer Shares have not been, and will not be,  registered
         under the Securities Act, or under any state  securities  laws, and are
         being  offered and sold in reliance  upon federal and state  exemptions
         for transactions  not involving any public  offering,  (B) is acquiring
         the Debentures solely for Seller's own account for investment purposes,
         and  not  with a view to the  distribution  thereof,  (C) has  received
         copies of all of Buyer's  filings  with the SEC during 1998 and has had
         the opportunity to obtain additional information as desired in order to
         evaluate  the merits and the risks  inherent in holding the  Debentures
         and/or Buyer Shares,  (D) is able to bear the economic risk and lack of
         liquidity  inherent in holding the Debentures and/or Buyer Shares,  and
         (E) understands that Buyer has not agreed to, and has no obligation to,
         file a registration statement to permit sale of the Debentures or Buyer
         Shares received under or in connection with this Agreement.

                  (vii)  Restrictions on Shares. The Seller understands that the
         Debentures  and Buyer Shares may not be  transferred  or resold without
         (A)  registration  under the  Securities  Act or any  applicable  state
         securities law, or (B) an exemption from the registration  requirements
         of the Securities  Act and applicable  state  securities  laws.  Seller
         understands that the  certificates  evidencing the Debentures and Buyer
         Shares may bear the following (or similar)  legend and any other legend
         required by applicable state law:

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND MAY NOT BE SOLD,  PLEDGED,  OR TRANSFERRED WITHIN IN THE
         UNITED STATES UNLESS THE SAME ARE  REGISTERED  UNDER THE SECURITIES ACT
         OF 1933, OR THE COMPANY  RECEIVES AN OPINION FROM COUNSEL  SATISFACTORY
         TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

         (b)  Representations  and Warranties of the Buyer. The Buyer represents
and  warrants to the Sellers  (and the  Church,  solely with  respect to clauses
(i)-(iii) of this '3(b)) that the statements contained in this '3(b) are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this '3(b)), except as set
forth in Annex II attached hereto.

                  (i) Organization, Qualification and Corporate Power. The Buyer
         is a corporation duly organized, validly existing, and in good standing
         under the laws of the jurisdiction of its  incorporation.  The Buyer is
         duly  qualified to conduct  business and is in good standing  under the
         laws of each jurisdiction where such qualification is required,  except
         where the lack of such qualification  would not have a material adverse
         effect  on the  business,  financial  condition,  operations  or future
         prospects  of the  Buyer.  The  Buyer  has  full  corporate  power  and
         authority and all  licenses,  permits and  authorizations  necessary to
         carry on the  business in which it is engaged and in which it presently
         proposes to engage and to own and use the properties  owned and used by
         it. The Buyer has delivered to the Sellers  correct and complete copies
         of the charter and bylaws of the Buyer (as amended to date). The minute
         books  (containing the records of meetings of the  stockholders and the
         board of directors),  the stock certificate books, and the stock record
         books of the  Buyer  are  correct  and  complete.  The  Buyer is not in
         default  under or in  violation  of any  provision  of its  charter  or
         bylaws.

                  (ii)  Authorization  of Transaction.  The Buyer has full power
         and authority (including full corporate power and authority) to execute
         and deliver this  Agreement and to perform its  obligations  hereunder.
         The execution and delivery of this  Agreement and the  consummation  of
         the  transactions  contemplated  hereby  and  thereby  have  been  duly
         authorized by all necessary  corporate action on the part of the Buyer.
         This Agreement  constitutes the valid and legally binding obligation of
         the Buyer, enforceable in accordance with its terms and conditions. The
         Buyer need not give any notice to, make any filing with,  or obtain any
         authorization,  consent,  or approval of any government or governmental
         agency  or any  third  party in order to  consummate  the  transactions
         contemplated by this Agreement.

                  (iii) Noncontravention. Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated  hereby,  will  (A)  violate  any  constitution,  statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Buyer is subject or any provision of its charter or bylaws
         or (B)  conflict  with,  result in a breach  of,  constitute  a default
         under,  result in the acceleration of, create in any party the right to
         accelerate,  terminate,  modify, or cancel, or require any notice under
         any  agreement,   contract,   lease,  license,   instrument,  or  other
         arrangement to which the Buyer is a party or by which it is bound or to
         which any of its assets is subject.

                  (iv) Brokers'  Fees.  The Buyer has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         any Seller could become liable or obligated.

                  (v) Validity of Buyer Shares.  The Buyer  Shares,  when issued
         and  delivered  by the  Company  in  accordance  with the terms of this
         Agreement  and the terms of the  Debentures,  shall be duly and validly
         issued, fully paid, and non-assessable and will be free of any liens or
         encumbrances.

                  (vi) Financial Statements.  Buyer has provided to Sellers: (1)
         the  Company's  Form 10-K for the fiscal year ended  December  31, 1997
         (the "Most Recent Audited Balance  Sheet");  and (2) the Company's Form
         10-Q for the fiscal  quarters ended March 31, 1998,  June 30, 1998, and
         September  30,  1998.  The  foregoing  financial  statements  are true,
         correct, and complete in all material respects,  and have been prepared
         in accordance with generally accepted  accounting  principles  ("GAAP")
         applied on a consistent  basis  throughout  the periods  involved,  and
         fairly  present the financial  condition of the Company as of the dates
         set forth in such financial statements and the results of operations of
         the Buyer for the period  covered  thereby.  The  Buyer's  most  recent
         balance  sheet,  included in the  foregoing  financial  statements  are
         hereinafter referred to as "Buyer Balance Sheet."

                  (vii)  Investment.  The  Buyer is not  acquiring  the  Company
         Shares with a view to or for sale in connection  with any  distribution
         thereof within the meaning of the Securities Act.

                  (viii) SEC  Filings.  Buyer has filed all forms,  reports  and
         documents,  together with all  exhibits,  required to be filed with the
         U.S.  Securities  and Exchange  Commission  ("SEC") since  December 31,
         1993. All such required forms,  reports and documents  (including those
         that Buyer may file  subsequent  to the date  hereof)  are  referred to
         herein as the "SEC Reports." The SEC Reports (i) as of their respective
         dates  were  prepared  in  accordance  with  the  requirements  of  the
         Securities  Act or the  Securities and Exchange Act of 1934, as amended
         (the "Exchange  Act") as the case may be, and the rules and regulations
         of the SEC thereunder  applicable to such SEC Reports, and (ii) did not
         at the time they were filed (or if amended  or  superseded  by a filing
         prior to the date of this  Agreement,  then on the date of such filing)
         or, in the case of the SEC Reports filed under the Securities Act, when
         such  filing  became  effective,  contain  any  untrue  statement  of a
         material  fact or omit a  statement  of  material  fact  required to be
         stated therein or necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading.

                  (ix)  Capitalization.  The entire authorized  capital stock of
         the Buyer  consists  of  10,000,000  shares of common  stock,  of which
         3,419,126  shares are issued and  outstanding as of the date hereof and
         2,000,000  shares of preferred stock, no shares of which are issued and
         outstanding  as of the date hereof.  All of the issues and  outstanding
         shares of common stock of Buyer have been duly authorized,  are validly
         issued, fully paid, and nonassessable.

                  (x)  Undisclosed  Liabilities.  To the Knowledge of the Buyer,
         the  Buyer has no  material  Liability  (and  there is no Basis for any
         present or future action,  suit,  proceeding,  hearing,  investigation,
         charge,  complaint,  claim,  or demand  against  it giving  rise to any
         Liability),  except  for (i)  Liabilities  set forth on the face of the
         Buyers  Balance  Sheet  (rather  than in any  notes  thereto)  and (ii)
         Liabilities  which have arisen after September 30, 1998 in the Ordinary
         Course of Business (none of which results from,  arises out of, relates
         to, is in the  nature  of, or was  caused  by any  breach of  contract,
         breach of warranty, tort, infringement, or violation of law).

                  (xi) Legal Compliance.  To the Knowledge of the Buyer, each of
         the Buyer and its respective  predecessors  and Affiliates has complied
         with all applicable laws (including rules,  regulations,  codes, plans,
         injunctions,   judgments,   orders,   decrees,   rulings,  and  charges
         thereunder) of federal,  state, local, and foreign governments (and all
         agencies  thereof),   and  no  action,   suit,   proceeding,   hearing,
         investigation,  charge,  complaint,  claim,  demand, or notice has been
         filed or  commenced  against  any of them  alleging  any  failure so to
         comply,  except  where the failure to comply  would not have a material
         adverse effect on the business,  financial  condition,  operations,  or
         future prospects of the Buyer.

                  (xii) Disclosure. The representations and warranties contained
         in this '3(b) do not contain any untrue statement of a material fact or
         omit to  state  any  material  fact  necessary  in  order  to make  the
         statements and information contained in this '3(b) not misleading.

         (c) Representations and Warranties of the Church. The Church represents
and  warrants  to the Buyer  that the  statements  contained  in this  '3(c) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this '3(c)) with
respect to itself.

                  (i)  Authorization  of Transaction.  The Church has full power
         and authority to execute and deliver this  Agreement and to perform its
         obligations hereunder. This Agreement constitutes the valid and legally
         binding  obligation of the Church  enforceable  in accordance  with its
         terms and conditions.  The Church need not give any notice to, make any
         filing with, or obtain any authorization,  consent,  or approval of any
         government  or  governmental  agency  or any  third  party  in order to
         consummate the transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Church is subject.

                  (iii)  Company  Shares.  The  Church  holds of record and owns
         beneficially the number of Company Shares set forth next to its name in
         '4(b) of Annex  III,  free and clear of any  restrictions  on  transfer
         (other  than  any  restrictions  under  the  Securities  Act and  state
         securities  laws),  Taxes,  Security  Interests,   options,   warrants,
         purchase rights, contracts, commitments, equities, claims, and demands.
         The Church is not a party to any option,  warrant,  purchase  right, or
         other  contract or  commitment  that could  require the Church to sell,
         transfer,  or  otherwise  dispose of any  capital  stock of the Company
         (other  than this  Agreement).  The Church is not a party to any voting
         trust,  proxy, or other agreement or understanding  with respect to the
         voting of any capital stock of the Company.

4. Representations and Warranties  Concerning the Company. The Sellers represent
and warrant to the Buyer that the  statements  contained  in this '4 are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted  for the date of this Agreement  throughout  this '4), except as set
forth in Annex III  delivered by the Sellers to the Buyer on the date hereof and
initialed  by the  Parties.  Nothing in any Annex  shall be deemed  adequate  to
disclose an exception to a  representation  or warranty made herein,  unless the
Annex  discloses  the  exception  in  reasonable  detail.  Without  limiting the
generality  of the  foregoing,  the mere  listing (or  inclusion of a copy) of a
document or other item shall not be deemed  adequate to disclose an exception to
a representation or warranty made herein (unless the  representation or warranty
has to do with the  existence of the document or other item  itself).  Annex III
will be  arranged in  paragraphs  corresponding  to the  lettered  and  numbered
paragraphs contained in this '4.

         (a) Organization,  Qualification, and Corporate Power. The Company is a
corporation  duly organized,  validly  existing,  and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct  business and is in good  standing  under the laws of each  jurisdiction
where  such   qualification   is  required,   except  where  the  lack  of  such
qualification  would  not  have a  material  adverse  effect  on  the  business,
financial condition,  operations or future prospects of the Company. The Company
has  full  corporate  power  and  authority  and  all  licenses,   permits,  and
authorizations  necessary to carry on the  businesses in which it is engaged and
in which it presently proposes to engage and to own and use the properties owned
and used by it.  '4(a) of Annex III  lists the  directors  and  officers  of the
Company.  The Sellers have delivered to the Buyer correct and complete copies of
the charter and bylaws of the  Company  (as amended to date).  The minute  books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the board of directors),  the stock certificate books, and
the stock record books of the Company are correct and  complete.  The Company is
not in default under or in violation of any provision of its charter or bylaws.

         (b) Capitalization.  The entire authorized capital stock of the Company
consists of 1,000,000  Company Shares,  of which 1,000 Company Shares are issued
and outstanding. All of the issued and outstanding Company Shares have been duly
authorized,  are validly issued, fully paid, and nonassessable,  and are held of
record by the  respective  Sellers as set forth in '4(b) of Annex III. There are
no outstanding or authorized options,  warrants,  purchase rights,  subscription
rights,  conversion  rights,  exchange rights, or other contracts or commitments
that could  require the Company to issue,  sell,  or  otherwise  cause to become
outstanding  any of its capital  stock.  There are no  outstanding or authorized
stock appreciation,  phantom stock, profit participation, or similar rights with
respect to the Company. There are no voting trusts, proxies, or other agreements
or  understandings  with  respect  to the  voting  of the  capital  stock of the
Company.

         (c)  Noncontravention.  Neither the  execution and the delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which the Company is subject or any provision
of the  charter or bylaws of the  Company  or (ii)  conflict  with,  result in a
breach of, constitute a default under,  result in the acceleration of, create in
any party the right to accelerate,  terminate, modify, or cancel, or require any
notice under any  agreement,  contract,  lease,  license,  instrument,  or other
arrangement  to which the Company is a party or by which it is bound or to which
any of its  assets is  subject  (or  result in the  imposition  of any  Security
Interest upon any of its assets), except where the violation,  conflict, breach,
default, acceleration, termination, modification,  cancellation, failure to give
notice,  or Securities  Interest would not have a material adverse effect on the
business, financial condition,  operations of future prospects of the Company or
the  Parties'  ability  to  consummate  the  transactions  contemplated  by this
Agreement.  The  Company  does not need to give any notice  to,  make any filing
with, or obtain any  authorization,  consent,  or approval of any  government or
governmental  agency in order for the  Parties to  consummate  the  transactions
contemplated  by this  Agreement  except  where the failure to take such actions
would not have a material  adverse effect on the business,  financial  condition
except where the lack of such  qualification  would not have a material  adverse
effect on the business,  financial condition,  operations of future prospects of
the Company or the Parties' ability to consummate the transactions  contemplated
by this Agreement.

         (d) Brokers'  Fees.  The Company has no Liability or  obligation to pay
any fees or  commissions  to any broker,  finder,  or agent with  respect to the
transactions  contemplated  by this Agreement for which the Company or the Buyer
could become liable or obligated.

         (e) Title to Assets. The Company has good and marketable title to, or a
valid  leasehold  interest in, the  properties and assets used by it, located on
its premises,  or shown on the Most Recent  Balance Sheet or acquired  after the
date thereof,  free and clear of all Security  Interests,  except for properties
and assets  disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet.

         (f)  Financial  Statements.  Attached  hereto  as  Exhibit  D  are  the
following financial statements  (collectively the "Financial  Statements"):  (i)
balance sheets and statements of income,  changes in stockholders'  equity,  and
cash flow as of and for the fiscal years ended  December 31, 1995,  December 31,
1996, and December 31, 1997 (the "Most Recent Fiscal Year End") for the Company;
and (ii) unaudited  consolidated and consolidating balance sheets and statements
of income,  changes in  stockholders'  equity,  and cash flow (the "Most  Recent
Financial  Statements")  as of and for the 8 months  ended  August 31, 1998 (the
"Most  Recent  Fiscal  Month End") for the  Company.  The  Financial  Statements
present  fairly the financial  condition of the Company as of such dates and the
results of operations of the Company for such periods, are correct and complete,
and are  consistent  with the books and records of the Company  (which books and
records are  correct  and  complete);  provided,  however,  that the Most Recent
Financial  Statements are subject to normal year-end adjustments (which will not
be material  individually  or in the  aggregate)  and lack  footnotes  and other
presentation items.

         (g) Events  Subsequent to Most Recent  Fiscal Year End.  Since the Most
Recent Fiscal Year End,  there has not been any material  adverse  change in the
business,  financial  condition,  operations,  results of operations,  or future
prospects of the Company.
Without limiting the generality of the foregoing, since that date:

                  (i) the Company has not sold, leased, transferred, or assigned
         any of its material  assets,  tangible or intangible,  other than for a
         fair consideration in the Ordinary Course of Business;

                  (ii) the Company has not entered into any material  agreement,
         contract, lease, or license outside the Ordinary Course of Business;

                  (iii)  no  party  (including  the  Company)  has  accelerated,
         terminated,  modified,  or canceled any material  agreement,  contract,
         lease,  or  license  to which the  Company is a party or by which it is
         bound;

                  (iv) the Company has not made any material capital expenditure
         outside the Ordinary Course of Business;

                  (v) the Company has not made any  capital  investment  in, any
         loan to, or any  acquisition  of the securities or assets of, any other
         Person;

                  (vi)  the  Company  has not  created,  incurred,  assumed,  or
         guaranteed  more that $10,000 in the  aggregate  any  indebtedness  for
         borrowed money and capitalized lease obligation;

                  (vii) the Company has not delayed or postponed  the payment of
         accounts payable and other  Liabilities  outside the Ordinary Course of
         Business;

                  (viii) the Company has not canceled,  compromised,  waived, or
         released  any right or claim (or series of related  rights and  claims)
         either  involving  more than $10,000 or outside the Ordinary  Course of
         Business;

                  (ix) the  Company  has not  declared,  set aside,  or paid any
         dividend or made any  distribution  with  respect to its capital  stock
         (whether  in cash or in  kind) or  redeemed,  purchased,  or  otherwise
         acquired any of its capital stock;

                  (x) the Company has not experienced  any damage,  destruction,
         or loss (whether or not covered by insurance) to its property;

                  (xi) the Company has not made any loan to, or entered into any
         other transaction with, any of its directors,  officers,  and employees
         outside the Ordinary Course of Business;

                  (xii)  the  Company  has  not  granted  any  increase  in  the
         compensation of any of its directors,  officers,  and employees outside
         the Ordinary Course of Business;

                  (xiii) the  Company has not  adopted,  amended,  modified,  or
         terminated any bonus,  profit-sharing,  incentive,  severance, or other
         plan, contract,  or commitment for the benefit of any of its directors,
         officers,  and  employees (or taken any such action with respect to any
         other Employee Benefit Plan);

                  (xiv)  the  Company  has not  made  or  pledged  to  make  any
         charitable or other capital contribution outside the Ordinary Course of
         Business; and

                  (xv)   the Company has not committed to any of the foregoing.

         (h) Undisclosed  Liabilities.  The Company has no Liability (and to the
Knowledge  of the Sellers,  there is no Basis for any present or future  action,
suit, proceeding,  hearing,  investigation,  charge, complaint, claim, or demand
against it giving rise to any  Liability),  except for (i) Liabilities set forth
on the face of the Most Recent  Balance Sheet (rather than in any notes thereto)
and (ii) Liabilities which have arisen after the Most Recent Fiscal Month End in
the Ordinary  Course of Business  (none of which  results  from,  arises out of,
relates to, is in the nature of, or was caused by any breach of contract, breach
of warranty, tort, infringement, or violation of law).

         (i) Legal  Compliance.  To the  Knowledge of the  Sellers,  each of the
Company and its  respective  predecessors  and  Affiliates has complied with all
applicable  laws  (including  rules,  regulations,  codes,  plans,  injunctions,
judgments,  orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof),  and no action, suit,
proceeding, hearing, investigation,  charge, complaint, claim, demand, or notice
has been filed or  commenced  against  any of them  alleging  any  failure so to
comply,  except  where the failure to comply  would not have a material  adverse
effect on the business, financial condition,  operations, or future prospects of
the Company.

         (j)      Tax Matters.

                  (i) The Company has filed all Tax Returns that it was required
         to file on or  before  the  Closing  Date.  All such Tax  Returns  were
         correct and  complete in all material  respects.  All Taxes owed by the
         Company  (whether or not shown on any Tax Return)  have been paid.  The
         Company  currently  is not the  beneficiary  of any  extension  of time
         within  which to file any Tax Return.  There is no material  dispute or
         claim  concerning  any Tax Return  either (A)  claimed or raised by any
         authority  in  writing  or (b) as to  which  any  of  the  Sellers  has
         Knowledge.

                  (ii) The Company has withheld  and paid all Taxes  required to
         have been withheld and paid on or before the Closing Date in connection
         with amounts  paid or owing to any  employee,  independent  contractor,
         creditor, stockholder, or other third party.

                  (iii) The Company has not waived any statute of limitations in
         respect of Taxes or agreed to any  extension  of time with respect to a
         Tax assessment or deficiency.

                  (iv) The  Company has not filed a consent  under Code  '341(f)
         concerning  collapsible  corporations.  The  Company  has not  made any
         material payments, is not obligated to make any material payments,  nor
         is it a party to any agreement that under certain  circumstances  could
         obligate it to make any material  payments  that will not be deductible
         under  Code  '280G.  The  Company  has not  been a United  States  real
         property  holding  corporation  within the  meaning of Code  '897(c)(2)
         during the applicable period specified in Code  '897(c)(1)(A)(ii).  The
         Company is not a party to any Tax allocation or sharing agreement.  The
         Company (A) has not been a member of an  affiliated  group  (within the
         meaning of Code  '1504(a))  filing a  consolidated  federal  income Tax
         Return and (B) has no Liability for the Taxes of any Person (other than
         the Company) under Reg.  '1.1502-6 (or any similar  provision of state,
         local, or foreign law), as a transferee or successor,  by contract,  or
         otherwise.

                  (v) The unpaid  Taxes of the  Company  (A) did not,  as of the
         Most Recent  Fiscal  Month End,  exceed the  reserve for Tax  Liability
         (rather  than any reserve for  deferred  Taxes  established  to reflect
         timing  differences  between book and Tax income) set forth on the face
         of the Most Recent Balance Sheet (rather than in any notes thereto) and
         (B) do not exceed  that  reserve as  adjusted  for the  passage of time
         through  the  Closing  Date in  accordance  with  the past  custom  and
         practice of the Company in filing its Tax Returns.

         (k)      Intellectual Property.

                  (i) The  Company  owns or has the  right  to use  pursuant  to
         license, sublicense, agreement, or permission all Intellectual Property
         necessary  for  the  operation  of the  businesses  of the  Company  as
         presently  conducted and as presently  proposed to be  conducted.  Each
         item of Intellectual  Property owned or used by the Company immediately
         prior to the Closing  hereunder  will be owned or available  for use by
         the Company on identical terms and conditions immediately subsequent to
         the Closing  hereunder.  To the  Knowledge of any of the  Sellers,  the
         Company has taken all  necessary  action to maintain  and protect  each
         material item of Intellectual Property that it owns or uses.

                  (ii) To the  Knowledge of any of the Sellers,  the Company has
         not interfered  with,  infringed  upon,  misappropriated,  or otherwise
         violated any material  Intellectual  Property  rights of third parties,
         and no such  person has ever  received  any charge,  complaint,  claim,
         demand,  or  notice  alleging  any  such  interference,   infringement,
         misappropriation,  or violation  (including  any claim that the Company
         must license or refrain from using any Intellectual  Property rights of
         any third  party).  To the  Knowledge of any of the  Sellers,  no third
         party  has  interfered  with,  infringed  upon,   misappropriated,   or
         otherwise  violated any material  Intellectual  Property  rights of the
         Company.

                  (iii)  '4(k)(iii)  of Annex  III  identifies  each  patent  or
         registration  which has been issued to the Company  with respect to any
         of  its   Intellectual   Property,   identifies   each  pending  patent
         application or application for registration  which the Company has made
         with respect to any of its Intellectual  Property,  and identifies each
         material license,  agreement, or other permission which the Company has
         granted  to any third  party with  respect  to any of its  Intellectual
         Property (together with any exceptions).  The Sellers have delivered to
         the  Buyer   correct  and   complete   copies  of  all  such   patents,
         registrations,  applications, licenses, agreements, and permissions (as
         amended to date). '4(k)(iii) of Annex III also identifies each material
         trade name or unregistered  trademark used by the Company in connection
         with any of its  businesses.  With respect to each item of Intellectual
         Property required to be identified in '4(k)(iii) of Annex III:

                           (A)  the  Company  possess  all  right,   title,  and
                  interest  in and to the item,  free and clear of any  Security
                  Interest, license, or other restriction;

                           (B)  the  item  is not  subject  to  any  outstanding
                  injunction, judgment, order, decree, ruling, or charge;

                           (C)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the  Sellers,  is  threatened
                  which challenges the legality, validity, enforceability,  use,
                  or ownership of the item; and

                           (D) The Company has not ever agreed to indemnify  any
                  Person  for  or  against   any   interference,   infringement,
                  misappropriation, or other conflict with respect to the item.

                  (iv) '4(k)(iv) of Annex III  identifies  each material item of
         Intellectual  Property  that any third  party owns and that the Company
         uses pursuant to license,  sublicense,  agreement,  or permission.  The
         Sellers have delivered to the Buyer correct and complete  copies of all
         such licenses, sublicenses,  agreements, and permissions (as amended to
         date).  With respect to each item of Intellectual  Property required to
         be identified in '4(k)(iv) of Annex III:

                           (A) the license, sublicense, agreement, or permission
                  covering the item is legal, valid, binding,  enforceable,  and
                  in full force and effect in all material respects;

                           (B) the license, sublicense, agreement, or permission
                  will continue to be legal, valid, binding, enforceable, and in
                  full  force  and  effect  on  identical  terms  following  the
                  consummation of the transactions contemplated hereby;

                           (C) no party to the license,  sublicense,  agreement,
                  or  permission  is in  breach  or  default,  and no event  has
                  occurred which with notice or lapse of time would constitute a
                  breach or  default  or permit  termination,  modification,  or
                  acceleration thereunder;

                           (D) no party to the license,  sublicense,  agreement,
                  or permission has repudiated any material provision thereof;

                           (E) with respect to each sublicense, to the Knowledge
                  of any of the Sellers,  the representations and warranties set
                  forth  in  subsections  (A)  through  (D)  above  are true and
                  correct with respect to the underlying license;

                           (F) the underlying item of  Intellectual  Property is
                  not subject to any outstanding  injunction,  judgment,  order,
                  decree, ruling, or charge;

                           (G)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the  Sellers,  is  threatened
                  which challenges the legality,  validity, or enforceability of
                  the underlying item of Intellectual Property; and

                           (H) The Company has not  granted  any  sublicense  or
                  similar  right  with  respect  to  the  license,   sublicense,
                  agreement, or permission.

                  (v) To the  Knowledge of any of the Sellers,  the Company will
         not interfere with,  infringe upon,  misappropriate,  or otherwise come
         into conflict with, any  Intellectual  Property rights of third parties
         as a result of the continued  operation of its  businesses as presently
         conducted and as presently proposed to be conducted.

                  (vi)  None  of the  Sellers  has  any  Knowledge  of  any  new
         products,  inventions,  procedures,  or  methods  of  manufacturing  or
         processing  that any  competitors or other third parties have developed
         which  reasonably  could be expected to supersede or make  obsolete any
         product or process of the Company.

         (l)  Tangible  Assets.  The  Company  owns  or  leases  all  buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
businesses  as presently  conducted  and as presently  proposed to be conducted.
Each such tangible asset is free from material defects (patent and latent),  has
been  maintained  in  accordance  with  normal  industry  practice,  is in  good
operating  condition  and  repair  (subject  to normal  wear and  tear),  and is
suitable  for the  purposes  for which it  presently  is used and  presently  is
proposed to be used.

         (m) Inventory.  The inventory of the Company  consists of raw materials
and supplies,  manufactured and purchased parts, goods in process,  and finished
goods,  all of which is  merchantable  and fit for the  purpose for which it was
procured or manufactured,  and none of which is obsolete, damaged, or defective,
subject only to the reserve for inventory writedown set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company.

         (n) Contracts.  '4(n) of Annex III is a true, correct and complete list
of all the material  contracts of the Company  (including  insurance policies to
which the Company has been a party, a named insured,  or the  beneficiary at any
time within the past five years), and all amendments and modifications  thereto,
and there are no oral or other amendment or modifications  thereto.  The Sellers
have  delivered  to the  Buyer a  correct  and  complete  copy  of each  written
agreement  listed  in '4(n) of Annex  III (as  amended  to date)  and a  written
summary  setting forth the terms and conditions of each oral agreement  referred
to in '4(n) of Annex III. With respect to each such agreement: (A) the agreement
is legal,  valid,  binding,  enforceable,  and in full force and effect; (B) the
agreement will continue to be legal, valid,  binding,  enforceable,  and in full
force  and  effect  on  identical  terms  following  the   consummation  of  the
transactions  contemplated  hereby;  and  (C)  to  the  Knowledge  of any of the
Sellers, no party is in breach or default,  and no event has occurred which with
notice  or  lapse of time  would  constitute  a breach  or  default,  or  permit
termination, modification, or acceleration, under the agreement and no party has
repudiated any provision of the agreement.

         (o) Notes and Accounts Receivable. All notes and accounts receivable of
the  Company  are  reflected  properly  on its  books  and  records,  are  valid
receivables  subject to no setoffs or  counterclaims,  are  current  and, to the
Knowledge of each Seller, collectible,  and will be collected in accordance with
their terms at their recorded amounts, subject only to the reserve for bad debts
set forth on the face of the Most Recent Balance Sheet (rather than in any notes
thereto)  as  adjusted  for the  passage of time  through  the  Closing  Date in
accordance with the past custom and practice of the Company.

         (p) Powers of  Attorney.  There are no  outstanding  powers of attorney
executed on behalf of the Company.

         (q) Insurance. The Company has been covered during the past 10 years by
insurance in scope and amount  customary and  reasonable  for the  businesses in
which it has engaged during the aforementioned period.

         (r)  Litigation.  '4(r) of Annex III sets forth each  instance in which
the  Company  (i) is subject to any  outstanding  injunction,  judgment,  order,
decree,  ruling, or charge or (ii) is a party or, to the Knowledge of any of the
Sellers,  is  threatened  to be made a party to any  action,  suit,  proceeding,
hearing,  or  investigation  of,  in, or before any court or  quasi-judicial  or
administrative  agency of any federal,  state, local, or foreign jurisdiction or
before any arbitrator.  None of the actions, suits,  proceedings,  hearings, and
investigations  set forth in '4(r) of Annex III could  reasonably be expected to
result in any material  adverse  change in the  business,  financial  condition,
operations,  results of operations,  or future prospects of the Company. None of
the  Sellers  and the  directors  and  officers of the Company has any reason to
believe that any such action, suit, proceeding, hearing, or investigation may be
brought or threatened against the Company.

         (s) Product  Warranty.  Each product  manufactured,  sold,  leased,  or
delivered by the Company has been in conformity with all applicable  contractual
commitments  and all  express  and  implied  warranties,  and the Company has no
material Liability (and, to the Knowledge of the Sellers,  there is no Basis for
any present or future action, suit, proceeding, hearing, investigation,  charge,
complaint,  claim,  or demand  against  it  giving  rise to any  Liability)  for
replacement or repair thereof or other damages in connection therewith,  subject
only to the  reserve for  product  warranty  claims set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company. No product manufactured,  sold, leased, or delivered by
the Company is subject to any guaranty,  warranty, or other indemnity beyond the
applicable  standard terms and  conditions of sale or lease.  '4(s) of Annex III
includes  copies of the standard  terms and  conditions of sale or lease for the
Company (containing applicable guaranty, warranty, and indemnity provisions).

         (t) Product  Liability.  The Company has no material Liability (and, to
the  Knowledge  of the  Sellers,  there is no Basis  for any  present  or future
action, suit, proceeding, hearing,  investigation,  charge, complaint, claim, or
demand  against it giving  rise to any  Liability)  arising out of any injury to
individuals or property as a result of the ownership,  possession, or use of any
product manufactured, sold, leased, or delivered by the Company.

         (u)  Employees.  To the Knowledge of any of the Sellers,  no executive,
key employee,  or group of employees has any plans to terminate  employment with
the Company. The Company is not a party to or bound by any collective bargaining
agreement,  nor has it  experienced  any strikes,  grievances,  claims of unfair
labor practices,  or other collective  bargaining disputes.  To the Knowledge of
Sellers,  the Company has not committed any unfair labor  practice.  None of the
Sellers has any Knowledge of any  organizational  effort presently being made or
threatened  by or on behalf of any labor union with  respect to employees of any
of the Company.

         (v)      Employee Benefits.

                  (i) '4(v) of Annex III lists each  Employee  Benefit Plan that
         the Company  maintains or to which the Company  contributes  or has any
         obligation to contribute.

                           (A) Each such Employee Benefit Plan (and each related
                  trust,  insurance  contract,  or fund) complies in form and in
                  operation with the applicable requirements of ERISA, the Code,
                  and other applicable laws.

                           (B) All required reports and  descriptions  have been
                  timely  filed and  distributed  appropriately  with respect to
                  each such Employee  Benefit Plan.  The  requirements  of COBRA
                  have been met with respect to each such Employee  Benefit Plan
                  which is subject to COBRA.

                           (C) All premiums  and  contributions  (including  all
                  employer   contributions   and   employee   salary   reduction
                  contributions)  which  are due  have  been  paid to each  such
                  Employee Benefit Plan, and all premiums and  contributions for
                  any period  ending on or before the Closing Date which are not
                  yet due have been paid to each such  Employee  Benefit Plan or
                  accrued in accordance with the past custom and practice of the
                  Company.

                           (D)  Each  such  Employee  Benefit  Plan  which is an
                  Employee  Pension  Benefit  Plan meets the  requirements  of a
                  "qualified plan" under Code '401(a), has received,  within the
                  last four  years,  a favorable  determination  letter from the
                  Internal  Revenue  Service that it is a "qualified  plan," and
                  none of the  Sellers  is aware of any  facts or  circumstances
                  that  could  result in the  revocation  of such  determination
                  letter.

                           (E) The  market  value  of  assets  under  each  such
                  Employee  Benefit  Plan which is an Employee  Pension  Benefit
                  Plan (other than any Multiemployer Plan) equals or exceeds the
                  present  value  of  all  vested  and   nonvested   Liabilities
                  thereunder   determined  in  accordance   with  PBGC  methods,
                  factors,  and  assumptions  applicable to an Employee  Pension
                  Benefit Plan terminating on the date for determination.

                           (F) The Sellers have  delivered to the Buyer  correct
                  and  complete  copies of the plan  documents  and summary plan
                  descriptions,  the most recent  determination  letter received
                  from the Internal Revenue  Service,  the most recent Form 5500
                  Annual  Report,  and all related trust  agreements,  insurance
                  contracts,  and other funding  agreements which implement each
                  such Employee Benefit Plan.

                  (ii)  With  respect  to each  Employee  Benefit  Plan that the
         Company and any ERISA Affiliate  maintains or ever has maintained or to
         which any of them contributes,  ever has contributed,  or ever has been
         required to contribute:

                           (A)  No  such  Employee  Benefit  Plan  which  is  an
                  Employee  Pension  Benefit Plan (other than any  Multiemployer
                  Plan) has been completely or partially  terminated or been the
                  subject of a  Reportable  Event as to which  notices  would be
                  required to be filed with the PBGC.  No proceeding by the PBGC
                  to terminate  any such  Employee  Pension  Benefit Plan (other
                  than any  Multiemployer  Plan) has been  instituted or, to the
                  Knowledge of any of the Sellers and the directors and officers
                  of the Company, threatened.

                           (B) There have been no Prohibited  Transactions  with
                  respect to any such  Employee  Benefit  Plan. No Fiduciary has
                  any  Liability  for  breach  of  fiduciary  duty or any  other
                  failure to act or comply in connection with the administration
                  or investment of the assets of any such Employee Benefit Plan.
                  No action,  suit,  proceeding,  hearing, or investigation with
                  respect to the  administration or the investment of the assets
                  of any such Employee  Benefit Plan (other than routine  claims
                  for  benefits)  is pending or, to the  Knowledge of any of the
                  Sellers,  threatened. None of the Sellers has any Knowledge of
                  any Basis for any such action, suit,  proceeding,  hearing, or
                  investigation.

                           (C) The  Company  has not  incurred,  and none of the
                  Sellers has any reason to expect  that the Company  will incur
                  any  Liability to the PBGC (other than PBGC premium  payments)
                  or otherwise under Title IV of ERISA (including any withdrawal
                  liability  as defined  in ERISA  '4201) or under the Code with
                  respect to any such Employee Benefit Plan which is an Employee
                  Pension Benefit Plan.

                  (iii)  The  Company   does  not   contribute   to,  never  has
         contributed  to,  and  never has been  required  to  contribute  to any
         Multiemployer Plan or has any material Liability (including  withdrawal
         liability as defined in ERISA '4201) under any Multiemployer Plan.

                  (iv) The Company does not maintain and never has maintained or
         contributed, and never has been required to contribute, to any Employee
         Welfare Benefit Plan providing  medical,  health,  or life insurance or
         other  welfare-type  benefits for current  retirees,  future  retirees,
         retired or terminated  employees,  their spouses,  or their  dependents
         (other than in accordance with COBRA).

         (w)  Guaranties.  The Company is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.

         (x)      Environmental, Health, and Safety Matters.

                  (i)  each of the Company and its predecessors has complied and
         is in compliance with all Environmental, Health, and Safety 
         Requirements;

                  (ii) without  limiting the  generality of the  foregoing,  the
         Company has obtained and complied with, and is in compliance  with, all
         permits,  licenses and other  authorizations that are required pursuant
         to Environmental, Health, and Safety Requirements for the occupation of
         its  facilities  and the operation of its business;  a list of all such
         permits,  licenses  and other  authorizations  is set forth on '4(x) of
         Annex III;

                  (iii)  neither the Company nor its  predecessors  has received
         any written or oral notice,  report or other information  regarding any
         actual or  alleged  violation  of  Environmental,  Health,  and  Safety
         Requirements,  or any  liabilities  or potential  liabilities  (whether
         accrued, absolute,  contingent,  unliquidated or otherwise),  including
         any investigatory,  remedial or corrective obligations, relating to any
         of them or its  facilities  arising under  Environmental,  Health,  and
         Safety Requirements;

                  (iv) none of the following  exists at any property or facility
         owned or operated by the Company:  (1) underground  storage tanks,  (2)
         asbestos-containing material in any form or condition, (3) materials or
         equipment  containing  polychlorinated  biphenyls,  or  (4)  landfills,
         surface impoundments, or disposal areas;

                  (v)  none of the  Company  or its  predecessors  has  treated,
         stored,  disposed  of,  arranged  for or  permitted  the  disposal  of,
         transported,  handled,  or released any  substance,  including  without
         limitation any hazardous  substance,  or owned or operated any property
         or facility  (and no such property or facility is  contaminated  by any
         such  substance)  in a manner  that has  given  or would  give  rise to
         liabilities,  including any liability  for response  costs,  corrective
         action costs,  personal  injury,  property  damage,  natural  resources
         damages or attorney fees,  pursuant to any  Environmental,  Health, and
         Safety Requirements; and

                  (vi)  to  the  Knowledge  of  Sellers,  no  facts,  events  or
         conditions  relating to the past or present  facilities,  properties or
         operations of the Company or any of its predecessors  will give rise to
         any  investigatory,  remedial  or  corrective  obligations  pursuant to
         Environmental,  Health,  and Safety  Requirements,  or give rise to any
         other liabilities  including without  limitation any relating to onsite
         or offsite  releases or  threatened  releases of  hazardous  materials,
         substances  or  wastes,  personal  injury,  property  damage or natural
         resources damage.

         (y)  Certain  Business  Relationships  with  the  Company.  None of the
Sellers  and  their  Affiliates  has  been  involved  in any  material  business
arrangement or relationship with the Company within the past 12 months, and none
of the  Sellers  and their  Affiliates  owns any  material  asset,  tangible  or
intangible, which is used in the business of the Company.

         (z) Year 2000 Items. All Information  Technology that is relied upon by
the  Company  in its  internal  operations  or is  included  as  part of the any
products  produced by the Company,  currently and during the past two years,  is
Year 2000 Compliant.  Additionally, to the Knowledge of each Seller, the Company
has  received  no  notice of any  material  vendor or  customer  of the  Company
indicating  that such  vendor or  customer  may be unable to continue to conduct
business in the ordinary course due to difficulties  with its own business being
Year 2000 Compliant.

         (aa) Disclosure.  The representations and warranties  contained in this
'4 do not contain any untrue  statement of a material  fact or omit to state any
material  fact  necessary  in  order  to make  the  statements  and  information
contained in this '4 not misleading.

5.  Pre-Closing  Covenants.  The Parties  agree as follows  with  respect to the
period between the execution of this Agreement and the Closing.

         (a) General.  Each of the Parties will use his reasonable  best efforts
to take all action  and to do all  things  necessary  or  advisable  in order to
consummate and make effective the  transactions  contemplated  by this Agreement
(including satisfaction,  but not waiver, of the closing conditions set forth in
'7 below).

         (b) Notices and  Consents.  The Sellers  will cause the Company to give
any notices to third parties, and will cause the Company to use its best efforts
to obtain any third party  consents,  that the Buyer may  request in  connection
with the matters  referred to in '4(c) above.  Each of the Parties will (and the
Sellers  will cause the Company to) give any notices to, make any filings  with,
and use its best efforts to obtain any authorizations,  consents,  and approvals
of governments and governmental agencies in connection with the matters referred
to in '3(a)(ii), '3(b)(ii), and '4(c) above.

         (c)  Operation  of  Business.  The Sellers will not cause or permit the
Company  to  engage  in any  practice,  take  any  action,  or  enter  into  any
transaction  outside the  Ordinary  Course of  Business.  Without  limiting  the
generality of the foregoing, the Sellers will not cause or permit the Company to
(i)  declare,  set aside,  or pay any  dividend  or make any  distribution  with
respect to its capital stock or redeem,  purchase,  or otherwise  acquire any of
its  capital  stock,  (ii)  materially  increase or modify the  compensation  or
benefits to any of its employees; (iii) issue any equity securities or rights to
acquire  such  securities;  (iv)  dispose of any assets,  except in the Ordinary
Course of  Business;  (v) take any other  action or fail to take any action that
would result in a material decline in the value of the Company's  business as of
the date of this Agreement;  or (vi) otherwise engage in any practice,  take any
action, or enter into any transaction of the sort described in '4(g) above.

         (d)  Preservation  of  Business.  The Sellers will cause the Company to
keep its business and  properties  substantially  intact,  including its present
operations,  physical  facilities,  working  conditions,  and relationships with
lessors, licensors, suppliers, customers, and employees.

         (e) Full Access.  Each of the Sellers will permit, and the Sellers will
cause the Company to permit, representatives of the Buyer to have full access at
all  reasonable  times,  and in a manner so as not to interfere  with the normal
business  operations  of the Company,  to all premises,  properties,  personnel,
books,  records  (including  Tax  records),   contracts,  and  documents  of  or
pertaining to the Company.

         (f) Notice of Developments. The Sellers will give prompt written notice
to the Buyer of any material adverse  development causing a breach of any of the
representations  and warranties in '4 above. Each Party will give prompt written
notice to the others of any material adverse development causing a breach of any
of his or its own  representations  and warranties in '3 above. No disclosure by
any  Party  pursuant  to this  '5(f),  however,  shall  be  deemed  to  amend or
supplement  Annex  I,  Annex  II,  or  Annex  III  or to  prevent  or  cure  any
misrepresentation, breach of warranty, or breach of covenant.

         (g)  Exclusivity.  None of the Sellers  will (and the Sellers  will not
cause or  permit  the  Company  to) (i)  solicit,  initiate,  or  encourage  the
submission of any proposal or offer from any Person  relating to the acquisition
of any capital stock or other voting securities,  or any substantial  portion of
the assets,  of the Company  (including any acquisition  structured as a merger,
consolidation,  or share  exchange) or (ii)  participate  in any  discussions or
negotiations  regarding,  furnish any  information  with  respect to,  assist or
participate  in, or  facilitate in any other manner any effort or attempt by any
Person to do or seek any of the  foregoing.  None of the Sellers will vote their
Company  Shares  in  favor  of any  such  acquisition  structured  as a  merger,
consolidation,  or share exchange. The Sellers will notify the Buyer immediately
if any Person makes any proposal, offer, inquiry, or contact with respect to any
of the foregoing.

6.  Post-Closing  Covenants.  The Parties  agree as follows  with respect to the
period following the Closing.

         (a) General.  In case at any time after the Closing any further  action
is necessary or desirable to carry out the purposes of this  Agreement,  each of
the Parties will take such further action  (including the execution and delivery
of such further  instruments  and  documents) as any other Party  reasonably may
request,  all at the sole cost and expense of the  requesting  Party (unless the
requesting Party is entitled to  indemnification  therefor under '8 below).  The
Sellers  acknowledge and agree that from and after the Closing the Buyer will be
entitled to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.

         (b)  Litigation  Support.  In the  event  and for so long as any  Party
actively is  contesting  or  defending  against any  action,  suit,  proceeding,
hearing,  investigation,  charge, complaint, claim, or demand in connection with
(i)  any  transaction  contemplated  under  this  Agreement  or (ii)  any  fact,
situation,   circumstance,   status,   condition,   activity,   practice,  plan,
occurrence,  event, incident, action, failure to act, or transaction on or prior
to the Closing  Date  involving  the  Company,  each of the other  Parties  will
cooperate with him or it and his or its counsel in the contest or defense,  make
available their personnel,  and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the  contesting  or defending  Party (unless the
contesting or defending Party is entitled to  indemnification  therefor under '8
below).

         (c)  Transition.  None of the  Sellers  will  take any  action  that is
designed or intended to have the effect of  discouraging  any lessor,  licensor,
customer,  supplier,  or other  business  associate  of the  Company on the date
hereof from maintaining the same business  relationships  with the Company after
the Closing as it maintained with the Company prior to the Closing.  Each of the
Sellers  will refer all customer  inquiries  relating to the  businesses  of the
Company  to the Buyer  from and  after  the  Closing  until  the  expiration  or
termination of any employment agreement between such Seller and the Company.

         (d)      Confidentiality.

                  (i) Confidential Information of the Buyer. Each of the Sellers
         acknowledges that in the course of performing this Agreement, Buyer may
         provide  to a  Seller  or  the  Company  confidential  and  proprietary
         information about its business which is not generally  available to the
         public ("Buyer Confidential  Information"),  the disclosure of which to
         third  parties  without  the express  authorization  of the Buyer would
         result in economic losses to the Buyer. Accordingly,  regardless of the
         means of  communication  of the Buyer  Confidential  Information,  each
         Seller receiving Buyer Confidential Information (the "Receiving Party")
         agrees to (and will cause the Company  to) hold the Buyer  Confidential
         Information  in  strict  confidence  and,  without  the  prior  written
         permission from the Buyer, or as set forth in '6(d)(iii)  below, not to
         disclose the Buyer  Confidential  Information to any third parties,  or
         use it for  any  commercial  purposes  except  in  performance  of this
         Agreement.

                  (ii)  Confidential  Information  of the  Company.  Each of the
         Sellers will treat and hold as such all of the confidential information
         of the Company ("Company Confidential  Information"),  and refrain from
         using Company  Confidential  Information except in connection with this
         Agreement  or in the  course  of their  continued  employment  with the
         Company.

                  (iii) General.  Each Seller shall promptly notify the Buyer of
         any breach of the  foregoing  obligations  of  confidentiality.  In the
         event that any of the Sellers or the Company is  requested  or required
         (by oral question or request for  information or documents in any legal
         proceeding,  interrogatory,  subpoena,  civil investigative  demand, or
         similar process) to disclose any Confidential Information,  that Seller
         or the  Company  will  notify  the Buyer  promptly  of the  request  or
         requirement so that the Buyer may seek an appropriate  protective order
         or waive  compliance  with the  provisions  of this  '6(d).  If, in the
         absence of a protective order or the receipt of a waiver hereunder, any
         of the Sellers or the  Company is, on the advice of counsel,  compelled
         to disclose any Confidential  Information to any tribunal or else stand
         liable for  contempt,  that  Seller or the  Company  may  disclose  the
         Confidential Information to the tribunal;  provided,  however, that the
         disclosing  Seller shall use (and cause the Company to use)  reasonable
         efforts to obtain, at the request and expense of the Buyer, an order or
         other  assurance that  confidential  treatment will be accorded to such
         portion of the Confidential Information required to be disclosed as the
         Buyer shall designate.  The foregoing provisions shall not apply to any
         Confidential  Information  which is  generally  available to the public
         immediately prior to the time of disclosure.

         (e) Covenant Not to Compete. For a period of three years from and after
the Closing Date,  none of the Sellers will engage directly or indirectly in any
business that the Company conducts as of the Closing Date in any geographic area
in which the Company now or hereafter  conducts that business if such conduct on
the part of such Seller  would have a negative  economic  impact on the Company;
provided, however, that any Seller may own less than 3% of any outstanding class
of securities registered pursuant to the Exchange Act of an issuer that competes
with the Buyer or the  Company.  If the final  judgment of a court of  competent
jurisdiction  declares  that any term or  provision  of this '6(e) is invalid or
unenforceable,  the Parties  agree that the court  making the  determination  of
invalidity  or  unenforceability  shall  have the  power to  reduce  the  scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace  any invalid or  unenforceable  term or  provision  with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision,  and this Agreement
shall be  enforceable  as so modified  after the  expiration  of the time within
which the judgment may be appealed.

7.       Conditions to Obligation to Close.

         (a) Conditions to Obligation of the Buyer.  The obligation of the Buyer
to consummate  the  transactions  to be performed by it in  connection  with the
Closing is subject to satisfaction of the following conditions:

                  (i) the  representations and warranties set forth in '3(a) and
         '4 above shall be true and correct in all  material  respects at and as
         of the Closing Date;

                  (ii) the Sellers shall have performed and complied with all of
         their covenants hereunder in all material respects through the Closing;

                  (iii) the Company  shall have  procured all of the third party
         consents specified in '5(b) above;

                  (iv) no action,  suit, or  proceeding  shall be pending or, to
         the  Knowledge  of  the  Sellers,   threatened   before  any  court  or
         quasi-judicial or administrative  agency of any federal,  state, local,
         or foreign jurisdiction or before any arbitrator wherein an unfavorable
         injunction,  judgment,  order,  decree,  ruling,  or  charge  would (A)
         prevent  consummation of any of the  transactions  contemplated by this
         Agreement,  (B)  cause  any of the  transactions  contemplated  by this
         Agreement to be rescinded following consummation,  (C) affect adversely
         the right of the Buyer to own the  Company  Shares and to  control  the
         Company,  or (D) affect  adversely  the right of the Company to own its
         assets and to operate its businesses (and no such injunction, judgment,
         order, decree, ruling, or charge shall be in effect);

                  (v)  the  Sellers   shall  have   delivered  to  the  Buyer  a
         certificate to the effect that each of the conditions  specified  above
         in '7(a)(i)-(iv) is satisfied in all respects;

                  (vi) Buyer and each of the Sellers shall enter into employment
         agreements  in form and  substance  as set forth in  Exhibit E attached
         hereto and the same shall be in full force and effect;

                  (vii) the Company and Pine Mountain  Properties,  L.L.C. shall
         have entered into an Amendment to Lease in the form attached  hereto as
         Exhibit G;

                  (viii) Buyer and J. Tracy Livingston shall have entered into a
         Voice Technology  Project  Agreement in form and substance as set forth
         in  Exhibit H  attached  hereto and the same shall be in full force and
         effect;

                  (ix) the Buyer shall have received the resignations, effective
         as of the Closing,  of each  director and officer of the Company  other
         than those whom the Buyer shall have specified in writing at least five
         business days prior to the Closing;

                  (x) no material  adverse change in the financial  condition or
         results of operation of the  Company,  or in the  condition or value of
         its material assets,  taken as a whole, shall have occurred between the
         date of this Agreement and the Closing Date;

                  (xi) Buyer shall be satisfied  with its  continuing  business,
         legal, environmental, and accounting due diligence investigation of the
         Company in all respects; and

                  (xii) all  actions to be taken by the  Sellers  in  connection
         with  consummation  of the  transactions  contemplated  hereby  and all
         certificates,  instruments,  and other documents required to effect the
         transactions  contemplated  hereby will be reasonably  satisfactory  in
         form and substance to the Buyer.

The Buyer may waive any  condition  specified  in this  '7(a) if it  executes  a
writing so stating at or prior to the Closing.

         (b)  Conditions  to Obligation  of the Sellers.  The  obligation of the
Sellers and the Church to consummate the transactions to be performed by them in
connection  with  the  Closing  is  subject  to  satisfaction  of the  following
conditions; provided that clause (v) below shall not apply to the Church:

                  (i)  the representations and warranties set forth in '3(b) 
         above shall be true and correct in all material respects at and as of 
         the Closing Date;

                  (ii) the Buyer shall have  performed  and complied with all of
         its covenants hereunder in all material respects through the Closing;

                  (iii) no action,  suit, or proceeding  shall be pending or, to
         the Knowledge of Buyer,  threatened  before any court or quasi-judicial
         or  administrative  agency of any  federal,  state,  local,  or foreign
         jurisdiction   or  before  any   arbitrator   wherein  an   unfavorable
         injunction,  judgment,  order,  decree,  ruling,  or  charge  would (A)
         prevent  consummation of any of the  transactions  contemplated by this
         Agreement  or (B) cause any of the  transactions  contemplated  by this
         Agreement  to  be  rescinded   following   consummation  (and  no  such
         injunction,  judgment,  order,  decree,  ruling,  or charge shall be in
         effect);

                  (iv)  the  Buyer  shall  have   delivered  to  the  Sellers  a
         certificate to the effect that each of the conditions  specified  above
         in '7(b)(i)-(iii) is satisfied in all respects;

                  (v) Buyer and each of the Sellers shall enter into  employment
         agreements  in form and  substance  as set forth in  Exhibit E attached
         hereto and the same shall be in full force and effect;

                  (vi) all actions to be taken by the Buyer in  connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Sellers.

The Sellers may waive any  condition  specified  in this '7(b) if they execute a
writing so stating at or prior to the Closing.

8.       Remedies for Breaches of This Agreement.

         (a)   Survival  of   Representations   and   Warranties.   All  of  the
representations  and warranties of the Parties contained in this Agreement shall
survive the Closing  hereunder  (even if the damaged Party knew or had reason to
know of any  misrepresentation  or breach of warranty or covenant at the time of
Closing) and continue in full force and effect  forever  thereafter for a period
of 4 years  (subject  to any  applicable  statutes  of  limitations);  provided,
however,  the  representations  and warranties  contained in "4(j) and (x) shall
survive Closing subject only to applicable statutes of limitations.

         (b)      Indemnification Provisions for Benefit of the Buyer.

                  (i) In the event any of the Sellers  breaches (or in the event
         any third  party  alleges  facts that,  if true,  would mean any of the
         Sellers has breached)  any of their  representations,  warranties,  and
         covenants contained herein (other than the covenants in '2(a) above and
         the  representations  and warranties in '3(a) above),  then each of the
         Sellers  agrees to indemnify the Buyer from and against the entirety of
         any  Adverse  Consequences  the Buyer may suffer  through and after the
         date of the claim for  indemnification  resulting from, arising out of,
         relating  to, in the nature of, or caused by the breach (or the alleged
         breach); provided, that any such claim for indemnification must be made
         by the Buyer against the Sellers before the expiration of the four year
         period  beginning  on the Closing  Date;  provided,  further,  that the
         aggregate  amount of all  indemnification  obligations  of the  Sellers
         hereunder shall not exceed  $3,575,000.00 minus the total amount of all
         indemnification obligations borne by the Sellers pursuant to '8(b)(ii);
         and provided,  further,  that in the event the aggregate  amount of all
         indemnification  obligations  of the  Sellers  hereunder  is less  than
         $25,000.00,  the Buyer  shall  not make any  claim for  indemnification
         against the Sellers hereunder.

                  (ii) In the event any of the Sellers breaches (or in the event
         any third  party  alleges  facts that,  if true,  would mean any of the
         Sellers has breached) any of his covenants in '2(a) above or any of his
         representations  and warranties in '3(a) above,  then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification  resulting from, arising out of, relating to,
         in the  nature of, or caused by the  breach  (or the  alleged  breach);
         provided,  that any such claim for indemnification  must be made by the
         Buyer against the Sellers before the expiration of the four year period
         beginning on the Closing Date;  provided,  further,  that the aggregate
         amount of all  indemnification  obligations  of the  Sellers  hereunder
         shall  not  exceed   $3,575,000.00   minus  the  total  amount  of  all
         indemnification  obligations borne by the Sellers pursuant to '8(b)(i);
         and provided,  further,  that in the event the aggregate  amount of all
         indemnification  obligations  of the  Sellers  hereunder  is less  than
         $25,000.00,  the Buyer  shall  not make any  claim for  indemnification
         against the Sellers hereunder.

                  (iii) Each of the Sellers  agrees to indemnify  the Buyer from
         and against the  entirety  of any  Adverse  Consequences  the Buyer may
         suffer  resulting from,  arising out of, relating to, in the nature of,
         or  caused by any  Liability  of the  Company  (x) for any Taxes of the
         Company  with respect to any Tax year or portion  thereof  ending on or
         before  the  Closing  Date (or for any Tax year  beginning  before  and
         ending after the Closing Date to the extent allocable  (determined in a
         manner  consistent with '9(c)) to the portion of such period  beginning
         before and ending on the  Closing  Date),  to the extent such Taxes are
         not reflected in the reserve for Tax Liability (rather than any reserve
         for deferred Taxes  established to reflect timing  differences  between
         book and Tax income)  shown on the face of the Closing  Balance  Sheet,
         and (y) for the unpaid  Taxes of any Person  (other  than the  Company)
         under Reg.  '1.1502-6  (or any similar  provision of state,  local,  or
         foreign law), as a transferee or successor, by contract, or otherwise.

         (c) Indemnification Provisions for Benefit of the Sellers. In the event
the Buyer breaches (or in the event any third party alleges facts that, if true,
would mean the Buyer has breached) any of its representations,  warranties,  and
covenants  contained  herein,  then the Buyer  agrees to  indemnify  each of the
Sellers from and against the entirety of any Adverse Consequences the Seller may
suffer  through  and after the date of the claim for  indemnification  resulting
from, arising out of, relating to, in the nature of, or caused by the breach (or
the alleged breach);  provided,  that any such claim for indemnification must be
made by the Seller  against  the Buyer  before the  expiration  of the four year
period  beginning on the Closing  Date;  provided,  further,  that the aggregate
amount of any indemnification obligation of the Buyer hereunder shall not exceed
$3,575,000.00;  provided, further, that in the event the aggregate amount of all
indemnification  obligations of the Buyer hereunder is less than $25,000.00, the
Sellers  shall  not  make  any  claim  for  indemnification  against  the  Buyer
hereunder.

         (d)      Matters Involving Third Parties.

                  (i)  If  any  third   party   shall   notify  any  Party  (the
         "Indemnified Party") with respect to any matter (a "Third Party Claim")
         which may give rise to a claim for  indemnification  against  any other
         Party (the  "Indemnifying  Party") under this '8, then the  Indemnified
         Party shall promptly notify each Indemnifying Party thereof in writing;
         provided,  however,  that no delay on the part of the Indemnified Party
         in notifying  any  Indemnifying  Party shall  relieve the  Indemnifying
         Party from any  obligation  hereunder  unless  (and then  solely to the
         extent) the Indemnifying Party thereby is prejudiced.

                  (ii) Any Indemnifying  Party will have the right to defend the
         Indemnified  Party  against the Third  Party Claim with  counsel of its
         choice reasonably  satisfactory to the Indemnified Party so long as (A)
         the Indemnifying Party notifies the Indemnified Party in writing within
         20 days after the Indemnified Party has given notice of the Third Party
         Claim that the Indemnifying  Party will indemnify the Indemnified Party
         from  and  against  the  entirety  of  any  Adverse   Consequences  the
         Indemnified  Party may suffer resulting from,  arising out of, relating
         to, in the nature of, or caused by the Third  Party  Claim,  subject to
         the  terms  of  this  '8,  (B)  the  Indemnifying  Party  provides  the
         Indemnified   Party  with   evidence   reasonably   acceptable  to  the
         Indemnified  Party that the Indemnifying  Party will have the financial
         resources  to defend  against  the Third  Party  Claim and  fulfill its
         indemnification  obligations  hereunder,  (C)  the  Third  Party  Claim
         involves  only money  damages and does not seek an  injunction or other
         equitable  relief,  (D)  settlement  of, or an  adverse  judgment  with
         respect to, the Third Party Claim is not, in the good faith judgment of
         the  Indemnified  Party,  likely to establish a precedential  custom or
         practice materially adverse to the continuing business interests of the
         Indemnified  Party, and (E) the Indemnifying Party conducts the defense
         of the Third Party Claim actively and diligently.

                  (iii)  So long as the  Indemnifying  Party is  conducting  the
         defense of the Third Party Claim in accordance  with  '8(d)(ii)  above,
         (A) the Indemnified  Party may retain  separate  co-counsel at its sole
         cost and  expense  and  participate  in the  defense of the Third Party
         Claim,  (B) the Indemnified  Party will not consent to the entry of any
         judgment or enter into any  settlement  with respect to the Third Party
         Claim without the prior written consent of the Indemnifying  Party (not
         to be withheld  unreasonably),  and (C) the Indemnifying Party will not
         consent to the entry of any judgment or enter into any settlement  with
         respect to the Third Party Claim without the prior  written  consent of
         the Indemnified Party (not to be withheld unreasonably).

                  (iv) In the event any of the conditions in '8(d)(ii)  above is
         or becomes  unsatisfied,  however, (A) the Indemnified Party may defend
         against,  and  consent to the entry of any  judgment  or enter into any
         settlement  with  respect  to, the Third  Party  Claim in any manner it
         reasonably may deem  appropriate  (and the  Indemnified  Party need not
         consult  with, or obtain any consent from,  any  Indemnifying  Party in
         connection therewith),  (B) the Indemnifying Parties will reimburse the
         Indemnified Party promptly and periodically for the reasonable costs of
         defending   against  the  Third  Party  Claim   (including   reasonable
         attorneys' fees and expenses),  and (C) the  Indemnifying  Parties will
         remain  responsible for any Adverse  Consequences the Indemnified Party
         may suffer  resulting from,  arising out of, relating to, in the nature
         of, or caused by the Third Party Claim to the fullest  extent  provided
         in this '8.

         (e) Determination of Adverse Consequences. All indemnification payments
under this '8 shall be deemed adjustments to the Purchase Price.

         (f) Recoupment Under the Hold-back and Debentures. The Buyer shall have
the  option of  recouping  all or any part of any  Adverse  Consequences  it may
suffer (in addition to seeking any indemnification to which it is entitled under
this '8) by notifying any Seller that the Buyer is reducing the Hold-back and/or
the principal amount outstanding under Debentures.  This shall affect the timing
and amount of payments  required  under the  Debentures in the same manner as if
the  Buyer  had  made  a  permitted  prepayment  (without  premium  or  penalty)
thereunder.

         (g) Other  Indemnification  Provisions.  The foregoing  indemnification
provisions  are in  addition  to,  and  not in  derogation  of,  any  statutory,
equitable,  or common law remedy (including  without  limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the Company or the transactions  contemplated by this Agreement.
Each  of the  Sellers  hereby  agrees  that he  will  not  make  any  claim  for
indemnification  against  the  Company  by reason of the fact that  Seller was a
director,  officer,  employee, or agent of any such entity or was serving at the
request of any such entity as a partner, trustee,  director,  officer, employee,
or agent of  another  entity  (whether  such  claim is for  judgments,  damages,
penalties,  fines,  costs,  amounts paid in  settlement,  losses,  expenses,  or
otherwise and whether such claim is pursuant to any statute,  charter  document,
bylaw,  agreement,  or otherwise) with respect to any action, suit,  proceeding,
complaint,  claim,  or demand brought by the Buyer against such Seller  (whether
such action, suit, proceeding,  complaint,  claim, or demand is pursuant to this
Agreement,  applicable law, or otherwise)  which in the aggregate (under any and
all such claims made at any time by any of the Sellers)  exceeds fifty  thousand
dollars ($50,000).

9. Tax  Matters.  The  following  provisions  shall  govern  the  allocation  of
responsibility  as between  Buyer and Sellers for certain tax matters  following
the Closing Date:

         (a) Tax  Periods  Ending on or Before the  Closing  Date.  Buyer  shall
prepare or cause to be  prepared  and file or cause to be filed all Tax  Returns
for the Company for all periods ending on or prior to the Closing Date which are
filed after the Closing Date.  Buyer shall permit  Sellers to review and comment
on each such Tax Return  described in the  preceding  sentence  prior to filing.
Subject to the provisions of '8(b)(ii) hereof, Sellers shall reimburse Buyer for
Taxes of the Company with respect to such periods within fifteen (15) days after
payment by Buyer or the Company of such Taxes  (whether in  connection  with the
filing of such Tax Return or as the result of an audit) to the extent such Taxes
are not reflected in the reserve for Tax Liability  (rather than any reserve for
deferred Taxes  established to reflect timing  differences  between book and Tax
income) shown on the face of the Closing Balance Sheet.

         (b) Tax Periods  Beginning  Before and Ending  After the Closing  Date.
Buyer shall  prepare or cause to be  prepared  and file or cause to be filed any
Tax Returns of the Company for Tax periods  which begin  before the Closing Date
and end after the Closing Date.  Sellers shall pay to Buyer within  fifteen (15)
days  after the date on which  Taxes are paid with  respect  to such  periods an
amount  equal to the portion of such Taxes which  relates to the portion of such
Taxable  period  ending on the  Closing  Date to the  extent  such Taxes are not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes  established  to reflect timing  differences  between book and Tax income)
shown on the face of the Closing Balance Sheet. For purposes of this Section, in
the case of any Taxes that are imposed on a periodic basis and are payable for a
Taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which  relates to the portion of such Taxable  period  ending on the
Closing  Date shall (x) in the case of any Taxes  other than Taxes based upon or
related  to income or  receipts,  be deemed to be the amount of such Tax for the
entire  Taxable  period  multiplied  by a fraction the numerator of which is the
number  of days  in the  Taxable  period  ending  on the  Closing  Date  and the
denominator of which is the number of days in the entire Taxable period, and (y)
in the case of any Tax based  upon or related  to income or  receipts  be deemed
equal to the amount which would be payable if the relevant  Taxable period ended
on the Closing Date. Any credits relating to a Taxable period that begins before
and ends  after the  Closing  Date  shall be taken  into  account  as though the
relevant Taxable period ended on the Closing Date. All determinations  necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior  practice of the  Company.  This '9(b) shall be construed so as to be
consistent with the provisions of '8(b)(ii).

         (c)  Cooperation on Tax Matters.  Buyer,  the Company and Sellers shall
cooperate fully, as and to the extent  reasonably  requested by the other party,
in  connection  with the filing of Tax Returns  pursuant to this Section and any
audit,  litigation or other  proceeding  with respect to Taxes.  The Company and
Sellers  agree to retain  all books and  records  with  respect  to Tax  matters
pertinent to the Company  relating to any taxable  period  beginning  before the
Closing Date until the  expiration  of the statute of  limitations  (and, to the
extent notified by Buyer or Sellers,  any extensions  thereof) of the respective
taxable periods.

         (d) Certain Taxes.  Subject to the provisions of '8(b)(ii) hereof,  all
transfer,  documentary, sales, use, stamp, registration and other such Taxes and
fees  (including  any penalties and interest)  incurred in connection  with this
Agreement  shall be paid by Sellers  when due,  and Sellers  will,  at their own
expense,  file all necessary Tax Returns and other documentation with respect to
all such transfer,  documentary, sales, use, stamp, registration and other Taxes
and fees,  and, if required by applicable  law,  Buyer will,  and will cause its
affiliates  to,  join  in the  execution  of any  such  Tax  Returns  and  other
documentation.

         (e) Code ' 338 Election.  Notwithstanding  any other  provision of this
Agreement, if Buyer elects to make a Code ' 338 election in connection with this
transaction,  Sellers  each  agree to pay up to $5,000 to the  extent  that such
election  results in Tax  Liability  to the Company in excess of such  Liability
without such election.  If the Tax Liability for any Seller  resulting from such
election  exceeds $5,000,  then Buyer shall pay the amount of such Tax Liability
for such Seller in excess of $5,000 per Seller.

10.      Termination.

         (a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

                  (i)  the Buyer and the Sellers may terminate this Agreement by
         mutual written consent at any time prior to the Closing;

                  (ii) the Buyer may terminate  this Agreement by giving written
         notice to the Sellers at any time prior to the Closing (A) in the event
         any of the Sellers has breached any material representation,  warranty,
         or covenant  contained in this Agreement in any material  respect,  the
         Buyer has  notified  the  Sellers  of the  breach,  and the  breach has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under '7(a) hereof (unless the failure results primarily from the Buyer
         itself breaching any representation, warranty, or covenant contained in
         this Agreement); and

                  (iii) the  Sellers  may  terminate  this  Agreement  by giving
         written notice to the Buyer at any time prior to the Closing (A) in the
         event the Buyer has breached any material representation,  warranty, or
         covenant  contained in this Agreement in any material  respect,  any of
         the Sellers has  notified  the Buyer of the breach,  and the breach has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under '7(b) hereof  (unless the failure  results  primarily from any of
         the Sellers  themselves  breaching  any  representation,  warranty,  or
         covenant contained in this Agreement).

         (b)  Effect of  Termination.  If any Party  terminates  this  Agreement
pursuant to '10(a) above,  all rights and  obligations of the Parties  hereunder
shall  terminate  without any  Liability of any Party to any other Party (except
for any Liability of any Party then in breach).

11.      Miscellaneous.

         (a)      Nature of Certain Obligations.

                  (i) The  covenants  of  each of the  Sellers  in  '2(a)  above
         concerning  the  sale  of his  Company  Shares  to the  Buyer  and  the
         representations  and  warranties  of each of the Sellers in '3(a) above
         concerning the transaction are several obligations. This means that the
         particular Seller making the representation, warranty, or covenant will
         be  solely  responsible  to the  extent  provided  in '8 above  for any
         Adverse  Consequences  the Buyer may  suffer as a result of any  breach
         thereof.

                  (ii) The  remainder of the  representations,  warranties,  and
         covenants in this  Agreement  are joint and several  obligations.  This
         means that each Seller will be responsible to the extent provided in '8
         above for the entirety of any Adverse Consequences the Buyer may suffer
         as a result of any breach thereof.

         (b) Termination of Shareholders Agreement.  Effective upon Closing, the
Shareholders agree to terminate that certain Shareholders  Agreement Pursuant to
Section 732 of the Utah Revised  Business  Corporation  Act,  dated  October 30,
1995,  among the Sellers and the  Company.  The Company  shall  acknowledge  the
agreement  contained in this subsection by acknowledging such termination at the
end of this Agreement.

         (c) Press Releases and Public  Announcements.  No Party shall issue any
press release or make any public announcement  relating to the subject matter of
this Agreement  without the prior written approval of the Buyer and the Sellers;
provided,  however, that any Party may make any public disclosure it believes in
good faith is required  by  applicable  law or any listing or trading  agreement
concerning its  publicly-traded  securities (in which case the disclosing  Party
will use its reasonable best efforts to advise the other Parties prior to making
the disclosure).

         (d) No Third-Party  Beneficiaries.  This Agreement shall not confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

         (e) Entire Agreement.  This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior  understandings,  agreements,  or representations by or among the Parties,
written or oral,  to the extent they  related in any way to the  subject  matter
hereof,  including  that certain  Letter of Intent  between the  Parties,  dated
November 4, 1998.

         (f) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of his
or its rights,  interests,  or obligations  hereunder  without the prior written
approval of the Buyer and the Sellers; provided, however, that the Buyer may (i)
assign any or all of its rights and  interests  hereunder  to one or more of its
Affiliates  and (ii)  designate  one or more of its  Affiliates  to perform  its
obligations  hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder).

         (g)  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

         (h)  Headings.  The section  headings  contained in this  Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

         (i)  Notices.  All  notices,  requests,   demands,  claims,  and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder  shall be deemed  duly given if (and then two
business days after) it is sent by registered or certified mail,  return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to the Sellers:         .........        Copy to:

ZEVEX International, Inc.  .........Stoel Rives LLP
4314 ZEVEX Park Lane       .........201 S. Main Street, Suite 1100
Salt Lake City, UT 84123   .........Salt Lake City, UT 84111-4904
Attn: Len Smith            .........Attn: Clint M. Hanni

ZEVEX International, Inc.
4314 ZEVEX Park Lane
Salt Lake City, UT 84123
Attn: J. Tracy Livingston

ZEVEX International, Inc.
4314 ZEVEX Park Lane
Salt Lake City, UT 84123
Attn: Dave Bernardi

If to the Buyer:           .........Copy to:
----------------                    --------

ZEVEX International, Inc.  .........Jones, Waldo, Holbrook & McDonough
4314 ZEVEX Park Lane       .........170 S. Main Street, Suite 1500
Salt Lake City, UT 84123   .........Salt Lake City, UT 84101
Attn: Phillip McStotts     .........Attn: Ronald Poelman

Any Party may send any notice,  request,  demand,  claim, or other communication
hereunder  to the  intended  recipient  at the address set forth above using any
other means (including personal delivery,  expedited courier, messenger service,
telecopy,  telex,  ordinary  mail,  or  electronic  mail),  but no such  notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received by the intended  recipient.  Any
Party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.

         (j) Governing Law. This Agreement shall be governed by and construed in
accordance  with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule (whether of the State of Utah or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction other than the State of Utah.

         (k)  Amendments  and Waivers.  No  amendment  of any  provision of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant  hereunder,  whether intentional or not, shall
be deemed to extend to any prior or subsequent  default,  misrepresentation,  or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

         (l)  Severability.  Any term or  provision  of this  Agreement  that is
invalid or unenforceable  in any situation in any jurisdiction  shall not affect
the validity or  enforceability  of the remaining terms and provisions hereof or
the validity or  enforceability  of the offending term or provision in any other
situation or in any other jurisdiction.

         (m)  Expenses.  The Buyer  agrees that the Company will bear all of the
Sellers' costs and expenses  (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby.

         (n)  Construction.   The  Parties  have  participated  jointly  in  the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any Party by virtue of the authorship of any of
the provisions of this Agreement.  The Parties intend that each  representation,
warranty, and covenant contained herein shall have independent significance.  If
any Party has  breached  any  representation,  warranty,  or covenant  contained
herein  in any  respect,  the fact that  there  exists  another  representation,
warranty,  or covenant  relating to the same subject  matter  (regardless of the
relative  levels of  specificity)  which the  Party has not  breached  shall not
detract  from or  mitigate  the fact  that the  Party is in  breach of the first
representation, warranty, or covenant.

         (o) Incorporation of Exhibits,  Annexes,  and Schedules.  The Exhibits,
Annexes,  and Schedules  identified in this Agreement are incorporated herein by
reference and made a part hereof.

         (p) Specific  Performance.  Each of the Parties acknowledges and agrees
that the other  Parties  would be  damaged  irreparably  in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly,  each of the Parties  agrees that
the other Parties shall be entitled to an injunction or  injunctions  to prevent
breaches of the  provisions of this Agreement and to enforce  specifically  this
Agreement and the terms and  provisions  hereof in any action  instituted in any
court of the United States or any state  thereof  having  jurisdiction  over the
Parties and the matter (subject to the provisions set forth in '10(p) below), in
addition to any other remedy to which they may be entitled, at law or in equity.

         (q)  Submission  to  Jurisdiction.  Each of the Parties  submits to the
jurisdiction of any state or federal court sitting in Salt Lake County, Utah, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all  claims  in  respect  of the  action  or  proceeding  may be heard  and
determined in any such court.  Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of  inconvenient  forum to the  maintenance of
any action or  proceeding  so brought  and  waives  any bond,  surety,  or other
security  that might be required of any other Party with respect  thereto.  Each
Party agrees that a final  judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.

         (r)  Limitation  on  Obligations  of the  Church.  Except as  expressly
provided  in  this  Agreement,  the  Church  shall  have  no  obligation,  duty,
liability,  or  responsibility  under this Agreement or under any instruments or
agreements  delivered pursuant to this Agreement,  except to transfer and convey
to the Buyer the Company  Shares  identified in Section 4(b) of Annex III hereto
as being owned by the Church,  free and clear of all liens,  security  interest,
encumbrances, pledges and claims arising by, through, or under the Church.
IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.

ZEVEX INTERNATIONAL, INC.

By:      /s/Phillip L. McStotts.....        
         Philip L. McStotts
         Chief Financial Officer

/s/ Leonard C. Smith       .........        
LEONARD C. SMITH

/s/ James T. Livingston    .........
JAMES T. LIVINGSTON

/s/ David W. Bernardi      .........        
DAVID W. BERNARDI

THE CORPORATION OF THE PRESIDENT
OF THE CHURCH OF JESUS CHRIST OF
LATTER-DAY SAINTS

By:      /s/ Ray Anderson  .........
Its:     Authorize Agent   .........

Acknowledgement and Agreement of JTech Medical Industries, Inc. for purposes of
Section 10(b).

JTECH MEDICAL INDUSTRIES, INC.

By:      /s/ Leonard C. Smith.......        
         Leonard C. Smith,
         President
EXHIBIT A
                                FORM OF DEBENTURE

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE  STATE LAW AND MAY NOT
         BE OFFERED,  SOLD, OR OTHERWISE  TRANSFERRED,  PLEDGED, OR HYPOTHECATED
         UNLESS  AND  UNTIL  REGISTERED  UNDER  THE ACT OR STATE  LAW OR, IN THE
         OPINION OF COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE ISSUER OF
         THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION
         IS IN COMPLIANCE THEREWITH.

                                                CONVERTIBLE DEBENTURE

                                               (Due _________________)

______________, 199___                                 
(the "Issuance Date")

         The undersigned, ZEVEX INTERNATIONAL, INC., a Delaware corporation (the
"Company"),  for  value  received,  hereby  promises  to  pay to  the  order  of
_____________________________________  (the  "Holder") the  principal  amount of
_________________________________________   ($________________)   together  with
interest  on such  principal  amount  and  any  other  amounts  due  under  this
Debenture.

         This Debenture  (the  "Debenture")  is issued  pursuant to that certain
Stock  Purchase  Agreement,  dated  December __, 1998,  entered into between the
Company and the Holder of this  Debenture (the  "Agreement").  This Debenture is
also subject to the following additional terms and conditions:
1. Interest.  Commencing on the date of this Debenture and continuing  until all
principal  and  interest  due  under  this  Debenture  are  paid  in  full,  the
outstanding  principal balance of this Debenture shall bear interest at the rate
of eight  percent (8%) per annum,  compounded  annually.  Interest  shall accrue
daily and be calculated on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed in any partial calendar month.

2. Payment.  Accrued interest shall be due and payable beginning April, 1, 1999,
and on each July 1,  October  1,  January 1, and April 1  thereafter  until this
Debenture  is paid in full.  The unpaid  principal  balance  of this  Debenture,
together with any and all accrued but unpaid interest,  shall be due and payable
in full three (3) years from the Issuance  Date.  All payments of principal  and
interest  shall be made in lawful  money of the United  States of America at the
address of the holder set forth in Section  8.1 below.  Unless the Holder  shall
elect  otherwise,  each payment made under this Debenture shall be applied first
to interest due under this  Debenture and any balance shall be applied to reduce
the principal balance of this Debenture.

3.       Right of Conversion

         3.1 Conversion  Into Company  Securities.  At any time after a date one
(1) year from the Issuance  Date until a date three (3) years after the Issuance
Date, and from time to time during such period,  the Holder may elect to convert
all or a portion  of the unpaid  principal  amount  and all  accrued  but unpaid
interest of this Debenture into fully paid and  nonassessable  shares of Company
Common Stock, $0.001 par value (the "Conversion Shares") at the conversion price
of eleven dollars ($11.00) per share (the "Conversion Price"); provided that any
partial  conversion of less than the entire remaining  principal balance of this
Debenture  may not be less than  $25,000 in  principal  and  accrued  and unpaid
interest.

         3.2  Mechanics of  Conversion.  Upon the  Holder's  election to convert
pursuant  to Section  3.1 above,  the Holder  shall send  written  notice of its
election to the Company and shall surrender this Debenture to the Company at its
principal office. The written election shall specify the amount of principal and
accrued and unpaid interest that is to be converted.  Each  conversion  shall be
deemed to have been  effected  as of the  close of the  business  on the date on
which the notice is  delivered  to the  Company  and the  outstanding  principal
balance and accrued and unpaid interest shall be reduced by the amount converted
as set forth in the notice.  Within a reasonable  time  thereafter,  the Company
shall  cancel the  designated  portion of the  unpaid  principal  amount of this
Debenture  converted by the Holder and issue a certificate or certificates  (the
"Conversion  Certificates"),  registered  in the  name of such  Holder,  for the
number of full shares of the Conversion Shares issuable at the Conversion Price,
bearing  such  restrictive  legends  as may be  required  by  federal  and state
securities laws. In the event of a Partial Conversion,  the Company shall return
with the Conversion  Certificates  this Debenture,  bearing a proper notation of
the  principal  amount  that  remains  due and payable  after  Holder's  partial
conversion,  but otherwise unaltered.  Conversion Certificates will be delivered
promptly to the Holder after  issuance by the Company;  provided,  however,  the
Company may, in its discretion,  hold in its possession Conversion  Certificates
for that  number  of  Conversion  Shares  which are  subject  to  forfeiture  as
described in Section 7 below. Each Conversion Certificate shall bear a legend to
the extent it is subject to forfeiture.

         3.3 Effects of  Conversion.  Upon  conversion  of the entire  amount of
principal and unpaid interest of this Debenture, the rights of the Holder of the
Debenture as such shall cease.  The person or persons in whose name or names the
Conversion  Certificates are issued shall be deemed to have become the holder or
holders of record of the Conversion Shares represented thereby.

         3.4 No Fractional  Shares. No fractional share of the Conversion Shares
will be issued in  connection  with any  conversion  hereunder.  Instead  of any
fractional  share the  Company  shall pay a cash  adjustment  in respect of such
fractional interest as determined by reference to the Conversion Price.

         3.5 No Rights as  Stockholders.  Prior to the  conversion of all or any
portion of this  Debenture,  the Holder  shall not be entitled to any right as a
stockholder,  including  without  limitation  the  right  to vote or to  receive
dividends or other distribution, and shall not be entitled to receive any notice
of any proceeding of the Company, except as provided herein.

         3.6  Taxes on  Conversion.  Any taxes  required  upon the  issuance  of
Conversion  Certificates  on conversion of this  Debenture  shall be paid by the
Holder.

         3.7  Adjustments.  In the  event  of any  Company  stock  split,  stock
combination,  merger,  consolidation  or  recapitalization  affecting the Common
Stock of the Company prior to repayment or conversion under this Debenture,  the
Company shall make  appropriate,  proportionate  adjustments  to the  Conversion
Shares issued to Holder under Holder's conversion right.

         3.8  Notices  of Record  Date.  In the  event of (i) any  taking by the
Company of a record of the holders of securities  for the purpose of determining
the  holders  thereof  who  are  entitled  to  receive  any  dividend  or  other
distribution or (ii) any  reclassification  or  recapitalization  of the capital
stock of the  Company,  any  merger  or  consolidation  of the  Company,  or any
transfer of all or  substantially  all of the assets of the Company to any other
corporation,  entity,  or person,  or any voluntary or involuntary  dissolution,
liquidation,  or a winding-up of the Company, which occurs during the conversion
period, the Company shall mail to the Holder of the Debenture,  at least fifteen
(15) days prior to the record date specified  therein,  a notice  specifying (A)
the date on which  any  such  record  is to be  taken  for the  purpose  of such
dividend or distribution and a description of such dividend or distribution, (B)
the  date  on  which  any  such  reorganization,   reclassification,   transfer,
consolidation,  merger,  dissolution,  liquidation, or winding-up is expected to
become effective,  and (C) the time, if any is to be set, as to when the holders
of record of such  security  shall be  entitled  to  exchange  their  shares for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  transfer, consolidation, merger, dissolution, liquidation, or
winding-up.

4.       Events of Default; Acceleration

         4.1  Events,  Remedy.  If any of the  following  conditions  or  events
("Events of Default") shall occur:

                  (a)  if the  Company  shall  default  in  the  payment  of the
principal or interest on the Debenture when due and such default continues for a
period of 30 days after written notice thereof to the Company from Holder; or

                  (b) if the  Company  shall  default in the  performance  of or
compliance with any term or covenant contained in this Debenture, the Agreement,
or the Pledge  Agreement and such default shall not have been remedied within 30
days after written notice thereof shall have been given to the Company by Holder
(provided,  however,  if such default is not cured within such 30-day period and
the  Company  is  diligently  pursuing  such  cure,  the  Company  shall have an
additional  period of time not to exceed  ninety (90) days in which to cure such
default); or

                  (c) if the Company shall make an assignment for the benefit of
creditors,  or shall  admit in writing  its  inability  to pay its debts as they
become  due,  or shall file a  voluntary  petition  in  bankruptcy,  or shall be
adjudicated  a  bankrupt  or  insolvent,  or shall file any  petition  or answer
seeking for itself any reorganization,  arrangement, composition,  readjustment,
liquidation, dissolution, or similar relief under any present or future statute,
law or  regulation,  or shall file any answer  admitting or not  contesting  the
material  allegations  of a  petition  filed  against  the  Company  in any such
proceeding,  or shall seek or consent to or acquiesce in the  appointment of any
trustee, receiver or liquidator of the Company or of all or any substantial part
of the properties of the Company, or if the Company or its directors or majority
stockholders  shall take any action looking to the dissolution or liquidation of
the Company; or

                  (d) if, within 60 days after the service of process on Company
following   commencement   of  an  action   against  the  Company   seeking  any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute,  law or regulation,  such
action  shall  not have  been  dismissed  or if,  alternatively,  all  orders or
proceedings  thereunder  affecting the operations or the business of the Company
stayed,  or if the stay of any such order or proceeding  shall thereafter be set
aside,  or if,  within 60 days  after the  appointment  without  the  consent or
acquiescence  of the  Company of any  trustee,  receiver  or  liquidator  of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;

then and in any such event  Holder may at any time  (unless all  defaults  shall
theretofore have been remedied) at his option, by written notice to the Company,
declare the entire principal and interest of the Debenture then remaining unpaid
to be due and payable immediately. Notwithstanding the foregoing, this Debenture
shall not be in default to the extent that the Company has  exercised its rights
of recoupment under Section 8(f) of the Agreement.

         4.2 Other  Remedies on Default,  Etc. In case any one or more Events of
Default shall occur, be continuing, and not have been waived, Holder may proceed
to protect and  enforce  the rights of such Holder by an action at law,  suit in
equity, or other appropriate proceeding, whether for the specific performance of
any  agreement  contained  herein  or  under  terms of the  Agreement  or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power  granted  hereby or thereby or by law. In case of a
default in the payment of  principal or interest on the  Debenture,  the Company
will pay to the Holder  thereof such further  amount as shall be  sufficient  to
cover the costs and  expenses  of  collection,  including,  without  limitation,
reasonable attorneys' fees. No course of dealing and no delay on the part of any
Holder in exercising  any right shall  operate as a waiver  thereof or otherwise
prejudice such Holder's  rights.  No right conferred  hereby or by the Agreement
upon any Holder  shall be  exclusive  of any other  right  referred to herein or
therein  or now or  hereafter  available  at  law,  in  equity,  by  statute  or
otherwise.

5.       Prepayment

         This  Debenture  may be prepaid  (including a deemed  prepayment  under
Section 8(f) of the Purchase  Agreement)  without  penalty upon thirty (30) days
prior written  notice by the Company to Holder.  Except in the event of a deemed
prepayment in  accordance  with Section 8(f) of the Purchase  Agreement,  Holder
shall have the right  within  such  thirty day period to convert  all or part of
this Debenture at Holder's election pursuant to Section 3 above.

6.       Security for Debenture

         This  Debenture  is secured by a Stock  Pledge  Agreement  of even date
herewith by and between the Company and Holder.

7.       Forfeiture of Debenture/Conversion Shares

         Holder  acknowledges  and agrees that this Debenture and any Conversion
Shares issued upon  conversion of this  Debenture are subject to the  forfeiture
provisions of Section  10.1(iii) of that certain  Employment  Agreement  between
Holder and JTech Medical  Industries,  Inc., dated as of the date hereof. In the
event of a forfeiture  of this  Debenture in  accordance  with the terms of such
Section 10.1(iii), Holder shall promptly surrender this Debenture to the Company
at its principal  office.  The Company  shall  promptly  thereafter  return this
Debenture  to Holder,  bearing a proper  notation of the  principal  amount that
remains due and payable after such forfeiture,  but otherwise unaltered.  In the
event of a  forfeiture  of  Conversion  Shares in  accordance  with the terms of
Section 10.1(iii) of the Employment Agreement, the Company shall promptly cancel
the Conversion  Certificates  applicable to the forfeited  Conversion Shares and
issue and deliver to Holder new certificates for any Conversion Shares that were
not forfeited by Holder.

8.       Miscellaneous Provisions

         8.1 Notices.  Any notice herein required or payment required  hereunder
shall  be made or  given to the  address  of the  parties  as  specified  in the
Agreement.

         8.2  Amendments  or Waivers.  Any  provision of this  Debenture  may be
amended,  waived, or modified,  but only upon the written consent of the Company
and the Holder.

         8.3  Governing  Law.  This  Debenture has been executed in and shall be
governed by the laws of the State of Utah  excluding that body of law pertaining
to conflicts of law.

         8.4 Miscellaneous.  The unenforceability or invalidity of any provision
of this Debenture shall not affect the  enforceability  or validity of any other
provision  of this  Debenture.  The  terms  of this  Debenture  shall  bind  the
undersigned  and inure to the  benefit  of Holder  and their  respective  heirs,
successors,  assigns and legal  representatives.  The Holder may, in  accordance
with the terms of the Agreement,  assign all or part of Holder's  interest under
this Debenture upon prior written notice to the Company.

         IN WITNESS WHEREOF,  the Company has caused this Debenture to be issued
this ____ day of _________________, 1998.

                            ZEVEX INTERNATIONAL, INC.

                              Phillip L. McStotts,
                             Chief Financial Officer
EXHIBIT C
                    CALCULATION OF POSSIBLE EARN OUT PAYMENT

The formula for calculating the possible First Earn Out Payment will be:

         A + B x ($375,000.00) = Cash portion of possible First Earn Out Payment

         A + B x  ($375,000.00)  = Debenture  portion of possible First Earn Out
Payment

Where:

         A        = 1999  Actual  Revenue - 1998  Projected  Revenue x 0.50 1999
                  Projected Revenue - 1998 Projected Revenue

         B        = 1999 Actual Pre Tax Income - 1998 Projected Pre Tax Income x
                  0.50 1999  Projected  Pre Tax Income - 1998  Projected Pre Tax
                  Income

And:

         "1998 Projected Revenue" is $4,000,000.

         "1999  Actual  Revenue" is the total  gross  revenue for J-Tech for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Revenue" is $6,200,000.00

         "1998 Projected Pre Tax Income" is $600,000

         "1999  Actual Pre Tax  Income" is the pre tax income for J-Tech for the
period from January 1, 1999 to December 31, 1999

         "1999 Projected Pre Tax Income" is $930,000

The formula for calculating the possible Second Earn Out Payment will be:

         A + B x  ($200,000.00)  = Cash  portion  of  possible  Second  Earn Out
Payment

         A + B x ($200,000.00)  = Debenture  portion of possible Second Earn Out
Payment
Where:

         A        = 2000  Actual  Revenue - 1999  Projected  Revenue x 0.50 2000
                  Projected Revenue - 1999 Projected Revenue

         B        = 2000 Actual Pre Tax Income - 1999 Projected Pre Tax Income x
                  0.50 2000  Projected  Pre Tax Income - 1999  Projected Pre Tax
                  Income

And:

         "1999 Projected Revenue" is $6,200,000.00

         "2000  Actual  Revenue" is the total  gross  revenue for J-Tech for the
period from January 1, 2000 to December 31, 2000.

         "2000 Projected Revenue" is $9,500,000.

         "1999 Projected Pre Tax Income" is $930,000

         "2000  Actual Pre Tax  Income" is the pre tax income for J-Tech for the
period from January 1, 2000 to December 31, 2000.

         "2000 Projected Pre Tax Income" is $1,577,000.

Example

         Assuming that "1999 Actual  Revenue" is $5,000,000 and "1999 Actual Pre
Tax Income" is $800,000,  the possible  First Earn Out Payment is  calculated as
follows:

         5,000,000 - 4,000,000 x .50 = 0.2273
         6,200,000 - 4,000,000

         800,000 - 600,000 x .50 = 0.3030
         930,000 - 600,000

         0.2273 + 0.3030 = 0.5303

         0.5303 x  $375,000 = $198,863  cash  portion of First Earn Out  Payment
         0.5303 x  $375,000  =  $198,863  Debenture  portion  of First  Earn Out
         Payment
EXHIBIT E
                         FORMS OF EMPLOYMENT AGREEMENTS

                                    EXHIBIT F
                          ALLOCATION OF PURCHASE PRICE

Cash portion of the Purchase Price paid at Closing:

Leonard C. Smith           .........$       1,000.00

J. Tracy Livingston        .........$       1,000.00

David W. Bernardi          .........$       1,000.00
                                    ----------------

TOTAL                      .........$       3,000.00

Cash portion of the Purchase Price paid on January 6, 1999:

                           .........Price Before Holdback Payment After Holdback

Leonard C. Smith           .........$1,256,900.55             $1,056,950.55

J. Tracy Livingston        .........$1,288,550.44             $1,088,600.44

David W. Bernardi          .........$  408,549.01             $  343,449.01

Corporation of the President
of The Church of Jesus Christ
of Latter-day Saints       .........$  143,000.00              $  143,000.00
                                     -------------              -------------

TOTAL                      .........$3,097,000.00              $2,632,000.00

Debenture portion of the Purchase Price paid on January 6, 1999:

Leonard C. Smith           .........$1,290,000.00

J. Tracy Livingston        .........$1,290,000.00

David W. Bernardi          .........$  420,000.00

Holdback  Amounts Paid  Following  Closing are allocated in accordance  with the
following percentages:

Leonard C. Smith           .........43%
J. Tracy Livingston        .........43%
David W. Bernardi          .........14%

The First and Second  Earn-Out  Payments are  allocated in  accordance  with the
following percentages:

Leonard C. Smith           .........50%
J. Tracy Livingston        .........25%
David W. Bernardi          .........25%
STOCK PURCHASE AGREEMENT

                                     BETWEEN

                            ZEVEX INTERNATIONAL, INC.

                                       AND

                                   VIJAY LUMBA

                                December 31, 1998

                                TABLE OF CONTENTS
                                                                           PAGE

1.       Definitions...........................................................1

2.       Purchase and Sale of Company Shares...................................5
         (a)      Basic Transaction............................................5
         (b)      Purchase Price...............................................5
         (c)      Terms of Debentures..........................................6
         (d)      The Hold-Back................................................6
         (e)      Purchase Price Adjustment....................................6
         (g)      The Closing..................................................7
         (h)      Deliveries at the Closing....................................7
3.       Representations and Warranties Concerning the Transaction.............7
         (a)      Representations and Warranties of the Seller.................7
         (b)      Representations and Warranties of the Buyer..................9

4.       Representations and Warranties Concerning the Company................10
         (a)      Organization, Qualification, and Corporate Power............10
         (b)      Capitalization..............................................11
         (c)      Noncontravention............................................11
         (d)      Brokers' Fees...............................................11
         (e)      Title to Assets.............................................11
         (f)      Financial Statements........................................12
         (g)      Events Subsequent to Most Recent Fiscal Year End............12
         (h)      Undisclosed Liabilities.....................................13
         (i)      Legal Compliance............................................13
         (j)      Tax Matters.................................................14
         (k)      Intellectual Property.......................................15
         (l)      Tangible Assets.............................................17
         (m)      Inventory...................................................17
         (n)      Contracts...................................................17
         (o)      Notes and Accounts Receivable...............................18
         (p)      Powers of Attorney..........................................18
         (q)      Insurance...................................................18
         (r)      Litigation..................................................18
         (s)      Product Warranty............................................18
         (t)      Product Liability...........................................19
         (u)      Employees...................................................19
         (v)      Employee Benefits...........................................19
         (w)      Guaranties..................................................21
         (x)      Environmental, Health, and Safety Matters...................21
         (y)      Certain Business Relationships with the Company.............22
         (z)      Year 2000 Items.............................................22
         (aa)     Disclosure..................................................22
5.       Pre-Closing Covenants................................................22
         (a)      General.....................................................23
         (b)      Notices and Consents........................................23
         (c)      Operation of Business.......................................23
         (d)      Preservation of Business....................................23
         (e)      Full Access.................................................23
         (f)      Notice of Developments......................................23
         (g)      Exclusivity.................................................24

6.       Post-Closing Covenants...............................................24
         (a)      General.....................................................24
         (b)      Litigation Support..........................................24
         (c)      Transition..................................................24
         (d)      Confidentiality.............................................25
         (e)      Covenant Not to Compete.....................................25

7.       Conditions to Obligation to Close....................................26
         (a)      Conditions to Obligation of the Buyer.......................26
         (b)      Conditions to Obligation of the Seller......................27

8.       Remedies for Breaches of This Agreement..............................28
         (a)      Survival of Representations and Warranties..................28
         (b)      Indemnification Provisions for Benefit of the Buyer.........28
         (c)      Indemnification Provisions for Benefit of the Seller........29
         (d)      Matters Involving Third Parties.............................29
         (e)      Determination of Adverse Consequences.......................30
         (f)      Recoupment Under the Hold-Back and Debentures...............30
         (g)      Limitation On Amount........................................31
         (h)      Other Indemnification Provisions............................31

9.       Tax Matters..........................................................31
         (a)      Tax Periods Ending on or Before the Closing Date............31
         (b)      Tax Periods Beginning Before and Ending After the Closing 
                  Date........................................................31
         (c)      Cooperation on Tax Matters..................................32
         (d)      Certain Taxes...............................................32

10.      Termination..........................................................32
         (a)      Termination of Agreement....................................32
         (b)      Effect of Termination.......................................33

11.      Miscellaneous........................................................33
         (a)      Press Releases and Public Announcements.....................33
         (b)      No Third-Party Beneficiaries................................33
         (c)      Entire Agreement............................................33
         (d)      Succession and Assignment...................................33
         (e)      Counterparts................................................34
         (f)      Headings....................................................34
         (g)      Notices.....................................................34
         (h)      Governing Law...............................................34
         (i)      Dispute Resolution..........................................35
         (j)      Amendments and Waivers......................................36
         (k)      Severability................................................36
         (l)      Expenses....................................................36
         (m)      Construction................................................36
         (n)      Incorporation of Exhibits, Annexes, and Schedules...........37
         (o)      Specific Performance........................................37
         (p)      Submission to Jurisdiction..................................37

Exhibit A--Form of Convertible Debenture
Exhibit B--Formula for Calculating Earn-Out Payment
Exhibit C--Historical Financial Statements

Annex I--Exceptions to the Seller's Representations and Warranties Concerning
         the Transaction

Annex II--Exceptions to the Buyer's Representations and Warranties Concerning
          the Transaction

Disclosure Schedule--Exceptions to Representations and Warranties Concerning the
                     Company
STOCK PURCHASE AGREEMENT

         This Stock  Purchase  Agreement  ("Agreement")  is  entered  into as of
December  31,  1998,  by  and  among  ZEVEX  International,   Inc.,  a  Delaware
corporation  ("Buyer") and Vijay Lumba ("Seller").  The Buyer and the Seller are
referred to collectively herein as the "Parties."

         The  Seller  owns  all  of  the  outstanding  capital  stock  of  Aborn
Electronics, Inc, a California corporation (the "Company").

         This  Agreement  contemplates  a  transaction  in which the Buyer  will
purchase  from the  Seller,  and the Seller  will sell to the Buyer,  all of the
outstanding  capital  stock of the Company in return for cash and certain  other
consideration.

         Now,  therefore,  in  consideration  of the  premises  and  the  mutual
promises herein made, and in consideration of the  representations,  warranties,
and covenants herein contained, the Parties agree as follows.
1.       Definitions.

         "Accredited  Investor"  has the  meaning  set  forth  in  Regulation  D
promulgated under the Securities Act.

         "Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders, decrees, rulings,  damages, dues, penalties,  fines, costs, amounts paid
in settlement,  Liabilities,  obligations,  Taxes, liens, losses,  expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

         "Affiliate"  has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

         "Basis"  means  any  past or  present  fact,  situation,  circumstance,
status,  condition,  activity,  practice,  plan,  occurrence,  event,  incident,
action,  failure to act, or  transaction  that forms or could form the basis for
any specified consequence.

         "Buyer Confidential Information" has the meaning set forth in '6(d)(i) 
below.

         "Buyer Shares" has the meaning set forth in '2(c) below.

         "Closing" has the meaning set forth in '2(g) below.

         "Closing Date" has the meaning set forth in '2(g) below.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "COBRA"  means the  requirements  of Part 6 of Subtitle B of Title I of
ERISA and Code '4980B.

         "Company Confidential Information" has the meaning set forth in '6(d) 
(ii) below.

         "Company Share" means any share of the Common Stock, par value $.01 per
share, of the Company.

         "Debenture" has the meaning set forth in '2(b)(i) below.

         "Disclosure Schedule" has the meaning set forth in '4 below.

         "Earn-Out Payment" has the meaning set forth in '2(b)(ii) below.

         "Employee   Benefit   Plan"   means  any  (a)   nonqualified   deferred
compensation  or  retirement  plan  or   arrangement,   (b)  qualified   defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified  defined benefit  retirement plan or arrangement which is an
Employee  Pension  Benefit  Plan  (including  any  Multiemployer  Plan),  or (d)
Employee  Welfare Benefit Plan or material  fringe benefit or other  retirement,
bonus, or incentive plan or program.

         "Employee Pension Benefit Plan" has the meaning set forth in 
ERISA '3(2).

         "Employee Welfare Benefit Plan" has the meaning set forth in 
ERISA '3(1).

         "Environmental,   Health,  and  Safety  Requirements"  shall  mean  all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended.

         "ERISA  Affiliate"  means  each  entity  which is  treated  as a single
employer with Seller for purposes of Code '414.

         "Estimated Net Asset Amount" has the meaning set forth in '2(b)(i) 
below.

         "Fiduciary" has the meaning set forth in ERISA '3(21).

         "Final Net Asset Amount" has the meaning set forth in '2(e) below.

         "Financial Statement" has the meaning set forth in '4(f) below.

         "GAAP" means United States generally accepted accounting  principles as
in effect from time to time.

         "Hold-Back" has the meaning set forth in '2(d) below.

         "Indemnified Party" has the meaning set forth in '8(d) below.

         "Indemnifying Party" has the meaning set forth in '8(d) below.

         "Information  Technology" means computer  software,  computer firmware,
computer  hardware  (whether  general or specific  purpose) and other similar or
related items of automated, computerized or software systems.

         "Initial Payment" has the meaning set forth in '2(b)(i) below.

         "Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice),  all improvements thereto,
and all patents, patent applications, and patent disclosures,  together with all
reissuances,  continuations,  continuations-in-part,  revisions, extensions, and
reexaminations  thereof, (b) all trademarks,  service marks, trade dress, logos,
trade names, and corporate names,  together with all translations,  adaptations,
derivations,  and  combinations  thereof and including  all goodwill  associated
therewith,  and all  applications,  registrations,  and  renewals in  connection
therewith,  (c) all copyrightable  works, all copyrights,  and all applications,
registrations,  and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential  business  information  (including ideas,  research and
development,  know-how,  formulas,  compositions,  manufacturing  and production
processes and techniques,  technical data,  designs,  drawings,  specifications,
customer  and supplier  lists,  pricing and cost  information,  and business and
marketing plans and proposals),  (f) all computer  software  (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

         "Knowledge" means actual knowledge after reasonable investigation.

         "Liability"  means any  liability  (whether  known or unknown,  whether
asserted or  unasserted,  whether  absolute or  contingent,  whether  accrued or
unaccrued,  whether  liquidated  or  unliquidated,  and whether due or to become
due), including any liability for Taxes.

         "Most Recent  Balance Sheet" means the balance sheet  contained  within
the Financial Statements for the Most Recent Fiscal Year End.

         "Most Recent Fiscal Year End" has the meaning set forth in '4(f) below.

         "Multiemployer Plan" has the meaning set forth in ERISA '3(37).

         "Ordinary  Course of Business"  means the  ordinary  course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Person"  means  an  individual,  a  partnership,  a  corporation,   an
association,  a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity.

         "Prohibited Transaction" has the meaning set forth in ERISA '406 and 
Code '4975.

         "Purchase Price" has the meaning set forth in '2(b) below.

         "Reportable Event" has the meaning set forth in ERISA '4043.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         "Security  Interest"  means any mortgage,  pledge,  lien,  encumbrance,
charge, or other security  interest,  other than (a) mechanic's,  materialmen's,
and similar  liens,  (b) liens for Taxes not yet due and  payable,  (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary  Course of Business and not incurred
in connection with the borrowing of money.

         "Tax"  means any  federal,  state,  local,  or  foreign  income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental  (including  taxes under Code '59A),
customs duties, capital stock, franchise, profits, withholding,  social security
(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

         "Tax Return" means any return,  declaration,  report, claim for refund,
or information return or statement relating to Taxes,  including any schedule or
attachment thereto, and including any amendment thereof.

         "Third Party Claim" has the meaning set forth in '8(d) below.

         "Year 2000 Compliant"  means,  with respect to Information  Technology,
the  Information  Technology is fully  functional and compatible with use during
and after the  calendar  year 2000 A.D.,  and the  Information  Technology  used
during  each such time  period  will  accurately  receive,  provide  and process
date/time  data,  (including,  but not limited to,  calculating,  comparing  and
sequencing)  from, into and between the 20th and 21st  centuries,  including the
years 1999 and 2000, and leap year calculations and will not malfunction,  cease
to function,  or provide  invalid or incorrect  results as a result of date/time
data.

2.       Purchase and Sale of Company Shares.

         (a) Basic  Transaction.  On and subject to the terms and  conditions of
this  Agreement,  the Buyer agrees to purchase  from the Seller,  and the Seller
agrees  to  sell  to  the  Buyer,   all  of  Seller's  Company  Shares  for  the
consideration specified below in this '2.

         (b)  Purchase  Price.  The Buyer agrees to pay to the Seller a purchase
price of up to, but not  exceeding,  Five Million One Hundred  Thousand  Dollars
($5,100,000) (the "Purchase Price"),  subject to the reductions  described below
in this '2(b). The Purchase Price will be paid in the following manner:

                  (i)  Payment at  Closing.  At  Closing,  the Buyer will pay to
Seller Five Thousand Dollars in cash by bank check.

                  (ii) Payment by January 6, 1998. On January 6, 1998, the Buyer
         will pay to Seller:  (A) One Million  Three Hundred Forty Five Thousand
         Dollars  ($1,345,000)  in  cash  payable  by  wire  transfer  or  other
         immediately  available  funds; (B) an estimated amount in cash equal to
         the  difference  between  the  current  assets  of  cash  and  accounts
         receivables  less current  liabilities  ("Estimated Net Asset Amount"),
         which amount will not exceed Five Hundred Thousand Dollars  ($500,000),
         and (C) a convertible  debenture in the form attached hereto as Exhibit
         A ("Debenture") in the aggregate  principal amount of One Million Three
         Hundred Fifty Thousand  Dollars  ($1,350,000).  The cash portion of the
         foregoing  payment  (the  "Initial  Payment")  shall be  subject to the
         hold-back provisions of '2(d) and the adjustment provisions of '2(e)

                  (iii)  Earn-Out  Payment.  Within  sixty  (60) days  following
         receipt of acceptable  financial  statements  for the fiscal year ended
         December  31,  1999,  the Buyer  will pay to the  Seller an  additional
         amount  of  cash  and  Debentures  in an  amount  to be  calculated  in
         accordance  with the formula and  example  described  in Exhibit B (the
         "Earn-Out  Payment").  The Earn-Out  Payment  shall not exceed (A) Nine
         Hundred Fifty Thousand Dollars  ($950,000) in cash, and (B) a Debenture
         in the  aggregate  principal  amount  of Nine  Hundred  Fifty  Thousand
         Dollars  ($950,000).  As  provided  in Exhibit B, in the event that the
         1999  Actual  Pretax  Income of the  Company  (as defined in Exhibit B)
         equals or exceeds $1,176,500,  Seller shall receive one hundred percent
         of foregoing maximum the Earn-Out Payment.
(c) Terms of  Debentures.  In  addition  to the  terms  and  conditions
contained in the form of Debenture in Exhibit A, each Debenture may be converted
by its holder,  in whole or in part,  into the common stock of the Buyer ("Buyer
Shares") at a rate of Eleven  Dollars  ($11.00)  per share at any time after one
(1) year and before three (3) years, measured from the date of issuance.

         (d) The  Hold-Back.  The Buyer will hold and not deliver at Closing Two
Hundred  Seventy  Seven  Thousand  Five Hundred  Dollars  ($277,500) of the cash
portion  of the  Purchase  Price  (the  "Hold-Back").  The  Parties  agree  that
two-thirds  of the Hold-Back  ($185,000)  shall be held by the Buyer and paid to
the Seller on a deferred basis promptly following the post-Closing completion of
the audit  requirements of the Buyer, less amounts applied by the Buyer to cover
unknown audit  contingencies which occur following the Closing Date. The Parties
agree that the remaining  one-third of the Hold-Back  ($92,500) shall be held by
the Buyer and paid to the Seller on a deferred  basis one hundred  eighty  (180)
days  after  Closing,  less  amounts  applied  by the  Buyer  to  cover  unknown
contingencies that occur following Closing, including amounts due to Buyer under
'8(b).  Buyer shall also pay to Seller the interest  actually earned by Buyer on
Hold-Back amounts paid to Seller during the time such amounts are held by Buyer.

         (e)  Purchase  Price  Adjustment.  Within  thirty  (30) days  following
Closing,  the Company shall produce a definitive balance sheet as of the Closing
Date (the "Closing  Balance  Sheet") and  accounting  for the Company's  current
assets of cash and accounts receivables less current liabilities (the "Final Net
Asset  Amount").  The Final Net Asset  Amount  shall  not  exceed  Five  Hundred
Thousand Dollars  ($500,000).  Upon notice from the Buyer that the Buyer, in its
discretion,  accepts such  accounting,  the Purchase Price shall be increased by
the amount,  if any, by which the Final Net Asset Amount  exceeds the  Estimated
Net Asset Amount,  or  conversely,  the Purchase Price shall be decreased by the
amount,  if any, by which the Final Net Asset Amount is less than the  Estimated
Net Asset  Amount.  The Buyer  shall pay to the Seller any such  increase in the
Purchase  Price and the Seller shall repay to the Buyer any such decrease in the
Purchase  Price within ten (10) days  following  the notice of acceptance of the
Buyer.

         (f) Partial  Assignment of  Debentures.  The Parties  acknowledge  that
Seller has agreed to  compensate  Harry  Parmar as a finder for the  Company and
Seller with regard to this transaction. As compensation in full for the services
of Mr.  Parmar,  Seller is making,  upon Closing and at the time of the Earn-Out
Payment, a partial assignment of the Debentures as follows: (i) an assignment of
Seller's rights and interests under the Initial Payment  Debenture in the amount
of eight percent (8%) of the total Initial Payment  debenture  value  ($216,000)
and (ii) an assignment of Seller's rights and interests under the
Earn-Out  Payment  Debenture  in the amount of eight  percent (8%) of the total
Earn-Out Payment Debenture value (up to a maximum of $152,000, if any).

         (g) The Closing.  The closing of the transactions  contemplated by this
Agreement (the "Closing")  shall take place at the offices of Buyer in Salt Lake
City,  Utah,  commencing  at 9:00 a.m.  local  time on the second  business  day
following the satisfaction or waiver of all conditions to the obligations of the
Parties  to  consummate  the  transactions   contemplated   hereby  (other  than
conditions  with  respect to actions  the  respective  Parties  will take at the
Closing  itself)  or such  other  date as the  Buyer  and  Seller  may  mutually
determine (the "Closing Date").

         (h)  Deliveries  at the Closing.  At the  Closing,  (i) the Seller will
deliver  to the Buyer  the  various  certificates,  instruments,  and  documents
referred  to in '7(a)  below,  (ii) the Buyer  will  deliver  to the  Seller the
various  certificates,  instruments,  and documents  referred to in '7(b) below,
(iii) the Seller will deliver to the Buyer stock  certificates  representing all
of his  Company  Shares,  endorsed  in blank  or  accompanied  by duly  executed
assignment  documents,  and  (iv) the  Buyer  will  deliver  to the  Seller  the
consideration specified in '2(b) above.

3.       Representations and Warranties Concerning the Transaction.

         (a) Representations and Warranties of the Seller. The Seller represents
and  warrants  to the Buyer  that the  statements  contained  in this  '3(a) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this '3(a)) with
respect to himself, except as set forth in Annex I attached hereto.

                  (i)  Authorization  of Transaction.  The Seller has full power
         and  authority  to execute and deliver  this  Agreement  and to perform
         Seller's obligations  hereunder.  This Agreement  constitutes the valid
         and legally binding obligation of the Seller, enforceable in accordance
         with its terms and conditions.  The Seller need not give any notice to,
         make any filing with, or obtain any authorization, consent, or approval
         of any  government or  governmental  agency in order to consummate  the
         transactions contemplated by this Agreement.

                  (ii) Noncontravention.  Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated   hereby,   will   violate  any   constitution,   statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Seller is subject.

                  (iii) Brokers'  Fees.  Except at provided in Section 2(f), the
         Seller has no Liability or obligation to pay any fees or commissions to
         any  broker,   finder,  or  agent  with  respect  to  the  transactions
         contemplated  by this Agreement for which the Buyer could become liable
         or obligated.

                  (iv) Absence of Indebtedness  and Claims.  Except as set forth
         on Annex I, Seller is not  indebted to Company,  and the Company is not
         indebted to Seller and the Seller has no claims against the Company.

                  (v)  Company  Shares.  The  Seller  holds of  record  and owns
         beneficially  all  of  the  Company  Shares,  free  and  clear  of  any
         restrictions  on  transfer  (other  than  any  restrictions  under  the
         Securities Act and state securities laws),  Taxes,  Security Interests,
         options, warrants, purchase rights, contracts,  commitments,  equities,
         claims, and demands. The Seller is not a party to any option,  warrant,
         purchase  right, or other contract or commitment that could require the
         Seller to sell, transfer,  or otherwise dispose of any capital stock of
         the Company (other than this  Agreement).  The Seller is not a party to
         any voting  trust,  proxy,  or other  agreement or  understanding  with
         respect to the voting of any capital stock of the Company.

                  (vi)   Investment.   The  Seller  (A)  understands   that  the
         Debentures and Buyer Shares have not been, and will not be,  registered
         under the Securities Act, or under any state  securities  laws, and are
         being  offered and sold in reliance  upon federal and state  exemptions
         for transactions  not involving any public  offering,  (B) is acquiring
         the Debentures solely for Seller's own account for investment purposes,
         and  not  with a view to the  distribution  thereof,  (C) has  received
         copies of all of Buyer's  filings  with the SEC during 1998 and has had
         the opportunity to obtain additional information as desired in order to
         evaluate  the merits and the risks  inherent in holding the  Debentures
         and/or Buyer Shares,  (D) is able to bear the economic risk and lack of
         liquidity  inherent in holding the Debentures and/or Buyer Shares,  (E)
         understands  that Buyer has not agreed  to, and has no  obligation  to,
         file a registration statement to permit sale of the Debentures or Buyer
         Shares  received under or in connection  with this  Agreement,  and (F)
         represents that Seller is an Accredited Investor.

                  (vii)  Restrictions on Shares. The Seller understands that the
         Debentures  and Buyer Shares may not be  transferred  or resold without
         (A)  registration  under the  Securities  Act or any  applicable  state
         securities law, or (B) an exemption from the registration  requirements
         of the Securities  Act and applicable  state  securities  laws.  Seller
         understands that the  certificates  evidencing the Debentures and Buyer
         Shares may bear the following (or similar)  legend and any other legend
         required by applicable state law:

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND MAY NOT BE SOLD,  PLEDGED,  OR TRANSFERRED WITHIN IN THE
         UNITED STATES UNLESS THE SAME ARE  REGISTERED  UNDER THE SECURITIES ACT
         OF 1933, OR THE COMPANY  RECEIVES AN OPINION FROM COUNSEL  SATISFACTORY
         TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

         (b)  Representations  and Warranties of the Buyer. The Buyer represents
and  warrants  to the Seller  that the  statements  contained  in this '3(b) are
correct and  complete as of the date of this  Agreement  and will be correct and
complete as of the  Closing  Date (as though made then and as though the Closing
Date were  substituted  for the date of this Agreement  throughout  this '3(b)),
except as set forth in Annex II attached hereto.

                  (i) Organization of the Buyer. The Buyer is a corporation duly
         organized, validly existing, and in good standing under the laws of the
         jurisdiction of its incorporation.

                  (ii)  Authorization  of Transaction.  The Buyer has full power
         and authority (including full corporate power and authority) to execute
         and deliver this  Agreement and to perform its  obligations  hereunder.
         This Agreement  constitutes the valid and legally binding obligation of
         the Buyer, enforceable in accordance with its terms and conditions. The
         Buyer need not give any notice to, make any filing with,  or obtain any
         authorization,  consent,  or approval of any government or governmental
         agency in order to consummate  the  transactions  contemplated  by this
         Agreement.

                  (iii) Noncontravention. Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated  hereby,  will  (A)  violate  any  constitution,  statute,
         regulation, rule, injunction,  judgment, order, decree, ruling, charge,
         or other restriction of any government,  governmental  agency, or court
         to which the Buyer is subject or any provision of its charter or bylaws
         or (B)  conflict  with,  result in a breach  of,  constitute  a default
         under,  result in the acceleration of, create in any party the right to
         accelerate,  terminate,  modify, or cancel, or require any notice under
         any  agreement,   contract,   lease,  license,   instrument,  or  other
         arrangement to which the Buyer is a party or by which it is bound or to
         which any of its assets is subject.

                  (iv) Brokers'  Fees.  The Buyer has no Liability or obligation
         to pay any fees or  commissions  to any broker,  finder,  or agent with
         respect to the  transactions  contemplated  by this Agreement for which
         Seller could become liable or obligated.

                  (v) Validity of Buyer Shares.  The Buyer  Shares,  when issued
         and  delivered  by the  Company  in  accordance  with the terms of this
         Agreement  and the terms of the  Debentures,  shall be duly and validly
         issued, fully paid, and non-assessable and will be free of any liens or
         encumbrances.

                  (vi) Financial  Statements.  Buyer has provided to Seller: (1)
         the  Company's  Form 10-K for the fiscal year ended  December 31, 1997;
         and (2) the Company's Form 10-Q for the fiscal quarters ended March 31,
         1998,  June 30, 1998 and  September 30, 1998.  The foregoing  financial
         statements are true,  correct,  and complete in all material  respects,
         and has been prepared in accordance with generally accepted  accounting
         principles  ("GAAP")  applied  on a  consistent  basis  throughout  the
         periods  involved,  and fairly  present the financial  condition of the
         Company as of the dates set forth in such financial  statements and the
         results of operations of the Buyer for the period covered thereby.

                  (vii)  Investment.  The  Buyer is not  acquiring  the  Company
         Shares with a view to or for sale in connection  with any  distribution
         thereof within the meaning of the Securities Act.

                  (viii)   Disclosure.   The   representations   and  warranties
         contained  in this  '3(b) do not  contain  any  untrue  statement  of a
         material fact or omit to state any material fact  necessary in order to
         make  the  statements  and  information  contained  in this  '3(b)  not
         misleading.

4. Representations and Warranties  Concerning the Company. The Seller represents
and warrants to the Buyer that the  statements  contained in this '4 are correct
and complete as of the date of this  Agreement  and will be correct and complete
as of the Closing  Date (as though made then and as though the Closing Date were
substituted  for the date of this Agreement  throughout  this '4), except as set
forth in the  disclosure  schedule  delivered  by the Seller to the Buyer on the
date hereof and initialed by the Parties (the "Disclosure Schedule"). Nothing in
the Disclosure  Schedule shall be deemed  adequate to disclose an exception to a
representation or warranty made herein,  however, unless the Disclosure Schedule
identifies the exception with  particularity and describes the relevant facts in
reasonable  detail.  Without limiting the generality of the foregoing,  the mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a  representation  or warranty  made herein
(unless the  representation  or  warranty  has to do with the  existence  of the
document or other item  itself).  The  Disclosure  Schedule  will be arranged in
paragraphs  corresponding to the lettered and numbered  paragraphs  contained in
this '4.

         (a) Organization,  Qualification, and Corporate Power. The Company is a
corporation  duly organized,  validly  existing,  and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct  business and is in good  standing  under the laws of each  jurisdiction
where  such   qualification   is  required,   except  where  the  lack  of  such
qualification  would  not  have a  material  adverse  effect  on  the  business,
financial condition,  operations or future prospects of the Company. The Company
has  full  corporate  power  and  authority  and  all  licenses,   permits,  and
authorizations  necessary to carry on the  businesses in which it is engaged and
in which it presently proposes to engage and to own and use the properties owned
and  used by it.  '4(a) of the  Disclosure  Schedule  lists  the  directors  and
officers  of the  Company.  The Seller has  delivered  to the Buyer  correct and
complete  copies of the  charter and bylaws of the Company (as amended to date).
The minute books  (containing the records of meetings of the  stockholders,  the
board of directors,  and any  committees of the board of  directors),  the stock
certificate  books,  and the stock  record  books of the Company are correct and
complete.  The Company is not in default  under or in violation of any provision
of its charter or bylaws.

         (b) Capitalization.  The entire authorized capital stock of the Company
consists of 6,400,000 Company Shares, of which 285,000 Company Shares are issued
and outstanding. All of the issued and outstanding Company Shares have been duly
authorized,  are validly issued, fully paid, and nonassessable,  and are held of
record by the Seller. There are no outstanding or authorized options,  warrants,
purchase rights,  subscription  rights,  conversion rights,  exchange rights, or
other contracts or commitments that could require the Company to issue, sell, or
otherwise  cause to become  outstanding  any of its capital stock.  There are no
outstanding   or  authorized   stock   appreciation,   phantom   stock,   profit
participation,  or similar  rights  with  respect to the  Company.  There are no
voting trusts,  proxies,  or other agreements or understandings  with respect to
the voting of the capital stock of the Company.

         (c)  Noncontravention.  Neither the  execution and the delivery of this
Agreement,  nor the consummation of the transactions  contemplated  hereby, will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which the Company is subject or any provision
of the  charter or bylaws of the  Company  or (ii)  conflict  with,  result in a
breach of, constitute a default under,  result in the acceleration of, create in
any party the right to accelerate,  terminate, modify, or cancel, or require any
notice under any  agreement,  contract,  lease,  license,  instrument,  or other
arrangement  to which the Company is a party or by which it is bound or to which
any of its  assets is  subject  (or  result in the  imposition  of any  Security
Interest upon any of its assets), except where the violation,  conflict, breach,
default, acceleration, termination, modification,  cancellation, failure to give
notice,  or Securities  Interest would not have a material adverse effect on the
business, financial condition,  operations of future prospects of the Company or
the  Parties'  ability  to  consummate  the  transactions  contemplated  by this
Agreement.  The  Company  does not need to give any notice  to,  make any filing
with, or obtain any  authorization,  consent,  or approval of any  government or
governmental  agency in order for the  Parties to  consummate  the  transactions
contemplated  by this  Agreement  except  where the failure to take such actions
would not have a material  adverse effect on the business,  financial  condition
except where the lack of such  qualification  would not have a material  adverse
effect on the business,  financial condition,  operations of future prospects of
the Company or the Parties' ability to consummate the transactions  contemplated
by this Agreement.

         (d) Brokers' Fees.  Except as provided in Section 2(f), the Company has
no Liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the  transactions  contemplated  by this  Agreement for
which the Company or the Buyer could become liable or obligated.

         (e) Title to Assets. The Company has good and marketable title to, or a
valid  leasehold  interest in, the  properties and assets used by it, located on
its premises,  or shown on the Most Recent  Balance Sheet or acquired  after the
date thereof,  free and clear of all Security  Interests,  except for properties
and assets  disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet.

         (f) Financial Statements.  Attached hereto as Exhibit C are the balance
sheets and statements of income,  changes in stockholders' equity, and cash flow
as of and for the fiscal  years ended June 30,  1997 and 1998 (the "Most  Recent
Fiscal Year End") for the Company (collectively the "Financial Statements"). The
Financial  Statements  (including  the  notes  thereto)  have been  prepared  in
accordance  with GAAP  applied on a  consistent  basis  throughout  the  periods
covered  thereby,  present  fairly the financial  condition of the Company as of
such dates and the results of operations  of the Company for such  periods,  are
correct  and  complete,  and are  consistent  with the books and  records of the
Company (which books and records are correct and complete).

         (g) Events  Subsequent to Most Recent  Fiscal Year End.  Since the Most
Recent Fiscal Year End,  there has not been any material  adverse  change in the
business,  financial  condition,  operations,  results of operations,  or future
prospects of the Company.
Without limiting the generality of the foregoing, since that date:

                  (i) the Company has not sold, leased, transferred, or assigned
         any of its material  assets,  tangible or intangible,  other than for a
         fair consideration in the Ordinary Course of Business;

                  (ii) the Company has not entered into any material  agreement,
         contract, lease, or license outside the Ordinary Course of Business;

                  (iii)  no  party  (including  the  Company)  has  accelerated,
         terminated,  modified,  or cancelled any material agreement,  contract,
         lease,  or  license  to which the  Company is a party or by which it is
         bound;

                  (iv) the Company has not made any material capital expenditure
outside the Ordinary Course of Business;

                  (v) the Company has not made any  capital  investment  in, any
         loan to, or any  acquisition  of the securities or assets of, any other
         Person;

                  (vi)  the  Company  has not  created,  incurred,  assumed,  or
         guaranteed  more that $10,000 in the  aggregate  any  indebtedness  for
         borrowed money and capitalized lease obligation;

                  (vii) the Company has not delayed or postponed  the payment of
         accounts payable and other  Liabilities  outside the Ordinary Course of
         Business;

                  (viii) the Company has not cancelled,  compromised, waived, or
         released  any right or claim (or series of related  rights and  claims)
         either  involving  more than $10,000 or outside the Ordinary  Course of
         Business;

                  (ix) the  Company  has not  declared,  set aside,  or paid any
         dividend or made any  distribution  with  respect to its capital  stock
         (whether  in cash or in  kind) or  redeemed,  purchased,  or  otherwise
         acquired any of its capital stock;

                  (x) the Company has not experienced  any damage,  destruction,
         or loss (whether or not covered by insurance) to its property;

                  (xi) the Company has not made any loan to, or entered into any
         other transaction with, any of its directors,  officers,  and employees
         outside the Ordinary Course of Business;

                  (xii)  the  Company  has  not  granted  any  increase  in  the
         compensation of any of its directors,  officers,  and employees outside
         the Ordinary Course of Business;

                  (xiii) the  Company has not  adopted,  amended,  modified,  or
         terminated any bonus,  profit-sharing,  incentive,  severance, or other
         plan, contract,  or commitment for the benefit of any of its directors,
         officers,  and  employees (or taken any such action with respect to any
         other Employee Benefit Plan);

                  (xiv)  the  Company  has not  made  or  pledged  to  make  any
         charitable or other capital contribution outside the Ordinary Course of
         Business; and

                  (xv)    the Company has not committed to any of the foregoing.

         (h) Undisclosed Liabilities. The Company has no Liability (and there is
no  Basis  for  any  present  or  future  action,  suit,  proceeding,   hearing,
investigation, charge, complaint, claim, or demand against it giving rise to any
Liability),  except for (i) Liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (ii) Liabilities which have
arisen after the Most Recent Fiscal Year End in the Ordinary  Course of Business
(none of which results from,  arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

         (i)  Legal   Compliance.   The  Company  and  each  of  its  respective
predecessors  and Affiliates has complied with all  applicable  laws  (including
rules,  regulations,  codes, plans,  injunctions,  judgments,  orders,  decrees,
rulings,  and  charges  thereunder)  of  federal,   state,  local,  and  foreign
governments  (and  all  agencies  thereof),  and no  action,  suit,  proceeding,
hearing,  investigation,  charge,  complaint,  claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply, except
where the  failure  to comply  would not have a material  adverse  effect on the
business, financial condition, operations, or future prospects of the Company.

         (j)      Tax Matters.

                  (i) The Company has filed all Tax Returns that it was required
         to  file.  All  such Tax  Returns  were  correct  and  complete  in all
         respects.  All Taxes owed by the  Company  (whether or not shown on any
         Tax  Return)  have  been  paid.  The  Company   currently  is  not  the
         beneficiary  of any  extension  of time  within  which  to file any Tax
         Return. There is no material dispute or claim concerning any Tax Return
         either (A) claimed or raised by any  authority  in writing or (b) as to
         which the Seller or the  directors  and  officers  of the  Company  has
         Knowledge.

                  (ii) The Company has withheld  and paid all Taxes  required to
         have been withheld and paid in connection with amounts paid or owing to
         any employee, independent contractor,  creditor,  stockholder, or other
         third party.

                  (iii) The Company has not waived any statute of limitations in
         respect of Taxes or agreed to any  extension  of time with respect to a
         Tax assessment or deficiency.

                  (iv) The  Company has not filed a consent  under Code  '341(f)
         concerning  collapsible  corporations.  The  Company  has not  made any
         material payments, is not obligated to make any material payments,  nor
         is it a party to any agreement that under certain  circumstances  could
         obligate it to make any material  payments  that will not be deductible
         under  Code  '280G.  The  Company  has not  been a United  States  real
         property  holding  corporation  within the  meaning of Code  '897(c)(2)
         during the applicable period specified in Code  '897(c)(1)(A)(ii).  The
         Company is not a party to any Tax allocation or sharing agreement.  The
         Company (A) has not been a member of an  affiliated  group  (within the
         meaning of Code  '1504(a))  filing a  consolidated  federal  income Tax
         Return and (B) has no Liability for the Taxes of any Person (other than
         the Company) under Reg.  '1.1502-6 (or any similar  provision of state,
         local, or foreign law), as a transferee or successor,  by contract,  or
         otherwise.

                  (v) The unpaid  Taxes of the  Company  (A) did not,  as of the
         Most  Recent  Fiscal Year End,  exceed the  reserve  for Tax  Liability
         (rather  than any reserve for  deferred  Taxes  established  to reflect
         timing  differences  between book and Tax income) set forth on the face
         of the Most Recent Balance Sheet (rather than in any notes thereto) and
         (B) do not exceed  that  reserve as  adjusted  for the  passage of time
         through  the  Closing  Date in  accordance  with  the past  custom  and
         practice of the Company in filing its Tax Returns.

         (k)      Intellectual Property.

                  (i) The  Company  owns or has the  right  to use  pursuant  to
         license, sublicense, agreement, or permission all Intellectual Property
         necessary  for  the  operation  of the  businesses  of the  Company  as
         presently  conducted and as presently  proposed to be  conducted.  Each
         item of Intellectual  Property owned or used by the Company immediately
         prior to the Closing  hereunder  will be owned or available  for use by
         the Company on identical terms and conditions immediately subsequent to
         the Closing  hereunder.  To the  Knowledge of any of the Seller and the
         directors   and   officers  of  the   Company   (and   employees   with
         responsibility  for  Intellectual  Property  matters),  the Company has
         taken  all  necessary  action  to  maintain  and  protect  each item of
         Intellectual Property that it owns or uses.

                  (ii) To the  Knowledge of any of the Seller and the  directors
         and  officers of the Company (and  employees  with  responsibility  for
         Intellectual  Property  matters),  the Company has not interfered with,
         infringed  upon,  misappropriated,  or otherwise  violated any material
         Intellectual  Property rights of third parties,  and no such person has
         ever received any charge, complaint,  claim, demand, or notice alleging
         any such  interference,  infringement,  misappropriation,  or violation
         (including  any claim that the  Company  must  license or refrain  from
         using any  Intellectual  Property  rights of any third  party).  To the
         Knowledge  of any of the Seller and the  directors  and officers of the
         Company (and employees with  responsibility  for Intellectual  Property
         matters),   no  third  party  has  interfered  with,   infringed  upon,
         misappropriated,   or  otherwise  violated  any  material  Intellectual
         Property rights of the Company.

                  (iii)  '4(k)(iii) of the Disclosure  Schedule  identifies each
         patent or  registration  which  has been  issued  to the  Company  with
         respect to any of its  Intellectual  Property,  identifies each pending
         patent  application or application for  registration  which the Company
         has  made  with  respect  to  any  of its  Intellectual  Property,  and
         identifies each material license,  agreement, or other permission which
         the Company  has granted to any third party with  respect to any of its
         Intellectual  Property  (together with any exceptions).  The Seller has
         delivered to the Buyer correct and complete copies of all such patents,
         registrations,  applications, licenses, agreements, and permissions (as
         amended to date). '4(k)(iii) of the Disclosure Schedule also identifies
         each material trade name or unregistered  trademark used by the Company
         in connection with any of its businesses.  With respect to each item of
         Intellectual  Property  required to be  identified in '4(k)(iii) of the
         Disclosure Schedule:

                           (A)  the  Company  possess  all  right,   title,  and
                  interest  in and to the item,  free and clear of any  Security
                  Interest, license, or other restriction;

                           (B)  the  item  is not  subject  to  any  outstanding
injunction, judgment, order, decree, ruling, or charge;

                           (C)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the Seller and the  directors
                  and  officers   (and   employees   with   responsibility   for
                  Intellectual  Property matters) of the Company,  is threatened
                  which challenges the legality, validity, enforceability,  use,
                  or ownership of the item; and

                           (D) The Company has not ever agreed to indemnify  any
                  Person  for  or  against   any   interference,   infringement,
                  misappropriation, or other conflict with respect to the item.

                  (iv) '4(k)(iv) of the Disclosure Schedule identifies each item
         of Intellectual Property that any third party owns and that the Company
         uses pursuant to license,  sublicense,  agreement,  or permission.  The
         Seller has  delivered to the Buyer  correct and complete  copies of all
         such licenses, sublicenses,  agreements, and permissions (as amended to
         date).  With respect to each item of Intellectual  Property required to
         be identified in '4(k)(iv) of the Disclosure Schedule:

                           (A) the license, sublicense, agreement, or permission
                  covering the item is legal, valid, binding,  enforceable,  and
                  in full force and effect in all material respects;

                           (B) the license, sublicense, agreement, or permission
                  will continue to be legal, valid, binding, enforceable, and in
                  full  force  and  effect  on  identical  terms  following  the
                  consummation of the transactions contemplated hereby;

                           (C) no party to the license,  sublicense,  agreement,
                  or  permission  is in  breach  or  default,  and no event  has
                  occurred which with notice or lapse of time would constitute a
                  breach or  default  or permit  termination,  modification,  or
                  acceleration thereunder;

                           (D) no party to the license,  sublicense,  agreement,
                  or permission has repudiated any material provision thereof;

                           (E) with respect to each sublicense, to the Knowledge
                  of any of the  Seller  and the  directors  and  officers  (and
                  employees  with   responsibility  for  Intellectual   Property
                  matters) of the Company the representations and warranties set
                  forth  in  subsections  (A)  through  (D)  above  are true and
                  correct with respect to the underlying license;

                           (F) the underlying item of  Intellectual  Property is
                  not subject to any outstanding  injunction,  judgment,  order,
                  decree, ruling, or charge;

                           (G)   no   action,   suit,    proceeding,    hearing,
                  investigation,  charge, complaint, claim, or demand is pending
                  or, to the  Knowledge  of any of the Seller and the  directors
                  and  officers   (and   employees   with   responsibility   for
                  Intellectual  Property matters) of the Company,  is threatened
                  which challenges the legality,  validity, or enforceability of
                  the underlying item of Intellectual Property; and

                           (H) The Company has not  granted  any  sublicense  or
                  similar  right  with  respect  to  the  license,   sublicense,
                  agreement, or permission.

                  (v) To the  Knowledge  of any of the Seller and the  directors
         and  officers  (and  employees  with  responsibility  for  Intellectual
         Property matters) of the Company,  the Company will not interfere with,
         infringe  upon,  misappropriate,  or otherwise come into conflict with,
         any  Intellectual  Property  rights of third parties as a result of the
         continued  operation of its  businesses  as presently  conducted and as
         presently proposed to be conducted.

                  (vi) Neither the Seller nor the  directors  and officers  (and
         employees with responsibility for Intellectual Property matters) of the
         Company has any Knowledge of any new products, inventions,  procedures,
         or methods of manufacturing or processing that any competitors or other
         third  parties have  developed  which  reasonably  could be expected to
         supersede or make obsolete any product or process of the Company.

         (l)  Tangible  Assets.  The  Company  owns  or  leases  all  buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
businesses  as presently  conducted  and as presently  proposed to be conducted.
Each such tangible asset is free from material defects (patent and latent),  has
been  maintained  in  accordance  with  normal  industry  practice,  is in  good
operating  condition  and  repair  (subject  to normal  wear and  tear),  and is
suitable  for the  purposes  for which it  presently  is used and  presently  is
proposed to be used.

         (m) Inventory.  The inventory of the Company  consists of raw materials
and supplies,  manufactured and purchased parts, goods in process,  and finished
goods,  all of which is  merchantable  and fit for the  purpose for which it was
procured or manufactured,  and none of which is slow-moving,  obsolete, damaged,
or defective,  subject only to the reserve for inventory  writedown set forth on
the face of the Most Recent  Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Company.

         (n) Contracts.  '4(n) of the Disclosure Schedule is a true, correct and
complete list of all the material contracts of the Company (including  insurance
policies  to  which  the  Company  has  been a party,  a named  insured,  or the
beneficiary  at any time within the past five  years),  and all  amendments  and
modifications thereto, and there are no oral or other amendment or modifications
thereto.  The Seller has  delivered to the Buyer a correct and complete  copy of
each written agreement listed in '4(n) of the Disclosure Schedule (as amended to
date) and a written  summary setting forth the terms and conditions of each oral
agreement referred to in '4(n) of the Disclosure Schedule.  With respect to each
such agreement: (A) the agreement is legal, valid, binding,  enforceable, and in
full force and effect;  (B) the  agreement  will  continue  to be legal,  valid,
binding,  enforceable, and in full force and effect on identical terms following
the  consummation  of  the  transactions  contemplated  hereby;  and  (C) to the
Knowledge of any of the Seller and the officers and  directors of the Company no
party is in breach or default,  and no event has  occurred  which with notice or
lapse of time  would  constitute  a breach or  default,  or permit  termination,
modification,  or acceleration,  under the agreement and no party has repudiated
any provision of the agreement.

         (o) Notes and Accounts Receivable. All notes and accounts receivable of
the  Company  are  reflected  properly  on its  books  and  records,  are  valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded  amounts,
subject  only to the  reserve  for bad  debts  set forth on the face of the Most
Recent  Balance  Sheet  (rather  than in any notes  thereto) as adjusted for the
passage of time through the Closing Date in accordance  with the past custom and
practice of the Company.

         (p) Powers of  Attorney.  There are no  outstanding  powers of attorney
executed on behalf of the Company.

         (q) Insurance. the Company has been covered during the past 10 years by
insurance in scope and amount  customary and  reasonable  for the  businesses in
which it has engaged during the aforementioned  period.  '4(q) of the Disclosure
Schedule describes any self-insurance arrangements affecting the Company.

         (r)  Litigation.  '4(r) of the  Disclosure  Schedule  sets  forth  each
instance  in which the  Company  (i) is subject to any  outstanding  injunction,
judgment,  order,  decree,  ruling,  or  charge  or (ii) is a party  or,  to the
Knowledge of any of the Seller and the directors and officers of the Company, is
threatened  to be made a party to any  action,  suit,  proceeding,  hearing,  or
investigation  of, in, or before any court or  quasi-judicial  or administrative
agency of any  federal,  state,  local,  or foreign  jurisdiction  or before any
arbitrator.   None  of  the   actions,   suits,   proceedings,   hearings,   and
investigations set forth in '4(r) of the Disclosure Schedule could result in any
material  adverse  change  in the  business,  financial  condition,  operations,
results of operations,  or future  prospects of the Company.  Neither the Seller
nor the directors and officers of the Company has any reason to believe that any
such action,  suit,  proceeding,  hearing,  or  investigation  may be brought or
threatened against the Company.

         (s) Product  Warranty.  Each product  manufactured,  sold,  leased,  or
delivered by the Company has been in conformity with all applicable  contractual
commitments  and all  express  and  implied  warranties,  and the Company has no
material  Liability  (and there is no Basis for any  present  or future  action,
suit, proceeding,  hearing,  investigation,  charge, complaint, claim, or demand
against it giving rise to any  Liability)  for  replacement or repair thereof or
other damages in connection  therewith,  subject only to the reserve for product
warranty  claims set forth on the face of the Most Recent  Balance Sheet (rather
than in any notes  thereto)  as  adjusted  for the  passage of time  through the
Closing Date in accordance with the past custom and practice of the Company.  No
product  manufactured,  sold,  leased, or delivered by the Company is subject to
any guaranty,  warranty, or other indemnity beyond the applicable standard terms
and  conditions  of sale or lease.  '4(s) of the  Disclosure  Schedule  includes
copies of the  standard  terms and  conditions  of sale or lease for the Company
(containing applicable guaranty, warranty, and indemnity provisions).

         (t) Product  Liability.  The Company has no Liability  (and there is no
Basis  for  any   present  or  future   action,   suit,   proceeding,   hearing,
investigation, charge, complaint, claim, or demand against it giving rise to any
Liability)  arising out of any injury to  individuals or property as a result of
the ownership,  possession, or use of any product manufactured, sold, leased, or
delivered by the Company.

         (u) Employees.  To the Knowledge of any of the Seller and the directors
and officers of the Company, no executive,  key employee,  or group of employees
has any plans to terminate  employment  with the  Company.  The Company is not a
party to or bound by any collective bargaining agreement, nor has it experienced
any strikes,  grievances,  claims of unfair labor practices, or other collective
bargaining  disputes.  The Company has not committed any unfair labor  practice.
Neither  the  Seller nor the  directors  and  officers  of the  Company  has any
Knowledge of any organizational  effort presently being made or threatened by or
on behalf of any labor union with respect to employees of the Company.

         (v)      Employee Benefits.

                  (i)  '4(v) of the  Disclosure  Schedule  lists  each  Employee
         Benefit  Plan  that  the  Company  maintains  or to which  the  Company
         contributes or has any obligation to contribute.

                           (A) Each such Employee Benefit Plan (and each related
                  trust,  insurance  contract,  or fund) complies in form and in
                  operation in all respects with the applicable  requirements of
                  ERISA, the Code, and other applicable laws.

                           (B) All required reports and  descriptions  have been
                  timely  filed and  distributed  appropriately  with respect to
                  each such Employee  Benefit Plan.  The  requirements  of COBRA
                  have been met with respect to each such Employee  Benefit Plan
                  which is subject to COBRA.

                           (C) All premiums  and  contributions  (including  all
                  employer   contributions   and   employee   salary   reduction
                  contributions)  which  are due  have  been  paid to each  such
                  Employee Benefit Plan and all premiums and  contributions  for
                  any period  ending on or before the Closing Date which are not
                  yet due have been paid to each such  Employee  Benefit Plan or
                  accrued in accordance with the past custom and practice of the
                  Company.

                           (D)  Each  such  Employee  Benefit  Plan  which is an
                  Employee  Pension  Benefit  Plan meets the  requirements  of a
                  "qualified plan" under Code '401(a), has received,  within the
                  last four  years,  a favorable  determination  letter from the
                  Internal  Revenue  Service that it is a "qualified  plan," and
                  Seller is not aware of any facts or  circumstances  that could
                  result in the revocation of such determination letter.

                           (E) The  market  value  of  assets  under  each  such
                  Employee  Benefit  Plan which is an Employee  Pension  Benefit
                  Plan (other than any Multiemployer Plan) equals or exceeds the
                  present  value  of  all  vested  and   nonvested   Liabilities
                  thereunder   determined  in  accordance   with  PBGC  methods,
                  factors,  and  assumptions  applicable to an Employee  Pension
                  Benefit Plan terminating on the date for determination.

                           (F) The Seller has delivered to the Buyer correct and
                  complete  copies  of  the  plan  documents  and  summary  plan
                  descriptions,  the most recent  determination  letter received
                  from the Internal Revenue  Service,  the most recent Form 5500
                  Annual  Report,  and all related trust  agreements,  insurance
                  contracts,  and other funding  agreements which implement each
                  such Employee Benefit Plan.

                  (ii)  With  respect  to each  Employee  Benefit  Plan that the
         Company and any ERISA Affiliate  maintains or ever has maintained or to
         which any of them contributes,  ever has contributed,  or ever has been
         required to contribute:

                           (A)  No  such  Employee  Benefit  Plan  which  is  an
                  Employee  Pension  Benefit Plan (other than any  Multiemployer
                  Plan) has been completely or partially  terminated or been the
                  subject of a  Reportable  Event as to which  notices  would be
                  required to be filed with the PBGC.  No proceeding by the PBGC
                  to terminate  any such  Employee  Pension  Benefit Plan (other
                  than any  Multiemployer  Plan) has been  instituted or, to the
                  Knowledge of the Seller and the  directors and officers of the
                  Company, threatened.

                           (B) There have been no Prohibited  Transactions  with
                  respect to any such  Employee  Benefit  Plan. No Fiduciary has
                  any  Liability  for  breach  of  fiduciary  duty or any  other
                  failure to act or comply in connection with the administration
                  or investment of the assets of any such Employee Benefit Plan.
                  No action,  suit,  proceeding,  hearing, or investigation with
                  respect to the  administration or the investment of the assets
                  of any such Employee  Benefit Plan (other than routine  claims
                  for  benefits)  is pending or, to the  Knowledge of the Seller
                  and the  directors  and officers of the  Company,  threatened.
                  Neither  the  Seller nor the  directors  and  officers  of the
                  Company has any  Knowledge  of any Basis for any such  action,
                  suit, proceeding, hearing, or investigation.

                           (C) The  Company  has not  incurred,  and neither the
                  Seller nor the  directors  and officers of the Company has any
                  reason to expect that the Company will incur any  Liability to
                  the PBGC (other than PBGC premium payments) or otherwise under
                  Title IV of  ERISA  (including  any  withdrawal  liability  as
                  defined in ERISA  '4201) or under the Code with respect to any
                  such  Employee  Benefit  Plan  which  is an  Employee  Pension
                  Benefit Plan.

                  (iii)  The  Company   does  not   contribute   to,  never  has
         contributed  to,  and  never has been  required  to  contribute  to any
         Multiemployer Plan or has any Liability (including withdrawal liability
         as defined in ERISA '4201) under any Multiemployer Plan.

                  (iv) The Company does not maintain and never has maintained or
         contributed, and never has been required to contribute, to any Employee
         Welfare Benefit Plan providing  medical,  health,  or life insurance or
         other  welfare-type  benefits for current retirees,  future retirees or
         terminated employees, their spouses, or their dependents (other than in
         accordance with COBRA).

         (w)  Guaranties.  The Company is not a guarantor or otherwise is liable
for any Liability or obligation (including indebtedness) of any other Person.

         (x)      Environmental, Health, and Safety Matters.

                  (i) Each of the Company and its  predecessors has complied and
         is  in  compliance   with  all   Environmental,   Health,   and  Safety
         Requirements.

                  (ii) Without  limiting the  generality of the  foregoing,  the
         Company has obtained and complied with, and is in compliance  with, all
         permits,  licenses and other  authorizations that are required pursuant
         to Environmental, Health, and Safety Requirements for the occupation of
         its  facilities  and the operation of its business;  a list of all such
         permits, licenses and other authorizations is set forth on the attached
         "Environmental and Safety Permits Schedule."

                  (iii)  Neither the Company nor its  predecessors  has received
         any written or oral notice,  report or other information  regarding any
         actual or  alleged  violation  of  Environmental,  Health,  and  Safety
         Requirements,  or any  liabilities  or potential  liabilities  (whether
         accrued, absolute,  contingent,  unliquidated or otherwise),  including
         any investigatory,  remedial or corrective obligations, relating to any
         of them or its  facilities  arising under  Environmental,  Health,  and
         Safety Requirements.

                  (iv) None of the following  exists at any property or facility
         owned or operated by the Company:  (1) underground  storage tanks,  (2)
         asbestos-containing material in any form or condition, (3) materials or
         equipment  containing  polychlorinated  biphenyls,  or  (4)  landfills,
         surface impoundments, or disposal areas.

                  (v)  Neither the Company  nor its  predecessors  has  treated,
         stored,  disposed  of,  arranged  for or  permitted  the  disposal  of,
         transported,  handled,  or released any  substance,  including  without
         limitation any hazardous  substance,  or owned or operated any property
         or facility  (and no such property or facility is  contaminated  by any
         such  substance)  in a manner  that has  given  or would  give  rise to
         liabilities,  including any liability  for response  costs,  corrective
         action costs,  personal  injury,  property  damage,  natural  resources
         damages or attorney fees,  pursuant to any  Environmental,  Health, and
         Safety Requirements.

                  (vi) To the  Knowledge  of any of the Seller and the  officers
         and directors of the Company,  no facts,  events or conditions relating
         to the past or present  facilities,  properties  or  operations  of the
         Company or any of its predecessors will give rise to any investigatory,
         remedial or corrective  obligations pursuant to Environmental,  Health,
         and  Safety  Requirements,  or  give  rise  to  any  other  liabilities
         including without limitation any relating to onsite or offsite releases
         or threatened  releases of hazardous  materials,  substances or wastes,
         personal injury, property damage or natural resources damage.

         (y) Certain Business  Relationships with the Company. Other than in his
capacity  as an  shareholder,  officer,  and  director,  the Seller has not been
involved in any material  business  arrangement or relationship with the Company
within the past 12 months,  and does not own any  material  asset,  tangible  or
intangible, which is used in the business of the Company.

         (z) Year 2000 Items. All Information  Technology that is relied upon by
the Company in its  internal  operations  or is included as part of the products
produced by the Company,  currently and during the past two years,  is Year 2000
Compliant.  Additionally,  to the  Knowledge  of the  Seller,  the  Company  has
received no notice of any material vendor or customer of the Company  indicating
that such  vendor or customer  may be unable to continue to conduct  business in
the ordinary  course due to  difficulties  with its own business being Year 2000
Compliant.

         (aa) Disclosure.  The representations and warranties  contained in this
'4 do not contain any untrue  statement of a material  fact or omit to state any
material  fact  necessary  in  order  to make  the  statements  and  information
contained in this '4 not misleading.

5.  Pre-Closing  Covenants.  The Parties  agree as follows  with  respect to the
period between the execution of this Agreement and the Closing.

         (a) General.  Each of the Parties will use his or its  reasonable  best
efforts to take all action and to do all things  necessary or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction,  but not waiver, of the closing conditions set forth in
'7 below).

         (b) Notices and Consents. The Seller will cause the Company to give any
notices to third parties,  and will cause the Company to use its best efforts to
obtain any third party  consents,  that the Buyer may request in connection with
the matters referred to in '4(c) above. Each of the Parties will (and the Seller
will cause the Company to) give any notices to, make any filings  with,  and use
its best  efforts to obtain  any  authorizations,  consents,  and  approvals  of
governments and governmental agencies in connection with the matters referred to
in '3(a)(ii), '3(b)(ii), and '4(c) above.

         (c)  Operation  of  Business.  The Seller  will not cause or permit the
Company  to  engage  in any  practice,  take  any  action,  or  enter  into  any
transaction  outside the  Ordinary  Course of  Business.  Without  limiting  the
generality of the foregoing,  the Seller will not cause or permit the Company to
(i)  declare,  set aside,  or pay any  dividend  or make any  distribution  with
respect to its capital stock or redeem,  purchase,  or otherwise  acquire any of
its  capital  stock,  (ii)  materially  increase or modify the  compensation  or
benefits to any of its employees; (iii) issue any equity securities or rights to
acquire  such  securities;  (iv)  dispose of any assets,  except in the Ordinary
Course of  Business;  (v) take any other  action or fail to take any action that
would result in a material  change in the value of the Company's  business as of
the date of this Agreement;  or (vi) otherwise engage in any practice,  take any
action, or enter into any transaction of the sort described in '4(g) above.

         (d) Preservation of Business. The Seller will cause the Company to keep
its  business  and  properties   substantially  intact,  including  its  present
operations,  physical  facilities,  working  conditions,  and relationships with
lessors, licensors, suppliers, customers, and employees.

         (e) Full Access.  The Seller will permit, and the Seller will cause the
Company  to  permit,  representatives  of the Buyer to have  full  access at all
reasonable  times,  and in a  manner  so as not to  interfere  with  the  normal
business  operations  of the Company,  to all premises,  properties,  personnel,
books,  records  (including  Tax  records),   contracts,  and  documents  of  or
pertaining to the Company.

         (f) Notice of Developments.  The Seller will give prompt written notice
to the Buyer of any material adverse  development causing a breach of any of the
representations  and warranties in '4 above. Each Party will give prompt written
notice to the others of any material adverse development causing a breach of any
of his or its own  representations  and warranties in '3 above. No disclosure by
any  Party  pursuant  to this  '5(f),  however,  shall  be  deemed  to  amend or
supplement  Annex I, Annex II, or the Disclosure  Schedule or to prevent or cure
any misrepresentation, breach of warranty, or breach of covenant.

         (g) Exclusivity.  The Seller will not (and will not cause or permit the
Company to) (i) solicit,  initiate,  or encourage the submission of any proposal
or offer from any Person  relating to the  acquisition  of any capital  stock or
other  voting  securities,  or any  substantial  portion of the  assets,  of the
Company  (including any acquisition  structured as a merger,  consolidation,  or
share  exchange)  or  (ii)   participate  in  any  discussions  or  negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the  foregoing.  The Seller will not vote his Company  Shares in favor of
any such acquisition structured as a merger,  consolidation,  or share exchange.
The Seller will notify the Buyer  immediately  if any Person makes any proposal,
offer, inquiry, or contact with respect to any of the foregoing.

6.  Post-Closing  Covenants.  The Parties  agree as follows  with respect to the
period following the Closing.

         (a) General.  In case at any time after the Closing any further  action
is necessary or desirable to carry out the purposes of this  Agreement,  each of
the Parties will take such further action  (including the execution and delivery
of such further  instruments  and  documents) as any other Party  reasonably may
request,  all at the sole cost and expense of the  requesting  Party (unless the
requesting Party is entitled to  indemnification  therefor under '8 below).  The
Seller acknowledges and agrees that from and after the Closing the Buyer will be
entitled to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.

         (b)  Litigation  Support.  In the  event  and for so long as any  Party
actively is  contesting  or  defending  against any  action,  suit,  proceeding,
hearing,  investigation,  charge, complaint, claim, or demand in connection with
(i)  any  transaction  contemplated  under  this  Agreement  or (ii)  any  fact,
situation,   circumstance,   status,   condition,   activity,   practice,  plan,
occurrence,  event, incident, action, failure to act, or transaction on or prior
to the Closing  Date  involving  the  Company,  each of the other  Parties  will
cooperate with him or it and his or its counsel in the contest or defense,  make
available their personnel,  and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the  contesting  or defending  Party (unless the
contesting or defending Party is entitled to  indemnification  therefor under '8
below).

         (c) Transition. The Seller will not take any action that is designed or
intended  to have the effect of  discouraging  any lessor,  licensor,  customer,
supplier,  or other business  associate of the Company from maintaining the same
business  relationships with the Company after the Closing as it maintained with
the Company prior to the Closing.  The Seller will refer all customer  inquiries
relating  to the  businesses  of the  Company  to the  Buyer  from and after the
Closing.

         (d)      Confidentiality.

                  (i)   Confidential   Information  of  the  Buyer.  The  Seller
         acknowledges that in the course of performing this Agreement, Buyer may
         provide  to the  Seller or the  Company  confidential  and  proprietary
         information about its business which is not generally  available to the
         public ("Buyer Confidential  Information"),  the disclosure of which to
         third  parties  without  the express  authorization  of the Buyer would
         result in economic losses to the Buyer. Accordingly,  regardless of the
         means of  communication  of the  Buyer  Confidential  Information,  the
         Seller  agrees to (and  cause the  Company  to agree to) hold the Buyer
         Confidential  Information in strict  confidence and,  without the prior
         written   permission  from  the  Buyer,   not  to  disclose  the  Buyer
         Confidential  Information  to any  third  parties,  or  use it for  any
         commercial purposes except in performance of this Agreement.

                  (ii) Confidential  Information of the Company. The Seller will
         treat  and  hold as such  all of the  confidential  information  of the
         Company ("Company  Confidential  Information"),  and refrain from using
         any of Company Confidential  Information except in connection with this
         Agreement  or in  the  course  of his  continued  employment  with  the
         Company.

                  (iii) General.  The Seller shall promptly  notify the Buyer of
         any breach of the  foregoing  obligations  of  confidentiality.  In the
         event that the Seller or the Company is  requested or required (by oral
         question  or  request  for   information  or  documents  in  any  legal
         proceeding,  interrogatory,  subpoena,  civil investigative  demand, or
         similar process) to disclose any Confidential  Information,  the Seller
         will (or will cause the  Company  to) notify the Buyer  promptly of the
         request  or  requirement  so that the  Buyer  may  seek an  appropriate
         protective order or waive compliance with the provisions of this '6(d).
         If, in the  absence of a  protective  order or the  receipt of a waiver
         hereunder,  the  Seller  or  Company  is,  on the  advice  of  counsel,
         compelled to disclose any  Confidential  Information to any tribunal or
         else stand  liable for  contempt,  the Seller (or Company) may disclose
         the Confidential Information to the tribunal;  provided,  however, that
         the Seller  shall use (and shall cause the  Company to use)  reasonable
         efforts to  obtain,  at the  request  of the  Buyer,  an order or other
         assurance that confidential  treatment will be accorded to such portion
         of the Confidential  Information  required to be disclosed as the Buyer
         shall  designate.  The  foregoing  provisions  shall  not  apply to any
         Confidential  Information  which is  generally  available to the public
         immediately prior to the time of disclosure.

         (e) Covenant Not to Compete. For a period of three years from and after
the Closing  Date,  the Seller will not engage  directly  or  indirectly  in any
business that the Company conducts as of the Closing Date in any geographic area
in which the Company now or hereafter conducts that business; provided, however,
that no owner of less than 1% of the  outstanding  stock of any  publicly-traded
corporation  shall be deemed to engage  solely by reason  thereof  in any of its
businesses.  If the final judgment of a court of competent jurisdiction declares
that any term or  provision  of this  '6(e) is  invalid  or  unenforceable,  the
Parties  agree  that  the  court  making  the  determination  of  invalidity  or
unenforceability  shall have the power to reduce the scope, duration, or area of
the term or provision,  to delete  specific words or phrases,  or to replace any
invalid or  unenforceable  term or provision  with a term or  provision  that is
valid and  enforceable and that comes closest to expressing the intention of the
invalid  or  unenforceable  term or  provision,  and  this  Agreement  shall  be
enforceable  as so modified  after the  expiration  of the time within which the
judgment may be appealed.

7.       Conditions to Obligation to Close.

         (a) Conditions to Obligation of the Buyer.  The obligation of the Buyer
to consummate  the  transactions  to be performed by it in  connection  with the
Closing is subject to satisfaction of the following conditions:

                  (i) the  representations and warranties set forth in '3(a) and
         '4 above shall be true and correct in all  material  respects at and as
         of the Closing Date;

                  (ii) the Seller shall have  performed and complied with all of
         his covenants hereunder in all material respects through the Closing;

                  (iii) the Company  shall have  procured all of the third party
consents specified in '5(b) above;

                  (iv) no  action,  suit,  or  proceeding  shall be  pending  or
         threatened before any court or quasi-judicial or administrative  agency
         of any federal,  state,  local,  or foreign  jurisdiction or before any
         arbitrator wherein an unfavorable injunction,  judgment, order, decree,
         ruling,  or  charge  would  (A)  prevent  consummation  of  any  of the
         transactions  contemplated  by this  Agreement,  (B)  cause  any of the
         transactions  contemplated by this Agreement to be rescinded  following
         consummation,  (C) affect  adversely  the right of the Buyer to own the
         Company Shares and to control the Company,  or (D) affect adversely the
         right of the  Company to own its assets and to operate  its  businesses
         (and no such injunction,  judgment,  order,  decree,  ruling, or charge
         shall be in effect);

                  (v) the Seller shall have delivered to the Buyer a certificate
         to  the  effect  that  each  of  the  conditions   specified  above  in
         '7(a)(i)-(iv) is satisfied in all respects;

                  (vi) Buyer and Seller shall enter into an employment agreement
         in a form mutually  agreeable to Buyer and Seller and the same shall be
         in full force and effect;

                  (vii) Buyer and Seller  shall enter into a mutually  agreeable
         form of Pledge Agreement to secure the Debentures and the same shall be
         in full force and effect;

                  (viii)  the  Buyer  shall  have  received  the   resignations,
         effective  as of the  Closing,  of each  director  and  officer  of the
         Company other than those whom the Buyer shall have specified in writing
         at least five business days prior to the Closing;

                  (ix) no material adverse change in the financial  condition or
         results of operation of the  Company,  or in the  condition or value of
         its material assets,  taken as a whole, shall have occurred between the
         date of this Agreement and the Closing Date;

                  (x) Buyer shall be  satisfied  with its  continuing  business,
         legal, environmental, and accounting due diligence investigation of the
         Company in all respects; and

                  (xi) all actions to be taken by the Seller in connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Buyer.

The Buyer may waive any  condition  specified  in this  '7(a) if it  executes  a
writing so stating at or prior to the Closing.

         (b)  Conditions  to  Obligation  of the Seller.  The  obligation of the
Seller to consummate the  transactions to be performed by him in connection with
the Closing is subject to satisfaction of the following conditions:

                  (i)      the representations and warranties set forth in '3(b)
         above shall be true and correct in all material respects at and as of 
         the Closing Date;

                  (ii) the Buyer shall have  performed  and complied with all of
         its covenants hereunder in all material respects through the Closing;

                  (iii) no  action,  suit,  or  proceeding  shall be  pending or
         threatened before any court or quasi-judicial or administrative  agency
         of any federal,  state,  local,  or foreign  jurisdiction or before any
         arbitrator wherein an unfavorable injunction,  judgment, order, decree,
         ruling,  or  charge  would  (A)  prevent  consummation  of  any  of the
         transactions  contemplated  by this  Agreement  or (B) cause any of the
         transactions  contemplated by this Agreement to be rescinded  following
         consummation (and no such injunction,  judgment, order, decree, ruling,
         or charge shall be in effect);

                  (iv)  the  Buyer  shall  have   delivered   to  the  Seller  a
         certificate to the effect that each of the conditions  specified  above
         in '7(b)(i)-(iii) is satisfied in all respects;

                  (v) Buyer and Seller shall enter into employment agreements in
         form and  substance  as set forth in Exhibit D attached  hereto and the
         same shall be in full force and effect;

                  (vi) Buyer and Seller  shall  enter into a mutually  agreeable
         form of Pledge Agreement to secure the Debentures and the same shall be
         in full force and effect; and

                  (vii) all actions to be taken by the Buyer in connection  with
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments,  and other documents required to
         effect  the  transactions   contemplated   hereby  will  be  reasonably
         satisfactory in form and substance to the Seller.

The  Seller may waive any  condition  specified  in this '7(b) if he  executes a
writing so stating at or prior to the Closing.

8.       Remedies for Breaches of This Agreement.

         (a) Survival of Representations and Warranties. Except for '3(a)(v) and
'4(b), (j) and (x), all of the  representations and warranties of Seller and the
Company contained in this Agreement shall survive the Closing (even if Buyer had
reason to know of any  misrepresentation  or breach of  warranty  at the time of
Closing)  and  continue  in full force and effect for a period of four (4) years
thereafter.  The  representations  and warranties in '3(a)(v) and '4(b), (j) and
(x)  shall   survive   Closing  (even  if  Buyer  had  reason  to  know  of  any
misrepresentation  or breach of warranty at the time of Closing) and continue in
full  force  and  effect  thereafter  subject  only to  applicable  statutes  of
limitation.

         (b)      Indemnification Provisions for Benefit of the Buyer.

                  (i) In the  event  the  Seller  breaches  (or in the event any
         third  party  alleges  facts that,  if true,  would mean the Seller has
         breached)  any  of  his  representations,   warranties,  and  covenants
         contained  herein  (other  than the  covenants  in '2(a)  above and the
         representations  and warranties in '3(a) above), then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification  resulting from, arising out of, relating to,
         in the nature of, or caused by the breach (or the alleged breach).

                  (ii) In the event  the  Seller  breaches  (or in the event any
         third  party  alleges  facts that,  if true,  would mean the Seller has
         breached)   any  of  his  covenants  in  '2(a)  above  or  any  of  his
         representations  and warranties in '3(a) above,  then the Seller agrees
         to  indemnify  the Buyer from and against  the  entirety of any Adverse
         Consequences  the Buyer may  suffer  through  and after the date of the
         claim for indemnification (including any Adverse Consequences the Buyer
         may suffer after the end of any applicable  survival period)  resulting
         from,  arising out of,  relating to, in the nature of, or caused by the
         breach (or the alleged breach).

                  (iii) The  Seller  agrees  to  indemnify  the  Buyer  from and
         against the entirety of any Adverse  Consequences  the Buyer may suffer
         resulting  from,  arising  out of,  relating  to, in the  nature of, or
         caused by any Liability of the Company (x) for any Taxes of the Company
         with respect to any Tax year or portion thereof ending on or before the
         Closing Date (or for any Tax year beginning before and ending after the
         Closing Date to the extent allocable (determined in a manner consistent
         with '9(c)) to the portion of such period  beginning  before and ending
         on the Closing Date), to the extent such Taxes are not reflected in the
         reserve for Tax Liability  (rather than any reserve for deferred  Taxes
         established to reflect timing differences  between book and Tax income)
         shown on the face of the Closing Balance Sheet,  and (y) for the unpaid
         Taxes of any Person (other than the Company)  under Reg.  '1.1502-6 (or
         any similar provision of state, local, or foreign law), as a transferee
         or successor, by contract, or otherwise.

         (c) Indemnification  Provisions for Benefit of the Seller. In the event
the Buyer breaches (or in the event any third party alleges facts that, if true,
would mean the Buyer has breached) any of its representations,  warranties,  and
covenants  contained herein,  then the Buyer agrees to indemnify the Seller from
and against  the  entirety  of any  Adverse  Consequences  the Seller may suffer
through  and after the date of the claim  for  indemnification  resulting  from,
arising out of,  relating  to, in the nature of, or caused by the breach (or the
alleged breach).

         (d)      Matters Involving Third Parties.

                  (i)  If  any  third   party   shall   notify  any  Party  (the
         "Indemnified Party") with respect to any matter (a "Third Party Claim")
         which may give rise to a claim for  indemnification  against  any other
         Party (the  "Indemnifying  Party") under this '8, then the  Indemnified
         Party shall promptly notify each Indemnifying Party thereof in writing;
         provided,  however,  that no delay on the part of the Indemnified Party
         in notifying  any  Indemnifying  Party shall  relieve the  Indemnifying
         Party from any  obligation  hereunder  unless  (and then  solely to the
         extent) the Indemnifying Party thereby is prejudiced.

                  (ii) Any Indemnifying  Party will have the right to defend the
         Indemnified  Party  against the Third  Party Claim with  counsel of its
         choice reasonably  satisfactory to the Indemnified Party so long as (A)
         the Indemnifying Party notifies the Indemnified Party in writing within
         20 days after the Indemnified Party has given notice of the Third Party
         Claim that the Indemnifying  Party will indemnify the Indemnified Party
         from  and  against  the  entirety  of  any  Adverse   Consequences  the
         Indemnified  Party may suffer resulting from,  arising out of, relating
         to, in the  nature  of, or caused  by the Third  Party  Claim,  (B) the
         Indemnifying   Party  provides  the  Indemnified  Party  with  evidence
         reasonably  acceptable to the Indemnified  Party that the  Indemnifying
         Party will have the  financial  resources  to defend  against the Third
         Party Claim and fulfill its indemnification  obligations hereunder, (C)
         the Third Party Claim  involves only money damages and does not seek an
         injunction or other equitable relief,  (D) settlement of, or an adverse
         judgment  with  respect  to, the Third  Party Claim is not, in the good
         faith  judgment  of  the  Indemnified  Party,  likely  to  establish  a
         precedential  custom or practice  materially  adverse to the continuing
         business  interests of the Indemnified  Party, and (E) the Indemnifying
         Party  conducts  the  defense of the Third  Party  Claim  actively  and
         diligently.

                  (iii)  So long as the  Indemnifying  Party is  conducting  the
         defense of the Third Party Claim in accordance  with  '8(d)(ii)  above,
         (A) the Indemnified  Party may retain  separate  co-counsel at its sole
         cost and  expense  and  participate  in the  defense of the Third Party
         Claim,  (B) the Indemnified  Party will not consent to the entry of any
         judgment or enter into any  settlement  with respect to the Third Party
         Claim without the prior written consent of the Indemnifying  Party (not
         to be withheld  unreasonably),  and (C) the Indemnifying Party will not
         consent to the entry of any judgment or enter into any settlement  with
         respect to the Third Party Claim without the prior  written  consent of
         the Indemnified Party (not to be withheld unreasonably).

                  (iv) In the event any of the conditions in '8(d)(ii)  above is
         or becomes  unsatisfied,  however, (A) the Indemnified Party may defend
         against,  and  consent to the entry of any  judgment  or enter into any
         settlement  with  respect  to, the Third  Party  Claim in any manner it
         reasonably may deem  appropriate  (and the  Indemnified  Party need not
         consult  with, or obtain any consent from,  any  Indemnifying  Party in
         connection therewith),  (B) the Indemnifying Parties will reimburse the
         Indemnified  Party promptly and periodically for the costs of defending
         against the Third Party Claim (including reasonable attorneys' fees and
         expenses), and (C) the Indemnifying Parties will remain responsible for
         any Adverse  Consequences  the Indemnified  Party may suffer  resulting
         from,  arising out of,  relating to, in the nature of, or caused by the
         Third Party Claim to the fullest extent provided in this '8.

         (e) Determination of Adverse Consequences. All indemnification payments
under this '8 shall be deemed adjustments to the Purchase Price.

         (f) Recoupment Under the Hold-Back and Debentures. The Buyer shall have
the  option of  recouping  all or any part of any  Adverse  Consequences  it may
suffer (in addition to seeking any indemnification to which it is entitled under
this '8) by notifying Seller that the Buyer is reducing the Hold-Back and/or the
principal amount outstanding under the Debentures; provided, however that Seller
shall have the option of making a cash payment of the recoupment  amount in lieu
any reduction in the Debentures,  if such cash payment is made in fully to Buyer
within thirty (30) days of notice of such recoupment  from Buyer.  Recoupment by
reduction of the principal  amount of the debenture  shall affect the timing and
amount of payments  required  under the  Debentures in the same manner as if the
Buyer had made a permitted prepayment (without premium or penalty) thereunder.

         (g)  Limitation On Amount.  In no event shall Seller be liable to Buyer
for amounts owed under Seller's indemnification  obligation under this Section 8
in excess of the Purchase Price.

         (h) Other  Indemnification  Provisions.  The foregoing  indemnification
provisions  are in  addition  to,  and  not in  derogation  of,  any  statutory,
equitable,  or common law remedy (including  without  limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the Company or the transactions  contemplated by this Agreement.
The Seller  hereby  agrees  that he will not make any claim for  indemnification
against the  Company by reason of the fact that Seller was a director,  officer,
employee,  or agent of any such entity or was serving at the request of any such
entity as a partner, trustee,  director,  officer, employee, or agent of another
entity (whether such claim is for judgments,  damages,  penalties, fines, costs,
amounts paid in  settlement,  losses,  expenses,  or otherwise  and whether such
claim is  pursuant  to any  statute,  charter  document,  bylaw,  agreement,  or
otherwise) with respect to any action, suit,  proceeding,  complaint,  claim, or
demand  brought by the Buyer  against such Seller  (whether  such action,  suit,
proceeding,   complaint,  claim,  or  demand  is  pursuant  to  this  Agreement,
applicable law, or otherwise).

9. Tax  Matters.  The  following  provisions  shall  govern  the  allocation  of
responsibility as between Buyer and Seller for certain tax matters following the
Closing Date:

         (a) Tax  Periods  Ending on or Before the  Closing  Date.  Buyer  shall
prepare or cause to be  prepared  and file or cause to be filed all Tax  Returns
for the Company for all periods ending on or prior to the Closing Date which are
filed after the Closing Date. Buyer shall permit Seller to review and comment on
each such Tax Return described in the preceding sentence prior to filing. Seller
shall  reimburse  Buyer for Taxes of the Company  with  respect to such  periods
within  fifteen  (15) days after  payment by Buyer or the  Company of such Taxes
(whether in connection with the filing of such Tax Return or as the result of an
audit)  to the  extent  such  Taxes are not  reflected  in the  reserve  for Tax
Liability  (rather than any reserve for deferred  Taxes  established  to reflect
timing differences between book and Tax income) shown on the face of the Closing
Balance Sheet.

         (b) Tax Periods  Beginning  Before and Ending  After the Closing  Date.
Buyer shall  prepare or cause to be  prepared  and file or cause to be filed any
Tax Returns of the Company for Tax periods  which begin  before the Closing Date
and end after the Closing  Date.  Seller shall pay to Buyer within  fifteen (15)
days  after the date on which  Taxes are paid with  respect  to such  periods an
amount  equal to the portion of such Taxes which  relates to the portion of such
Taxable  period  ending on the  Closing  Date to the  extent  such Taxes are not
reflected in the reserve for Tax Liability (rather than any reserve for deferred
Taxes  established  to reflect timing  differences  between book and Tax income)
shown on the face of the Closing Balance Sheet. For purposes of this Section, in
the case of any Taxes that are imposed on a periodic basis and are payable for a
Taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which  relates to the portion of such Taxable  period  ending on the
Closing  Date shall (x) in the case of any Taxes  other than Taxes based upon or
related  to income or  receipts,  be deemed to be the amount of such Tax for the
entire  Taxable  period  multiplied  by a fraction the numerator of which is the
number  of days  in the  Taxable  period  ending  on the  Closing  Date  and the
denominator of which is the number of days in the entire Taxable period, and (y)
in the case of any Tax based  upon or related  to income or  receipts  be deemed
equal to the amount which would be payable if the relevant  Taxable period ended
on the Closing Date. Any credits relating to a Taxable period that begins before
and ends  after the  Closing  Date  shall be taken  into  account  as though the
relevant Taxable period ended on the Closing Date. All determinations  necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior practice of the Company.

         (c) Cooperation on Tax Matters.  The Buyer,  the Company and the Seller
shall cooperate  fully, as and to the extent  reasonably  requested by the other
party, in connection with the filing of Tax Returns pursuant to this Section and
any audit, litigation or other proceeding with respect to Taxes. The Company and
the Seller  agree to retain all books and  records  with  respect to Tax matters
pertinent to the Company  relating to any taxable  period  beginning  before the
Closing Date until the  expiration  of the statute of  limitations  (and, to the
extent  notified by Buyer or Seller,  any extensions  thereof) of the respective
taxable periods.

         (d) Certain  Taxes.  All  transfer,  documentary,  sales,  use,  stamp,
registration  and  other  such  Taxes  and fees  (including  any  penalties  and
interest)  incurred in connection  with this  Agreement  shall be paid by Seller
when due, and Seller will,  at his own expense,  file all  necessary Tax Returns
and other documentation with respect to all such transfer,  documentary,  sales,
use,  stamp,  registration  and other  Taxes  and  fees,  and,  if  required  by
applicable  law,  Buyer  will,  and will cause its  affiliates  to,  join in the
execution of any such Tax Returns and other documentation.

10.      Termination.

         (a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:

                  (i)  the Buyer and the Seller may terminate this Agreement by 
         mutual written consent at any time prior to the Closing;

                  (ii) the Buyer may terminate  this Agreement by giving written
         notice to the Seller at any time prior to the  Closing (A) in the event
         the Seller has  breached  any  material  representation,  warranty,  or
         covenant contained in this Agreement in any material respect, the Buyer
         has  notified  the Seller of the breach,  and the breach has  continued
         without  cure for a period of 15 days after the notice of breach or (B)
         if the Closing shall not have occurred on or before  December 31, 1998,
         by reason of the failure of any condition  precedent under '7(a) hereof
         (unless the failure results  primarily from the Buyer itself  breaching
         any representation, warranty, or covenant contained in this Agreement);
         and

                  (iii)  the  Seller  may  terminate  this  Agreement  by giving
         written notice to the Buyer at any time prior to the Closing (A) in the
         event the Buyer has breached any material representation,  warranty, or
         covenant  contained  in this  Agreement in any  material  respect,  the
         Seller  has  notified  the  Buyer of the  breach,  and the  breach  has
         continued  without  cure for a period of 15 days  after  the  notice of
         breach  or (B) if the  Closing  shall  not have  occurred  on or before
         December 31, 1998, by reason of the failure of any condition  precedent
         under  '7(b)  hereof  (unless the failure  results  primarily  from the
         Seller  himself  breaching any  representation,  warranty,  or covenant
         contained in this Agreement).

         (b)  Effect of  Termination.  If any Party  terminates  this  Agreement
pursuant to '10(a) above,  all rights and  obligations of the Parties  hereunder
shall  terminate  without any  Liability of any Party to any other Party (except
for any Liability of any Party then in breach).

11.      Miscellaneous.

         (a) Press Releases and Public Announcements.  Neither Party shall issue
any press release or make any public announcement relating to the subject matter
of this  Agreement  without  the prior  written  approval  of the  other  Party;
provided,  however,  that either Party may make any public  disclosure  he or it
believes in good faith is required by  applicable  law or any listing or trading
agreement   concerning  its  publicly-traded   securities  (in  which  case  the
disclosing  Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).

         (b) No Third-Party  Beneficiaries.  This Agreement shall not confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

         (c) Entire Agreement.  This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior  understandings,  agreements,  or representations by or among the Parties,
written or oral,  to the extent they  related in any way to the  subject  matter
hereof,  including  that certain  Letter of Intent  between the  Parties,  dated
November 4, 1998.

         (d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of his
or its rights,  interests,  or obligations  hereunder  without the prior written
approval of other Party; provided, however, that the Buyer may (i) assign any or
all of its rights and interests  hereunder to one or more of its  Affiliates and
(ii)  designate  one or  more  of its  Affiliates  to  perform  its  obligations
hereunder  (in any or all of which  cases the  Buyer  nonetheless  shall  remain
responsible for the performance of all of its obligations hereunder).

         (e)  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together will constitute one and the same instrument.

         (f)  Headings.  The section  headings  contained in this  Agreement are
inserted  for  convenience  only and shall not affect in any way the  meaning or
interpretation of this Agreement.

         (g)  Notices.  All  notices,  requests,   demands,  claims,  and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder  shall be deemed  duly given if (and then two
business days after) it is sent by registered or certified mail,  return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to the Seller:

Aborn Electronics, Inc.
2108 D Bering Drive
San Jose, CA 95131
Atten: Vijay Lumba         .........

If to the Buyer:           .........Copy to:
----------------                    --------

ZEVEX International, Inc.  .........Jones, Waldo, Holbrook & McDonough
4314 ZEVEX Park Lane       .........170 S. Main Street, Suite 1500
Salt Lake City, UT 84123   .........Salt Lake City, UT 84101
Atten: Phillip McStotts    .........Atten: Ronald Poelman

A Party may send any notice,  request,  demand,  claim,  or other  communication
hereunder  to the  intended  recipient  at the address set forth above using any
other means (including personal delivery,  expedited courier, messenger service,
telecopy,  telex,  ordinary  mail,  or  electronic  mail),  but no such  notice,
request, demand, claim, or other communication shall be deemed to have been duly
given  unless and until it actually is received  by the  intended  recipient.  A
Party may change the address to which notices,  requests,  demands,  claims, and
other  communications  hereunder  are to be  delivered by giving the other Party
notice in the manner herein set forth.

         (h) Governing Law. This Agreement shall be governed by and construed in
accordance  with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule (whether of the State of Utah or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction other than the State of Utah.

         (i)      Dispute Resolution.

                  (i) The Parties desire to resolve disputes arising out of this
Agreement without litigation.  Accordingly, except for actions to seek temporary
restraining orders or injunctions  related to the purposes of this Agreement,  a
dispute  involving the adjudication of the rights of a third party that does not
agree to arbitration, or a suit to compel compliance with the dispute resolution
provision,  the Parties agree to use the following alternative dispute procedure
as their sole remedy with respect to any  controversy or claim arising out of or
relating to this Agreement or its breach.

                  (ii) At the  written  request  of a  Party,  each  Party  will
appoint a  knowledgeable,  responsible  representative  to meet and negotiate in
good faith to resolve  any dispute  arising  under this  Agreement.  The Parties
intend  that  these   negotiations   be   conducted  by   non-lawyer,   business
representatives.  The location,  format,  frequency,  duration and conclusion of
these discussions shall be left to the discretion of the  representatives.  Upon
agreement between the Parties, the representatives may utilize other alternative
dispute  resolution  procedures such as mediation to assist in the negotiations.
Discussions and  correspondence  among the  representatives  for the purposes of
these  negotiations shall be treated as confidential  information  developed for
the purposes of settlement,  exempt from discovery and  production,  which shall
not be admissible in the  arbitration  described below or in any lawsuit without
the concurrence of both Parties.  Documents  identified in or provided with such
communications, which are not prepared for purposes of the negotiations, are not
so exempted  and may, if  otherwise  admissible,  be admitted in evidence in the
arbitration or lawsuit.

                  (iii) If the  negotiations  do not resolve the dispute  within
thirty  (30) days after the  initial  written  request,  the  disputes  shall be
submitted to binding arbitration by a panel of three arbitrators pursuant to the
Commercial  Arbitration  Rules of the American  Arbitration  Association in Salt
Lake  City,  Utah.  A Party may  demand  such  arbitration  in  accordance  with
procedures set out in those rules. Each party shall designate,  as its appointed
arbitrator,  an  impartial  individual  who is  experienced  in the  business of
manufacturing products similar to the products of the Company. Within 20 days of
appointment,  the two  designated  arbitrators  shall then  designate  by mutual
agreement an impartial attorney licensed in the state of the arbitration,  which
attorney shall serve as the panel's  administrative  head. The majority decision
of the panel shall final and conclusive  upon both Parties.  Discovery  shall be
controlled  by the  arbitrators  and shall be permitted to the extent set out in
this  paragraph.  Each Party may  submit in  writing to a Party,  and that Party
shall respond,  to a maximum of any  combination  of  thirty-five  (35) (none of
which may have subplots) of the following:  interrogatories,  demands to produce
documents,  and requests for  admission.  The Parties  shall  contract  with the
arbitrators  to commence the  arbitration  hearing within sixty (60) days of the
demand for  arbitration.  The arbitrators  shall control the scheduling so as to
process the matter  expeditiously.  The Parties may submit written  briefs.  The
Parties  shall  require  the  arbitrators  to rule on the  dispute  by issuing a
written  opinion  within thirty (30) days after the close of the  hearings.  The
times  specified in this paragraph may be extended upon a showing of good cause.
Judgment upon the award rendered by the  arbitrators may be entered in any court
having jurisdiction.

                  (iv) Each Party shall bear its own cost of these procedures. A
Party seeking  discovery  shall  reimburse to the responding  Party the costs of
production of documents (to including search time and reproduction  costs).  The
Parties shall equally split the fees of any mediation, but in any arbitration or
permissible  legal  proceedings,  the  prevailing  Party  shall be  entitled  to
reasonable  attorneys'  fees,  costs and other  disbursements in addition to any
other relief to which such Party may be entitled.

         (j)  Amendments  and Waivers.  No  amendment  of any  provision of this
Agreement  shall be valid  unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by a Party of any default, misrepresentation, or
breach of warranty or covenant  hereunder,  whether intentional or not, shall be
deemed  to  extend to any prior or  subsequent  default,  misrepresentation,  or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

         (k)  Severability.  Any term or  provision  of this  Agreement  that is
invalid or unenforceable  in any situation in any jurisdiction  shall not affect
the validity or  enforceability  of the remaining terms and provisions hereof or
the validity or  enforceability  of the offending term or provision in any other
situation or in any other jurisdiction.

         (l) Expenses.  Each of the Parties and the Company will bear his or its
own  costs  and  expenses  (including  legal  fees  and  expenses)  incurred  in
connection with this Agreement and the  transactions  contemplated  hereby.  The
Seller  agrees that the  Company has not borne or will bear any of the  Seller's
costs and expenses  (including any of his legal fees and expenses) in connection
with this Agreement or any of the transactions contemplated hereby.

         (m)  Construction.   The  Parties  have  participated  jointly  in  the
negotiation  and  drafting  of this  Agreement.  In the  event an  ambiguity  or
question of intent or interpretation  arises,  this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise  favoring or  disfavoring  any Party by virtue of the authorship of any of
the provisions of this Agreement.  The Parties intend that each  representation,
warranty, and covenant contained herein shall have independent significance.  If
a Party has breached any representation,  warranty, or covenant contained herein
in any respect, the fact that there exists another representation,  warranty, or
covenant relating to the same subject matter  (regardless of the relative levels
of  specificity)  which the Party has not  breached  shall not  detract  from or
mitigate  the fact that the  Party is in  breach  of the  first  representation,
warranty, or covenant.

         (n) Incorporation of Exhibits,  Annexes,  and Schedules.  The Exhibits,
Annexes,  and Schedules  identified in this Agreement are incorporated herein by
reference and made a part hereof.

         (o) Specific  Performance.  Each Party acknowledges and agrees that the
other Party would be damaged  irreparably  in the event any of the provisions of
this  Agreement  are not performed in accordance  with their  specific  terms or
otherwise  are  breached.  Accordingly,  each Party  agrees that the other Party
shall be entitled to an injunction  or  injunctions  to prevent  breaches of the
provisions of this Agreement and to enforce  specifically this Agreement and the
terms and provisions  hereof in any action instituted in any court of the United
States or any state thereof having  jurisdiction over the Parties and the matter
(subject to the provisions set forth in '10(p) below),  in addition to any other
remedy to which they may be entitled, at law or in equity.

         (p) Submission to Jurisdiction.  Each Party submits to the jurisdiction
of any state or federal court  sitting in Salt Lake County,  Utah, in any action
or proceeding arising out of or relating to this Agreement that is allowed under
'10(i) and agrees that all claims in respect of the action or proceeding  may be
heard and determined in any such court.  Each Party also agrees not to bring any
such action or  proceeding  arising out of or relating to this  Agreement in any
other  court.  Each  Party  waives  any  defense  of  inconvenient  forum to the
maintenance of any action or proceeding so brought and waives any bond,  surety,
or other  security  that  might be  required  of any other  Party  with  respect
thereto.  Each Party agrees that a final judgment in any action or proceeding so
brought  shall be  conclusive  and may be enforced by suit on the judgment or in
any other manner provided by law or at equity.
IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement as
of the date first above written.

ZEVEX INTERNATIONAL, INC.

By:/s/Phillip L. McStotts

Title:Chief Financial Officer

/s/Vijay Lumba             
VIJAY LUMBA
EXHIBIT A
                          FORM OF CONVERTIBLE DEBENTURE

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE  STATE LAW AND MAY NOT
         BE OFFERED,  SOLD, OR OTHERWISE  TRANSFERRED,  PLEDGED, OR HYPOTHECATED
         UNLESS  AND  UNTIL  REGISTERED  UNDER  THE ACT OR STATE  LAW OR, IN THE
         OPINION OF COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE ISSUER OF
         THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION
         IS IN COMPLIANCE THEREWITH.

                                                CONVERTIBLE DEBENTURE

                                               (Due _________________)

______________, 199___                                                         
(the "Issuance Date")

         The undersigned, ZEVEX INTERNATIONAL, INC., a Delaware corporation (the
"Company"),  for value  received,  hereby  promises to pay to the order of VIJAY
LUMBA        (the         "Holder")         the         principal         amount
of______________________________________________   ($________________)  together
with  interest  on such  principal  amount and any other  amounts due under this
Debenture.

         This Debenture  (the  "Debenture")  is issued  pursuant to that certain
Stock  Purchase  Agreement,  dated  December 31, 1998,  entered into between the
Company and the Holder of this  Debenture (the  "Agreement").  This Debenture is
also subject to the following additional terms and conditions:
1. Interest.  Commencing on the date of this Debenture and continuing  until all
principal  and  interest  due  under  this  Debenture  are  paid  in  full,  the
outstanding  principal balance of this Debenture shall bear interest at the rate
of seven  percent (7%) per annum,  compounded  annually.  Interest  shall accrue
daily and be calculated on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed in any partial calendar month.

2. Payment.  Accrued  interest shall be due and payable  beginning April 1, 1999
and on each July 1,  October  1,  January 1, and April 1  thereafter  until this
Debenture  is paid in full.  The unpaid  principal  balance  of this  Debenture,
together with any and all accrued but unpaid interest,  shall be due and payable
in full three (3) years from the Issuance  Date.  All payments of principal  and
interest  shall be made in lawful  money of the United  States of America at the
address of the holder set forth in Section  7.1 below.  Unless the Holder  shall
elect  otherwise,  each payment made under this Debenture shall be applied first
to interest due under this  Debenture and any balance shall be applied to reduce
the principal balance of this Debenture.

3.       Right of Conversion

         3.1 Conversion  Into Company  Securities.  At any time after a date one
(1) year from the Issuance  Date until a date three (3) years after the Issuance
Date, and from time to time during such period,  the Holder may elect to convert
all or a portion  of the unpaid  principal  amount  and all  accrued  but unpaid
interest of this Debenture into fully paid and  nonassessable  shares of Company
Common Stock, $0.001 par value (the "Conversion Shares") at the conversion price
of eleven dollars ($11.00) per share (the "Conversion Price"); provided that any
partial  conversion of less than the entire remaining  principal balance of this
Debenture  may not be less than  $25,000 in  principal  and  accrued  and unpaid
interest.

         3.2  Mechanics of  Conversion.  Upon the  Holder's  election to convert
pursuant  to Section  3.1 above,  the Holder  shall send  written  notice of its
election to the Company and shall surrender this Debenture to the Company at its
principal office. The written election shall specify the amount of principal and
accrued and unpaid interest that is to be converted.  Each  conversion  shall be
deemed to have been  effected  as of the  close of the  business  on the date on
which the notice is  delivered  to the  Company  and the  outstanding  principal
balance and accrued and unpaid interest shall be reduced by the amount converted
as set forth in the notice.  Within a reasonable  time  thereafter,  the Company
shall  cancel the  designated  portion of the  unpaid  principal  amount of this
Debenture  converted  by the  Holder  and  issue  and  deliver  to the  Holder a
certificate or certificates (the "Conversion  Certificates"),  registered in the
name of such  Holder,  for the number of full  shares of the  Conversion  Shares
issuable at the Conversion  Price,  bearing such  restrictive  legends as may be
required  by  federal  and  state  securities  laws.  In the  event of a Partial
Conversion,  the Company  shall  return with the  Conversion  Certificates  this
Debenture,  bearing a proper  notation of the principal  amount that remains due
and payable after Holder's partial conversion, but otherwise unaltered.

         3.3 Effects of  Conversion.  Upon  conversion  of the entire  amount of
principal and unpaid interest of this Debenture, the rights of the Holder of the
Debenture as such shall cease.  The person or persons in whose name or names the
Conversion  Certificates are issued shall be deemed to have become the holder or
holders of record of the Conversion Shares represented thereby.

         3.4 No Fractional  Shares. No fractional share of the Conversion Shares
will be issued in  connection  with any  conversion  hereunder.  Instead  of any
fractional  share the  Company  shall pay a cash  adjustment  in respect of such
fractional interest as determined by reference to the Conversion Price.

         3.5 No Rights as  Stockholders.  Prior to the  conversion of all or any
portion of this  Debenture,  the Holder  shall not be entitled to any right as a
stockholder,  including  without  limitation  the  right  to vote or to  receive
dividends or other distribution, and shall not be entitled to receive any notice
of any proceeding of the Company, except as provided herein.

         3.6  Taxes on  Conversion.  Any taxes  required  upon the  issuance  of
Conversion  Certificates  on conversion of this  Debenture  shall be paid by the
Holder.

         3.7  Adjustments.  In the  event  of any  Company  stock  split,  stock
combination,  merger,  consolidation  or  recapitalization  affecting the Common
Stock of the Company prior to repayment or conversion under this Debenture,  the
Company shall make  appropriate,  proportionate  adjustments  to the  Conversion
Shares issued to Holder under Holder's conversion right.

         3.8  Notices  of Record  Date.  In the  event of (i) any  taking by the
Company of a record of the holders of securities  for the purpose of determining
the  holders  thereof  who  are  entitled  to  receive  any  dividend  or  other
distribution or (ii) any  reclassification  or  recapitalization  of the capital
stock of the  Company,  any  merger  or  consolidation  of the  Company,  or any
transfer of all or  substantially  all of the assets of the Company to any other
corporation,  entity,  or person,  or any voluntary or involuntary  dissolution,
liquidation,  or a winding-up of the Company, which occurs during the conversion
period, the Company shall mail to the Holder of the Debenture,  at least fifteen
(15) days prior to the record date specified  therein,  a notice  specifying (A)
the date on which  any  such  record  is to be  taken  for the  purpose  of such
dividend or distribution and a description of such dividend or distribution, (B)
the  date  on  which  any  such  reorganization,   reclassification,   transfer,
consolidation,  merger,  dissolution,  liquidation, or winding-up is expected to
become effective,  and (C) the time, if any is to be set, as to when the holders
of record of such  security  shall be  entitled  to  exchange  their  shares for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  transfer, consolidation, merger, dissolution, liquidation, or
winding-up.

4.       Events of Default; Acceleration

         4.1  Events,  Remedy.  If any of the  following  conditions  or  events
("Events of Default") shall occur:

                  (a)  if the  Company  shall  default  in  the  payment  of the
principal or interest on the Debenture when due and such default continues for a
period of 30 days after written notice thereof to the Company from Holder; or

                  (b) if the  Company  shall  default in the  performance  of or
compliance with any term or covenant contained in this Debenture, the Agreement,
or the Pledge  Agreement and such default shall not have been remedied within 30
days after written notice thereof shall have been given to the Company by Holder
(provided,  however,  if such default is not cured within such 30-day period and
the  Company  is  diligently  pursuing  such  cure,  the  Company  shall have an
additional  period of time not to exceed  ninety (90) days in which to cure such
default); or

                  (c) if the Company shall make an assignment for the benefit of
creditors,  or shall  admit in writing  its  inability  to pay its debts as they
become  due,  or shall file a  voluntary  petition  in  bankruptcy,  or shall be
adjudicated  a  bankrupt  or  insolvent,  or shall file any  petition  or answer
seeking for itself any reorganization,  arrangement, composition,  readjustment,
liquidation, dissolution, or similar relief under any present or future statute,
law or  regulation,  or shall file any answer  admitting or not  contesting  the
material  allegations  of a  petition  filed  against  the  Company  in any such
proceeding,  or shall seek or consent to or acquiesce in the  appointment of any
trustee, receiver or liquidator of the Company or of all or any substantial part
of the properties of the Company, or if the Company or its directors or majority
stockholders  shall take any action looking to the dissolution or liquidation of
the Company; or

                  (d) if, within 60 days after the service of process on Company
following   commencement   of  an  action   against  the  Company   seeking  any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute,  law or regulation,  such
action  shall  not have  been  dismissed  or if,  alternatively,  all  orders or
proceedings  thereunder  affecting the operations or the business of the Company
stayed,  or if the stay of any such order or proceeding  shall thereafter be set
aside,  or if,  within 60 days  after the  appointment  without  the  consent or
acquiescence  of the  Company of any  trustee,  receiver  or  liquidator  of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;

then and in any such event  Holder may at any time  (unless all  defaults  shall
theretofore have been remedied) at his option, by written notice to the Company,
declare the entire principal and interest of the Debenture then remaining unpaid
to be due and payable immediately. Notwithstanding the foregoing, this Debenture
shall not be in default to the extent that the Company has  exercised its rights
of recoupment under Section 8(f) of the Agreement.

         4.2 Other  Remedies on Default,  Etc. In case any one or more Events of
Default shall occur, be continuing, and not have been waived, Holder may proceed
to protect and  enforce  the rights of such Holder by an action at law,  suit in
equity, or other appropriate proceeding, whether for the specific performance of
any  agreement  contained  herein  or  under  terms of the  Agreement  or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power  granted  hereby or thereby or by law. In case of a
default in the payment of  principal or interest on the  Debenture,  the Company
will pay to the Holder  thereof such further  amount as shall be  sufficient  to
cover the costs and  expenses  of  collection,  including,  without  limitation,
reasonable attorneys' fees. No course of dealing and no delay on the part of any
Holder in exercising  any right shall  operate as a waiver  thereof or otherwise
prejudice such Holder's  rights.  No right conferred  hereby or by the Agreement
upon any Holder  shall be  exclusive  of any other  right  referred to herein or
therein  or now or  hereafter  available  at  law,  in  equity,  by  statute  or
otherwise.

5.       Prepayment

         This  Debenture  may be prepaid at any time  without  prior  notice and
without  penalty,  including  any  recoupment  deemed a prepayment  hereof under
Section 8(f) of the Agreement.

6.       Security for Debenture

         This  Debenture  is secured by a Stock  Pledge  Agreement  of even date
herewith by and between the Company and Holder.

7.       Miscellaneous Provisions

         7.1 Notices.  Any notice herein required or payment required  hereunder
shall  be made or  given to the  address  of the  parties  as  specified  in the
Agreement.

         7.2  Amendments  or Waivers.  Any  provision of this  Debenture  may be
amended,  waived, or modified,  but only upon the written consent of the Company
and the Holder.

         7.3  Governing  Law.  This  Debenture has been executed in and shall be
governed by the laws of the State of Utah  excluding that body of law pertaining
to conflicts of law.

         7.4 Miscellaneous.  The unenforceability or invalidity of any provision
of this Debenture shall not affect the  enforceability  or validity of any other
provision  of this  Debenture.  The  terms  of this  Debenture  shall  bind  the
undersigned  and inure to the  benefit  of Holder  and their  respective  heirs,
successors,  assigns and legal  representatives.  The Holder may, in  accordance
with the terms of the Agreement,  assign all or part of Holder's  interest under
this Debenture.

         IN WITNESS WHEREOF,  the Company has caused this Debenture to be issued
this ____ day of _________________, 1998.

                                                       ZEVEX INTERNATIONAL, INC.

                                                       By:   
                                                       Its:
EXHIBIT B
                FORMULA FOR CALCULATING POSSIBLE EARN-OUT PAYMENT

The formula for calculating the possible Earn-Out Payment will be:

         A + B x ($950,000.00) = Cash portion of possible Earn-Out Payment

         A + B x ($950,000.00) = Debenture portion of possible Earn-Out Payment

Where:

         A        = 1999  Actual  Revenue  - 1998  Actual  Revenue  x 0.30  1999
                  Projected Revenue - 1998 Actual Revenue

         B        = 1999  Actual Pre Tax  Income - 1998  Actual Pre Tax Income x
                  0.70  1999  Projected  Pre Tax  Income - 1998  Actual  Pre Tax
                  Income

And:

         "1998 Projected Revenue" is $1,310,098 (taken from projection).

         "1999  Actual  Revenue"  is the total  gross  revenue for Aborn for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Revenue" is $2,721,500.00.

         "1998 Projected Pre Tax Income" is $337,078 (taken from projection).

         "1999  Actual  Pre Tax  Income" is the pre tax income for Aborn for the
period from January 1, 1999 to December 31, 1999.

         "1999 Projected Pre Tax Income" is $1,176,500

Notwithstanding  the foregoing,  in the event that the 1999 Actual Pretax Income
equals  or  exceeds  $1,176,500,   Seller  shall  receive  one  hundred  percent
($950,000) of the Earn-Out Payment.

Example

         Assuming that "1999 Actual  Revenue" is $2,000,000 and "1999 Actual Pre
Tax Income" is $800,000, the possible Earn-Out Payment is calculated as follows:

         2,000,000 - 1,310,098 x .30 = 0.1846
         2,721,500 - 1,310,098

           800,000 - 337,078 x .70 = 0.3862
         1,176,000 - 337,078

         0.1466 + 0.3862 = 0.5384

         0.5384 x $950,000 = $508,060 cash portion of Earn-Out  Payment 0.5384 x
         $950,000 = $508,060 Debenture portion of Earn-Out Payment