SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                     --------------------------------------

                                    FORM 8-K
                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


Date of Report (date of earliest event reported):  October 2, 1998

                                  BEL FUSE INC.
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)

 New Jersey                       0-11676                          22-1463699
(State or other                (Commission                      (IRS Employer
 jurisdiction of                File Number)                     Identification
 incorporation)                                                     Number)

        198 Van Vorst Street, Jersey City, New Jersey                    07302
        (Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (201) 432-0463



    -----------------------------------------------------------------------
          (Former name or former address, if changed since last report)






Item 2.   Acquisition or Disposition of Assets

          On October 2, 1998, Bel Fuse Inc. ("Bel" or the "Company") consummated
its  acquisition  of  certain  of  the  assets  of  Lucent  Technologies  Inc.'s
("Lucent's")  signal  transformer  business,  a part of Lucent's  Power  Systems
manufacturing  operations,  for  approximately $30 million in cash. The purchase
price was paid from cash on hand.

          Bel intends to continue the signal transformer business purchased from
Lucent,  and to move  the  business  to Bel's  existing  factory  locations.  In
connection with the acquisition,  Lucent and Bel signed a long-term contract for
the continued supply of Lucent's signal transformer magnetics requirements.


Item 7.  Financial Statements and Exhibits

         (a)   Financial Statements of Businesses Acquired

          The  financial  statements  of the  business  acquired  are not  being
provided herewith since it is impracticable for the Company to do so at the time
this Report is filed. Such required  financial  statements will be filed as soon
as  practicable  and in no event  later than 60 days after the date this  Report
must be filed.

         (b)   Pro Forma Financial Information

          The pro forma financial information required pursuant to Article 11 of
Regulation S-X is not being furnished herewith since it is impracticable for the
Company  to do so at the time  this  Report is filed.  Such  required  pro forma
financial information will be filed as soon as practicable and in no event later
than 60 days after the date this Report must be filed.

         (c) The following  exhibits are filed with this Current  Report on Form
8-K:

Exhibit 2.1  Agreement  for the  Purchase and Sale of Assets by and among Lucent
             Technologies Inc., Lucent Technologies Maquiladoras Inc. and Bel 
             Fuse Inc., dated as of October 2, 1998







                                   SIGNATURES


          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                              BEL FUSE INC.


                                              By: /s/ Daniel Bernstein
                                                  _____________________
                                                  Daniel Bernstein
                                                  President

Dated:  October 17, 1998


                  AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS

                                  BY AND AMONG

                            LUCENT TECHNOLOGIES INC.,

                     LUCENT TECHNOLOGIES MAQUILADORAS INC.,
                                 each as Seller

                                       AND

                                  BEL FUSE INC.
                                    as Buyer


                           Dated as of October 2, 1998


                                TABLE OF CONTENTS

1.       Definitions
1.1      Defined Terms
1.2      Other Definitional and Interpretive Matters
2.       Purchase and Sale of Assets
2.1      Purchased Assets
2.2      Excluded Assets
2.3      Purchase Price
2.4      Assumed Liabilities
2.5      Excluded Liabilities
2.6      Consent of Third Parties; Further Assurances
2.7      No Licenses
2.8      Bulk Sales Law
2.9      Taxes
2.10     Employees
2.11     Adjustments to Purchase Price
3.       Representations and Warranties of Sellers
3.1      Organization and Authority
3.2      Authorization; Binding Obligations
3.3      No Violations
3.4      Assets
3.5      Personal Property
3.6      Compliance With Laws and Litigation; Environmental Matters
3.7      Contracts; Permits and Licenses
3.8      Intellectual Property
3.9      Brokers
3.10     No Other Representations or Warranties
4.       Representations and Warranties of Buyer
4.1      Organization and Authority
4.2      Authorization; Binding Obligations
4.3      No Violations
4.4      Brokers
4.5      No Knowledge of Misrepresentations
4.6      No Other Representations or Warranties
5.       Certain Covenants
5.1      Information
5.2      Post Closing Audit
5.3      Sale by Buyer of Inventory Marked With Sellers' Name
5.4      Collateral Agreements
5.5      Regulatory Compliance
5.6      [Intentionally Omitted]
5.7      Reacquisition Right
5.8      Maquiladora Assets
6.       Confidential Nature of Information
6.1      Confidentiality Agreement
6.2      Sellers' Proprietary Information
7.       Closing
7.1      Documents to be Delivered by Sellers
7.2      Documents to be Delivered by Buyer
7.3      Closing Date
7.4      Contemporaneous Effectiveness
8.       Conditions Precedent to Closing
8.1      General Conditions
8.2      Conditions Precedent to Buyer's Obligations
8.3      Conditions Precedent to Sellers' Obligations
9.       Status of Agreements
9.1      Effect of Breach
9.2      Survival of Representations and Warranties
9.3      General Agreement to Indemnify
9.4      Procedures for Indemnification
9.5      Arbitration;  Choice of Law
10.      Miscellaneous Provisions
10.1     Notices
10.2     Expenses
10.3     Entire Agreement; Modification
10.4     Assignment; Binding Effect; Severability
10.5     Governing Law
10.6     Execution in Counterparts
10.7     Public Announcement
10.8     No Third-Party Beneficiaries
11.      Termination and Waiver
11.1     Waiver of Agreement
11.2     Amendment of Agreement



Schedules

Schedule 1.1               Permitted Encumbrances
Schedule 1.2               Knowledge of Certain Persons
Schedule 2.1(a)            Equipment
Schedule 2.1(b)            Inventory
Schedule 2.1(c)            Assigned Contracts
Schedule 2.1(d)            Assigned Licenses
Schedule 2.2               Excluded Assets
Schedule 2.10              Affected Employees
Schedule 3.6               Governmental Permits
Schedule 4.3(b)            Buyer's Consents
Schedule 5.2               Seller's Exceptions to Covenant to Operate Business 
                           in Ordinary Course

Exhibits

Exhibit A         Form of Assignment and Assumption Agreement
Exhibit B-1       Form of Maquiladora Bill of Sale
Exhibit B-2       Form of U.S. Bill of Sale
Exhibit C         Form of Supply Agreement
Exhibit D         Form of Technology Transfer Agreement
Exhibit E         Form of Transition Services Agreement




                  AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS


          THIS AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS (this  "Agreement")
is made as of October 2, 1998 by and among Lucent  Technologies Inc., a Delaware
corporation,  having a principal office at 600-700 Mountain Avenue, Murray Hill,
NJ 07974-0636  ("Lucent"),  Lucent  Technologies  Maquiladoras  Inc., a Delaware
corporation, having a principal office at 475 South Street, Morristown, NJ 07962
("LTM" and  together  with Lucent,  "Sellers"),  and Bel Fuse Inc., a New Jersey
corporation,  having a principal office at 198 Van Vorst Street, Jersey City, NJ
07302 ("Buyer").

          WHEREAS,  Lucent is, among other things,  engaged  through its Network
Products Group in the development, manufacture and sale of Business Products (as
hereinafter defined);

          WHEREAS,  Sellers  desire  to sell to  Buyer,  and  Buyer  desires  to
purchase from Sellers,  certain assets  relating to the  manufacture and sale of
Business Products on the terms and subject to the conditions set forth herein;

          WHEREAS,  Sellers wishes to transfer to Buyer, and Buyer is willing to
assume from Sellers,  the Assumed  Liabilities (as  hereinafter  defined) on the
terms and subject to the conditions set forth herein; and

          WHEREAS,  Lucent  and  Buyer  wish to enter  into  certain  collateral
agreements as hereinafter  specified,  namely a Technology Transfer Agreement, a
Supply Agreement and a Transition Services Agreement.

          NOW THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby,  the parties agree as
follows:


         1.       Definitions


         1.1      Defined Terms


          For the purposes of this  Agreement,  the following  words and phrases
shall have the following meanings:

          "Accounts  Receivable"  means  all the  accounts,  notes  and  finance
receivables generated by the Business including all funds, refunds, receivables,
credits,  offsets, or reimbursements,  claims, debts, obligations and such other
rights,  together with all accrued  interest thereon in each case existing as of
the close of business on the Closing Date.

          "Affected Employees" has the meaning assigned in Section 2.10.

          "Affiliate"  of any Person  means any Person,  directly or  indirectly
controlled  by,  controlling  or under common  control  with,  such Person.  For
purposes of this  Agreement,  "control" means the power to direct the management
and policies of a Person, whether through the ownership of voting securities, by
agreement or otherwise.

          "Asset  Acquisition  Statement"  has the  meaning  assigned in Section
2.3(b).

          "Assigned Contracts" means Third-Party contracts,  agreements, leases,
supply  contracts,  purchase  orders,  sales  orders  and  instruments  relating
exclusively  to the Business to which Lucent or any of its Affiliates is a party
and which are identified on Schedule  2.1(c) but in each case only to the extent
assignable.

          "Assigned   Licenses"   means  all  licenses,   agreements  and  other
arrangements under which Lucent has the right to use any Proprietary Information
of a Third Party to the extent used exclusively in the operation of the Business
and  which  are  identified  on  Schedule 2.1(d)  other  than the  Nonassignable
Licenses.

          "Assignment  and  Assumption   Agreement"  means  the  assignment  and
assumption agreement substantially in the form set forth as Exhibit A.

          "Assumed Liabilities" means the liabilities and obligations of Sellers
assumed  by Buyer  pursuant  to the  Assignment  and  Assumption  Agreement  and
Section 2.4.

          "Auditor" has the meaning assigned by Section 2.11(e).

          "Best  Efforts"  means that the obligated  party is required to make a
diligent,  reasonable  and  good  faith  effort  to  accomplish  the  applicable
objective. Such obligation, however, does not require an expenditure of funds or
the  incurrence of a liability on the part of the obligated  party,  nor does it
require  that the  obligated  party act in a manner  that would be  contrary  to
normal commercial practices in order to accomplish the objective.  The fact that
the objective is not actually  accomplished  is no indication that the obligated
party did not in fact utilize its Best Efforts in attempting  to accomplish  the
objective.

          "Bill of Sale" means  collectively,  the Maquiladora  Bill of Sale and
the U.S. Bill of Sale.

          "Business" means the manufacturing,  marketing,  selling and repairing
Business Products as carried on by Lucent  immediately prior to the date of this
Agreement.

          "Business  Day"  means a day that is not a  Saturday,  a  Sunday  or a
statutory  or civic  holiday  in the state of New York or any other day on which
the  principal  offices of either  Lucent or Buyer are  closed or become  closed
prior to 2:00 p.m.  local time whether in accordance  with  established  company
policy  or as a  result  of  unanticipated  events,  including  adverse  weather
conditions.

          "Business Locations" means Lucent's facilities located at 3000 Skyline
Drive,  Mesquite,  Texas 75149 and Norte 7 y Ave. Lauro Villar #4, H. Matamoros,
Tam. C. P. 87490.

          "Business  Product"  means  XDSL,  ISDN,  modem,  power and  broadband
transmission transformers and related components manufactured by the Business.

          "Business Records" means all books,  records,  mailing lists, customer
lists, vendor data equipment maintenance records, warranty information,  manuals
of  operation  or  business  procedures,  and other  similar  information,  used
primarily  by the  Business  and  reasonably  available  to Lucent at one of the
Business Locations; provided, all materials noted above which are subject to any
non-disclosure agreements shall not for purposes of this Agreement be treated as
"Business Records."

          "Buyer's  Adjustment  Response"  has the  meaning  assigned by Section
2.11(b).

          "Closing"  means  the  closing  of  the   transactions   described  in
Article 7.

          "Closing Date" means the date of the Closing as determined pursuant to
Section 7.3.

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

          "Collateral  Agreements"  means  the  agreements  to be  entered  into
between Buyer and Lucent and/or its Affiliates and listed in Section 5.4.

          "Consents" has the meaning assigned by Section 2.6(b).

          "Counsel for Buyer" means Blau, Kramer, Wactler & Lieberman, P.C.

          "Counsel for Seller" means a Corporate Counsel of Sellers.

          "Deemed Inventory Amount" means $10,000,000.00.

          "Disclosure  Schedule" means the disclosure  schedule attached to this
Agreement   setting  forth  the  exceptions  and   qualifications   to  Sellers'
representations and warranties set forth in Article 3.

          "Encumbrance"  means  any  lien,  claim,  charge,  security  interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
covenant or other similar restrictions affecting the Purchased Assets.

          "Environmental Law" means any local,  county, state and/or federal law
or regulation  that governs the existence of or provides a remedy for release of
Hazardous  Substances,  the  protection  of persons,  natural  resources  or the
environment,  the  management  of  Hazardous  Substances,  or  other  activities
involving Hazardous Substances  including,  without limitation,  under CERCLA or
any other similar federal,  state,  local and/or county laws or regulations,  in
each case as in effect on or prior to the Closing Date.

          "Equipment"  means the  equipment  identified  in the summary list set
forth on  Schedule 2.1(a).  Equipment includes rights to the warranties received
from the manufacturers and distributors of said items and to any related claims,
credits,  rights of recovery and setoff with respect to said items,  but only to
the extent such rights are assignable.

          "Excluded Assets" means all rights, properties and assets that are not
Purchased Assets,  including,  without limitation,  those rights, properties and
assets set forth in Section 2.2 or identified on Schedule 2.2.

          "Excluded  Liabilities" means the liabilities and obligations that are
not assumed by Buyer as provided in Section 2.5.

          "Final Inventory Amount" has the meaning assigned by Section 2.11(d).

          "Governmental  Body" means any court,  government  (federal,  state or
local),  department,  commission,  board,  agency,  bureau,  official  or  other
regulatory, administrative or governmental authority.

          "Governmental   Permits"  means  all  the  governmental   permits  and
licenses,  certificates of inspection,  approvals or other authorizations issued
to Lucent with respect to the Business and  necessary  for the  operation of the
Business.

          "Hazardous  Substance" means any substance that is regulated under any
Environmental  Law or is  deemed  by any  Environmental  Law to be  "hazardous,"
"toxic," a "containment," "waste," or a source of contamination or a pollutant.

          "Indemnified Party" has the meaning assigned by Section 9.3.

          "Indemnifying Party" has the meaning assigned by Section 9.4(a).

          "Inventory"  means all  inventory  identified  in the summary list set
forth on Schedule 2.1(b).  Inventory shall also include any rights of Sellers to
the warranties received from suppliers and any related claims,  credits,  rights
of recovery and set-off with respect to such  inventory,  but only to the extent
such rights are assignable.

          "IRS" means the U.S. Internal Revenue Service.

          "Losses" has the meaning assigned by Section 9.3(a).

          "Maquiladora Assets" has the meaning assigned by Section 2.1.

          "Maquiladora Bill of Sale" means the bill of sale in substantially the
form set forth as Exhibit B-1.

          "Marked Inventory" has the meaning assigned by Section 5.3(a).

          "Nonassignable Assets" has the meaning assigned by Section 2.6(b).

          "Nonassignable  Licenses" means licenses of Proprietary Information to
which  Lucent  or an  Affiliate  of  Lucent  is the  licensee  and  that are not
assignable to Buyer.

          "Permitted  Encumbrances"  means the (i) statutory liens for taxes not
yet due and  payable,  (ii)  statutory  liens of  landlords,  liens of carriers,
warehouseman,  mechanics  and material  men  incurred in the ordinary  course of
business,  for sums not yet due and payable,  (iii)  Encumbrances and exceptions
set  forth  on  Schedule  1.1,  and (iv)  licenses  under  Sellers'  Proprietary
Information.

          "Person"  means  any  individual,   corporation,   partnership,  firm,
association,   joint  venture,  joint  stock  company,   trust,   unincorporated
organization or other entity, or any government or regulatory, administrative or
political subdivision or agency, department or instrumentality thereof.

          "Proprietary  Information"  means  all  information  (whether  or  not
protectable  by  patent,  copyright,  mask  works or trade  secret  rights)  not
generally  known to the public (except in the case of patents),  including,  but
not limited to, works of authorship, inventions, discoveries, patentable subject
matter,  patents,  patent applications,  industrial models,  industrial designs,
trade  secrets,  trade secret rights,  software,  works,  copyrightable  subject
matters, copyright rights and registrations,  mask works, know-how and show-how,
trademarks,  trade names, service marks,  emblems,  logos,  insignia and related
marks and registrations,  specifications, technical manuals and data, libraries,
blueprints, drawings, proprietary processes, product information and development
work-in-process.

          "Purchased Assets" has the meaning assigned by Section 2.1.

          "Purchase Price" has the meaning assigned by Section 2.3(a).

          "Purchase  Price  Adjustment"  has the  meaning  assigned  by  Section
2.11(a).

          "Seller's  Adjustment  Statement" has the meaning  assigned by Section
2.11(a).

          "Settlement Date" has the meaning assigned by Section 2.11(d).

          "Senior Executives" means, in the case of Lucent,  Bruce A. Brock, and
in the case of Buyer, Daniel Bernstein.

          "Supply Agreement" means the supply agreement between Lucent and Buyer
in substantially the form set forth as Exhibit C.

          "Taxes" means, all taxes of any kind, charges, fees, customs,  levies,
duties,  imposts,  required deposits or other  assessments,  including,  without
limitation,  all  net  income,  capital  gains,  gross  income,  gross  receipt,
property,  franchise,  sales,  use, excise,  withholding,  payroll,  employment,
social security, worker's compensation, unemployment, occupation, capital stock,
ad  valorem,   value  added,   transfer,   gains,  profits,  net  worth,  asset,
transaction,  and other  taxes,  imposed  upon any Person by  federal,  foreign,
state,  or local law or taxing  authority,  together  with any  interest and any
penalties, or additions to tax, with respect to such taxes.

          "Technology   Transfer   Agreement"  means  the  technology   transfer
agreement  between  Lucent and Buyer for the  transfer  of certain  intellectual
property of Lucent, in substantially the form set forth as Exhibit D.

          "Third  Party"  means  any  Person  not  an  Affiliate  of  the  other
referenced Person or Persons.

          "Third-Party Claim" has the meaning assigned by Section 9.4(a).


          "Transition   Services   Agreement"  means  the  transition   services
agreement between Lucent,  Lucent Technologies  Microelectronica de Mexico, S.A.
de C.V. and Buyer in substantially the form set forth as Exhibit E.

          "U.S. Bill of Sale" means the bill of sale in  substantially  the form
set forth as Exhibit B-2.

          "WIP" has the meaning assigned by Section 2.11(a).

          1.2 Other Definitional and Interpretive Matters

          Unless otherwise expressly  provided,  for purposes of this Agreement,
the following rules of interpretation shall apply:

          Accounting  Terms. All accounting  terms not  specifically  defined in
this Agreement  shall be construed in accordance  with U.S.  Generally  Accepted
Accounting Principles.

          Calculation of Time Period. When calculating the period of time before
which,  within  which or  following  which  any act is to be done or step  taken
pursuant to this  Agreement,  the date that is the reference date in calculating
such period shall be excluded.  If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.

          Gender and Number.  Any  reference  in this  Agreement to gender shall
include all genders,  and words imparting the singular number only shall include
the plural and vice versa.

          Headings.  The provision of a Table of Contents,  the division of this
Agreement into Articles,  Sections and other  subdivisions  and the insertion of
headings  are for  convenience  of  reference  only and shall  not  affect or be
utilized in construing or interpreting  this  Agreement.  All references in this
Agreement to any "Section" are to the  corresponding  Section of this  Agreement
unless otherwise specified.

          Herein.  The words  such as  "herein,"  "hereinafter,"  "hereof,"  and
"hereunder"  refer to this  Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.

          Including.  The  word  "including"  or  any  variation  thereof  means
"including,  without limitation" and shall not be construed to limit any general
statement  that  it  follows  to  the  specific  or  similar  items  or  matters
immediately following it.

          Knowledge.  Any  reference  to Sellers'  knowledge  shall refer to the
actual knowledge of the senior managers of Lucent set forth on Schedule 1.2.

          Disclosure Schedule,  Schedules and Exhibits. The Disclosure Schedule,
Schedules and Exhibits attached to this Agreement shall be construed with and as
an integral  part of this  Agreement  to the same extent as if the same had been
set forth verbatim herein.

          2. Purchase and Sale of Assets

          2.1 Purchased Assets

          Upon the terms and subject to the  conditions of this Agreement and in
reliance on the representations and warranties  contained herein, on the Closing
Date, Sellers shall collectively sell, transfer,  assign,  convey and deliver to
Buyer,  and Buyer shall  purchase,  acquire and accept from Sellers,  all of the
right,  title and  interest in, to and under the  Purchased  Assets that Sellers
possess  and have the right to  transfer  as the same shall exist on the Closing
Date,  except  with  respect to those  assets  which are  located in Mexico (the
"Maquiladora  Assets").  Title to the  Maquiladora  Assets will be  transferred,
assigned,  conveyed and delivered to Buyer (or to any wholly-owned subsidiary of
Buyer) upon their export from Mexico  following the conclusion of the Transition
Period provided for in the Transition Services Agreement.  The transfer of title
and  delivery  of all  Maquiladora  Assets  will occur  outside  of Mexico.  For
purposes of this Agreement,  "Purchased  Assets" shall mean the specific assets,
properties and rights set forth or described in  Sections 2.1(a)  through 2.1(f)
(and the corresponding  Schedules applicable thereto),  inclusive whether or not
any of such assets, property or rights have any value for accounting purposes or
are carried or reflected  on or  specifically  referred to in Sellers'  books or
financial statements:

          (a) the Equipment;

          (b) the Inventory;

          (c) all of Sellers' rights under the Assigned Contracts;

          (d) all of Sellers' rights under the Assigned Licenses;

          (e) the Business Records; and

          (f) Proprietary Information of Lucent but only to the extent set forth
in the Technology Transfer Agreement.

          2.2 Excluded Assets

          Sellers shall retain all right, title and interest to and in and shall
not sell,  transfer,  assign,  convey or deliver to Buyer,  and Buyer  shall not
purchase,  acquire or accept from Sellers, any Excluded Assets.  Excluded Assets
shall include, without limitation, all of the following:

          (a) any of  Sellers'  cash,  Accounts  Receivable,  bank  deposits  or
similar cash items;

          (b) any Proprietary Information of Sellers (including product designs)
other than as expressly provided under the Technology Transfer Agreement;

          (c) (i) Sellers' personnel  records;  (ii) any other books and records
that  Sellers  are  required  by law to retain  or that  Sellers  determine  are
necessary or advisable to retain;  provided,  however, that Buyer shall have the
right to make copies of any  portions of such  retained  books and records  that
relate to the Purchased Assets;  and (iii) any information  management system of
Sellers other than those used exclusively with the Purchased Assets;

          (d) any claim,  right or  interest  of  Sellers  in or to any  refund,
rebate,  abatement or other recovery for U.S. federal,  state,  local or foreign
net income,  franchise,  gross  income,  alternative  or add-on  minimum,  gross
income,  gross receipts,  sales, use, ad valorem,  transfer,  profits,  license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
environmental, windfall profit, real or personal property taxes, customs, duties
or other taxes,  governmental  fees or other like  assessment  or charges of any
kind whatsoever, together with any interest due Sellers thereon, for any periods
prior to the Closing Date;

          (e) all "AT&T" or "Lucent  Technologies" marked sales and marketing or
packaging  materials,   samples,   prototypes,  other  similar  AT&T  or  Lucent
Technologies-identified  sales and  marketing  or  packaging  materials  and any
marketing studies, except to the extent such materials are sold or used by Buyer
in the ordinary course of business in accordance with the terms of Section 5.3;

          (f) any  Inventory  used or sold in the  ordinary  course of  business
between the date hereof and the Closing Date;

          (g) all of  Sellers'  rights,  claims or causes of action  against any
Person  relating to the assets,  properties,  business or  operations of Sellers
arising out of transactions occurring prior to the Closing Date; and

          (h) all other assets, properties,  interests and rights of Sellers not
specifically identified in Section 2.1.

          2.3 Purchase Price

          (a) In consideration of the sale, transfer, assignment, conveyance and
delivery  by  Sellers  of the  Purchased  Assets to Buyer and,  in  addition  to
assuming the Assumed  Liabilities,  Buyer shall pay to Lucent,  on behalf of the
Sellers,  at the Closing Thirty Million  Dollars  ($30,000,000.00)  in cash (the
"Purchase Price") by wire transfer of immediately available funds to the account
of Lucent designated by Lucent's written instructions. The Purchase Price may be
subject to adjustment pursuant to Section 2.11.

          (b) Buyer and Sellers recognize their respective  obligations pursuant
to Section 1060 of the Code to timely file IRS Form 8594 (the "Asset Acquisition
Statement")  with  each  of  their   respective   federal  income  tax  returns.
Accordingly, within 30 days after Buyer and Lucent agree to the final adjustment
amount,  if any,  pursuant to Section 2.11, Buyer and Lucent agree to attempt in
good faith to (i) enter into a Purchase Price Allocation Agreement providing for
the  allocation  of the Tax  Purchase  Price (to be defined  therein)  among the
Purchased Assets  consistent with the provisions of Section 1060 of the Code and
the Treasury Regulations thereunder and (ii) cooperate in the preparation of the
Asset  Acquisition  Statement  for  timely  filing  in each of their  respective
federal income tax returns; provided, however, the foregoing provision shall not
be  interpreted  to require  that the parties  must enter into a Purchase  Price
Allocation Agreement.

          2.4 Assumed Liabilities

          On the Closing  Date,  Buyer and Sellers  shall execute and deliver to
each other the Assignment and Assumption Agreement pursuant to which Buyer shall
accept,  assume and agree to pay, perform or otherwise discharge,  in accordance
with the respective terms and subject to the respective  conditions thereof, all
of the liabilities and obligations of Sellers  pursuant to and under the Assumed
Liabilities.  "Assumed  Liabilities"  shall mean all liabilities and obligations
set forth in this Section 2.4:

          (a) All  liabilities  and  obligations  arising after the Closing Date
under the  Assigned  Contracts  which  relate to periods on or after the Closing
Date;

          (b) All  liabilities  and  obligations  arising after the Closing Date
under the  Assigned  Licenses  which  relate to periods on or after the  Closing
Date;

          (c) All warranty and repair obligations of Sellers with respect to any
Business Product sold by Sellers on or prior to the Closing Date;

          (d) All Permitted  Encumbrances  and all other  Encumbrances and other
obligations  attaching  to the  Purchased  Assets  that are  identified  in this
Agreement or the Schedules hereto; and

          (e) All  liabilities  and  obligations  of Sellers with respect to the
Purchased Assets, known or unknown, fixed or contingent, as the same shall arise
or mature after the Closing Date which relate to periods on or after the Closing
Date.

          2.5 Excluded Liabilities

          Buyer shall not assume or be  obligated  to pay,  perform or otherwise
assume or discharge any  liabilities  or  obligations of Sellers or any of their
Affiliates,  whether  direct or  indirect,  known or  unknown,  or  absolute  or
contingent,  except for the Assumed  Liabilities  (all of such  liabilities  and
obligations   not  so  assumed  being   referred  to  herein  as  the  "Excluded
Liabilities"),  and,  notwithstanding  the  provisions of Section 2.4, the Buyer
shall not assume  (and each  shall be deemed to be an  Excluded  Liability)  any
liabilities or obligations in respect of the Excluded Assets.

          2.6 Consent of Third Parties; Further Assurances

          (a) From time to time following the Closing, Sellers shall execute and
deliver,  or cause to be  executed  and  delivered,  to  Buyer  such  additional
instruments of conveyance and transfer as Buyer may reasonably request or as may
be otherwise  necessary to more effectively  convey or transfer to, and vest in,
Buyer and put Buyer in possession of, any part of the Purchased Assets.

          (b) Nothing in this Agreement nor the consummation of the transactions
contemplated  hereby shall be construed as an attempt or agreement to assign any
Purchased Asset,  which by its terms or by law is nonassignable  ("Nonassignable
Assets") without the consent of third Persons ("Consents") unless and until such
Consent shall be given.  Sellers agree to cooperate with Buyer at its request in
endeavoring  to obtain such  Consents  promptly;  provided,  however,  that such
cooperation shall not require Sellers to remain  secondarily liable with respect
to any Nonassignable Asset.

          (c) To the extent  permitted by applicable  law, in the event Consents
cannot be obtained,  such  Nonassignable  Assets shall be held,  as and from the
Closing Date,  by Sellers in trust for Buyer and the  covenants and  obligations
thereunder  shall be  performed  by Buyer in Sellers'  name and all benefits and
obligations existing thereunder shall be for Buyer's account.

          (d) Sellers  shall take or cause to be taken at Buyer's  expense  such
action in its name or otherwise as Buyer may reasonably request so as to provide
Buyer with the benefits of the Nonassignable  Assets and to effect collection of
money or other  consideration to become due and payable under the  Nonassignable
Assets,  and  Sellers  shall  promptly  pay  over to  Buyer  all  money or other
consideration received by it in respect to all Nonassignable Assets.

          (e) As of and from the Closing Date,  Sellers  authorize Buyer, to the
extent permitted by applicable law and the terms of the Nonassignable Assets, at
Buyer's expense,  to perform all the obligations and receive all the benefits of
Sellers under the Nonassignable  Assets and appoints Buyer its  attorney-in-fact
to act in its name on its behalf with respect thereto.

          2.7 No Licenses

          Unless expressly set forth in the Technology  Transfer  Agreement , no
right or license of any kind is granted to Buyer pursuant to this Agreement with
respect to Sellers' Proprietary Information,  either directly or indirectly,  by
implication, by estoppel or otherwise.

          2.8 Bulk Sales Law

          Buyer hereby waives  compliance by Sellers with the  requirements  and
provisions of any "bulk-transfer" laws of any jurisdiction that may otherwise be
applicable  with  respect to the sale of any or all of the  Purchased  Assets to
Buyer.

          2.9 Taxes

          Buyer shall pay all Taxes and all recording  and filing fees,  whether
levied on Sellers or Buyer,  that are  payable as a result of the  operation  of
this Agreement including the sales, transfers,  leases,  rentals,  licenses, and
assignments  contemplated  hereby,  except for Sellers' income and capital gains
taxes or  franchise or other taxes based on Sellers'  income.  Annual ad valorem
property taxes will be apportioned  between  Sellers and Buyer as of the date of
closing,  each being responsible for the ad valorem taxes  attributable to their
respective periods of ownership.

          2.10 Employees

          For a period of two (2) years after the Closing Date, Buyer agrees not
to solicit or hire any employee of Sellers  without the prior written consent of
Lucent, which consent will not be unreasonably withheld;  provided,  however, on
or after the Closing  Date,  Buyer shall have the right to offer  employment  to
each of the  individuals  listed on Schedule 2.10 (the  "Affected  Employees" on
such terms and conditions established by Buyer without the prior written consent
of Lucent.

          2.11 Adjustments to Purchase Price

          (a) Within  thirty  (30) days after the  Closing  Date,  Lucent  shall
submit to Buyer a statement (the "Seller's Adjustment Statement") wherein Lucent
shall set forth in reasonable  detail Lucent's  valuation of the Inventory as of
the Closing  Date and its proposed  adjustment  to the  Purchase  Price  (either
upward or downward) as compared to the Deemed  Inventory  Amount (the  "Purchase
Price Adjustment").  Lucent shall certify that the Seller's Adjustment Statement
was prepared in accordance with GAAP (unless otherwise indicated or agreed to in
writing by Buyer and Lucent). The Seller's Adjustment Statement will be prepared
by Lucent in accordance  with the  following:  (i)  Inventory  will be valued at
Lucent's  "Standard  Cost" (as defined below) less the "RFMV" (as defined below)
balance  as of the  close of  business  on  October  2,  1998  plus or minus the
balances in operational variance accounts as of the close of business on October
2, 1998 which  consists of "Purchase  Price  Variances"  (as defined  below) and
"Operating  Variances"  (as  defined  below);  provided,  however,  that Work in
Process ("WIP") shall include Lucent's labor and load; provided,  further,  that
the value of such WIP and an  estimated  value of cost to  completion  shall not
exceed the price at which Lucent will  subsequently  purchase,  if any, such WIP
from Buyer in the form of finished  goods;  and (ii) Inventory will only consist
of  current,  merchantable,  readily  salable  goods  and  merchandise  that are
currently  and  actively  used in the  operation of the  Business,  and will not
include  items which are  discontinued  or scrap.  For  purposes of this Section
2.11, the term (1) "Standard Cost" shall mean Lucent's Power Systems'  published
local cost  methodology  used in Dallas at the Closing Date; (2) RFMV (Reduction
to Fair  Market  Value)  shall  mean  Lucent's  reserve  to write  off  obsolete
inventory  down to its  estimated  fair market value as  identified  on Lucent's
Power Systems' product family balance sheet; (3) "Purchase Price Variance" shall
mean the  difference  between  actual  price  paid per unit for  material  minus
Lucent's Power Systems' local Standard Cost per unit. Purchase Price Variance is
identified  as  105  account  on  the  Power  Systems'   product  family  income
statements;  and (4) "Operating  Variance" shall mean the difference between the
Standard  Cost of labor and load and the  incurred  labor and load plus the cost
difference  (at standard)  between the sum of components on the original bill of
material and the current bill of material.  Operating  Variance is identified as
104 account on Lucent's Power Systems' product family income statements.

          (b) Buyer shall review the Seller's Adjustment Statement promptly upon
receipt  thereof.  If Buyer believes that the Seller's  Adjustment  Statement is
incorrect  in any  respect,  Buyer shall  deliver to Lucent a  statement  within
thirty (30) days after  Buyer's  receipt of the  Seller's  Adjustment  Statement
identifying the specific aspects of the Seller's Adjustment Statement with which
Buyer  disagrees and the reasons  therefor with supporting  detail,  and setting
forth Buyer's valuation of the Inventory as of the Closing Date and its proposed
adjustment to the Purchase  Price (the "Buyer's  Adjustment  Response").  Buyer
shall  certify that the Buyer's  Adjustment  Response was prepared in accordance
with GAAP (unless  otherwise  indicated or agreed to in writing by the Buyer and
Lucent).

          (c) Within  thirty  (30) days after  Lucent's  receipt of the  Buyer's
Adjustment  Response,  the  parties  shall use their  best  efforts  to  resolve
mutually their  differences with regard to, and agree upon, the valuation of the
Inventory as of the Closing Date and the Purchase Price Adjustment.

          (d) If Lucent and Buyer are able to reach an agreement  with regard to
the  valuation of the  Inventory  as of the Closing  Date (the "Final  Inventory
Amount"),  and there is a difference  between the Final Inventory Amount and the
Deemed  Inventory  Amount,  payment will be made to either  Buyer or Lucent,  as
applicable, and the Purchase Price will be adjusted as hereinafter set forth:

               (i) If the Final  Inventory  Amount is  greater  than the  Deemed
          Inventory Amount,  then Buyer shall pay to Lucent,  for the benefit of
          the  Sellers,  an amount  equal to the  difference  between  the Final
          Inventory  Amount  and the  Deemed  Inventory  Amount  in  immediately
          available funds on the Settlement Date.

               (ii) If the Deemed  Inventory  Amount is  greater  than the Final
          Inventory Amount, then Lucent shall refund to Buyer an amount equal to
          the  difference  between  the  Deemed  Inventory  Amount and the Final
          Inventory  Amount in  immediately  available  funds on the  Settlement
          Date.

               (iii) The "Settlement Date" shall be a Business Day designated by
          the payor under Section 2.11(d) and shall be within (10) calendar days
          after the later of (i) the  expiration of the time provided in Section
          2.11(b) for service  upon  Lucent of the  Buyer's  Response  Statement
          without  Buyer having done so; or (ii) the date upon which the parties
          either  agree upon the  valuation  of the  Inventory as of the Closing
          Date,  or if Buyer and Lucent  cannot reach such  agreement,  then the
          date on which  the  Auditor  reaches  its  determination  pursuant  to
          Section 2.11(e).

          (e) If Buyer and Lucent are unable to resolve  mutually  their dispute
with regard to the  valuation of the Inventory as of the Closing Date within the
thirty (30) day calendar  period  provided for doing so, then the issue shall be
submitted to PricewaterhouseCoopers, New York Office (or, if such firm is unable
or unwilling to accept such  responsibility,  Arthur Andersen,  New York Office)
(the "Auditor") to resolve any dispute. The Auditor, acting as an expert and not
as an arbitrator,  shall determine whether the Seller's Adjustment Statement was
derived in accordance  with the standards set forth in Section 2.11(a) and, only
with respect to the  discrepancies  identified in Buyer's  Adjustment  Response,
whether and to what extent,  if any, the Purchase Price  Adjustment  proposed by
Lucent requires  adjustment.  The  determination  of the Auditor shall be final,
binding  and  conclusive  on the  parties.  Buyer and Lucent  shall  provide all
documents and information  requested by the Auditor promptly and shall use their
reasonable efforts to cause the Auditor to make its determination  within thirty
(30) days after the  dispute is  submitted  to it. The fees and  expenses of the
Auditor shall be borne by Sellers and Buyer equally.

          3. Representations and Warranties of Sellers

          The Sellers,  jointly and  severally,  represent and warrant to Buyer,
except as  disclosed  on the  Disclosure  Schedule or on any  specific  Schedule
attached hereto, that:

          3.1 Organization and Authority

          Each Seller is a corporation  duly organized,  validly existing and in
good  standing  under the laws of the state of Delaware  and has full  corporate
power to carry on the Business as now conducted.

          3.2 Authorization; Binding Obligations

          Each Seller has all necessary corporate power and authority to execute
and deliver this Agreement and the Collateral  Agreements to which it is a party
and to effect the  transactions  contemplated  hereby and  thereby  and has duly
authorized  the  execution,  delivery and  performance of this Agreement and the
Collateral Agreements by all necessary corporate action. This Agreement has been
duly  executed  and  delivered  by each  Seller and this  Agreement  is, and the
Collateral Agreements,  when duly executed and delivered by such Seller will be,
valid and legally binding obligations of such Seller,  enforceable against it in
accordance with their terms, except to the extent that enforcement of the rights
and  remedies  created  hereby  and  thereby  may  be  affected  by  bankruptcy,
reorganization, insolvency and similar laws of general application affecting the
rights and remedies of creditors and by general equity principles.

          3.3 No Violations

          (a) The execution,  delivery and performance of this Agreement and the
Collateral  Agreements by each Seller party thereto and the  consummation of the
transactions  contemplated hereby and thereby do not and will not: (i) result in
a breach or violation of any provision of such Seller's charter or by-laws or in
a material violation of any statute, rule, regulation or ordinance applicable to
such Seller, (ii) with or without the giving of notice or the passage of time or
both,  violate or result in a breach of or  constitute  an occurrence of default
under any  provision  of,  result in the  acceleration  or  cancellation  of any
obligation under, or give rise to a right by any party to terminate or amend its
obligations  under, any material mortgage,  deed of trust,  conveyance to secure
debt,  note,  loan,  indenture,  lien,  lease,  agreement,   instrument,  order,
judgment,  decree or other  material  arrangement  or  commitment  to which such
Seller  is a party or by which it is bound and which  relates  to the  Purchased
Assets, or (iii) violate any order, judgment,  decree, rule or regulation of any
court or any Governmental  Body having  jurisdiction  over such Seller or any of
its Purchased Assets.

          (b) No consent,  approval, order or authorization of, or registration,
declaration  or  filing  with,  any  Person  is  required  by  either  Seller in
connection  with the execution and delivery of this Agreement and the Collateral
Agreements  to  which  such  Seller  is a  party  or  the  consummation  of  the
transactions contemplated hereby or thereby, except for (i) any filings required
to be made  under  the HSR Act and  (ii) consents  of third  Persons  which  are
required  to  transfer  or assign to Buyer any  Purchased  Assets or assign  the
benefits of or delegate performance with regard thereto.

          3.4 Assets

          Sellers collectively have good and marketable title to, or a leasehold
interest  in,  all  the  tangible   Purchased  Assets  free  and  clear  of  any
Encumbrance, except for Permitted Encumbrances.

          (b) Except as indicated on Schedule 2.1(b),  no Inventory is stored at
any  location  other than at the  Business  Locations  and at Sellers'  customer
sites.

          (c) There are no existing agreements,  options,  commitments or rights
with,  of or to any Person to acquire any of Purchased  Assets,  or any interest
therein  except for the sale of  Inventory  in the  ordinary  course of business
between the date hereof and the Closing Date.

          3.5 Personal Property

          The items of personal  property included in the Purchased Assets which
are  presently  and  actively  used  in the  operation  of the  Business  are in
reasonable  operating  condition,  in light of their  respective  ages,  for the
purposes for which they are currently being used.

          3.6 Compliance With Laws and Litigation; Environmental Matters

          (a) With respect to the Purchased Assets, each Seller is in compliance
in  all  material  respects  with  all  applicable  laws,  rules,   regulations,
ordinances,  decrees,  orders,  judgments,  permits  and  licenses  of  or  from
Governmental Bodies.

          (b)  There  are  no  actions,   suits,   proceedings  or  governmental
investigations  pending or, to Sellers'  knowledge,  threatened  against it that
could be reasonably  expected to have a material adverse effect on the Purchased
Assets.

          (c) Each Seller is in material  compliance with Environmental Laws. No
environmental  proceeding or investigation involving the Business is pending or,
to Sellers'  knowledge,  threatened which could reasonably be expected to have a
material adverse effect on the Purchased Assets.

          3.7 Contracts; Permits and Licenses

          (a) Each Assigned Contract is valid,  binding and enforceable  against
the applicable Seller and, to Sellers' knowledge,  the other parties thereto, in
accordance  with its terms and is in full force and effect.  Neither  Seller has
received  any written  notice that it is in default or breach of or is otherwise
delinquent  in  performance  under  any  Assigned  Contract,  and,  to  Sellers'
knowledge,  each of the other  parties  thereto has  performed  in all  material
respects all  obligations  required to be  performed by it under,  and is not in
default in any material  respect under,  any Assigned  Contract and no event has
occurred that,  with notice or lapse of time, or both,  would  constitute such a
default.

          (b)  Except  as set  forth on  Schedule  3.6,  there  are no  material
Governmental  Permits  necessary  for or used by  Sellers  to use the  Purchased
Assets as now being used, which  Governmental  Permits are required by currently
effective laws, rules and regulations.

          3.8 Intellectual Property

          Lucent  has  not  received  any  writing  alleging  any  interference,
infringement,  misappropriaton  or  violation  with  respect to any  product (as
listed on Appendix B to the Technology  Transfer  Agreement)  made by use of the
Technical  Information (as defined in the Technology  Transfer  Agreement) being
licensed by Lucent to Buyer under the Technology  Transfer  Agreement.  Sellers'
representation  in this  Section 3.8 is being made without any inquiry by either
Seller.

          3.9 Brokers

          No broker,  investment  banker,  financial  advisor or other Person is
entitled to any broker's,  finder's, financial advisor's or other similar fee or
commission in connection  with the  transactions  contemplated by this Agreement
based upon arrangements made by or on behalf of either Seller.

          3.10 No Other Representations or Warranties

          In entering into this Agreement,  Sellers have not been induced by and
have not relied upon any  representations,  warranties  or  statements,  whether
express or  implied,  made by Buyer or any agent,  employee,  attorney  or other
representative of Buyer or by any Person representing or purporting to represent
Buyer that are not  expressly  set forth in this  Agreement,  whether or not any
such  representations,  warranties or statements were made in writing or orally.
It is hereby  agreed by Sellers  that,  except as otherwise  expressly  provided
herein, Buyer makes no other representations or warranties.

          4. Representations and Warranties of Buyer

          Buyer represents and warrants to Sellers that:

          4.1 Organization and Authority


          Buyer is a corporation  duly organized,  validly  existing and in good
standing under the laws of the state of New Jersey,  and Buyer has all corporate
power and authority necessary to carry on its business as now being conducted.

          4.2 Authorization; Binding Obligations

          Buyer has full  corporate  power to execute and deliver this Agreement
and the Collateral Agreements and to effect the transactions contemplated hereby
and thereby and has duly  authorized the execution,  delivery and performance of
this Agreement and the Collateral  Agreements by all necessary corporate action.
This  Agreement has been duly executed and delivered by Buyer and this Agreement
is, and the Collateral Agreements once duly executed and delivered by Buyer will
be, the valid and legally binding  obligations of Buyer,  enforceable against it
in accordance  with their terms,  except to the extent that  enforcement  of the
rights and remedies  created hereby and thereby may be limited by bankruptcy and
other similar laws of general  application  affecting the rights and remedies of
creditors and by general equity principles.

          4.3 No Violations

          The  execution,  delivery and  performance  of this  Agreement and the
Collateral  Agreements  by  Buyer  and  the  consummation  of  the  transactions
contemplated  hereby and thereby do not and will not  (i) result  in a breach or
violation  of any  provision  of  Buyer's  charter  or  by-laws or in a material
violation of any statute,  rule,  regulation or ordinance applicable to Buyer or
(ii) with  or  without  the  giving of notice  or the  passage  of time or both,
violate or result in a breach of or  constitute  an occurrence of default (or an
event that  might,  upon the  passage of time or the giving of notice,  or both,
constitute  an  occurrence  of  default)  under  any  provision  of,  result  in
acceleration or cancellation of any obligation under, or give rise to a right by
any party to terminate or amend its obligations  under,  any material  mortgage,
deed of trust,  conveyance to secure debt, note, loan,  indenture,  lien, lease,
agreement,  instrument, order, judgment, decree or other material arrangement or
commitment  to which Buyer is a party or by which it or its assets or properties
are bound, or (iii) violate any order,  judgment,  decree, rule or regulation of
any court or any Governmental Body having  jurisdiction over Buyer or any of its
properties.

          Except as disclosed on Schedule 4.3(b), no consent, approval, order or
authorization  of, or  registration,  declaration  or filing with, any Person is
required  by Buyer  in  connection  with  the  execution  and  delivery  of this
Agreement and the Collateral  Agreements or the consummation of the transactions
contemplated  hereby or thereby,  except for (i) any filings required to be made
under the HSR Act and (ii) such  consents,  approvals,  orders,  authorizations,
registrations,  declarations  or filings where failure of compliance  would not,
individually  or in the  aggregate,  have a material  adverse  effect on Buyer's
ability to consummate the transactions contemplated hereby and thereby.

          4.4 Brokers

          No broker,  investment banker,  financial advisor or other Person, the
fees and expenses of which will be paid by Buyer,  is entitled to any  broker's,
finder's,  financial  advisor's or other similar fee or commission in connection
with the transactions  contemplated by this Agreement based on arrangements made
by or on behalf of Buyer.

          4.5 No Knowledge of Misrepresentations

          During  the  course of  Buyer's  due  diligence  investigation  of the
Business or otherwise, Buyer has not been made aware of any information which if
true, would result in any of the  representations and warranties of Sellers made
in  Article  3  being  untrue  in  any  material  respect.  Notwithstanding  the
foregoing, the representation set forth in this Section 4.5 shall not in any way
limit Buyer's right to indemnification under Section 9.3.

          4.6 No Other Representations or Warranties

          (a) With respect to the Purchased Assets,  the Business,  or any other
rights or obligations to be transferred  hereunder or pursuant hereto, Buyer has
not been induced by and has not relied upon any  representations,  warranties or
statements,  whether express or implied, made by Sellers or any agent, employee,
attorney or other  representative  of Sellers or by any Person  representing  or
purporting  to  represent  Sellers  that  are not  expressly  set  forth in this
Agreement or, in the case of Proprietary Information, in the Technology Transfer
Agreement (including the Schedules hereto and thereto),  whether or not any such
representations,  warranties or statements were made in writing or orally. It is
hereby agreed by Buyer that, except as otherwise  expressly  provided herein or,
in the case of Proprietary  Information,  in the Technology  Transfer Agreement,
Sellers make no  representations  or  warranties  with respect to the  Purchased
Assets  or the  Business.  Buyer  assumes  the  responsibility  and risks of all
defects and  conditions  relating to the  Purchased  Assets  including,  without
limitation,  such conditions as are disclosed  herein and including  defects and
conditions that cannot be observed by casual inspection.

          (b)  Buyer  acknowledges  that it has made its own  assessment  of the
Purchased  Assets and is sufficiently  experienced to make an informed  judgment
with respect thereto.

          5. Certain Covenants

          5.1 Information

          (a)  Sellers  will  give  to  Buyer  and to its  officers,  employees,
accountants, counsel and other representatives reasonable access during Sellers'
normal  business  hours  throughout  the period  prior to the  Closing to all of
Sellers' properties, books, contracts,  commitments,  reports of examination and
records (excluding  personnel records) directly relating to the Purchased Assets
(but excluding the Excluded  Assets and Excluded  Liabilities and subject to any
limitations   that  are   reasonably   required  to  preserve   any   applicable
attorney-client privilege or third-party confidentiality obligation). Buyer will
hold,  and  will  cause  such  representatives  to  hold,  such  information  in
confidence as provided in Article 6. Further, prior to the Closing, Sellers will
afford Buyer access during normal  business hours to the Business  Locations and
Sellers'  environmental  books and records which relate to the Purchased  Assets
(except books and records subject to  attorney-client  or attorney-work  product
privileges)  so as to  afford  Buyer  full  opportunity  to  make  such  review,
examination  and  investigation  of  environmental   matters  and  environmental
conditions of the Purchased Assets as Buyer may reasonably desire to make.

          (b) After the Closing  Date,  Sellers  and Buyer will  provide to each
other  and  to  their  respective   officers,   employees,   counsel  and  other
representatives,  upon request  (subject to any limitations  that are reasonably
required to preserve any  applicable  attorney-client  privilege or  third-party
confidentiality obligation), reasonable access for inspection and copying of all
Business Records,  Assigned  Contracts and any other information  existing as of
the Closing Date and relating to the  Business,  and will make their  respective
personnel reasonably available for interviews,  depositions and testimony in any
legal  matter  concerning  transactions,  operations  or  activities  (including
treatment,  storage,   transportation,   disposal,  recycling  and  handling  of
Hazardous  Substances and compliance  with  Environmental  Laws) relating to the
Business or the Purchased Assets prior to the Closing Date, and as otherwise may
be necessary or desirable to enable the party  requesting  such  assistance  to:
(i) comply with reporting,  filing or other requirements imposed by any foreign,
local, state or federal court, agency or regulatory body;  (ii) assert or defend
any  claims  or   allegations  in  any  litigation  or  arbitration  or  in  any
administrative  or legal  proceeding  other than claims or allegations  that one
party to this Agreement has asserted  against the other;  or  (iii) (subject  to
clause  (ii) above),  perform its obligations  under this  Agreement.  The party
requesting  such  information or assistance  shall reimburse the other party for
all  reasonable  out-of-pocket  costs and  expenses  incurred  by such  party in
providing  such  information  and in rendering  such  assistance.  The access to
files,  books and records  contemplated by this  Section 5.1(b)  shall be during
normal  business  hours and upon not less than two Business  Days' prior written
request and shall be subject to such reasonable  limitations as the party having
custody or  control  thereof  may  impose to  preserve  the  confidentiality  of
information contained therein.

          (c) Buyer  agrees to preserve all  Business  Records and  Governmental
Permits for at least five (5) years after the Closing Date.  After this five (5)
year  period  and at least  90 days  prior  to the  planned  destruction  of any
Business Records or Governmental Permits,  Buyer shall notify Sellers in writing
and shall make available to Sellers, upon its request, such Business Records and
Governmental Permits.

          Post Closing Audit

          For purposes of complying  with Buyer's  obligation to file a Form 8-K
with the  Securities  and Exchange  Commission  ("SEC") in connection  with this
Agreement,   Lucent  will  use  its  Best  Efforts  to  cooperate  with  Buyer's
independent  auditors  so that  Buyer  can  prepare  and file  such  reformatted
financial  statements  (for such periods as may be required by the SEC) relating
to the Business.

          5.3 Sale by Buyer of Inventory Marked With Sellers' Name

          (a) To the extent that Inventory  consists of product or material that
is marked with the name or mark "Lucent  Technologies"  or "AT&T" (or with other
indicia of either of them) (the  "Marked  Inventory"),  Buyer shall use its Best
Efforts to ship such  Marked  Inventory  prior to  shipping  the same or similar
products of Buyer. Except as specifically  permitted under Section 5.3(b) below,
Buyer shall cease,  immediately  upon the Closing,  to mark, both internally and
externally,  all  Business  Products  or any other  product of Buyer that is not
Marked Inventory with the names, marks or other indicia of "Lucent Technologies"
or "AT&T".

          (b) For a period of 60 days after the Closing Date, Buyer may continue
to apply the name "Lucent Technologies" to Business Products manufactured during
that 30-day period. At the end of that 60-day period,  Buyer agrees to cease all
use  of  "Lucent  Technologies"  name  and  to  permanently  remove  the  Lucent
Technologies name on all molds bearing the Lucent  Technologies  name. Buyer may
sell  or  otherwise  distribute  Business  Products  which  display  the  Lucent
Technologies  name until such Business  Products are depleted or until  November
30, 1998,  whichever  occurs first. In the event Business  Products  bearing the
Lucent Technologies name and manufactured in accordance with this paragraph fall
below the standard of quality of Lucent's  products (as determined in good faith
by Seller), Lucent retains the right to terminate this grant upon written notice
to Buyer.

          (c)  Section  5.3(a) and (b) shall in all  respects  be subject to the
Supply Agreement.

          5.4 Collateral Agreements

          On or prior to the Closing  Date,  Buyer shall  execute and deliver to
Sellers and Sellers  shall  execute and  deliver to Buyer,  as  applicable,  the
following agreements (collectively, the "Collateral Agreements"): the Technology
Transfer Agreement, the Supply Agreement, the Transition Services Agreement, the
Assignment and Assumption Agreement and the Bill of Sale.

          5.5 Regulatory Compliance

          Each of Buyer and Sellers shall use reasonable  efforts to obtain, and
to cooperate with each other in obtaining, all authorizations,  consents, orders
and  approvals  of  Governmental  Bodies  that  may be or  become  necessary  in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement, prior to or following the Closing, and to take all reasonable actions
to avoid the entry of any order or decree by any  Governmental  Body prohibiting
the consummation of the transactions contemplated hereby.

          5.6 [Intentionally Omitted]

          5.7 Reacquisition Right

          If an Event of Default (as defined  below) shall occur anytime  during
the two (2) year period following the Closing Date,  Lucent shall,  upon 30 days
prior written notice to Buyer, have the right to reacquire all or any portion of
the  Purchased  Assets at their then fair market value (to be  determined by the
Auditor),  less all loss,  cost,  damage and expense of Lucent arising out of or
resulting  from  the  Event of  Default  and the  exercise  of  Lucent's  rights
hereunder.  For purposes of this Agreement,  any or all of the following  events
shall be deemed an "Event of  Default":  Buyer shall (i) apply for or consent to
the appointment of, or the taking possession by, a receiver,  custodian, trustee
or liquidator, of Buyer or a substantial part of Buyer's property, (ii) admit in
writing Buyer's inability, or be generally unable, to pay its debts as they come
due or cease operations of its present business, (iii) make a general assignment
for the benefit of creditors,  (iv) commence a voluntary  case under the federal
bankruptcy  laws (as now or hereafter in effect),  (v) be adjudicated a bankrupt
or insolvent,  (vi) file a petition  seeking to take  advantage of any other law
providing  for the  relief  of  debtors,  (vii)  acquiesce  to,  or fail to have
dismissed, within 60 days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (viii)  materially  breaches the Supply Agreement
which  breach is not cured or remedied  within the  applicable  cure periods set
forth in the Supply Agreement, as applicable.)

          5.8 Maquiladora Assets

          Until such time that title to the  Macquiladora  Assets is transferred
to Buyer, Buyer shall insure all of the Maquiladora Assets and pay all insurance
premiums and any other costs associated therewith.  Buyer's sole recourse to any
loss of, or damage to, any of the Maquiladora  Assets shall be limited to claims
under such insurance policies.

          6. Confidential Nature of Information

          6.1 Confidentiality Agreement

          Buyer agrees that the  Confidentiality  and  Non-Disclosure  Agreement
between  Buyer and Lucent  dated May 18,  1998 (the  "Nondisclosure  Agreement")
shall apply to (a) all documents,  materials and other information that it shall
have  obtained  regarding  Lucent or its  Affiliates  during  the  course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether   obtained   before  or  after  the  date  of  this   Agreement),   any
investigations  made  in  connection  therewith  and  the  preparation  of  this
Agreement and related  documents and (b) all  analyses,  reports,  compilations,
evaluations and other materials prepared by Buyer or its counsel, accountants or
financial advisors that contain or otherwise reflect or are based upon, in whole
or in part, any of the provided information;  provided, however, that subject to
Section 6.2(a),  the  Nondisclosure  Agreement shall terminate as of the Closing
and  shall  be of no  further  force  and  effect  thereafter  with  respect  to
information of Sellers the ownership of which is transferred to Buyer.

          6.2 Sellers' Proprietary Information

          (a) Except as provided in Section  6.2(b) or as otherwise  provided in
the Technology  Transfer  Agreement,  after the Closing and for a period of five
(5)  years  following  the  Closing  Date,   Buyer  agrees  that  it  will  keep
confidential  and not  use  all of  Sellers'  and  its  Affiliates'  Proprietary
Information  that is received  from, or made available by, Sellers in the course
of the transactions contemplated hereby, including, for purposes of this Section
6.2,  information  about  Sellers'  and  their  Affiliates'  business  plans and
strategies, marketing ideas and concepts, especially with respect to unannounced
products  and  services,  present  and future  product  plans,  pricing,  volume
estimates,  financial data,  product  enhancement  information,  business plans,
marketing plans, sales strategies,  customer information  (including  customers'
applications and environments),  market testing information,  development plans,
specifications, customer requirements, configurations, designs, plans, drawings,
apparatus,   sketches,   software,   hardware,   data,  prototypes,   connecting
requirements  or other  technical  and  business  information,  except  for such
Proprietary Information as is conveyed to Buyer as part of the Purchased Assets.

          (b) Notwithstanding the foregoing,  such Proprietary Information shall
not be deemed  confidential  and Buyer shall have no obligation  with respect to
any such Proprietary Information that:

               (i)  was  already   known  to  Buyer  other  than   through  this
          transaction;

               (ii) is or becomes publicly known through publication, inspection
          of a  product,  or  otherwise,  and  through  no  negligence  or other
          wrongful act of Buyer;

               (iii) is  received by Buyer from a Third  Party  without  similar
          restriction and without breach of any agreement;

               (iv) to the extent it is independently developed by Buyer; or

               (v) is, subject to Section 6.2(c), required to be disclosed under
          applicable law or judicial process.

          (c) If Buyer (or any of its  Affiliates)  is requested or required (by
oral question,  interrogatory,  request for information or documents,  subpoena,
civil  investigative  demand or similar  process)  to disclose  any  Proprietary
Information,  Buyer will promptly  notify Lucent of such request or  requirement
and will  cooperate  with  Lucent  such  that  Lucent  may  seek an  appropriate
protective order or other appropriate remedy. If, in the absence of a protective
order or the receipt of a waiver hereunder,  Buyer (or any of its Affiliates) is
in the written opinion of Buyer's counsel  compelled to disclose the Proprietary
Information  or else  stand  liable  for  contempt  or suffer  other  censure or
significant  penalty,  Buyer (or its Affiliate) may disclose only so much of the
Proprietary  Information  to the party  compelling  disclosure as is required by
law. Buyer will exercise its (and will cause its  Affiliates to exercise  their)
Best  Efforts to obtain a  protective  order or other  reliable  assurance  that
confidential treatment will be accorded to such Proprietary Information.


          (d) The terms and conditions of this  Agreement,  and all  attachments
and amendments  hereto and thereto shall be considered  Proprietary  Information
protected  under this Article 6.  Notwithstanding  anything in this Article 6 to
the contrary, in the event that any such Proprietary Information is also subject
to a limitation  on disclosure  or use  contained in another  written  agreement
between Buyer and Lucent that is more restrictive than the limitation  contained
in this Article 6, then the  limitation in such agreement  shall  supersede this
Article 6.

          7. Closing

          At the Closing, the following transactions shall take place:

          7.1 Documents to be Delivered by Sellers

          On the Closing Date,  Sellers shall  deliver,  or execute and deliver,
the following documents and agreements to Buyer (other than the Maquiladora Bill
of Sale,  which  Sellers  shall  deliver to Blau,  Kramer,  Wactlar &  Lieberman
("BKW&L") who shall hold it in escrow):

          (a) the Technology Transfer Agreement;

          (b) the Supply Agreement;

          (c) the Transition Services Agreement;

          (d) the U.S. Bill of Sale;

          (e) the Assignment and Assumption Agreement;

          (f) all consents, waivers or approvals theretofore obtained by Sellers
with respect to the Purchased  Assets or the  consummation  of the  transactions
contemplated by this Agreement;

          (g) a  certificate  of a duly  authorized  representative  of Sellers,
dated the Closing Date,  certifying the  fulfillment of the conditions set forth
in Sections 8.2(a) and (b);

          (h) to the  extent  required,  updated  Schedules  revised  to reflect
changes in the  operations or condition of the Business  between the date hereof
and the Closing Date; and

          (i) all such other bills of sale, assignments and other instruments of
assignment,  transfer or conveyance as Buyer may reasonably request or as may be
otherwise  necessary  to  evidence  and effect the sale,  transfer,  assignment,
conveyance  and  delivery of the  Purchased  Assets to Buyer and to put Buyer in
actual possession or control of the Purchased Assets.

          7.2 Documents to be Delivered by Buyer

          On the Closing Date, Buyer shall deliver, or execute and deliver,  the
following  funds,  documents  and  agreements to Lucent on behalf of the Sellers
(other than the side letter  executed by BKW&L pursuant to which BKW&L agrees to
hold the  Maquiladora  Bill of Sale in escrow,  which Buyer shall cause BKW&L to
execute and deliver to Sellers):

          (a) the Purchase Price as provided in Section 2.3;

          (b) the Technology Transfer Agreement;

          (c) the Supply Agreement;

          (d) the Transition Services Agreement;

          (e) the Assignment and Assumption Agreement;

          (f) a certificate of a duly authorized  representative of Buyer, dated
the Closing Date,  certifying to the  fulfillment of the conditions set forth in
Sections 8.3(a) and (b); and

          (g) all such other documents and instruments as Sellers may reasonably
request or as may be otherwise necessary or desirable to evidence and effect the
assumption by Buyer of the Assumed Liabilities.

          7.3 Closing Date

          The  Closing  shall  take  place at the office of Lucent at 10:00 a.m.
within three Business Days after all the conditions  specified in Article 8 have
been  satisfied or waived,  or at such other place or time or on such other date
as Lucent and Buyer may agree upon in writing (such date and time being referred
to herein as the "Closing Date"), but in no event later than October 2, 1998.

          7.4 Contemporaneous Effectiveness

          All acts and  deliveries  prescribed by this Article 7,  regardless of
chronological   sequence,   will  be  deemed  to  occur   contemporaneously  and
simultaneously  on the occurrence of the last act or delivery,  and none of such
acts or deliveries will be effective until the last of the same has occurred.

          8. Conditions Precedent to Closing

          8.1 General Conditions

          The respective  obligations of Buyer and Sellers to effect the Closing
of the transactions contemplated hereby are subject to the fulfillment, prior to
or at the Closing, of each of the following conditions:

          (a) Legal Proceedings.  No order of any court or administrative agency
shall be in effect that enjoins or prohibits the consummation of this Agreement,
and no  litigation  that has a  substantial  chance  of  success  on its  merits
initiated  by any bona fide Third  Party shall be pending  that would  enjoin or
prohibit the consummation of this Agreement.

          (b) HSR Act. Any applicable  waiting period under the HSR Act relating
to the  transactions  contemplated  by this Agreement shall have expired or been
terminated.

          8.2 Conditions Precedent to Buyer's Obligations

          The  obligations  of Buyer to effect the  Closing of the  transactions
contemplated hereby are subject to the fulfillment,  prior to or at the Closing,
of each of the  following  conditions,  any of which may be waived in writing by
Buyer:

          (a)  Representations  and  Warranties of Sellers True at Closing.  The
representations  and  warranties  of Sellers  contained in this  Agreement,  the
Collateral  Agreements or in any certificate  delivered  hereunder or thereunder
shall be true and  correct in all  material  respects  at and as of the  Closing
Date, as though such  representations  and warranties were made at and as of the
Closing Date, except to the extent that such  representations and warranties are
made as of a specified date, in which case such  representations  and warranties
shall be true in all material respects as of the specified date.

          (b)  Performance  by Sellers.  Each Seller shall have performed in all
material  respects all  obligations  and agreements and complied in all material
respects  with all  covenants and  conditions  required by this  Agreement to be
performed or complied with by it prior to or at the Closing.

          8.3 Conditions Precedent to Sellers' Obligations

          The  obligations of Sellers to effect the Closing of the  transactions
contemplated hereby are subject to the fulfillment,  prior to or at the Closing,
of each of the  following  conditions,  any of which may be waived in writing by
Sellers:

          (a)  Representations  and  Warranties  of Buyer True at  Closing.  The
representations  and  warranties  of  Buyer  contained  in this  Agreement,  the
Collateral  Agreements or in any certificate  delivered  hereunder or thereunder
shall be true in all  material  respects at and as of the Closing Date as though
such  representations  and  warranties  were made at and as of the Closing Date,
except to the extent that such  representations  and warranties are made as of a
specified date, in which case such  representations and warranties shall be true
in all material respects as of the specified date.

          (b)  Performance by Buyer.  Buyer shall have performed in all material
respects all  obligations  and agreements and complied in all material  respects
with all covenants and conditions  required by this Agreement to be performed or
complied with by it prior to or at the Closing.

          9. Status of Agreements

          The rights and  obligations  of Buyer and Sellers under this Agreement
shall be subject to the following terms and conditions:

          9.1 Effect of Breach

          In the event of a material breach of any representation, certification
or warranty,  or agreement or covenant of each Seller under this  Agreement that
is  discovered  by Buyer  prior to Closing and that cannot be or is not cured by
such Seller upon prior  notice and the passage of a  reasonable  period of time,
Buyer  may elect not to  proceed  with the  closing  hereunder,  which  shall be
Buyer's sole remedy for such breach.

          9.2 Survival of Representations and Warranties

          The  representations  and warranties of Buyer and Sellers contained in
this  Agreement  shall  survive the Closing for twelve (12)  months,  except for
representations and warranties contained in Section 3.1, 3.2, 3.3, 3.4, 4.1, 4.2
and 4.3, which shall survive until the  expiration of the applicable  statute of
limitations.  Neither Sellers nor Buyer shall have any liability whatsoever with
respect to any such  representations or warranties after the survival period for
such  representation  or warranty  expires,  except for claims  then  pending or
theretofore  asserted in writing by any party in  accordance  with the terms and
conditions of this Agreement.

          9.3 General Agreement to Indemnify

          (a) From and  after  the  Closing  Date,  each  Seller  or  Buyer,  as
applicable,shall  indemnify, defend and hold harmless the other party hereto and
any  director,  officer or  Affiliate  of the other party (each an  "Indemnified
Party")  from and  against  any and all  claims,  actions,  suits,  proceedings,
liabilities,  obligations,  losses,  and damages,  amounts  paid in  settlement,
interest,  costs and expenses (including reasonable attorney's fees, court costs
and  other  out-of-pocket  expenses  incurred  in  investigating,  preparing  or
defending the foregoing)  (collectively,  "Losses")  incurred or suffered by any
Indemnified  Party to the extent  that the Losses  arise by reason of, or result
from or relate to (i) the  failure of any  representation  or  warranty  of such
party  contained in this  Agreement  to have been true in all material  respects
when made and as of the Closing Date except as expressly  provided  otherwise in
Section  8.2(a) or 8.3(a) or (ii) the  breach by such party of any  covenant  or
agreement of such party  contained in this Agreement to the extent not waived by
the other party.

          (b) Buyer  further  agrees to indemnify  and hold harmless each Seller
with  respect  to: (i) any  failure  of Buyer to  discharge  any of the  Assumed
Liabilities ; (ii) any  liability  arising out of the operation of the Purchased
Assets after the Closing Date; and (iii) any claim,  demand or liability for the
taxes referred to in Section 2.9, including interest and penalties thereon.

          (c) Each Seller  further  agrees to indemnify and hold harmless  Buyer
from and against any Losses incurred by Buyer arising out of, resulting from, or
relating to (i) the Excluded Liabilities,  (ii) Buyer's waiver of any applicable
Bulk Sales  laws,  (iii) any  product  liability  lawsuits  from the sale of any
Business Products manufactured by Sellers prior to the Closing Date.

          (d)  Amounts  payable  in  respect  of  the  parties'  indemnification
obligations  shall  be  treated  as an  adjustment  to the  Purchase  Price.  In
accordance  with,  and subject to,  Section  2.3(b),  Buyer and Sellers agree to
cooperate in the preparation of a supplemental  Asset  Acquisition  Statement as
required by Section 2.3 and Treasury Reg.Section  1.1060-1T(f) and (h)(2)(ii) as
a result of any  adjustment  to the  Purchase  Price  pursuant to the  preceding
sentence.  Whether or not the  Indemnifying  Party (as defined below) chooses to
defend or prosecute any Third-Party  Claim (as defined in Section 9.4(a)),  both
parties hereto shall  cooperate in the defense or prosecution  thereof and shall
furnish such records,  information and testimony,  and attend such  conferences,
discovery  proceedings,  hearings,  trials  and  appeals,  as may be  reasonably
requested in connection therewith or as provided in Section 5.1.

          (e) The  amount  of the  Indemnifying  Party's  liability  under  this
Agreement  shall be  determined  taking into  account any  applicable  insurance
proceeds  actually received by, and tax savings that actually reduce the overall
impact  of  the  Losses  upon,  the  Indemnified   Party.  The   indemnification
obligations of each party hereto under this Article 9 shall inure to the benefit
of the directors,  officers and Affiliates of the other party hereto on the same
terms as are applicable to such other party.

          (f) Sellers' aggregate liability for all claims,  including those made
under  Section  9.3(a)  and under  any of the  Collateral  Agreements,  shall be
subject to the  following  limitations:  (i) Sellers shall have no liability for
such claims  until the  aggregate  amount of the Losses  incurred  shall  exceed
$100,000,  in which case  Sellers  shall be liable  only for the  portion of the
Losses exceeding  $100,000,  and (ii) Sellers' aggregate  liability for all such
claims   shall  not  exceed   $6,000,000.   Buyer  may  not  make  a  claim  for
indemnification under Section 9.3(a) for breach by either Seller of a particular
representation or warranty after the expiration of the survival period specified
in Section 9.2 to such representation or warranty.

          (g) Buyer's  liability for all claims made under Section 9.3(a)(i) for
a breach of the representations and warranties shall be subject to the following
limitation:  (i)  Buyer  shall  have no  liability  for such  claims  until  the
aggregate  amount of the Losses  incurred shall exceed  $100,000,  in which case
Buyer shall be liable only for the portion of the Losses exceeding  $100,000 and
(ii)  Buyer's  aggregate   liability  for  all  such  claims  shall  not  exceed
$6,000,000.  Sellers  may not make a claim  for  indemnification  under  Section
9.3(a)(i) for breach by Buyer of a particular  representation  or warranty after
the  expiration of the survival  period  specified in Section 9.2  applicable to
such representation or warranty.

          (h) The  indemnification  provided in this Article 9 shall be the sole
and exclusive remedy after the Closing Date for damages available to the parties
to this Agreement for breach of any of the terms, conditions, representations or
warranties  contained  herein or any  right,  claim or action  arising  from the
transactions contemplated by this Agreement.

          (i)  Notwithstanding  anything  contained  in  this  Agreement  to the
contrary,  no party  shall be liable to the other party for  indirect,  special,
punitive  or  consequential  loss or damage  (including  any loss of  revenue or
profit)  arising  out of this  Agreement.  Both  parties  shall  mitigate  their
damages.

          (j) All indemnity obligations of Sellers set forth in this Section 9.3
shall be joint and several.

          9.4 Procedures for Indemnification

          (a) The Indemnified Party seeking indemnification under this Agreement
shall  promptly  notify the party  against whom  indemnification  is sought (the
"Indemnifying  Party") of the assertion of any claim, or the commencement of any
action, suit or proceeding by any Third Party, in respect of which indemnity may
be sought hereunder and will give the  Indemnifying  Party such information with
respect thereto as the Indemnifying Party may reasonably request, but failure to
timely give such notice or at all shall not  relieve the  Indemnifying  Party of
any liability  hereunder  (unless and to the extent the  Indemnifying  Party has
suffered  prejudice  by such  failure).  The  Indemnifying  Party shall have the
right, but not the obligation,  exercisable by written notice to the Indemnified
Party  within 30 days of receipt  of notice  from the  Indemnified  Party of the
commencement of or assertion of any claim, action, suit or proceeding by a Third
Party in respect of which  indemnity  may be sought  hereunder  (a  "Third-Party
Claim"),  to assume the defense and control the  settlement of such  Third-Party
Claim that (i) involves (and continues to involve)  solely money damages or (ii)
involves (and continues to involve)  claims for both money damages and equitable
relief against the  Indemnified  Party that cannot be severed,  where the claims
for money  damages  are the primary  claims  asserted by the Third Party and the
claims for equitable relief are incidental to the claims for money damages.

          (b) The Indemnifying  Party or the Indemnified  Party, as the case may
be,  shall  have the  right to  participate  in (but  not  control),  at its own
expense,  the defense of any Third-Party  Claim that the other is defending,  as
provided in this Agreement.

          (c) The  Indemnifying  Party,  if it has  assumed  the  defense of any
Third-Party  Claim  as  provided  in this  Agreement,  shall  not  consent  to a
settlement of, or the entry of any judgment  arising from, any such  Third-Party
Claim without the Indemnified Party's prior written consent (which consent shall
not be unreasonably  withheld) unless such settlement or judgment relates solely
to monetary damages.  The Indemnifying  Party shall not, without the Indemnified
Party's prior written consent,  enter into any compromise or settlement that (i)
commits the Indemnified Party to take, or to forbear to take, any action or (ii)
does not provide for a complete  release by such Third Party of the  Indemnified
Party.  The Indemnified  Party shall have the sole and exclusive right to settle
any  Third-Party  Claim,  on such terms and  conditions  as it deems  reasonably
appropriate,  to the extent such Third-Party  Claim involves  equitable or other
non-monetary  relief against the Indemnified  Party, and shall have the right to
settle any Third-Party  Claim involving money damages for which the Indemnifying
Party has not assumed the defense  pursuant to this Section 9.4 with the written
consent of the  Indemnifying  Party,  which  consent  shall not be  unreasonably
withheld or delayed.

          9.5 Arbitration; Choice of Law

          (a) Any  dispute,  controversy  or claim,  whether  based on contract,
tort,  statute  or  other  legal  theory,  arising  out of or  related  to  this
Agreement, or any subsequent agreement between the parties, shall be resolved by
arbitration  pursuant to this Section 9.5 and the then-current  Commercial Rules
and supervision of the American Arbitration  Association.  The duty to arbitrate
shall extend to any officer, employee, shareholder, principal, agent, trustee in
bankruptcy or  otherwise,  affiliate,  subsidiary,  third-party  beneficiary  or
guarantor, of a party hereto making or defending any claim which would otherwise
be arbitrable hereunder.  Notwithstanding the foregoing,  any party hereto shall
have the  right  to seek  equitable  relief  independently,  including,  but not
limited  to,  temporary   restraining   orders,   provisional  and/or  permanent
injunctive relief,  specific performance or any other equitable remedy as may be
appropriate  to  enforce  or  prevent  the  violation  of any of the  terms  and
conditions of this Agreement.

          (b) Prior to demanding  arbitration,  the parties  shall first in good
faith consult among appropriate  officers of Buyer and Lucent, which shall begin
promptly  after one  party has  delivered  to the  other a written  request  for
consultation.  At any time thereafter,  either party may request in writing that
the dispute be referred to appropriate  Senior  Executives of Buyer and Sellers.
Within 10 Business Days after such request, the Senior Executives (and not their
designees) shall meet and attempt in good faith to resolve the dispute.

          (c)  Neither  party  shall  file a  demand  for  arbitration  until 45
Business Days after a request is made for Senior Executive  meetings as provided
for in Section 9.5(b).

          (d) The  arbitration  shall be held in  Newark,  New  Jersey  before a
single  arbitrator who is knowledgeable in the subject matter of the dispute and
who has been selected  mutually  between Lucent and Buyer in accordance with the
rules of the Amercian Arbitration  Association.  The arbitrator's  decisions and
award  shall  be  issued  within  30  Business  Days  from  the  closing  of the
arbitration  proceedings.  The decision and award shall be final and binding and
may be entered in any court having  jurisdiction  thereof.  The arbitrator shall
not have the  power to award  punitive  or  exemplary  damages,  or any  damages
excluded by, or in excess of any damage limitations expressed in, this Agreement
or any subsequent agreement between the parties.

          (e) In order to prevent  irreparable  harm,  the  arbitrator may grant
equitable relief (other than temporary or permanent  injunctive  relief) for the
protection of intellectual property rights.

          (f) Issues of arbitrability shall be determined in accordance with the
provisions of the United States  Arbitration Act regardless of its applicability
to the dispute;  all other aspects of this  Agreement  shall be  interpreted  in
accordance  with,  and the  arbitrator  shall  apply and be bound to follow  the
substantive  laws of,  the  State of New York.  Each  party  shall  bear its own
attorneys'  fees associated with the arbitration and other costs and expenses of
the  arbitration  shall be  borne  as  provided  by the  rules  of the  American
Arbitration Association.

          (g) The parties agree not to submit a dispute  subject to this Section
9.5 to any federal,  state,  local or foreign court or  arbitration  association
except as may be necessary to enforce the arbitration procedures of this Section
9.5, or to enforce the award of the  arbitrator.  If court  proceedings  to stay
litigation or compel  arbitration are necessary,  the prevailing  party shall be
entitled to recover all associated costs,  expenses and attorneys' fees which it
reasonably incurs.

          (h) The parties agree that prior to the conduct of any hearings,  they
will  cooperate  in the  exchange  of  documents,  exhibits,  witness  lists and
information  pursuant to detailed demands therefor,  and such other discovery as
they may agree upon. The arbitrator shall have no other power to order discovery
or  depositions  unless and then only to the extent that all  parties  otherwise
agree in writing;  provided,  however, that upon the request of either party the
arbitrator shall enforce  subpoenas issued by either party for the attendance of
witnesses and the production of documents.

          (i) Neither a party  (including,  such  party's  officers,  directors,
employees and  representatives)  nor the arbitrator may disclose the contents or
results of any  arbitration  hereunder  without  prior  written  consent of both
parties, unless and then only to the extent required to enforce or challenge the
award,  as required by law, or as necessary  for  financial  and tax reports and
audits.

          (j)  Notwithstanding  anything to the contrary in this Section 9.5, in
the  event of  alleged  violation  of a  party's  intellectual  property  rights
(including,   but  not  limited  to,  unauthorized  disclosure  of  confidential
information),  that party may seek temporary injunctive relief from any court of
competent   jurisdiction  pending  appointment  of  an  arbitrator.   The  party
requesting such relief shall simultaneously file a demand for arbitration of the
dispute, and shall request the American Arbitration Association to proceed under
its rules for expedited hearing. In no event shall any such temporary injunctive
relief continue for more than 30 days.

          (k) If any part of this  Section 9.5 is held to be  unenforceable,  it
shall be severed and shall not affect either the duty to arbitrate  hereunder or
any other part of this Section 9.5.

          10. Miscellaneous Provisions

          10.1 Notices

          All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given upon  receipt if (i) mailed by certified
or registered mail,  return receipt  requested,  (ii) sent by Federal Express or
other  express  carrier,  fee  prepaid,  (iii) sent via  facsimile  with receipt
confirmed,  or (iv) delivered personally,  addressed as follows or to such other
address or  addresses  of which the  respective  party shall have  notified  the
other.

          If to Sellers, to:

                  Lucent Technologies Inc.
                  Network Products Group
                  283 King George Road
                  Warren, New Jersey  07059
                  Attention:  Business Development Director
                  Facsimile:  908-559-1001

         With a copy to:

                  Lucent Technologies Inc.
                  Network Products Group
                  283 King George Road
                  Warren, New Jersey  07059
                  Attention:  General Attorney
                  Facimile:  908-508-8398

         (b)      If to Buyer, to:

                  Bel Fuse Inc.
                  198 Van Vorst Street
                  Jersey City, NJ  07302
                  Attention:  Dan Bernstein, President
                  Facsimile:  201-432-9542

         With a copy to:

                  Blau, Kramer, Wactlar & Lieberman, P.C.
                  100 Jericho Quadrangle, Suite 225
                  Jericho, NY  11753
                  Attention:  Edward S. Wactlar, Esq.
                  Facsimile:  516-822-4824

         10.2     Expenses

          Except as  otherwise  provided in this  Agreement,  each party to this
Agreement will bear all the fees,  costs and expenses that are incurred by it in
connection  with  the  transactions  contemplated  hereby,  whether  or not such
transactions are consummated.

         10.3     Entire Agreement; Modification

          The  agreement of the parties,  which is comprised of this  Agreement,
the  Disclosure  Schedule,  the Schedules and Exhibits  hereto and the documents
referred to herein,  including the Collateral Agreements,  sets forth the entire
agreement  and  understanding  between  the  parties  and  supersedes  any prior
agreement or understanding,  written or oral,  relating to the subject matter of
this  Agreement.  No  amendment,  supplement,  modification  or  waiver  of this
Agreement  shall be binding unless  executed in writing by the party to be bound
thereby, and in accordance with Section 11.4.

          10.4 Assignment; Binding Effect; Severability

          This  Agreement  may not be assigned by any party  hereto  without the
other party's written consent. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the successors,  legal  representatives and
permitted  assigns of each party hereto.  The  provisions of this  Agreement are
severable,  and in the event that any one or more  provisions are deemed illegal
or unenforceable the remaining  provisions shall remain in full force and effect
unless the  deletion  of such  provision  shall cause this  Agreement  to become
materially  adverse to either  party,  in which event the parties shall use Best
Efforts to arrive at an  accommodation  that best  preserves for the parties the
benefits and obligations of the offending provision.

          10.5 Governing Law

          This  Agreement  shall be governed by and  construed  and  enforced in
accordance  with  the  laws of the  state  of New  York  without  regard  to its
principles of conflicts of law.

          10.6 Execution in Counterparts

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

          10.7 Public Announcement

          Neither  Sellers nor Buyer  shall,  without the  approval of the other
party, make any press release or other announcement  concerning the existence of
this Agreement or the terms of the transactions  contemplated by this Agreement,
except as and to the extent that any such party shall be so obligated by law, in
which case the other party shall be advised and the parties shall use their Best
Efforts to cause a mutually  agreeable  release  or  announcement  to be issued;
provided,  however,  that the  foregoing  shall not preclude  communications  or
disclosures  necessary to comply with  accounting  and  Securities  and Exchange
Commission disclosure obligations.

          10.8 No Third-Party Beneficiaries

          Nothing in this Agreement, express or implied, is intended to or shall
(a) confer on any  Person  other than the  parties  hereto and their  respective
successors or assigns any rights  (including  Third-Party  beneficiary  rights),
remedies,  obligations  or  liabilities  under or by reason of this Agreement or
(b) constitute  the parties  hereto as partners  or as  participants  in a joint
venture.  This Agreement shall not provide Third Parties with any remedy, claim,
liability,  reimbursement,  cause of  action  or other  right in excess of those
existing without reference to the terms of this Agreement.  No Third Party shall
have any  right,  independent  of any  right  that  exist  irrespective  of this
Agreement,  under or  granted  by this  Agreement,  to bring  any suit at law or
equity  for  any  matter  governed  by or  subject  to the  provisions  of  this
Agreement.

          11. Termination and Waiver

          11.1 Waiver of Agreement

          Any term or  condition  hereof  may be waived at any time prior to the
Closing Date by the party  hereto  which is entitled to the benefits  thereof by
action  taken  by its  Board of  Directors  or its duly  authorized  officer  or
employee,  whether before or after the action of such party; provided,  however,
that such action  shall be evidenced by a written  instrument  duly  executed on
behalf of such party by its duly authorized officer or employee.  The failure of
either party to enforce at any time any provision of this Agreement shall not be
construed  to be a waiver of such  provision  nor shall it in any way affect the
validity of this Agreement or the right of such party thereafter to enforce each
and every such  provision.  No waiver of any breach of this  Agreement  shall be
held to constitute a waiver of any other or subsequent breach.

          11.2 Amendment of Agreement

          This Agreement may be amended with respect to any provision  contained
herein at any time prior to the  Closing  Date by action of the  parties  hereto
taken by their  Boards of  Directors  or by their duly  authorized  officers  or
employees,  whether before or after such party's action; provided, however, that
such  amendment  shall be evidenced  by a written  instrument  duly  executed on
behalf of each party by its duly authorized officer or employee.



          IN  WITNESS  WHEREOF,  each of  Buyer  and  Sellers  has  caused  this
Agreement to be duly executed on its behalf by its duly authorized officer as of
the date first written above.

LUCENT TECHNOLOGIES INC.
By:
Name:
Title:

LUCENT TECHNOLOGIES MAQUILADORAS INC.
By:
Name:
Title:

BEL FUSE INC.
By:
Name:
Title: