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<SEC-DOCUMENT>0000912057-02-023405.txt : 20020610
<SEC-HEADER>0000912057-02-023405.hdr.sgml : 20020610
<ACCEPTANCE-DATETIME>20020607132615
ACCESSION NUMBER:		0000912057-02-023405
CONFORMED SUBMISSION TYPE:	PREM14A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20020607

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HATHAWAY CORP
		CENTRAL INDEX KEY:			0000046129
		STANDARD INDUSTRIAL CLASSIFICATION:	INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825]
		IRS NUMBER:				840518115
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		PREM14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-04041
		FILM NUMBER:		02673337

	BUSINESS ADDRESS:	
		STREET 1:		8228 PARK MEADOWS DR
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80124-2746
		BUSINESS PHONE:		3034261600

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HATHAWAY INSTRUMENTS INC
		DATE OF NAME CHANGE:	19820916
</SEC-HEADER>
<DOCUMENT>
<TYPE>PREM14A
<SEQUENCE>1
<FILENAME>a2081689zprem14a.htm
<DESCRIPTION>PREM14A
<TEXT>
<HTML>
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<BR>
<FONT SIZE=3 ><A HREF="#02DEN1836_1">QuickLinks</A></FONT>
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<P ALIGN="CENTER"><FONT SIZE=2><B>SCHEDULE 14A INFORMATION</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Proxy
Statement Pursuant to Section 14(a) of<BR>
the Securities Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;) </FONT></P>

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<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>Filed by the Registrant <FONT FACE="WINGDINGS">&#253;</FONT><BR></FONT>
</TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>Filed by a Party other than the Registrant <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2><BR>
Check the appropriate box:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2>Preliminary Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2><B>Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2>Definitive Proxy Statement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2>Definitive Additional Materials</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="95%"><FONT SIZE=2>Soliciting Material Pursuant to &sect;240.14a-12<BR></FONT>
</TD>
</TR>
</TABLE>
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<TD COLSPAN=5 ALIGN="CENTER"><BR><FONT SIZE=2><B>Hathaway Corporation</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><HR NOSHADE><FONT SIZE=2> (Name of Registrant as Specified In Its Charter)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5 ALIGN="CENTER"><HR NOSHADE><FONT SIZE=2> (Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><FONT SIZE=2>Payment of Filing Fee (Check the appropriate box):</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>No fee required</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#253;</FONT></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and&nbsp;0-11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Title of each class of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Aggregate number of securities to which transaction applies:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash received&#151;$6,550,000 per Asset Purchase Agreement</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Proposed maximum aggregate value of transaction:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(5)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Total fee paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$1,310.00</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>Fee paid previously with preliminary materials.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2><FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Amount Previously Paid:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Form, Schedule or Registration Statement No.:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Filing Party:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="90%"><FONT SIZE=2>Date Filed:<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<HR NOSHADE>
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<TD WIDTH="21%"><FONT SIZE=1>Hathaway Corporation<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124<BR>
U.S.A.<BR>
Telephone: 303-799 8200<BR>
Facsimile: 303-799-8880</FONT></TD>
</TR>
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<TD COLSPAN=3><HR NOSHADE></TD>
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<P ALIGN="RIGHT"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002 </FONT></P>

<P><FONT SIZE=2>Dear
Shareholder: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited to attend the Special Meeting of Shareholders of Hathaway Corporation to be held on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2002, commencing at 2:00&nbsp;p.m. (Mountain Time) at the
Lone Tree Country Club, 9808 Sunningdale Blvd., Littleton, Colorado. The Board of Directors and management look forward to personally greeting those shareholders able to attend the meeting. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Special Meeting you will be asked to consider and vote on a proposal to sell substantially all our power and process segment to subsidiaries of Danaher Corporation for cash and
the assumption of certain related liabilities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
Board of Directors unanimously approved and recommends a vote </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the sale of the power and process segment. Regardless of the number
of shares you own and whether or not you plan to attend, it is important that your shares are represented and voted at the Special Meeting. Accordingly, you are requested to sign, date and mail the
enclosed proxy at your earliest convenience. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
behalf of the Board of Directors, thank you for your cooperation and support. </FONT></P>

<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>

<P><FONT SIZE=2>Sincerely,
</FONT></P>

<P><FONT SIZE=2>Richard
D. Smith<BR>
Chief Executive Officer </FONT></P>

</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_bf1836_1_2"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>HATHAWAY CORPORATION<BR>
8228 PARK MEADOWS DRIVE<BR>
LITTLETON, COLORADO 80124  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> <A NAME="bf1836_notice_of_special_meeting_of_shareholders"> </A>
<A NAME="toc_bf1836_1"> </A>
<BR>    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>To
Be Held&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,2002 </FONT></P>

<P><FONT SIZE=2>To
the Shareholders of<BR>
Hathaway Corporation: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are hereby notified that a Special Meeting of shareholders of Hathaway Corporation will be held on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002
at 2:00&nbsp;p.m. (Mountain Time) at the Lone Tree Country
Club, 9808 Sunningdale Blvd., Littleton, Colorado, for the following purposes: </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;to consider and vote on the sale of substantially all of Hathaway's power and process segment (including our consent
to the sale of substantially all the property of our directly and indirectly wholly owned subsidiaries: Hathaway Systems Corporation, Hathaway Industrial Automation,&nbsp;Inc., Hathaway
Systems,&nbsp;Ltd., and Hathaway Process Instrumentation Corporation (except its calibration business), together with our investment in two China joint ventures) pursuant to an Asset Purchase
Agreement dated May&nbsp;17, 2002, among Qualitrol Power Products, LLC and Danaher UK Industries,&nbsp;Ltd., as Buyers, and Hathaway Systems Corporation, Hathaway Industrial
Automation,&nbsp;Inc., Hathaway Systems,&nbsp;Ltd., Hathaway Process Instrumentation Corporation and Hathaway Corporation, as Seller, for a cash consideration to us and the assumption of certain
related liabilities; and </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;to consider and act upon such other business as may properly be presented for action at the Special Meeting or any
adjournment thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed the close of business on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002 as the Record Date for the Special Meeting. Only
shareholders of record at the close of business on the
Record Date will be entitled to notice of and to vote at the Special Meeting. Our transfer books will not be closed. Shareholders are entitled to certain dissenters' rights under Article&nbsp;113 of
the Colorado Business Corporation Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors extends a cordial invitation to all shareholders to attend the Special Meeting, as it is important that your shares be represented at the meeting. Even if you plan
to attend the Special Meeting, you are strongly encouraged to mark, date, sign and mail the enclosed proxy card in the return envelope provided as promptly as possible. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may revoke your proxy by following the procedures set forth in the accompanying proxy statement. If you are unable to attend, your written proxy will assure that your vote is
counted. </FONT></P>

<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>

<P><FONT SIZE=2>By
Order of the Board of Directors </FONT></P>

<P><FONT SIZE=2><B>
<IMG SRC="g485611.jpg" ALT="LOGO" WIDTH="282" HEIGHT="43">
  </B></FONT></P>

<P><FONT SIZE=2>Susan
M. Chiarmonte<BR></FONT> <FONT SIZE=2><I>Secretary  </I></FONT></P>

</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>

<P><FONT SIZE=2>Denver, Colorado<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_bg1836_1_3"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bg1836_table_of_contents"> </A>
<A NAME="toc_bg1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>  </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>PROXY STATEMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>QUORUM AND VOTING RIGHTS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>PROPOSAL TO SELL SUBSTANTIALLY ALL OUR POWER AND PROCESS SEGMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>SUMMARY TERM SHEET</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>QUESTIONS AND ANSWERS ABOUT THE POWER AND PROCESS TRANSACTION</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>THE BUYERS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>RISK FACTORS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>RISKS ASSOCIATED WITH THE SALE OF THE POWER AND PROCESS SEGMENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>RISKS ASSOCIATED WITH OUR BUSINESS FOLLOWING THE POWER AND PROCESS TRANSACTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>INFORMATION ABOUT HATHAWAY'S BUSINESS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>GENERAL</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>POWER AND PROCESS SEGMENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Power Instrumentation</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Systems and Automation</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Process Instrumentation</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>China Joint Ventures</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>MOTION CONTROL SEGMENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Motion Control Business Strategy</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Product Distribution and Principal Markets</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Proforma Financial Information</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>HATHAWAY CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Sales Backlog</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Engineering and Development Activities</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Environmental Issues</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Employees</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Properties</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>LEGAL PROCEEDINGS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>USE OF PROCEEDS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>MARKET PRICE OF HATHAWAY'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>CHANGES TO STOCK OPTIONS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>SEVERANCE AGREEMENTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>HATHAWAY APPOINTS NEW PRESIDENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<P ALIGN="CENTER"><FONT SIZE=2>iii</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=4,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=546547,FOLIO='iii',FILE='DISK038:[02DEN6.02DEN1836]BG1836A.;8',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
<A NAME="page_bg1836_1_4"> </A>

<!-- end of table folio -->
<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>THE POWER AND PROCESS TRANSACTION PROPOSAL</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>BOARD OF DIRECTORS RECOMMENDATION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>REASONS FOR THE POWER AND PROCESS TRANSACTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Introduction</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Factors Considered</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>BACKGROUND OF THE POWER AND PROCESS TRANSACTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>General</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Green Manning &amp; Bunch Opinion</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>DISSENTERS' RIGHTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>39</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>SUMMARY OF THE POWER AND PROCESS SEGMENT ASSET PURCHASE AGREEMENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Consideration</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Assets Sold</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Assumed Liabilities</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Excluded Liabilities</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Closing</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Representations and Warranties of Sellers</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Representations and Warranties of Qualitrol</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Covenants</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Conditions to Closing</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Conditions to Our Obligations</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Conditions to Obligations of Qualitrol</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Indemnification</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Termination of Asset Purchase Agreement</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Consequences of Termination</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Termination Fee</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Expenses</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Non-Competition and Confidentiality</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>ACCOUNTING TREATMENT OF THE POWER AND PROCESS TRANSACTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE POWER AND PROCESS TRANSACTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>General</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="87%"><FONT SIZE=2><I>Federal Income Tax Consequences to Hathaway</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>REGULATORY APPROVAL</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>STOCKHOLDERS AGREEMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>HISTORICAL INFORMATION ABOUT THE COMBINED POWER AND PROCESS SEGMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>50</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>OTHER MATTERS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>INDEPENDENT PUBLIC ACCOUNTANTS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>SHAREHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>GLOSSARY OF TERMS</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>65</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>APPENDIX A&#151;ASSET PURCHASE AGREEMENT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><B>A-1</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>APPENDIX B&#151;GREEN MANNING &amp; BUNCH OPINION</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><B>B-2</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>APPENDIX C&#151;ARTICLE 113&#151;COLORADO BUSINESS CORPORATION ACT</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><B>C-1</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>APPENDIX D&#151;FORM OF PROXY</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><B>D-1</B></FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>iv</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=2,SEQ=5,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=506545,FOLIO='iv',FILE='DISK038:[02DEN6.02DEN1836]BG1836A.;8',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
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<P ALIGN="CENTER"><FONT SIZE=2><B>HATHAWAY CORPORATION<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> <A NAME="ca1836_proxy_statement"> </A>
<A NAME="toc_ca1836_1"> </A>
<BR>    PROXY STATEMENT    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This proxy statement and the accompanying proxy card are being furnished to the holders of Common Stock of Hathaway Corporation in connection with the
solicitation of proxies by the Board of Directors to be voted at the Special Meeting of Shareholders to be held
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002 at 2:00&nbsp;p.m. (Mountain Time) at the Lone Tree Country
Club, 9808 Sunningdale Blvd., Littleton, Colorado. The Special Meeting is called for the purposes set forth in the accompanying Notice of Special Meeting of Shareholders. This proxy statement and the
accompanying proxy card were first mailed to shareholders on or about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1836_quorum_and_voting_rights"> </A>
<A NAME="toc_ca1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>QUORUM AND VOTING RIGHTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker non-votes and abstentions are considered to be present to determine whether a quorum is present, but with respect to non-routine
matters (such as the power and process transaction) they are not counted in favor of such matters. THEREFORE, IF YOU WISH TO VOTE IN FAVOR OF THE POWER AND PROCESS SALE TRANSACTION, YOU SHOULD
INDICATE ON THE PROXY CARD THAT YOU VOTE IN FAVOR OF THE PROPOSALS AND NOT MERELY SIGN THE PROXY CARD. As explained later in this section, if you do not indicate how your proxy should be voted the
designated proxies will vote your shares </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> Item 1, but marking your card to indicate your desired vote is the preferable action. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
applicable rules, brokers who hold shares of Common Stock in a street name have the authority to vote the shares in the broker's discretion on "routine matters" even if they have
not received specific instructions from the beneficial owner of the shares. Routine matters involve ordinary course events of limited significance. The power and process transaction represents a
fundamental change WHICH IS NOT a "routine" matter for this purpose. Therefore, with respect to the power and process transaction, brokers may not vote shares held in a street name without specific
instructions from the beneficial owner. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
presence, in person or by proxy, of the holders of a </FONT><FONT SIZE=2><I>majority of the votes entitled to be cast</I></FONT><FONT SIZE=2> on the matter presented is necessary to
constitute a quorum at the Special Meeting. The affirmative vote of the holders of a </FONT><FONT SIZE=2><I>majority of the shares of Common Stock entitled to vote</I></FONT><FONT SIZE=2> at the
Special Meeting is required for the approval of the sale of substantially all our power and process segment (Item 1). The </FONT><FONT SIZE=2><B>Record Date</B></FONT><FONT SIZE=2> for determination
of shareholders entitled to notice of, and to vote at, the Special
Meeting is the close of business on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002. As of the Record Date, there
were&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Common Stock outstanding, each of which is entitled to one vote at the Special
Meeting. Therefore, a quorum will consist of at least&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, and at least that number will be required to approve the power and process transaction. Since sale of substantially
all
the power and process segment requires the approving vote to be measured against all shares of all Common Stock entitled to vote, withholding authority (including broker non-votes) from
that vote is the equivalent of a vote against the sale. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
shares of Common Stock represented by properly executed proxies will, unless such proxies have been revoked previously, be voted in accordance with the instructions indicated in such
proxies. If no such instructions are indicated, such shares will be voted </FONT><FONT SIZE=2><B>FOR</B></FONT><FONT SIZE=2> the approval of the sale of substantially all the power and process
segment (Item 1), and in the discretion of the proxy holders on any other matter that may properly come before the Special Meeting (Item 2). The Board of Directors does not know of any matters other
than the power and process transaction that are to come before the Special Meeting. Pursuant to our bylaws, no shareholder proposal may be submitted by a shareholder unless the shareholder desiring to
submit a proposal first files a notice with us setting forth information required by Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934. </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
holder of Common Stock has the unconditional right to revoke his or her proxy at any time prior to the voting thereof at the Special Meeting by (i)&nbsp;filing with Hathaway's
corporate Secretary written revocation of his or her proxy prior to the voting thereof, (ii)&nbsp;giving a duly executed proxy bearing a </FONT><FONT SIZE=2><I>later</I></FONT><FONT SIZE=2> date,
or (iii)&nbsp;voting in person at the Special Meeting. If a shareholder's shares are held by a nominee and the shareholder seeks to vote shares in person at the Special Meeting, THE SHAREHOLDER MUST
BRING TO THE SPECIAL MEETING A WRITTEN STATEMENT FROM THE NOMINEE CONFIRMING THE SHAREHOLDER'S BENEFICIAL OWNERSHIP OF A STATED NUMBER OF SHARES AND THAT SUCH SHARES HAVE NOT BEEN VOTED BY THE
NOMINEE. Attendance by a shareholder at the Special Meeting will not in itself revoke his or her proxy. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a quorum is not present, or for any other good reason, the shareholders entitled to vote who are present in person or represented by proxy at the Special Meeting have the power to
adjourn the meeting from time to time, without notice other than </FONT><FONT SIZE=2><I>announcement</I></FONT><FONT SIZE=2> at the meeting, until a quorum is present or other reasons for adjournment
are satisfied. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the Special Meeting as originally called. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Solicitation
of proxies for use at the Special Meeting may be made in person or by mail, telephone or telegram, by our directors, officers and regular employees. Such persons will
receive no special compensation for any solicitation activities. In addition, Hathaway may retain the services of D.F. King&nbsp;&amp; Co.,&nbsp;Inc. to aid in the solicitation of proxies in person,
by mail, telephone or telegram. If retained, the costs are not expected to exceed $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;plus expenses. We will
request banking institutions, brokerage firms, custodians, trustees, nominees
and fiduciaries to forward solicitation materials to the beneficial owners of Common Stock held of record by such entities, and we will, upon the request of such record holders, reimburse reasonable
forwarding expenses. The costs of preparing, printing, assembling and mailing the proxy statement, proxy card and all materials used in the solicitation of proxies to shareholders, and all clerical
and other expenses of such solicitation, will be borne by Hathaway. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1836_cautionary_statement_co__ca102489"> </A>
<A NAME="toc_ca1836_3"> </A>
<BR></FONT><FONT SIZE=2><B>CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This proxy statement contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial
condition, results of operations, cash flows, financing plans, business strategies, </FONT><FONT SIZE=2><I>capital</I></FONT><FONT SIZE=2> and other expenditures, growth opportunities, and plans and
objectives of management. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Forward
looking statements involve known and unknown risks and uncertainties that may cause our actual results to differ materially from the forward looking statements. These statements appear in a number of
places in this proxy statement, but particularly under the caption </FONT><FONT SIZE=2><I>Motion Control Business Strategy</I></FONT><FONT SIZE=2> and include all statements that are not historical
facts. Some of the forward looking statements relate to our intent, belief or expectations of our management regarding our strategies and plans for operations and growth. Other forward looking
statements relate to trends affecting our financial condition and results of operations, and our anticipated capital needs and expenditures. Investors are cautioned that such forward looking
statements are not guarantees of future performance, and involve risks and uncertainties. Important factors that could cause actual results to differ materially include:
(i)&nbsp;post-closing adjustments, which may reduce the amount of net proceeds available to us which, in turn, may result in a lower amount available for our operations;
(ii)&nbsp;actions of customers and competitors; (iii)&nbsp;our ability to obtain future financing on favorable terms; and (iv)&nbsp;other risks and contingencies described in the section
entitled "RISK FACTORS" and other risk factors included in our Forms 10-K and 10-Q filed with the Securities and Exchange Commission. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
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<A NAME="toc_cc1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROPOSAL TO SELL SUBSTANTIALLY ALL OUR POWER AND PROCESS SEGMENT<BR>  (ITEM 1)    <BR>  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This section of the proxy statement describes certain aspects of the sale of substantially all the assets of our power and process segment. The power and process
segment includes our power instrumentation products, process instrumentation products (except calibration products) and systems and automation products, as well as investments in our two active China
joint ventures and the capital stock of Electric Power Research,&nbsp;Ltd. The calibration products manufactured by Hathaway Process Instrumentation Corporation in Dallas, Texas are not included in
the sale. Therefore, the power and process transaction described in this proxy statement means the sale of assets comprising the power and process segment except the calibration products which remain
with Hathaway but are for sale. We recommend that you read carefully the complete Asset Purchase Agreement for the terms of the sale and other information that may be important to you. The Asset
Purchase Agreement is included in this proxy statement as Appendix&nbsp;A. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cc1836_summary_term_sheet"> </A>
<A NAME="toc_cc1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>SUMMARY TERM SHEET    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a brief summary of the material terms of the proposed power and process transaction. This summary highlights selected information in this proxy </FONT> <FONT
SIZE=2><I>statement</I></FONT><FONT SIZE=2> and may not contain all of the information that may be important to you. You should carefully read this entire proxy statement and the other
documents referenced herein for a more complete understanding of the matters being considered at the Special Meeting. </FONT></P>

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<TD WIDTH="37%"><FONT SIZE=2>Time, Place and Date of the Special Meeting (page&nbsp;1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2>The Special Meeting will be held on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002, at 2:00 pm (Mountain Time) at the Lone Tree Country Club, 9808 Sunningdale Boulevard, Littleton,
Colorado</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="37%" VALIGN="TOP"><FONT SIZE=2><BR>
Purpose of the Meeting (page&nbsp;ii)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%" VALIGN="TOP"><FONT SIZE=2><BR>
We are holding this meeting:</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; to approve the power and process transaction; and</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; to transact such other business as may properly come before the meeting or any adjournment of the meeting.</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
Record Date and Shareholders Entitled to Vote (page&nbsp;1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
You are entitled to vote at the Special Meeting if you owned shares of Common Stock on the Record Date for the Special Meeting. You will have one vote for each share of Common Stock that you owned on the Record Date.</FONT></TD>
</TR>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
Vote required (page&nbsp;1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
In order to approve the power and process transaction, we will need the affirmative vote of the holders of a majority of the shares of Common Stock. Eugene E. Prince, chairman of the board of Hathaway, Elizabeth J. Prince, spouse of Mr. Prince and
trustee of trusts for Prince Children Trusts, and Richard D. Smith, chief executive officer of Hathaway, have agreed to vote all shares of Common Stock over which they have voting power to approve the power and process transaction.</FONT></TD>
</TR>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
Recommendations (page&nbsp;32)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The Hathaway Board of Directors, upon determining that its terms are fair and in the best interest of Hathaway shareholders, approved and recommends that you approve the power and process transaction.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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Hathaway Corporation (page&nbsp;33)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Hathaway is publicly traded on the NASDAQ small cap market under the symbol HATH. It currently operates in two business segments, the power and process segment and the motion control segment, which will be our sole business if the power and process
transaction is approved and sale of the calibration business is completed.</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Hathaway's executive and administrative offices are located at 8228 Park Meadows Drive, Littleton, Colorado 80124, and our telephone number at that location is (303) 799-8200.</FONT></TD>
</TR>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
The Power and Process Segment (page&nbsp;15)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Our power and process segment is comprised of power instrumentation products, systems and automation products and process instrumentation products. Our power instrumentation products help monitor and control power generation, transmission and
distribution processes and include fault recording products, fault location products, condition monitoring (circuit breaker) products, and remote terminal units. The systems and automation products are used to automate such industrial applications as
water and wastewater treatment plants and glass manufacturing plants, and to communicate information from instruments in power substations up into the information technology system of the power company for delivery to the user of such information.
Our products also communicate metering information from power generators to ensure the proper billing for electricity. The process instrumentation products include monitoring systems and calibration equipment. The monitoring systems, called visual
annunciators and sequential event recorders, provide both visual and audible alarms, and are used to control processes in various plants, including electrical generating, chemical, petroleum, food and beverage, pulp and paper, and textile plants.
Calibration equipment is also included in this product group. Calibration equipment is used to test and adjust instruments for proper and accurate operation in measuring electricity, temperatures and pressure within a process industry. However, the
calibration business and equipment is not being sold as a part of the power and process transaction, but is for sale. The power and process segment also includes investments in two China joint ventures. The Zibo joint venture designs, manufactures
and sells cable and overhead fault location products, and other test instruments within the China market. We may sell these products outside China. The Power joint venture manufactures and sells to electric power companies in China, under a license
from us, instrumentation products designed by us. The licenses will be transferred to Qualitrol as a part of the power and process transaction.</FONT></TD>
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<TD WIDTH="37%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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&nbsp;</FONT></TD>
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During the nine months ended March 31, 2002, the power and process segment accounted for 62% of our total revenues, and at March 31, 2002, the segment held 51% of the total identifiable assets. During the years ended June 30, 2001 and 2000, the
revenues of the power and process segment accounted for 56% and 59%, respectively, of our total revenues, and the power and process segment held 60% and 53%, respectively, of our total identifiable assets. The power and process segment currently
employs 183 employees, or approximately 53% of our total work force of 344.</FONT></TD>
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The Motion Control Segment (page&nbsp;16)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The motion control segment will be our remaining business segment after the power and process transaction and the sale of our calibration equipment. The motion control segment is operated by Hathaway Motion Control Corporation, a wholly owned
subsidiary of Hathaway. The motion control products are used in the telecommunications, semi-conductor processing, industrial, medical, military and aerospace industries, as well as in the manufacturing of analytical instruments and computer
peripherals. End products using Hathaway technology include tunable lasers, wavelength meters and spectrum analyzers for the fiber optic industry, robotic systems for the semi-conductor industry, gun control systems for the military, anti-lock
braking transducers, satellite tracking systems, MRI scanners and high-definition printers. Presently our motion control products are organized into one division and two subsidiary corporations of Hathaway Motion Control Corporation.</FONT></TD>
</TR>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
Qualitrol (page&nbsp;12)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The Buyers are Qualitrol Power Products, LLC, a Delaware limited liability company ("Qualitrol Power") and its affiliate, Danaher UK Industries, Ltd., a company incorporated under the laws of the United Kingdom ("DUKI"). Qualitrol Power and DUKI are
referred to herein together as "Qualitrol." Qualitrol Power is a wholly owned subsidiary of Qualitrol Corporation, which is a leading supplier of instruments, controls and monitoring systems utilized on transmission and distribution equipment in the
electric utility industry. Both Qualitrol Power and DUKI are direct or indirect subsidiaries of Danaher Corporation, a publicly traded corporation under the symbol DHR. Qualitrol Power's principal executive offices are at 1385 Fairport Road, New York
City, New York 14450. Qualitrol Power's telephone number is (716) 585-1515. DUKI's telephone number is 011 44 114 256 4200.</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
Risk Factors (page&nbsp;12)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
There are risk factors associated with both the power and process transaction and post-transaction operations of our business which will consist solely of the motion control segment. For a full description of the motion control business see the
caption "</FONT><FONT SIZE=2><B><I>INFORMATION ABOUT HATHAWAY'S BUSINESS</I></B></FONT><FONT SIZE=2>."</FONT></TD>
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<TD WIDTH="37%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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Purchase Price (page&nbsp;47)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Qualitrol has agreed to purchase substantially all of the assets of the subsidiaries comprising Hathaway's power and process segment for a purchase price of $6,550,000, in cash, subject to certain post-closing adjustments, plus the assumption of
certain related liabilities. As of March 31, 2002, the liabilities to be assumed by Qualitrol equal approximately $3,400,000. As of March 31, 2002, the purchase price would have been approximately $7,250,000 due to projected post-closing adjustments
of approximately $700,000. Under the Asset Purchase Agreement, the amount payable to us at closing is subject to holdbacks totaling $750,000. We expect the closing to occur before July 31, 2002.</FONT></TD>
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Reasons for the Power and Process Transaction (page&nbsp;32)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
In arriving at the determination that the power and process transaction is fair to, and in the best interests of, Hathaway shareholders, the Board of Directors considered a number of factors, including, without limitation, the following:</FONT></TD>
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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
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&#149; the financial performance and future prospects of the power and process segment;</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the terms of the power and process transaction, including the purchase price;</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the process our management used to evaluate the power and process transaction, which included solicitations for a potential buyer over a period of several months and discussions with several parties regarding potential
transactions;</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the cost to us and the time required to continue to develop and improve the power and process products given an increasingly competitive market;</FONT></TD>
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<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the ability of management to focus the resources of the Company on the motion control business;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the opinion of Green, Manning &amp; Bunch as to the fairness, from a financial point of view, of the consideration received by us in the power and process transaction.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Effects of the Power and Process Transaction&#151;The Motion Control Segment (page&nbsp;16)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Following the completion of the power and process transaction, we will continue as a public company to operate the motion control business, and are exploring acquisition of other motion control businesses to complement our existing
business.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Management Ownership (page&nbsp;28)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
As of May 30, 2002, Hathaway directors and executive officers owned beneficially, in the aggregate, 1,582,317 shares of our outstanding Common Stock, representing an aggregate of approximately 30% of our outstanding shares. Each of our directors and
executive officers has indicated his intention to vote in favor of the power and process transaction.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<TD WIDTH="37%"><FONT SIZE=2><BR>
Fairness Opinion (page&nbsp;37)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
In arriving at its determination that the power and process transaction is fair to, and in the best interest of, Hathaway, the Board of Directors has considered a number of factors, including an opinion of our financial advisor, Green, Manning &amp;
Bunch, as to the fairness, from a financial point of view, to Hathaway, of the consideration to be received by Hathaway in the power and process transaction. The opinion is addressed to our Board of Directors and does not constitute a recommendation
to any shareholder as to how to vote with respect to matters relating to the power and process transaction. For a full description of the opinion of Green, Manning &amp; Bunch see the caption </FONT><FONT SIZE=2><I>Green Manning &amp; Bunch
Opinion</I></FONT><FONT SIZE=2>. To review the text of the opinion, see Appendix B to this proxy statement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
The Asset Purchase Agreement (Appendix A)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The Asset Purchase Agreement is attached to this proxy statement as Appendix A. We encourage you to read the Asset Purchase Agreement in its entirety, as it is the legal document that governs the power and process transaction</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Dissenters' Rights (page&nbsp;44)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
Under Colorado corporate law, Hathaway shareholders have the right to "dissent" from the power and process transaction and demand payment from Hathaway of the "fair value" of their Common Stock. For that purpose, fair value means the value of Common
Stock immediately before the effective date of the sale, excluding any appreciation or depreciation in anticipation of the sale, except to the extent that exclusion would be inequitable. In order to exercise dissenters' rights, a shareholder must
give notice in advance of the meeting, not vote in favor of the power and process transaction and follow other procedures established by Colorado law. The procedures that must be followed are summarized under the caption DISSENTERS' RIGHTS, and a
copy of the relevant Colorado statute provisions is attached as Appendix C.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Representations and Warranties of the Parties (pages 49-50)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The Asset Purchase Agreement contains various representations and warranties made by each of the parties to the Agreement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Conditions to Completion of the Power and Process Transaction (page&nbsp;51)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The completion of the power and process transaction depends upon satisfaction of a number of conditions including, among other things:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; approval of the sale of substantially all the power and process segment by our shareholders; and</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&#149; the representations and warranties made in the Asset Purchase Agreement being true and correct.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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Material Federal Income Tax Consequences (page 55)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
We expect a gain for federal income tax purposes on the sale of substantially all the assets of the power and process segment. The power and process transaction may subject us to income, franchise, sales, use or other tax liabilities in foreign,
state or local tax jurisdictions in which assets of the power and process segment are located.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="37%"><FONT SIZE=2><BR>
Accounting Treatment of the Power and Process Transaction (page&nbsp;55)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
The power and process transaction will be accounted for under accounting principles generally accepted in the United States. We expect to recognize a pretax gain of approximately $2,000,000 for financial reporting purposes for the sale of the power
and process segment.</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
summary may not contain all of the information that may be important to you. You should read carefully this entire document and the other documents referred to for a complete
understanding of the power and process transaction. In particular, you should read the documents attached to this proxy statement, including the Asset Purchase Agreement, which is attached as
Appendix&nbsp;A, and the opinion of Green, Manning&nbsp;&amp; Bunch, which is attached as Appendix&nbsp;B. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<BR></FONT><FONT SIZE=2><B>QUESTIONS AND ANSWERS ABOUT THE POWER AND PROCESS TRANSACTION    <BR>  </B></FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> WHAT IS THE PROPOSED POWER AND PROCESS TRANSACTION?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>We
will sell substantially all the assets of our power and process segment, including investments in two China joint ventures, and transfer the majority of the liabilities of our power
and process segment to Qualitrol. Hathaway subsidiary corporations whose assets are being sold and liabilities assumed are Hathaway Systems Corporation, Hathaway Industrial Automation,&nbsp;Inc.,
Hathaway Systems,&nbsp;Ltd., and Hathaway Process Instrumentation Corporation (except for its calibration products). The purchase price for the assets being sold is $6,550,000, plus the amount of
any guarantees issued by banks guaranteeing performance of work in process, subject to increase or decrease pursuant to a post-closing adjustment based on the net equity (acquired assets
less assumed liabilities) of the power and process segment at the Closing The power and process segment (excluding the calibration business) employs 183 individuals or approximately 53% of our total
workforce of 344 persons. The power and process transaction will constitute the sale of substantially all the assets of the power and process segment, which is a significant portion of our total
assets. This sale marks the termination of our participation as a manufacturer in the power and process industries. The power and process transaction does not include the calibration products
manufactured and marketed by Hathaway Process Instrumentation Corporation. Since we are terminating our power and process business, the calibration products will be sold. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT
SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> WILL ANY OF THE SALE PROCEEDS BE DISTRIBUTED TO SHAREHOLDERS?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>No.
The net proceeds will be retained by the Company to help grow the motion control business. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> HOW WILL THE PROPOSED POWER AND PROCESS
TRANSACTION AFFECT HATHAWAY CORPORATION?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>After
the sale of substantially all of our power and process segment to Qualitrol and of the calibration products, our remaining operations will be our motion control business. We are
currently involved in analyzing acquisitions of other motion control assets. See the caption USE OF PROCEEDS. The motion control segment had an operating profit of $4,067,000 in fiscal year 2001 and
$1,022,000 in the first nine months of fiscal year 2002. The motion control segment employs 146 individuals or approximately 42% of our total work force. We do not anticipate terminating any present
employees of the motion control segment. Disposition of the power and process segment will allow us to devote substantially all of our energies and resources to development of our motion control
business, as opposed to dividing our management time between two unrelated businesses. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> WHAT WILL HATHAWAY DO IF ITS SHAREHOLDERS DO NOT
APPROVE THE PROPOSED POWER AND PROCESS TRANSACTION?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>In
the event our shareholders do not approve the proposed power and process transaction, we will continue to operate the power and process business in accordance with our past practice
and current and future strategy for that business, but may be required to raise additional debt or equity in order to properly fund future operations of the power and process segment. In addition, we
will seek out a different proposal for the disposition of the power and process business. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> HOW DO I VOTE?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>You
may vote by indicating on the enclosed proxy card how you want to vote, and by signing and mailing the proxy card in the enclosed pre-paid return envelope. Please vote
as soon as possible to insure that your shares are represented at the Special Meeting. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> WHAT ARE BROKER NONVOTES?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>If
a broker holding shares in street name submits a proxy card on which the broker physically lines out the matter, whether it is "routine" or "non-routine" or does not
indicate a specific choice ("FOR", "AGAINST", or "ABSTAIN") on a matter that is non-routine, that action is called a broker non-vote as to that matter. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT
SIZE=2><B> IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY SHARES FOR ME?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>Since
the power and process transaction is a non-routine matter, your broker will vote your shares only if you provide your broker instructions on how to vote. You should
follow the directions provided by your broker regarding how to instruct your broker to vote your shares. </FONT> <FONT SIZE=2><B> <BR><BR> </B></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> CAN I CHANGE MY VOTE AFTER I HAVE
MAILED IN MY SIGNED PROXY FORM?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>Yes.
You can change your vote at any time before we vote your proxy at the Special Meeting in one of three ways. First, you may file with Hathaway's corporate secretary the written
revocation of your proxy prior to the voting thereof. Second, you may complete a new proxy form and send it to the Secretary and a new proxy form will automatically replace any earlier proxy form you
returned. Third, you may attend and vote in person at the Special Meeting. </FONT><FONT SIZE=2><I>See</I></FONT><FONT SIZE=2> page 2 for information on voting in person. </FONT></DD></DL>
<UL>

<P><FONT SIZE=2>You
should send any written notice or new proxy to the secretary at the following address: Susan M. Chiarmonte, Secretary, Hathaway Corporation, 8228 Park Meadows Drive, Littleton, Colorado 80124. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>Q.</B></FONT></DT><DD><FONT SIZE=2><B> WHO DO I CONTACT IF I HAVE ADDITIONAL QUESTIONS OR WOULD LIKE ADDITIONAL COPIES OF THE PROXY STATEMENT?  </B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>You
may contact: Hathaway Corporation, 8228 Park Meadows Drive, Littleton, Colorado 80124, 303-799-8200, Attention: Susan M. Chiarmonte, Secretary </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ce1836_the_buyers"> </A>
<A NAME="toc_ce1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>THE BUYERS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qualitrol Power Products, LLC ("Qualitrol Power") is a newly-formed Delaware limited liability company and a wholly-owned subsidiary of Qualitrol Corporation. The
principal executive offices of Qualitrol Power and Qualitrol Corporation are located at 1385 Fairport Road, Fairport, New York 14450. The telephone number of Qualitrol Power and Qualitrol Corporation
is (716)&nbsp;586-1515. Qualitrol Power has not conducted any business other than in connection with the acquisition of the power and process segment of Hathaway. Qualitrol Corporation
is a leading supplier of instruments, controls and monitoring systems utilized on transmission and distribution equipment in the electric utility industry. Qualitrol Corporation is a New York
corporation and an indirect wholly-owned subsidiary of Danaher Corporation. Danaher UK Industries,&nbsp;Ltd ("DUKI") is a company incorporated under the laws of the United Kingdom with principal
executive offices located at Danaher House, Parkway One Business Centre, Parkway Drive, Sheffield, S9 4WU England. (Qualitrol Power and DUKI are referred herein together as "Qualitrol"). DUKI's
telephone number is 011-44-114-256-4200. DUKI is a leading manufacturer of Process/Environmental Controls and is an indirect wholly-owned subsidiary of
Danaher Corporation. Danaher Corporation is a Delaware corporation with principal executive offices located at 2099 Pennsylvania Avenue, NW, 12<SUP>th</SUP> Floor, Washington, D.C.
20006-1813. Danaher Corporation's telephone number is (202)&nbsp;828-0850. Danaher Corporation is a leading manufacturer of Process/Environmental Controls and Tools and
Components. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<BR></FONT><FONT SIZE=2><B>RISK FACTORS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>You should carefully consider the risks described below regarding the power and process transaction and Hathaway's business following the
power and process transaction, together with all the other information included in this proxy statement, before making a decision about voting on the proposal submitted for your consideration. If any
of the following risks actually occur, Hathaway's business, financial condition or result of operation could be materially harmed. If Hathaway's business is harmed, the trading price of Hathaway's
Common Stock could decline and you could lose all or part of your investment.  </I></FONT></P>


<P><FONT SIZE=2><B>RISKS ASSOCIATED WITH THE SALE OF THE POWER AND PROCESS SEGMENT  </B></FONT></P>

<P><FONT SIZE=2><B><I>If the post closing adjustments to the purchase price reflect a decrease in the net assets of the power and process business, the purchase price will be
less than we expect.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purchase price in the power and process transaction of $6,550,000 is subject to post closing adjustments based upon changes in the net assets of the power and
process business from November&nbsp;30, 2001 to the closing date of the transaction. Although we currently do not expect the net purchase price to be less than $6,550,000, there can be no assurance
that the purchase price as adjusted will not be less than our expectation. If the final purchase price is less than expected, our financial condition after the closing may be adversely affected, and
we may not be able to acquire additional motion control assets. </FONT></P>

<P><FONT SIZE=2><B><I>Sale of the power and process segment may cause the price of our common stock to decline.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As explained elsewhere in this proxy statement, we believe the market does not understand our two segments, and does not properly relate our market price to those
segments. Even so, it is possible that with the sale of the power and process segment, the price of our Common Stock will decline. </FONT></P>

<P><FONT SIZE=2><B><I>Exercise of Dissenters' Rights may decrease funds available for operation after sale of the power and process segment.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The right of Hathaway shareholders to dissent from the power and process transaction and obtain payment in cash of the fair value of their shares of common stock
could diminish the amount of funds available to Hathaway to fund operations of the motion control segment. Payment to dissenters who exercise their right will be at the fair value of shares
immediately before the Closing Date of the transaction, excluding any appreciation or depreciation in anticipation of the transaction, except to the extent that exclusion would be inequitable. If any
shareholders exercise their dissenters' rights, Hathaway will make the initial determination of fair value and make payment of that amount. Dissenters have the right, however, to contest the Hathaway
payment, and if Hathaway and the dissenters cannot resolve the amount payable, the determination of fair value may be made in a court proceeding. As finally determined, the fair value of dissenters'
shares may be enough to adversely affect the operation of the motion control segment after disposition of the power and process segment. </FONT></P>


<P><FONT SIZE=2><B>RISKS ASSOCIATED WITH OUR BUSINESS FOLLOWING THE POWER AND PROCESS TRANSACTION  </B></FONT></P>

<P><FONT SIZE=2><B><I>We may not be able to sustain or accelerate growth of, or sustain or accelerate recurring revenue from, the motion control segment.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that demand for our motion control services and products will increase or be sustained, or that our current or future products will have
market acceptance in that product category. To the extent we do not achieve growth it may be difficult for us to generate meaningful revenue at acceptable margins or achieve profitability. To the
extent the motion control segment is not </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>
successful, because market acceptance declines, or other competing technologies evolve in connection with the evolving market for our motion control products or for any other reason, we might have
future unexpected declines in revenues. </FONT></P>

<P><FONT SIZE=2><B><I>Rapid technological change could render our motion control products and services obsolete.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The industries serviced by our motion control products undergo rapid changes in user and customer requirements and
preference</FONT><FONT SIZE=2><I>.</I></FONT><FONT SIZE=2> Frequent new product and service introductions and the emergence of new industry standards and practices are necessary. Each of these
characteristics could render our
motion control products obsolete. The rapid evolution of our market requires that we improve continually the performance, features and reliability of our products and services, particularly in
response to competitive offerings. Our success also will depend, in part, on our ability to: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>develop,
acquire or license new products, services and technology that address the varied needs of our customers and prospective customers; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>respond
to technological advances and emerging industry standards and practices on a cost effective and timely basis. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we are unable, for technical, financial, legal or other reasons, to adapt in a timely manner to changing market conditions or user preferences, we could lose customers, which would
cause a decrease in our revenue. </FONT></P>

<P><FONT SIZE=2><B><I>We may be unable to obtain additional capital to grow our business, which would adversely impact our business.  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we raise additional financing through the issuance of equity securities, you may suffer significant dilution. Although we expect that cash from the power and
process transaction, our bank line of credit, and cash from operations will be sufficient to satisfy our working capital and capital expenditure needs over the next twelve months, we may have to seek
third party investment in order to provide additional working capital and to finance acquisitions to enhance our motion control segment. We cannot be certain that financing from third parties will be
available on acceptable terms to us or at all. Our future capital requirements will depend upon several factors, including the rate of market acceptance of our products and services, our ability to
expand our customer base, our level of expenditures for sales and marketing and our requirements for acquisition of additional motion control assets. If our capital requirements vary materially from
those currently planned, we may require additional financing sooner than anticipated. If we cannot raise funds on acceptable terms, we may not be able to develop our motion control products and
services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, any of which could have a material adverse affect on our ability to grow our
business. Further, if we issue equity securities, the new equity securities may have rights, preferences or privileges senior to those of our Common Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<BR></FONT><FONT SIZE=2><B>INFORMATION ABOUT HATHAWAY'S BUSINESS    <BR>  </B></FONT></P>


<P><FONT SIZE=2><B>GENERAL  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway was organized under the laws of Colorado in 1962. Hathaway is engaged in the business of designing, manufacturing and selling advanced systems and
instrumentation to the worldwide power and process industries, as well as motion control products to a broad spectrum of customers throughout the world. Hathaway operates primarily in the United
States and the United Kingdom and has joint venture investments in China. </FONT></P>

<P><FONT SIZE=2><B>POWER AND PROCESS SEGMENT  </B></FONT></P>


<P><FONT SIZE=2><I>Power Instrumentation  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway's power instrumentation products help ensure that electric utilities provide high quality service to consumers of electricity. With manufacturing
facilities in Seattle and Belfast, Northern Ireland, and sales and engineering functions in Seattle, Belfast and Denver, the power instrumentation products group produces a comprehensive and
cost-effective range of products designed exclusively for the power industry worldwide. Hathaway's equipment assists the electric power system operators in operating and maintaining proper
system performance. The products, which are used to monitor and control the power generation, transmission and distribution processes, include fault recording products, fault location products,
condition monitoring (circuit breaker) products and remote terminal units for Supervisory Control and Data Acquisition (SCADA) systems. The Hathaway subsidiary corporations involved in the power
instrumentation products are Hathaway Systems Corporation, a wholly owned subsidiary of Hathaway, which operates out of Denver, Colorado and Seattle, Washington; Hathaway Process Instrumentation
Corporation, a wholly owned subsidiary of Hathaway Systems Corporation, which operates out of Seattle, Washington; and Hathaway Systems,&nbsp;Ltd., which operates out of Belfast, Northern Ireland.
Hathaway Systems,&nbsp;Ltd. is a wholly owned subsidiary of Hathaway Systems (UK)
Group,&nbsp;Ltd., a corporation formed under the laws of the United Kingdom, and which is a wholly owned subsidiary of Hathaway Systems Corporation. </FONT></P>


<P><FONT SIZE=2><I>Systems and Automation  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1996, Hathaway acquired Tate Integrated Systems which has since operated under the name of Hathaway Industrial Automation ("Automation"), a
wholly-owned subsidiary of Hathaway Systems Corporation. Automation is located near Baltimore, Maryland and is a full service supplier of process automation systems for industrial applications.
Automation has developed a software system for SCADA and distributed control systems. The Automation system has been used to automate such industrial applications as water and wastewater treatment
plants and glass manufacturing plants. The focus of the systems business has shifted from industrial automation applications to the power generation and transmission industry. Hathaway has been
successful at integrating the Automation system with certain other Hathaway products and targeting the integrated product at substation automation applications used in the electric power industry. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
automation system provides the user the ability to securely send and receive information to and from intelligent electronic devices in transmission and distribution substations to
help monitor and control the delivery of electricity. In addition, the Automation system is used by organizations responsible for operating the transmission grid and ensuring the reliable delivery of
electricity. It is used to communicate with and control the output of power generators and to securely communicate metering information from such generators to ensure the proper billing for such
electricity. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2><I>Process Instrumentation  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The process instrumentation products group manufactures and markets products for industrial applications including monitoring systems, called visual annunciators
and sequential event recorders, which provide both visual and audible alarms and are used to control processes in various plants, including electrical generating plants, chemical, petroleum, food and
beverage, pulp and paper, and textiles through Hathaway Process Instrumentation Corporation, with offices in Seattle, Washington, a wholly owned subsidiary of Hathaway Systems Corporation. Hathaway
Process Instrumentation Corporation also manages the calibration equipment which is not included in the sale. Calibration equipment is used to test and adjust instrumentation for proper and accurate
operation in measuring electricity, temperatures and pressure within the process industry. </FONT></P>

<P><FONT SIZE=2><I>China Joint Ventures  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway has investments in two China joint ventures-a 25% interest in Zibo Kehui Electric Company&nbsp;Ltd. ("Zibo") and a 40% interest in Hathaway Power
Monitoring Systems Company,&nbsp;Ltd. ("Power"). Zibo designs, manufactures and sells cable and overhead fault location products, Supervisory Control and Data Acquisition systems and other test
instruments within the China market and Hathaway may sell these products outside of China. Power manufactures and sells, under a license from Hathaway, instrumentation products designed by Hathaway to
electric power companies in China. Zibo and Power are part of the power and process segment and are included in the power and process transaction. </FONT></P>

<P><FONT SIZE=2><B>MOTION CONTROL SEGMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The motion control segment, which will be our remaining business after the sale of substantially all our power and process segment, offers quality,
cost-effective products that suit a wide range of applications in the telecommunications, semi-conductor processing, industrial, medical, military and aerospace industries, as
well as in the manufacturing of analytical instruments and computer peripherals. End products using Hathaway technology include tunable lasers, wavelength meters and spectrum analyzers for the fiber
optic industry, robotic systems for the semiconductor industry, gun control systems for the military, anti-lock braking transducers, satellite tracking systems, MRI scanners and high
definition printers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
motion control segment is organized into one division and three direct and indirect subsidiaries of Hathaway Motion Control Corporation, a wholly-owned subsidiary of Hathaway: Motors
and Instruments Division ("MI"), Emoteq Corporation ("Emoteq-Tulsa"), Computer Optical Products,&nbsp;Inc. ("COPI"&#151;Chatsworth, CA) and Emoteq UK, Limited ("Emoteq UK"), a wholly owned
subsidiary of Emoteq-Tulsa. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
MI division manufactures precision direct-current fractional horsepower motors and certain motor components. Industrial equipment and military products are the major application for
the motors. This division also supplies spare parts and replacement equipment for general-purpose instrumentation products. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Emoteq-Tulsa
designs, manufactures and markets direct current brushless motors, related components, and drive and control electronics. Markets served include semiconductor manufacturing,
industrial automation, medical equipment, and military and aerospace. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
July&nbsp;1998, Emoteq-Tulsa acquired all of the outstanding shares of Ashurst Logistic Electronics Limited of Bournemouth, England (renamed Emoteq UK Limited). Emoteq UK
manufactures drive
electronics and position controllers for a variety of motor technologies as well as a family of static frequency converters for military and aerospace applications and has extensive experience in
power </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>
electronics design and software development required for the application of specialized drive electronics technology. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optical
encoders are manufactured by COPI. They are used to measure rotational and linear movements of parts in diverse applications such as tunable lasers, spectrum analyzers, machine
tools, robots, printers and medical equipment. The primary markets for the optical encoders are in the telecommunications, computer peripheral manufacturing, industrial and medical sectors. COPI also
designs, manufactures and markets fiber optic-based encoders with special characteristics, such as immunity to radio frequency interference and high temperature tolerance, suited for industrial,
aerospace and military environments. Applications include airborne navigational systems, anti-lock braking transducers, missile flight surface controls and high temperature process control
equipment. </FONT></P>

<P><FONT SIZE=2><I>Motion Control Business Strategy  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway's Board of Directors has approved the recommendation of its management team to focus the company on the execution of a "Pure-Play" Motion
Strategy and its ultimate goal of building a significant platform within the precision motion control marketplace. We believe that small to mid-sized companies, employing a
pure-play strategy, are rewarded with higher market valuations when compared to their counterparts with multiple product platforms. The key elements of the strategy include multiple
strategic acquisitions, niche marketing and improving internal operating efficiencies through the utilization and implementation of lean manufacturing principles throughout the organization. Hathaway
is currently in active discussion with numerous motion companies and fully expects to have an opportunity to make definitive offers for selected companies within a reasonably short period of time.
Each potential acquisition is being evaluated on its ability to be successful on a stand-alone basis and that ability will be a critical factor in our decision to proceed with an acquisition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Having
recently enjoyed good success and growth in the custom fractional horsepower motor and control market, a sub-set of the overall $85&nbsp;billion worldwide motor and
control market, Hathaway believes that additional emphasis within this segment will provide even greater opportunities and accelerate our growth in the future. The customized industrial fractional
horsepower motor segment can be defined as highly fragmented, with most manufacturers producing for niche markets, thereby lacking a clearly identifiable leader. The products are used in a wide
variety of applications and in numerous market segments including the industrial automation, semiconductor, telecommunications, medical, aviation and defense industries. Given the current market
conditions, we believe that Hathaway has the opportunity to carve out it's own niche and to become a leader in certain well defined market segments. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
products supplied by Hathaway, and the intended future acquisitions, can be characterized as providing the means to optimally achieve the performance requirements of an application,
while at the
same time satisfying the trend towards increased precision, miniaturization, flexibility and mass customization. In many applications, the optimized solutions provide an opportunity to enhance and
accelerate the conversion from mechanical to electro-mechanical motion solutions by providing the required precision, throughput and cost effectiveness to simplify the justification and approval
process during the engineering design cycle. This ability opens many significant segments of the older "power transmission" market to a conversion that will result in further acceleration of the
growth in the precision motion control market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
sales process within the industry can best be described as "A Solution Looking For A Problem" approach, whereby the engineering teams of both the customer and manufacturer jointly
develop a prototype as a solution for the application(s). A shorter lead-time in the design to prototype cycle will greatly enhance the chance of success in the application. Due to this
process, the manufacturer is most often a sole sourced supplier for the application, leading to a stable and diverse customer base. A further development of our marketing/sales strategy will result in
a "target market" </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>
approach whereby we develop optimal solutions to meet the special needs of selected market segments. These solutions will be directly sold and supported to a targeted customer base, by a team of
highly qualified sales engineering, applications engineering and design engineering personnel. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
breadth and fragmented nature of the motion control marketplace provides Hathaway with an opportunity to become highly focused and to significantly grow the company in the years
ahead. As with any venture, we fully recognize that a major factor in the success can be directly attributed to the strength of the management team within the company. To that end, we believe that our
current management team, supplemented by our ability to attract and add highly experienced and proven performers within the industry, provides Hathaway and its shareholders a significant opportunity
for success in the future. </FONT></P>

<P><FONT SIZE=2><I>Product Distribution and Principal Markets  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway maintains a direct sales force, which will be continued after the power and process transaction. In addition to its own marketing and sales force,
Hathaway has developed a worldwide network of independent sales representatives and agents to market its various product lines. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
face competition in all of our markets, although the number of competitors varies depending upon the product. There are numerous competitors in the motion control market. No clear
market share data is available for our product areas. Competition involves primarily product performance and price, although service and warranty are also important. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_cm1836_1_17"> </A> </FONT> <FONT SIZE=2><I>Proforma Financial Information  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited pro forma consolidated financial statements have been prepared from our historical financial statements to give effect to the sale of
substantially all our power and process segment. The unaudited pro forma consolidated balance sheet reflects adjustments as if the sale had occurred on March&nbsp;31, 2002. The unaudited pro forma
combined statements of operations for the nine months ended March&nbsp;31, 2002 and for the years ended June&nbsp;20, 2001, 2000 and 1999 reflect adjustments as if the sale had occurred on
July&nbsp;1, 2001, 2000, 1999 and 1998, respectively. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
unaudited pro forma consolidated financial statements do not purport to present the financial position or results of operations of the Company had the transactions and events assumed
therein occurred on the dates specified, nor are they necessarily indicative of the results of operations that may be achieved in the future. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements, including the related notes, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" of the Company from the Company's Annual Report on Form&nbsp;10-K for the year ended June&nbsp;30, 2001 and
from the Company's Quarterly Report on Form&nbsp;10-Q for the quarter ended March&nbsp;31, 2002. In addition, the unaudited pro forma consolidated financial statements should be read
in conjunction with the historical financial statements of the power and process business being sold, which are included in this proxy statement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION    <BR>    <BR>    UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS<BR>  FOR THE NINE MONTHS ENDED MARCH 31, 2002    <BR>    <BR>    (In thousands, except per share data)    <BR>
</B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="54%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Historical</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma<BR>
Adjustments</B></FONT><HR NOSHADE></TH>
<TH WIDTH="7%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2><B>Assets</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Current Assets:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Cash, cash equivalents and restricted cash</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,246</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>7,251</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(a)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,497</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Trade receivables, net of allowance for doubtful accounts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,854</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(3,856</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)(b)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,998</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Inventories, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,210</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(2,759</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)(b)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,451</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Other current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,408</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(299</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)(b)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,109</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Total current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,718</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>337</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>18,055</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Non-current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,455</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(915</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)(b)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,540</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Total Assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,173</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(578</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,595</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><BR><FONT SIZE=2><B>Liabilities and Stockholders' Investment</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Current Liabilities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Accounts payable, accrued liabilities and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(3,615</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)(b)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,385</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Income taxes payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>539</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>748</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(d)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,287</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Closing cost liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,015</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(c)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,015</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>432</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>432</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Total Liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,971</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,852</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,119</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Total Stockholders' Investment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14,202</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,274</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(e)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,476</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Total Liabilities and Stockholders' Investment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,173</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(578</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,595</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=23,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=883506,FOLIO='18',FILE='DISK038:[02DEN6.02DEN1836]CQ1836A.;3',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_cx1836_1_19"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cx1836_hathaway_corporation_unaudited__hat05455"> </A>
<A NAME="toc_cx1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION    <BR>    <BR>    UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS<BR>  FOR THE YEAR ENDED MARCH 31, 2002    <BR>    <BR>    (In thousands, except per share data)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Historical</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma<BR>
Adjustments(f)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="4%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>31,152</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(17,920</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>13,232</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Cost of products sold</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,658</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(10,346</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,494</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(7,574</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,920</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Operating costs and expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,568</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(3,688</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>880</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,971</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(1,411</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,560</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Engineering and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,425</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(2,598</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>827</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Amortization of intangibles and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total operating costs and expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,970</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(7,697</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,273</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(476</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>123</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(353</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Other income (expenses), net:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Gain on sale of investment in joint venture</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>674</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(674</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Other expense, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(143</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>85</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(58</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total other income (expense), net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>531</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(589</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(58</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(466</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(411</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Benefit for income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(89</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(63</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)(g)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(152</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net income (loss)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>144</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(403</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(259</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic net income (loss) per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.03</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(0.06</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted net income (loss) per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.03</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(0.05</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,636</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,636</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,782</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,782</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=24,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=736497,FOLIO='19',FILE='DISK038:[02DEN6.02DEN1836]CX1836A.;3',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_cz1836_1_20"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cz1836_hathaway_corporation_unaudited__hat05429"> </A>
<A NAME="toc_cz1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION    <BR>    <BR>    UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS<BR>  FOR THE YEAR ENDED JUNE 30, 2001    <BR>    <BR>    (In thousands, except per share data)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="92%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Historical</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma<BR>
Adjustments(f)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="7%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>48,386</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(24,894</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>23,492</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Cost of products sold</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>29,734</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(14,875</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14,859</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>18,652</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(10,019</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,633</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Operating costs and expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,174</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(4,150</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,024</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,551</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(2,345</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,206</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Engineering and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,806</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(3,598</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,208</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Restructuring charge</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>587</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(587</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Amortization of intangibles and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>57</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>57</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total operating costs and expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,175</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(10,680</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,495</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,477</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>661</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,138</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Other income (expense), net:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Equity income from investment in joint ventures</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,170</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(1,170</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Other expense, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(75</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(70</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total other income (expense), net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,095</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(1,165</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(70</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,572</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(504</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,068</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Provision for income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>576</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>189</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(g)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>765</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,996</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(693</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,303</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic net income per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.44</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.29</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted net income per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.41</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.27</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,493</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,493</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,834</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,834</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=25,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=198050,FOLIO='20',FILE='DISK038:[02DEN6.02DEN1836]CZ1836A.;3',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_da1836_1_21"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="da1836_hathaway_corporation_unaudited__hat05428"> </A>
<A NAME="toc_da1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION    <BR>    <BR>    UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS<BR>  FOR THE YEAR ENDED JUNE 30, 2000    <BR>    <BR>    (In thousands, except per share data)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="92%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Historical</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma<BR>
Adjustments(f)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="7%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>45,133</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(24,109</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>21,024</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Cost of products sold</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>28,175</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(15,269</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>12,906</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16,958</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(8,840</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,118</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Operating costs and expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,433</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(4,635</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,798</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,194</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(2,273</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,921</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Engineering and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,274</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(3,116</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,158</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Amortization of intangibles and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>83</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>83</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total operating costs and expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,984</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(10,024</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,960</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>974</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>1,184</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,158</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Other income (expenses), net:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Equity income from investment in joint ventures</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>698</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(698</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="50%"><FONT SIZE=2>Other expense, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(68</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(165</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(233</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total other income (expense), net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>630</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(863</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(233</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,604</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>321</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,925</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Provision for income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>129</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>583</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;(g)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>712</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,475</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(262</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,213</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic net income per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.34</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.28</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted net income per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.31</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.25</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,341</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,341</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Diluted weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,785</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,785</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=26,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=278345,FOLIO='21',FILE='DISK038:[02DEN6.02DEN1836]DA1836A.;3',USER='CJOHNSOC',CD=';7-JUN-2002;02:34' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dc1836_1_22"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dc1836_hathaway_corporation_unaudited__hat05454"> </A>
<A NAME="toc_dc1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION    <BR>    <BR>    UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS<BR>  FOR THE YEAR ENDED JUNE 30, 1999    <BR>    <BR>    (In thousands, except per share data)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Historical</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma<BR>
Adjustments(f)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="4%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Pro Forma</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>41,691</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(25,577</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16,114</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Cost of products sold</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>26,475</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(15,946</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,529</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,216</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(9,631</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,585</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Operating costs and expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,852</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(5,448</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,404</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,958</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(1,970</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,988</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Engineering and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,466</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(3,275</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,191</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Amortization of intangibles and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>481</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(373</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>108</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total operating costs and expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16,757</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(11,066</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,691</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,541</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>1,435</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(106</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Other income (expenses), net:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Equity income from investment in joint ventures</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>329</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(329</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="51%"><FONT SIZE=2>Other expense, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(105</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(18</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(123</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total other income (expense), net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>224</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(347</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(123</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Loss before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,317</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>1,088</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(229</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Provision (benefit) for income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>208</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>(293</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>)(g)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(85</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,525</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>1,381</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(144</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic and diluted net loss per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(0.36</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(0.03</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Basic and diluted weighted average shares outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,283</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,283</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>See accompanying notes to unaudited pro forma consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_de1836_1_23"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de1836_notes_#160;to_#160;unaudited_#__not01990"> </A>
<A NAME="de1836_hathaway_corporation_notes_to___hat03430"> </A>
<A NAME="toc_de1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION<BR>  NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2><B>Note&nbsp;1&#151;Basis of Presentation  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying unaudited pro forma consolidated financial statements are presented to reflect the sale of substantially all the Company's power and process
segment ("the power and process transaction"). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying unaudited pro forma consolidated balance sheet presents the historical financial information of the Company as of March&nbsp;31, 2002 as adjusted for the power and
process transaction as if the transaction had occurred on March&nbsp;31, 2002. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying unaudited pro forma consolidated statements of operations for the nine months ended March&nbsp;31, 2002 and years ended June&nbsp;30, 2001, 2000 and 1999 subtract
the historical operations of the business to be sold from the historical operations of the Company and add pro forma adjustments, as if the power and process transaction had occurred on July&nbsp;1,
2001, 2000, 1999 and 1998 respectively. </FONT></P>

<P><FONT SIZE=2><B>Note&nbsp;2&#151;Pro Forma Adjustments  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The unaudited pro forma consolidated financial statements reflect the following pro forma adjustments: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>Proceeds
from the power and process transaction. These proceeds include $701,000 of proceeds due the Company as a result of the increase in the net book value of the business over a
pre-determined value as determined at March&nbsp;31, 2002.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>The
assets sold and liabilities assumed by Qualitrol in the transaction. Qualitrol will not acquire the cash and cash equivalents, restricted cash and certain other current assets
totaling $13,000 at March&nbsp;31, 2002. In addition, Qualitrol will not assume certain accrued liabilities totaling $354,000 at March&nbsp;31, 2002.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>Accrual
for estimated costs incurred in the transaction. These costs include legal, investment banking, accounting, severance and other transaction related costs.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD><FONT SIZE=2>Estimated
tax liability on the gain on the transaction, calculated at the statutory rate of 37%.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(e)</FONT></DT><DD><FONT SIZE=2>Estimated
after-tax gain on the transaction.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(f)</FONT></DT><DD><FONT SIZE=2>Power
and process business revenues and expenses. The expenses exclude corporate allocations and charges, which will not be eliminated. The corporate allocations and charges that were
not eliminated are $984,000 for the nine months ended March&nbsp;31, 2002 and $1,166,000, $1,292,000 and $1,185,000 for the years ended June&nbsp;30, 2001, 2000 and 1999, respectively.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(g)</FONT></DT><DD><FONT SIZE=2>The
tax effect for all pre-tax pro forma adjustments has been calculated to reflect the pro forma tax provision at anticipated effective tax rates. </FONT></DD></DL>


<P><FONT SIZE=2><I>Sales Backlog  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our backlog at March&nbsp;31, 2002 for the Motion Control segment consisted of sales orders totaling approximately $9,246,000. This compares to a backlog of
$13,044,000 at June&nbsp;30,2001 and $12,305,000 at June&nbsp;30, 2000. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
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<A NAME="page_de1836_1_24"> </A>
<BR>

<P><FONT SIZE=2><I>Engineering and Development Activities  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our expenditures on engineering and development for the Motion Control segment were $622,000 for the nine months ended March&nbsp;31, 2002, $961,000 in fiscal
2001, and $861,000 in fiscal 2000. Of these expenditures, no material amounts were charged directly to customers. </FONT></P>

<P><FONT SIZE=2><I>Environmental Issues  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No significant pollution or other types of emission result from motion control operations and it is not anticipated that Hathaway's proposed operations will be
affected by federal, state or local provisions concerning environmental controls. However, there can be no assurance that any future regulations will not affect our operations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway,
with other parties, has been named as a defendant in an environmental contamination lawsuit. We are investigating the nature of the claims, but believe the claims are without
merit. Nevertheless, we will remain a party to the action until we can establish our position and be dismissed from the action. Any adverse finding in this matter could have a material adverse impact
on our financial position and results of operations. </FONT></P>

<P><FONT SIZE=2><I>Employees  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the end of fiscal 2001, we had approximately 146 full-time employees in the Motion Control segment. </FONT></P>


<P><FONT SIZE=2><I>Properties  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway leases its administrative offices and manufacturing facilities for the motion control segment as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="81%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="52%" ALIGN="LEFT"><FONT SIZE=1><B>Description / Use<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="26%" ALIGN="CENTER"><FONT SIZE=1><B>Location</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER"><FONT SIZE=1><B>Approximate<BR>
Square Footage</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Corporate headquarters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Littleton, Colorado</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>7,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Engineering and development facility</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Evergreen, Colorado</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>3,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Office and manufacturing facility</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Tulsa, Oklahoma</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Office and manufacturing facility</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Chatsworth, California</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>22,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Office and manufacturing facility</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Tulsa, Oklahoma</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>10,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Office and manufacturing facility</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>Bournemouth, England</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>2,000</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe the above-described facilities are adequate to meet our current and foreseeable needs. All facilities described above are operating at less than full capacity. </FONT></P>

<P><FONT SIZE=2><B>LEGAL PROCEEDINGS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the environmental action described under </FONT><FONT SIZE=2><I>Environmental Issues,</I></FONT><FONT SIZE=2> Hathaway is involved in certain
actions that have arisen out of the ordinary course of business. Management believes that resolution of the actions will not have a significant adverse affect on Hathaway's consolidated financial
position or results of operations. </FONT></P>

<P><FONT SIZE=2><B>USE OF PROCEEDS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway proposes to use the proceeds from the power and process transaction to increase its investment in the motion control segment and expand its business in
that segment. See the caption </FONT><FONT SIZE=2><I>Motion Control Business Strategy</I></FONT><FONT SIZE=2> for information concerning our desire to become a "pure play"
company. Hathaway has negotiations underway for the acquisition of multiple motion control companies and is aware of other opportunities for acquisitions in the motion control business. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dg1836_1_25"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1836_security_ownership_of_certain___sec02525"> </A>
<A NAME="toc_dg1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT    <BR>  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table and notes set forth, as of the Record Date (except for Mr.&nbsp;Albert for whom information is provided as of March&nbsp;16, 2000), the
beneficial ownership, as defined by the regulations of the Securities and Exchange Commission, of Common Stock by each person known to the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock (based on the records of the Company's stock transfer agent or a representation by the beneficial owner), each director and nominee, the executive officer and all
persons who serve as executive officers and directors of the Company, as a group. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="79%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="69%" ALIGN="LEFT"><FONT SIZE=1><B>Name and Address of Beneficial<BR>
Owner<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=1><B>Amount and Nature<BR>
of Beneficial Ownership(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Percent of Class(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2>Eugene E. Prince<BR>
7560 Panorama Drive<BR>
Boulder, Colorado 80303</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>927,050</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>(3)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>19.5</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Richard D. Smith<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
565,267</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(4)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
11.0</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Ira Albert<BR>
1304 SW 160th Avenue, Suite 209<BR>
Ft. Lauderdale, FL 33326</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
274,300</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(5)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
5.9</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Richard S. Warzala</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
10,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Delwin D. Hock</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
36,500</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(6)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Graydon D. Hubbard</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
30,500</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(7)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
George J. Pilmanis</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
13,000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(8)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="69%" VALIGN="TOP"><FONT SIZE=2><BR>
Directors and executive officers of the Company as a group (6 persons)</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
1,424,722</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>(9)</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
30.1</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>All
beneficial ownership is sole and direct unless otherwise noted.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>No
percent of class is shown for holdings of less than 1%.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Mr.&nbsp;Prince
retired as Chairman of the Board, President and Chief Executive Officer on August&nbsp;31, 1998. Includes 84,500 shares of Common Stock which Mr.&nbsp;Prince has
the right to acquire within 60&nbsp;days of the Record Date upon exercise of options. Includes 88,800 shares of Common Stock held by the Prince Children's Trusts, of which Mr.&nbsp;Prince's wife
is trustee and as to which Mr.&nbsp;Prince disclaims beneficial ownership.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Includes
430,000 shares of Common Stock which Mr.&nbsp;Smith has the right to acquire within 60&nbsp;days of the Record Date upon exercise of outstanding options and 121,784
shares of Common Stock held by the Company's Employee Stock Ownership Plan ("ESOP") as of the Record Date, as to which Mr.&nbsp;Smith could be deemed to have shared investment power as a trustee of
the ESOP, which includes 4,575 shares of Common Stock credited to the ESOP account of Mr.&nbsp;Smith. Includes 12,583 shares of Common Stock held by Smith Family Trust, of which Mr.&nbsp;Smith is
trustee.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>Based
on Schedule&nbsp;13D filed by Mr.&nbsp;Albert with the Securities and Exchange Commission on or about March&nbsp;16, 2000; includes 117,600 shares of Common Stock, held by
Albert Investment Associates, L.P., as to which Mr.&nbsp;Albert has sole voting and investment power; includes 133,200 </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
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<A NAME="page_dg1836_1_26"> </A>
<UL>

<P><FONT SIZE=2>shares
of Common Stock held by various accounts as to which Mr.&nbsp;Albert has sole investment power. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD><FONT SIZE=2>Includes
30,500 shares of Common Stock which Mr.&nbsp;Hock has the right to acquire within 60&nbsp;days of the Record date upon exercise of outstanding options.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD><FONT SIZE=2>Consists
of 30,500 shares of Common Stock which Mr.&nbsp;Hubbard has the right to acquire within 60&nbsp;days of the Record Date upon exercise of outstanding options.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD><FONT SIZE=2>Includes
5,000 shares of Common Stock which Mr.&nbsp;Pilmanis has the right to acquire within 60&nbsp;days of the Record Date upon exercise of outstanding options.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD><FONT SIZE=2>Includes
474,000 shares of Common Stock which directors and executive officers have the right to acquire within 60&nbsp;days of the Record Date upon exercise of outstanding options
and 121,784 shares of Common Stock held by the ESOP as to which Mr.&nbsp;Smith has shared investment power as trustee of the ESOP, which includes 4,150 shares of Common Stock held by the ESOP for
the account of Mr.&nbsp;Smith. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dk1836_1_27"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk1836_market_price_of_hathaway_s_com__mar02871"> </A>
<A NAME="toc_dk1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>MARKET PRICE OF HATHAWAY'S COMMON STOCK AND<BR>  RELATED SHAREHOLDER MATTERS    <BR>  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway Corporation's common stock is traded on the Nasdaq Small Cap Market system and trades under the symbol HATH. The number of holders of record of the
Company's common stock as of the close of business
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. The Company did not pay or
declare any dividends during fiscal years 2001 and 2000 as the Company's
long-term financing agreement prohibits the Company from doing so without prior approval. We have applied and intend to continue to apply any retained and current earnings toward the
development of our business and to finance the growth of the motion control business after the power and process transaction. Consequently, we currently do not anticipate paying cash dividends on
common stock in the foreseeable future. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth, for the periods indicated, the high and low prices of the Company's common stock on the Nasdaq Small Cap Market system, as reported by Nasdaq. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="69%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>Price Range</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>High</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Low</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>FISCAL 2000</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>9.25</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3.00</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>FISCAL 2001</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>9.88</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>5.06</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>7.38</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2.25</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6.94</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2.94</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Fourth Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>4.84</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3.10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>FISCAL 2002</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>First Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3.90</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2.04</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Second Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3.25</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1.75</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Third Quarter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3.00</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2.60</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2><B>CHANGES TO STOCK OPTIONS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our 1991 Stock Option Plan as originally written, options were cancelled on the date of termination of services, and under our 2000 Stock Option Plan as
originally written, options were cancelled 30&nbsp;days after the date of termination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
of the decrease in the market value of our Common Stock, some of the options that have been granted are "underwater," which means that the exercise price is greater than the
current market price of our stock. In addition, the term of options originally granted was seven years from the date of grant, but that term could be lengthened to as much as 10&nbsp;years, thereby
giving additional time for exercise of options by terminated optionees. The same limitations would apply in the event of termination after a change in control. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board has amended the 1991 Stock Option Plan as it applies to corporate employees and directors to provide that in the event of termination after a change in control for any reason
other than cause, as defined, voluntary termination, disability or death, the option expiration date was extended to 10&nbsp;years after the date of grant, but the options may expire earlier due to
termination for cause, as defined, voluntary termination, disability or death in accordance with the Plan. Stock Option Agreements were also amended, but they require the consent of the option holder.
Not all consents have been obtained. In the event of termination after a change in control of all directors and corporate office employees, we would be required to record a compensation charge of
$221,000 as a result of the amendments. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
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<A NAME="page_dk1836_1_28"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
action affected four employees in the corporate office who had unexercised options totaling 62,900 shares. The action affected options granted to directors as stated below: </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="66%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="85%" ALIGN="LEFT"><FONT SIZE=1><B>Director<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER"><FONT SIZE=1><B>Shares</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Delwin D. Hock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>45,500</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Graydon D. Hubbard</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>45,500</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>George J. Pilmanis</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>28,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Eugene E. Prince</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>99,500</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Richard D. Smith</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>430,000</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
options held by power and process employees will be fully vested when the sale closes, and those employees will be able to exercise options in accordance with the Agreements. Options
to purchase 445,667 shares of common stock are held by power and process employees at exercise prices ranging from $1.13 to $6.72. There will be no compensation charge required to be recorded as a
result of the acceleration of the options. As of May&nbsp;31, 2002, an aggregate of 109,967 such shares were exercisable at prices below the market price of common stock. </FONT></P>


<P><FONT SIZE=2><B>SEVERANCE AGREEMENTS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway has severance agreements with four key employees of the power and process segment that require it to pay an amount equal to one year base salary plus
incentive compensation and other incidental amounts if the employee is terminated under certain circumstances within specified periods following a sale of the assets of their particular employer. The
power and process transaction will constitute such a sale, and key employees will be entitled to severance benefits. Three of these key employees will be continued by Qualitrol, and Qualitrol will
assume their severance agreements, or the contracts with Hathaway will be canceled and new ones entered into with Qualitrol. The employment of the other employee covered by a serverance agreement will
not be continued by Qualitrol. Hathaway will continue to be bound by the severance agreement with him. </FONT></P>

<P><FONT SIZE=2><B>HATHAWAY APPOINTS NEW PRESIDENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective May&nbsp;1, 2002, Hathaway hired Richard S. Warzala as president. Richard D. Smith will continue as the chief executive officer and chief financial
officer, as well as a member of the board of directors. Mr.&nbsp;Warzala has over 20&nbsp;years experience in the motion control industry. From 2000 to 2001, he was president of the Motion
Components Group, a subsidiary of Danaher Corporation. From 1993 to 2000, he was president of API Motion,&nbsp;Inc., a subsidiary of American Precision Industries,&nbsp;Inc., a Delaware
corporation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk1836_the_power_and_process_transaction_proposal"> </A>
<A NAME="toc_dk1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>THE POWER AND PROCESS TRANSACTION PROPOSAL    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This section of the proxy statement describes certain aspects of the sale of substantially all the assets comprising our power and process segment. We recommend
that you read carefully the complete Asset Purchase Agreement for the terms of the sale and other information that may be important to you. The Asset Purchase Agreement is included in this proxy
statement as Appendix&nbsp;A. </FONT></P>

<P><FONT SIZE=2><B>BOARD OF DIRECTORS RECOMMENDATION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THE SHAREHOLDERS VOTE "FOR" THE POWER AND PROCESS TRANSACTION PROPOSAL TO SELL
SUBSTANTIALLY ALL THE OPERATING ASSETS OF THE POWER AND PROCESS SEGMENT TO QUALITROL FOR A PURCHASE PRICE OF $6,550,000, SUBJECT TO CERTAIN POST-CLOSING ADJUSTMENTS AND THE ASSUMPTION OF
CERTAIN OF THE LIABILITIES OF THE POWER AND PROCESS SEGMENT. THE BOARD HAS DETERMINED THAT THE  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

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<P><FONT SIZE=2><B> POWER AND PROCESS TRANSACTION PROPOSAL IS IN THE BEST INTERESTS OF THE SHAREHOLDERS.  </B></FONT></P>

<P><FONT SIZE=2><B> REASONS FOR THE POWER AND PROCESS TRANSACTION  </B></FONT></P>

<P><FONT SIZE=2><I>Introduction  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Today we conduct our operations in two business segments: our power and process segment and the motion control segment. We believe Hathaway currently does not
have sufficient access to the capital resources required to restructure our finances to grow both business segments. We further believe that among the available opportunities, selling the power and
process segment presents the best opportunity to resolve our current strategic and financial concerns. While the calibration business and equipment of Hathaway Process Instrumentation Corporation are
not being sold as a part of the power and process transaction, we intend to sell them. </FONT></P>

<P><FONT SIZE=2><I>Factors Considered  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reaching its determination to approve the sale of the power and process segment, the Board considered, among other factors, (1)&nbsp;management's belief that
the sale of the power and process transaction would help provide the remaining business flexibility to expand operations to meet changing demands, and (2)&nbsp;the opinion of Green, Manning&nbsp;&amp;
Bunch regarding the fairness, from the financial point of view, of the consideration to be received by Hathaway pursuant to the proposed power and process transaction. See </FONT> <FONT SIZE=2><I>Green, Manning&nbsp;&amp; Bunch
Opinion</I></FONT><FONT SIZE=2> and see Appendix&nbsp;B where that opinion is reprinted in full. The other material positive factors considered
by the Board of Directors in reaching this determination are: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Management's
belief that the market price of our Common Stock has been adversely affected by the inability of the market to see us as one company with two different
product segments. The market has difficulty in analyzing our power and process business and our motion control business and relate a market price to those two distinct but unrelated products. In the
view of management this results in a low price for our Common Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Management
believes it would be desirable to become a "pure play" company and focus our efforts on one industry that is recognizable in the market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;The
power instrumentation and systems automation business is affected by the uncertainties of deregulation and pending rulings by the Federal Energy Regulatory
Commission, and will most likely continue to require large investments into the future before becoming profitable. The motion control industry is diverse and is currently suffering the effects of the
downturn in the economy resulting in motion control businesses with low valuations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;The
power and process segment has generated operating losses in each of the last five years; whereas the motion control segment has generated operating profits. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material
negative factors considered by the Board of Directors in reaching its determination are: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;The
power and process transaction will result in a significant reduction in the size of our total operations and operating revenues. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Certain
expenses relating to the power and process segment will not be avoided by the sale and will be absorbed by the remaining motion control business. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

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<P><FONT SIZE=2><B>BACKGROUND OF THE POWER AND PROCESS TRANSACTION  </B></FONT></P>

<P><FONT SIZE=2><I>General  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway Common Stock is traded on the NASDAQ Small Cap Market under the symbol "HATH." We have long been concerned with the inability of the stock market to
reconcile the diverse business segments of Hathaway into a market price for Hathaway Common Stock that reflects the values of these diverse segments. This problem first became apparent during the
1980s when Hathaway was operating its power business, together with an application software business. The two businesses were not related and the price of Hathaway's Common Stock in the market fell
well below a price recognizing the relative values of the two business segments. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
application software business was sold in 1994, but the problem of disparate business segments continued with the development of the motion control segment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
1996, Hathaway purchased its systems automation business, which has been operated by Hathaway Industrial Automation,&nbsp;Inc. The systems automation business is included in the
power and process transaction. At about the same time as that acquisition, Hathaway became involved in efforts to reorganize the separate structure of its businesses into distinct subsidiaries and
divisions. This applied both to the power and process side of the business as well as the motion control business. This reorganization was undertaken in an effort to consolidate accounting and
reporting of the different business operations, with the hope that investors would be better able to analyze the product lines and reflect the different product lines in the market price for Common
Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
April&nbsp;1997, Hathaway considered the spin-off of its motion control business into a separate corporation which would have its own market for common stock, separate
and apart from the power and process business which would remain in Hathaway. A ruling request to the Internal Revenue Service with respect to the proposed spin-off was undertaken in 1997.
The ruling request was finalized and filed with the Internal Revenue Service in 1998. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
1997 and 1998, Hathaway received inquiries from various corporations with respect to acquiring the company or some of its product lines. In February&nbsp;1998, Hathaway hired Green
Manning&nbsp;&amp; Bunch,&nbsp;Ltd. ("GMB") to review strategic alternatives, with a view to achieving the best value to shareholders. GMB an investment banking firm that was founded in 1988 and is
located in Denver, Colorado. GMB provides financial advisory services to its clients with an emphasis on mergers and acquisitions and institutional private placements of debt and equity. GMB was asked
to prepare an analysis regarding Hathaway's strategic alternatives to maximize shareholder value. In 1998, GMB reported back to Hathaway and concluded that the equity value of Hathaway, based on the
individual business units, was significantly greater than its current stock value, and that Hathaway could not maximize shareholder value with its current structure. GMB recommended that Hathaway sell
the power/process/systems business, and focus on the motion control business. GMB recommended that Hathaway not pursue a spinoff of the power/process/systems business, or the motion control business,
into a separately traded company because neither of the resulting corporations would be of significant size or would likely qualify to be listed on the NASDAQ national market system, and while the
motion control business might be able to obtain financing, the power/process/systems business would not be able to obtain financing because of its history of losses. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the meantime, Hathaway continued to receive inquiries from outside parties interested in purchasing either the power and process business, or the motion control business, but at
prices which the Hathaway board of directors felt did not recognize the intrinsic value of either line of business. In April of 1998, the board authorized continuing discussions with various inquiring
companies and asked GMB to serve as financial advisor to the Company to implement their recommendation to sell the power/process/systems business. GMB developed confidential memoranda covering both
the power/process/systems business and the motion control business. In early 1999, GMB had completed its </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

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<P><FONT SIZE=2>
valuation of the Company, and the Company was prepared to go forward with a renewed effort to achieve sale of the Company or of at least one of its product segments. A favorable ruling on the spinoff
request was issued by the Internal Revenue Service in December&nbsp;1998. The ruling required financing for the motion control business to be in place within 30&nbsp;days after spinoff, and within
one year significantly more money would have to be provided to the two businesses than was available to them before the spinoff. These requirements made utilization of the spinoff ruling difficult and
impractical. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effort to dispose of the power/systems/process business was delayed in 1999 because of promising developments for the systems automation business due to power problems in California.
The Board of Directors approved going forward with the sale of the motion control business and authorized GMB to solicit interested parties. By mid 1999, GMB had developed several parties interested
in acquiring the motion control business. While efforts to market the power/systems/process business had been delayed, Hathaway continued to consider restructuring the business so it would be in
position for a sale if and
when negotiations could be resumed. In late 1999, a proposal was received from one party for the purchase of the motion control business, and the Board of Directors authorized discussion toward a
negotiated sale. The potential buyer determined not to move forward with negotiations, however, because of its own economic situation. The Board then authorized GMB to pursue other possibilities and
determined that the situation in California would now permit the proposal to go forward with the sale of the power/systems/process business. GMB finalized their confidential memorandum for the sale of
the power/systems/process business, and requested indications of interest from various parties. By February&nbsp;2000, GMB had contacted 21 prospective purchasers, but had received no responses
indicating an interest. GMB suggested that Hathaway wait a period of 18-24&nbsp;months and try another marketing effort. Hathaway's involvement with GMB was then terminated. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
that time, Hathaway engaged Blitzer, Ricketson and Co. ("BRC"), a New York, New York based investment banking firm, to dispose of the product lines of the process instrumentation
business. The reason for the sale of the process instrumentation division was to effect a downsizing of the division to eliminate losses and a furthering of the restructuring operation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
mid-2000, one party continued to show an interest in acquiring the motion control segment, but the Board rejected a proposal on the determination that it did not reflect
the true value of the segment based on its recent financial results and projection for the future. The Board notified the interested party that the Board would consider further reasonable offers the
interested party might present. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
October&nbsp;2000, negotiations for the sale of the process instrumentation business were terminated by the interested party because of a change in its business. The Board of
Directors then approved restructuring the process instrumentation business and asked BRC to continue with its efforts to effect a sale. At this time, the Board again resolved to continue to evaluate
strategies to maximize shareholder value, and authorized management to proceed with efforts to sell parts of the Company. Preliminary negotiations with one party at a purchase price within the range
of the current proposal from Qualitrol were terminated when it suffered an economic downturn. By that time discussions had been opened with representatives of Danaher, although another possible
purchaser indicated further interests in mid-2001, and proposed a merger to combine its privately held company with Hathaway as a public company. The Board of Directors reviewed the
relative values of the two companies as proposed by the offeror and concluded they were not in the best interest of Hathaway shareholders. The president was authorized to tell the offeror their
proposal was not acceptable, but to continue negotiations with the intention of developing terms that would be acceptable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
study by management and the development of proposals in mid-2001, the Board of Directors approved a proposed roll-up strategy that involved the sale of the
power and process segment and expansion of the motion control segment, with the realization this strategy would require significant </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

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additional financing. By October&nbsp;2001, a strategy to complete the roll-up financing was developed. The Board determined that refocusing the systems business to the power industry
would take longer than previously anticipated. Historically, the power industry has not quickly embraced new technologies and the uncertainties of deregulation and pending rules by the Federal Energy
Regulatory Commission will probably keep the industry in turmoil for many years. The power instrumentation and systems
automation business would continue to require investment into the future before becoming profitable. On the other hand, there was significant diversity in the motion control business, as that industry
was being adversely affected by the economic downturn. The Board also took into consideration that the power and process segment has generated operating losses during each of the last five years,
whereas the motion control segment has generated operating profits. The Board concluded that the recommended roll-up strategy, which involved disposition of the power and process business
and expansion of the motion control business, would help investors better understand Hathaway, and would contribute to the "pure play" objective which the board had previously approved. As a part of
this strategy, the Board of Directors determined it would be beneficial to Hathaway to proceed with proposals to sell the power and process business, and at the same time acquire a greater investment
in the motion control business. By this time Danaher, who is the parent entity of the purchaser in the power and process transaction, submitted an offer to acquire Hathaway. The Board of Directors
rejected the Danaher offer because the price per share did not represent an adequate value for the total company, but the Board of Directors encouraged Danaher to reconsider their offer solely as a
purchase of the power business. Discussions with other potential buyers were terminated because of loss of interest. Management entered into discussions with other entities for the purchase of
additional motion control assets. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December&nbsp;2001, Danaher showed interest in purchasing the power and process business for a cash consideration the Board of Directors thought adequate, and the president was
authorized to proceed with negotiations with Danaher to sell the assets of the power and process business to Danaher. Danaher did not include the calibration business in its offer and management was
authorized to proceed with efforts to sell the calibration business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Negotiations
with Danaher for the sale of the power and process segment continued, resulting ultimately in the submission of an Asset Purchase Agreement in February&nbsp;2002, which
resulted in agreement between Hathaway and Qualitrol for the sale of the power and process segment (except the calibration products), which is the subject of the power and process transaction being
considered in this proxy statement. </FONT></P>

<P><FONT SIZE=2><I>Green Manning&nbsp;&amp; Bunch Opinion  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective February&nbsp;14, 2002, Hathaway retained GMB to provide its Board of Directors with a fairness opinion regarding the financial aspects of the
proposed power and process transaction, whereby Hathaway agreed to sell its power and process segment. Specifically, the Company asked GMB to opine on whether the financial aspects of the power and
process transaction, considered in their entirety, are fair to the shareholders from a financial point of view. GMB's opinion is intended for the sole use of Hathaway's Board of Directors for the
purpose of evaluating the financial aspects of the power and process transaction. Neither GMB's opinion, nor the following discussion, is intended to, nor does it constitute, a recommendation to any
holder of Hathaway Common Stock as to whether such holder should vote in favor of the power and process transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
is an investment banking firm that was founded in 1988 and is located in Denver, Colorado. GMB provides financial advisory services to its clients with an emphasis on mergers and
acquisitions and institutional private placements of debt and equity. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_dm1836_1_33"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB has provided its opinion to Hathaway's Board of Directors that the financial aspects of the power and process transaction are fair to Hathaway from a financial point of view. In
rendering this opinion, GMB: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>Reviewed
the Asset Purchase Agreement, as executed May&nbsp;17, 2002 between Hathaway and Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>Reviewed
and analyzed financial information of certain publicly-traded companies that GMB deemed reasonably comparable to the power and process segment;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>Reviewed
and analyzed financial information of certain change of control business combination transactions that GMB deemed reasonably comparable to the power and process segment;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>Conducted
an unleveraged post-tax discounted cash flow analysis of projected five-year financial performance of the power and process segment, based on
information provided by Hathaway;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2>Held
discussions with certain members of Hathaway's management team;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>6.</FONT></DT><DD><FONT SIZE=2>Considered
qualitative factors including, but not limited to, the power and process segment's competitive position, the marketplace in which it operates, its size, and its access to
capital;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>7.</FONT></DT><DD><FONT SIZE=2>Conducted
such other studies, analyses and investigations and reviewed such other information as GMB considered appropriate for the purposes of its opinion; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>8.</FONT></DT><DD><FONT SIZE=2>Made
qualitative judgments as to the significance and relevance of each such analysis and factor. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
GMB's review and analysis, and in formulating the valuations, GMB assumed and relied upon the accuracy and completeness of all the financial and other information provided and has not
assumed any responsibility for independent verification of, and expresses no opinion as to the accuracy of, any such information. With respect to forward looking financial information, GMB has relied
upon the reasonableness and accuracy of the information, and has assumed that such information was reasonably prepared in good faith and on a basis reflecting the best currently available judgments
and estimates of Hathaway's management. GMB also assumed that management is unaware of any facts not disclosed to GMB that would make any of the information provided materially incomplete or
misleading. GMB has not reviewed any of the books or records of the power and process segment or conducted, or assumed any responsibility for conducting, a physical inspection of the properties or
facilities of the power and process segment or for making or obtaining an independent valuation or appraisal of the assets or liabilities of the power and process segment. GMB's valuation is
necessarily based on economic and market conditions and other circumstances as they currently exist and can be evaluated by GMB as of the date hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
reviewed the following information, provided by Hathaway if not otherwise noted, in connection with its evaluation of the financial aspects of the power and process transaction: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>Financial
statements for the power and process segment for the fiscal years ended June&nbsp;30, 1997 through June&nbsp;30 2001;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>Financial
statements for the power and process segment for the interim periods ended September&nbsp;30, 2001, December&nbsp;31, 2001 and March&nbsp;31, 2002;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>Financial
estimates and projections prepared by Hathaway's management for the power and process segment for the fiscal years ended June&nbsp;30, 2002 through June&nbsp;30, 2004;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>Descriptive
information on the power and process segment contained on Hathaway's website and in publicly-filed documents; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2>Descriptive
information on the power and process segment contained in presentation materials;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>6.</FONT></DT><DD><FONT SIZE=2>Information
on comparable companies gathered from public sources;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>7.</FONT></DT><DD><FONT SIZE=2>Information
on comparable acquisitions gathered from public sources;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>8.</FONT></DT><DD><FONT SIZE=2>New
business development summaries relating to the power and process segment from regular board meetings; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>9.</FONT></DT><DD><FONT SIZE=2>Copies
of written correspondence between Hathaway and Danaher Corporation. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><B>A COPY OF THE FULL TEXT OF THE OPINION OF GMB DATED MAY 28, 2002, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN IN
CONNECTION WITH THE OPINION, IS ATTACHED AS APPENDIX B. THE SUMMARY DISCUSSION THAT FOLLOWS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following is a summary of the quantitative valuation analyses performed by GMB in connection with the rendering of its opinion. GMB relied upon these analyses, as well as certain
other qualitative factors, in opining on whether the financial aspects of the power and process transaction, considered in their entirety, are fair to the shareholders of Hathaway from a financial
point of view. </FONT></P>

<P><FONT SIZE=2><I>Comparable Company Analysis  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utilizing its experience in valuing middle market companies and its understanding of the power and process segment's core business, GMB sought to identify a group
of comparable companies that, as a whole, it believed reflected the risk, opportunity and business fundamentals that are reasonably similar to the power and process segment. GMB selected the following
seven companies for detailed analysis and comparison: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>Badger
Meter,&nbsp;Inc.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>Intelligent
Controls,&nbsp;Inc.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>Metretek
Technologies,&nbsp;Inc.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>Powell
Industries,&nbsp;Inc.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2>Sutron
Corporation
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>6.</FONT></DT><DD><FONT SIZE=2>Technology
Research Corporation
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>7.</FONT></DT><DD><FONT SIZE=2>Transmation,&nbsp;Inc.
</FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
gathered financial results for the above seven companies from publicly-filed documents. Using this data, in conjunction with current capitalization for each company, GMB calculated a
variety of trading multiples, as well as average and median figures, for the entire group. In calculating average and median figures for the group, GMB discarded abnormally high and/or low values
that, at its discretion, it determined to be statistical outliers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
GMB's view, the size, profitability and liquidity of a company may have an effect on its market value. Larger companies are typically better suited to withstand economic or financial
downturns, and may be assigned a valuation premium by the market for this durability. The same may true of profitable companies, as they are typically able to fund their operations internally, or, in
the event of a severe downturn, they may be better able to access capital markets due to historical financial performance. Conversely, smaller unprofitable companies are likely to be assigned a market
discount. Finally, privately-held companies and divisions of publicly-traded companies are often assigned a </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

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<P><FONT SIZE=2>
valuation discount by the market because their stock and/or assets are less liquid and therefore carry greater risk. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
power and process segment is similar in size and profitability to the majority of the companies included in the comparable company analysis. However, in GMB's opinion, the assets of
the power and process segment are less liquid than the assets and/or stock of the seven companies included in the comparable company analysis. GMB therefore included a 35.0% discount, which GMB
believes to be an appropriate liquidity discount in the investment banking industry, in the comparable company analysis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
calculated median revenue and EBITDA multiples for the seven companies discussed above and applied a 15.0% premium and a 15.0% discount to those multiples to arrive at multiple
ranges. GMB applied the respective multiple ranges to the power and process segment's last-twelve-month ("LTM") net sales and Adjusted EBITDA, then averaged the implied value ranges to
arrive at an entity value reference range of $9.668&#151;$13.081&nbsp;million. Finally, GMB discounted both the low and high values of this range by 35.0%, based on the lack of liquidity of
the Segment, to arrive at a discounted entity value reference range of $6.284 -$8.502&nbsp;million. </FONT></P>

<P><FONT SIZE=2><B>Hathaway Corporation&#151;Power and Process Segment<BR>  </B></FONT><FONT SIZE=2>Comparable Company Analysis </FONT></P>

<P><FONT SIZE=2><B><I>Valuation Summary  </I></B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="84%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>LTM Ended 12/31/01<BR>
Operating Results</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER"><FONT SIZE=1><B>Relevant<BR>
Multiple(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="CENTER"><FONT SIZE=1><B>Implied<BR>
Value</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="CENTER"><FONT SIZE=1><B>Dollar Amounts in Millions<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>25.723</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>0.4x&#150;0.6x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>$10.909&#150;$14.760</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>EBIT</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(0.280</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>EBITDA</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(0.007</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Adjusted EBITDA(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1.250</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>6.7x&#150;9.1x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>$8.427&#150;$11.402</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Entity Value Reference Range(3)</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>$9.668&#150;$13.081</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Less:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="43%"><FONT SIZE=2>35% Liquidity Discount(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>3.384&#150;4.578</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Discounted Entity Value Reference Range</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE=2>$6.284&#150;$8.502</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="CENTER"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">

<P><FONT SIZE=2>NMF:
Not meaningful </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Low
multiples represent a 15% discount to median revenue and EBITDA multiples for comparable companies. High multiples represent a 15% premium to median revenue and EBITDA multiples
for comparable companies.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Adjusted
EBITDA is defined as EBITDA plus Total Intercompany Expenses (Income). This analysis assumes that a potential buyer would value Hathaway's Power and Process Segment based on
a multiple of Adjusted EBITDA, as opposed to EBITDA inclusive of Intercompany Expenses.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Entity
Value Reference Range is calculated as the average of the implied value range based on a revenue multiple and the implied value range based on an Adjusted EBITDA multiple.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Because
the assets of the Power and Process Segment are less liquid than the stock of the publicly-traded companies included in the Comparable Company Analysis, a 35% liquidity
discount is applied to the Entity Value Reference Range. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1836_1_36"> </A>

<P><FONT SIZE=2><I>Comparable Acquisition Analysis  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The comparable acquisition analysis utilizes the financial data of various change of control business combinations in the Power, Process and Systems Automation
industries, to the extent information is publicly available, to determine an appropriate valuation range for the power and process segment. GMB sought to identify a group of comparable acquisitions
that, as a whole, it believed reflected the same risk, opportunity and business fundamentals as the power and process segment. GMB focused its review on the following 20 acquisitions for which
financial data was publicly-available: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="70%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=1><B>Acquiror<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="49%" ALIGN="CENTER"><FONT SIZE=1><B>Target</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>AEA Technologies plc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Kinectrics</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Danaher Corporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Marconi Commerce Systems</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Hughes Corporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Transmation, Inc. MAC</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Danaher Corporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Microtest, Inc.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Danaher Corporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Lifschultz Industries, Inc.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>ABB Ltd.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Entrelec</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Danaher Corporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>United Power Corporation</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Private Investor Group</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Geomation</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>General Electric Company</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Smallworldwide plc</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>AZI LLC</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Arizona Instrument Corp.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Mikron Instrument Company, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>E-Squared Technology Corporation</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Thermo Instrument Systems</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Onix Systems, Inc</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Power-One, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>HC Power, Inc.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Siemens AG</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Moore Products Co.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>SL Industries, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Todd Products Corp.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>SL Industries, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>RFL Electronics Inc.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Transmation, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Metermaster, Inc.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Power-One, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>International Power Devices</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Spectrum Control, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Potter Production Corporation</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Metretek Technologies, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>American Meter Company</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
gathered certain operating results and determined both equity and entity values for the above target companies, and then calculated standard valuation multiples for each of the
acquisitions in the analysis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
considered some transactions to be more relevant than others, based on size and profitability. GMB calculated the median revenue and EBITDA multiples for the six most comparable
transactions and applied a 15.0% premium and a 15.0% discount to those multiples to arrive at multiple ranges. GMB applied the respective multiple ranges to the power and process segment's LTM net
sales and Adjusted EBITDA, then averaged the implied value ranges to arrive at an entity value reference range of $5.328&#151;$7.209&nbsp;million. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1836_1_37"> </A>
<BR>

<P><FONT SIZE=2><B>Hathaway Corporation&#151;Power and Process Segment<BR>  </B></FONT><FONT SIZE=2>Comparable Acquisition Analysis </FONT></P>

<P><FONT SIZE=2><B><I>Valuation Summary  </I></B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="81%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="46%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>LTM Ended 12/31/01<BR>
Operating Results</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=1><B>Relevant<BR>
Multiple(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER"><FONT SIZE=1><B>Implied<BR>
Value</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="46%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER"><FONT SIZE=1><B>Dollar Amounts in Millions<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>25.723</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2>0.2x&#150;0.3x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$6.321&#150;$8.552</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>EBIT</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(0.280</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>EBITDA</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(0.007</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>NMF&#150;NMF</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Adjusted EBITDA(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1.250</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2>3.5x&#150;4.7x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$4.335&#150;$5.865</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><B>Entity Value Reference Range</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$5.328&#150;$7.209</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">

<P><FONT SIZE=2>NMF:
Not meaningful </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Low
multiples represent a 15% discount to median revenue and EBITDA multiples for comparable transactions. High multiples represent a 15% premium to median revenue and EBITDA
multiples for comparable transactions.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Adjusted
EBITDA is defined as EBITDA plus Total Intercompany Expenses (Income). This analysis assumes that a potential buyer would value Hathaway's Power and Process Segment based on
a multiple of Adjusted EBITDA, as opposed to EBITDA inclusive of Intercompany Expenses.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Entity
Value Reference Range is calculated as the average of the implied value range based on a revenue multiple and the implied value range based on an Adjusted EBITDA multiple. </FONT></DD></DL>

<P><FONT SIZE=2><I>Discounted Cash Flow Analysis  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A discounted cash flow analysis values a business based on its future expected cash flows, discounted at a rate that reflects the estimated risk associated with
the company's ability to achieve those cash flows. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on income statement, balance sheet and cash flow statement projections provided by Hathaway management, GMB calculated unleveraged free cash flow for the power and process segment
through June&nbsp;30, 2006. Unleveraged free cash flow is defined as follows: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2><I>Unleveraged Free Cash Flow&nbsp;= Unleveraged Net Income&nbsp;+&nbsp;Depreciation&nbsp;+&nbsp;Amortization&nbsp;+&nbsp;Changes in Working Capital &#150;
Capital Expenditures.</I></FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>Whereby: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2><I>Unleveraged Net Income&nbsp;= Earnings Before Interest&nbsp;&amp; Taxes ("EBIT") &#150; Income Tax Expense.</I></FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Using
an estimated discount rate range of 15.4%&#151;20.8%, GMB discounted the power and process segment's projected five-year unleveraged free cash flow to the
present. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
discounted cash flow analysis also accounts for a company's discounted terminal value (i.e., the value that the enterprise is assumed to be sold for at the end of the discounted
period, which in this case was assumed to be five years). GMB calculated the terminal value for the power and process segment both as a multiple of assumed 2006 revenue and as a multiple of assumed
2006 EBITDA. The terminal multiples were calculated by applying a 15.0% premium and a 15.0% discount to the average of the median comparable company analysis and median comparable acquisition analysis
revenue </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

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<P><FONT SIZE=2>
multiples, and the average of the median comparable company analysis and median comparable acquisition analysis EBITDA multiples. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB
discounted the terminal value back to the present using the same discount rate range as discussed above and added this value to the discounted unleveraged free cash flow to arrived
at a valuation range of $4.564&#151;$8.421&nbsp;million. </FONT></P>

<P><FONT SIZE=2><B>Hathaway Corporation&#151;Power and Process Segment<BR>  </B></FONT><FONT SIZE=2>Discounted Cash Flow Analysis </FONT></P>

<P><FONT SIZE=2><B><I>Valuation Summary  </I></B></FONT></P>

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<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=1><B>Discount Rate(1)<BR>
15.4%&#150;20.8%</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER"><FONT SIZE=1><B>Terminal Multiple</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER"><FONT SIZE=1><B>Total Value</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER"><FONT SIZE=1><B>Dollar Amounts in Millions<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Entity Value&#151;Revenue Multiple(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="CENTER"><FONT SIZE=2>0.3x&#150;0.5x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="CENTER"><FONT SIZE=2>$4.168&#150;$7.746</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Entity Value&#151;EBITDA Multiple(3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="CENTER"><FONT SIZE=2>5.1x&#150;6.9x</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="CENTER"><FONT SIZE=2>$4.960&#150;$9.095</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><B>Entity Value Reference Range(4)</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="CENTER"><FONT SIZE=2>$4.564&#150;$8.421</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="CENTER"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Discount
rate range is calculated by applying a 15% discount and a 15% premium to the Segment's assumed weighted average cost of capital.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Low
multiple represents a 15% discount to the average of the median revenue multiple for comparable companies and the median revenue multiple for comparable transactions. High
multiple represents a 15% premium to the average of the median revenue multiple for comparable companies and the median revenue multiple for comparable transactions.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Low
multiple represents a 15% discount to the average of the median EBITDA multiple for comparable companies and the median EBITDA multiple for comparable transactions. High multiple
represents a 15% premium to the average of the median EBITDA multiple for comparable companies and the median EBITDA multiple for comparable transactions.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Entity
value reference range is calculated using the average of the revenue and EBITDA multiple entity values. </FONT></DD></DL>

<P><FONT SIZE=2><I>Summary of Valuations  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following is a summary of the three valuation methodologies, as discussed in the preceding paragraphs. GMB applied a 40.0% weight to the comparable company and
comparable acquisition analyses and a 20% weight to the discounted cash flow analysis. GMB determined these weights based on its
experience valuing middle market companies. GMB believes a strategic acquirer would place less weight on the discounted cash flow analysis, based on historical lack of profitability, so GMB reflected
this in its summary of valuations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

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<P><FONT SIZE=2><B>Hathaway Corporation&#151;Power and Process Segment<BR>  </B></FONT><FONT SIZE=2>Summary of Valuations </FONT></P>

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<TABLE WIDTH="81%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1><B>Valuation<BR>
Methodology<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER"><FONT SIZE=1><B>Implied<BR>
Value</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER"><FONT SIZE=1><B>Dollar Amounts in Millions<BR> </B></FONT><BR></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Hathaway Corporation&#151;Power, Process &amp; Systems</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="77%"><FONT SIZE=2>Comparable Company Analysis</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$6.284&#150;$8.502</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="77%"><FONT SIZE=2>Comparable Acquisition Analysis</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$5.328&#150;$7.209</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="77%"><FONT SIZE=2>Discounted Cash Flow Analysis</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$4.564&#150;$8.421</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Entity Value Reference Range(1)</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><FONT SIZE=2>$5.558&#150;$7.969</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="CENTER"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Entity
value reference range is calculated by applying a 40% weight to the Comparable Company Analysis and the Comparable Acquisition Analysis implied value ranges and a 20% weight to
the Discounted Cash Flow Analysis implied value range. </FONT></DD></DL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GMB's
summary entity value reference range suggests that, based on quantitative valuation methods only, Qualitrol's cash offer of $6.550&nbsp;million for the power and process segment
is fair from a financial point of view. As previously discussed, however, GMB relied on quantitative analyses, in addition to certain qualitative analyses, in rendering its opinion. </FONT></P>

<P><FONT SIZE=2><I>Fee Arrangements  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of its engagement, we paid GMB a fee of $175,000 for its services as financial advisor to Hathaway in reviewing strategic alternatives for the
Company with a view to achieving the best value to shareholders, as described under the caption BACKGROUND OF THE POWER AND PROCESS TRANSACTION. For its services in rendering the fairness opinion,
Hathaway paid GMB a cash fee of $50,000. Hathaway also agreed to reimburse GMB for its reasonable out-of-pocket expenses in rendering the fairness opinion. Hathaway also agreed
to indemnify GMB against liability arising out of its engagement and to reimburse GMB for any reasonable legal and other expenses incurred in connection with investigating or defending against any
such claim. </FONT></P>

<P><FONT SIZE=2><B>DISSENTERS' RIGHTS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Article&nbsp;113 of Colorado Business Corporation Act, Hathaway shareholders have the right to dissent from the power and process transaction and obtain
payment in cash of the "fair value" of their shares of Common Stock. For that purpose, "fair value" means the value of the shares immediately before the effective date of the transaction (the closing
date of the sale), excluding any appreciation or depreciation in anticipation of the transaction, except to the extent that exclusion would be inequitable. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;113
is set forth in its entirety as Appendix&nbsp;C to this proxy statement, and the following discussion which is not a complete statement thereof, is qualified in its
entirety by reference to the full text thereof. Because the right to demand payment of the "fair value" of shares of Common Stock depends on strict compliance with Article&nbsp;113 if you wish to
exercise rights you should review the text of Article&nbsp;113 carefully. In addition, if you wish to exercise such right you should consider consulting your attorney with respect to compliance with
these statutory procedures. The following is a brief summary of the steps necessary to be taken by a shareholder to perfect rights under Colorado law to receive the fair value of shares. This summary
does not purport to be complete, and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, Article&nbsp;113. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_dq1836_1_40"> </A> </FONT> <FONT SIZE=2><I>Notice of Intent to Demand Payment.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any shareholder who wishes to dissent and obtain payment for shares shall file with Hathaway, prior to the vote on the power and process transaction, a written
notice of intention to demand payment for shares if the proposed action is effectuated, and </FONT><FONT SIZE=2><B>shall refrain from voting shares in approval of such
action</B></FONT><FONT SIZE=2>.The address to which your notice of intention to demand payment should be mailed is: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Hathaway
Corporation<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124<BR>
ATTN: Susan M. Chiarmonte </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2><I>Dissenters' Notice.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the power and process transaction is approved by the required vote of shareholders, Hathaway will mail not later than 10&nbsp;days after the Special Meeting
a notice stating that the power and process transaction was authorized and stating the proposed transaction closing date, which will be the effective date of the transaction. The notice to
shareholders will state an address at which Hathaway will receive payment demands, and a place where certificates for shares may be deposited. The notice will supply a form for demanding payment, and
the form will provide an address to which payment to the shareholder is to be made. The notice will set the date by which Hathaway must receive the payment demand and certificates for shares, which
date shall not be less than 30&nbsp;days after the date such notice to the shareholder is given to shareholders. If a record shareholder dissents with respect to shares held by any one or more
beneficial shareholders, each such beneficial shareholder must certify to Hathaway that the beneficial shareholder and the record shareholder(s) thereof have asserted, or will timely assert,
dissenters' rights as to all such shares of a beneficial owner as to which there is no limitation on the ability to exercise dissenters' rights. The notice to shareholders must be accompanied by a
copy of Article&nbsp;113. </FONT></P>

<P><FONT SIZE=2><I>Failure to Demand Payment or Deposit Certificates.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>A shareholder who fails to demand payment or fails to deposit certificates as required by the notice mailed to shareholders, shall have no
right to receive payment for shares.</B></FONT></P>


<P><FONT SIZE=2><I>Procedure to Demand Payment.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A shareholder who wishes to assert dissenters' rights shall demand payment from Hathaway, which may be effected by the demand form mentioned above, or may be
stated in another writing. A dissenting shareholder must also deposit the shareholders' certificate for shares in accordance with Hathaway's instructions. A shareholder who properly demands payment
retains all rights of a shareholder, </FONT><FONT SIZE=2><B>except the right to transfer the shares</B></FONT><FONT SIZE=2>, until the effective date of the power and process transaction. After the
effective date of the power and process transaction, a dissenting shareholder has only the right to receive payment for shares. The demand for payment and deposit of certificates is irrevocable unless
the special meeting does not occur within 60&nbsp;days after the date set by Hathaway to receive the payment demands, or unless a dissenting shareholder does not give notice to Hathaway of the
dissenting shareholder's estimate of the fair value of shares and an address at which payment may be made within 30&nbsp;days after Hathaway offered payment for dissenter's shares. </FONT></P>

<P><FONT SIZE=2><I>Payment.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the effective date of the power and process transaction, Hathaway shall pay each dissenter who properly demanded payment the amount Hathaway estimates to be
the fair value of the dissenters' shares, plus accrued interest. At the time of making payment, Hathaway must also provide to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

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<P><FONT SIZE=2>
demanding shareholders certain financial statements. Hathaway must also provide a statement of its estimate of the fair value of the shares, an explanation of how interest was calculated, a statement
of the dissenters' right to demand payment if the shareholder is dissatisfied with the payment made by Hathaway, and a copy of Article&nbsp;113. </FONT></P>

<P><FONT SIZE=2><I>Shares Acquired After Announcement of the Power and Process Transaction.  </I></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special provisions are included relating to shares acquired after announcement of the power and process transaction. Under applicable provisions, Hathaway is not
required to make payment for such shares, but may offer to pay fair value of such shares if the dissenting shareholder agrees to accept it in full satisfaction of the demand. Even though Hathaway is
not required to make payment for such shares, the dissenter may object to Hathaway's offer by following the procedures described below. </FONT></P>

<P><FONT SIZE=2><I>Procedure if Dissenter is Dissatisfied with Payment.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A dissenter may give notice to Hathaway of the dissenter's estimate of the fair value of shares and of the amount of interest due, and may demand payment of such
estimate if (i)&nbsp;the dissenter believes the amount paid by Hathaway is less than the fair value of the shares or that interest due was incorrectly calculated, (ii)&nbsp;Hathaway fails to make
payment within 60&nbsp;days after the date set by Hathaway to receive payment demand. This notice must be given by the dissenter within 30&nbsp;days after Hathaway made payment. </FONT></P>

<P><FONT SIZE=2><I>Judicial Appraisal of Shares.  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a dissenting shareholder(s) and Hathaway cannot resolve a demand for payment, Hathaway will, within 60&nbsp;days after receiving the payment demand, petition
the District Court for Arapahoe County, Colorado, to determine the "fair value" of the shareholder's shares and accrued interest. If Hathaway does not commence that proceeding within such
60-day period, it must pay the shareholder the amount demanded. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway
would be required to pay the filing fees and other court costs of the judicial proceeding, except that, if the court finds that the dissenting shareholder acted arbitrarily,
vexatiously, or not in good faith, may order the dissenting shareholder to pay Hathaway costs in the proceeding. The court may assess the fees and expenses of the attorneys and experts of the
dissenter against Hathaway if it finds that Hathaway did not substantially comply with the requirements described above, or may require either party to pay the fees and expenses of the attorneys and
experts for the other party if it finds that such party acted arbitrarily, vexatiously, or not in good faith with respect to the matters described. If the court finds that services of counsel for any
dissenter were of substantial benefit to other dissenters, and such fees should not be assessed against Hathaway, the court may award counsel reasonable fees to be paid out of amounts awarded to the
dissenters who are benefited. </FONT></P>

<P><FONT SIZE=2><B>SUMMARY OF THE POWER AND PROCESS SEGMENT ASSET PURCHASE AGREEMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe this summary describes the material terms of the Asset Purchase Agreement, whereby Hathaway Systems Corporation, Hathaway Industrial
Automation,&nbsp;Inc., and Hathaway Systems,&nbsp;Ltd. sell substantially all their assets, Hathaway Process Instrumentation Corporation sells substantially all its assets except its calibrator
product line, and Hathaway Corporation sells its investments in two China joint ventures to Qualitrol. These parties to the Asset Purchase Agreement are referred to herein as "Sellers." The parties
purchasing these assets are Qualitrol Power and its affiliate, Danaher UK Industries,&nbsp;Ltd. (referred to together as "Qualitrol"). We recommend that you read carefully the complete Asset
Purchase Agreement for the terms of the power and process transaction and other information that may be important to you. The Asset Purchase Agreement is included in this proxy statement as
Appendix&nbsp;A. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>41</FONT></P>

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<P><FONT SIZE=2><I>Consideration  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consideration we will receive in the power and process transaction is cash in the amount of $6,550,000, increased by the aggregate amount of unexpired
performance guarantees in place at closing for assumed contracts (the "performance guarantee amount"), and increased or decreased pursuant to the post-closing adjustment mechanism
described below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that, as of March&nbsp;31, 2002, the post-closing adjustment mechanism would have resulted in an increase of the purchase price of approximately $700,000. We do
not believe the final net cash purchase price (excluding the performance guarantee amount) to be less than $6,550,000; however, we cannot be certain that will be the case. </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>At
the Closing, Qualitrol will pay Hathaway Corporation (a)&nbsp;$5,800,000, plus the performance guarantee amount, (b)&nbsp;holdback $700,000 as the
non-exclusive source for effecting post-closing adjustments to the purchase price, and (c)&nbsp;holdback $50,000 to be released to Hathaway Corporation when Hathaway changes
its corporate name to a name that does not include the word "Hathaway" or any name likely to be confused with the Hathaway name.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Upon
conclusion of the post-closing adjustment process, $200,000 of the $700,000 holdback, less any portion thereof utilized to satisfy certain
obligations of the Sellers, will be paid by Qualitrol to Hathaway, with interest from the closing date.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>On
the first anniversary of the closing date, the remaining amount of the $700,000 holdback, less any portion thereof utilized to satisfy obligations of the
Sellers, will be paid to Hathaway, with interest from the closing date. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
the closing, a statement of net equity as of the closing, setting forth the assets it acquired in the power and process transaction, and the liabilities assumed, is to be
prepared and agreed upon. If the closing net equity is less than $4,009,313, the purchase price will be reduced by an amount equal to the amount by which the closing net equity is less than
$4,009,313. If the closing net equity is greater than $4,009,313,, the purchase price shall be increased by an amount equal to the amount by which the closing net equity is greater than $4,009,313. </FONT></P>

<P><FONT SIZE=2><I>Assets Sold  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to, and upon the terms and conditions of, the Asset Purchase Agreement, the Sellers are selling to Qualitrol substantially all the assets of the power and
process segment. </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
are retaining certain assets relating to the power and process segment, including cash (except as required to cover outstanding checks), and cash
equivalents, and deposits, certificates of deposit, collateral or performance bonds held by any customer or other persons in respect to the power and process segment. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Assumed Liabilities  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qualitrol will assume, with certain agreed upon exceptions, the following power and process segment liabilities of the Sellers: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
liabilities under the assumed contracts which accrue after the closing date;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
liabilities under the severance or deferred compensation contracts with William T. Shaw, John Merron and Philip Gale;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for trade payables, to the extent set forth on the closing statement of net equity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for product warranty obligations; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>42</FONT></P>

<HR NOSHADE>
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<A NAME="page_dq1836_1_43"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for accrued commissions to the extent set forth on the closing statement of net equity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all-pre-closing
liabilities for accrued expenses to the extent set forth on the closing statement of net equity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for accrued payroll and accrued fringe benefits to the extent set forth on the closing statement of net equity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for accrued payroll and other taxes to the extent set forth on the closing statement of net equity (other than income
taxes, and certain sales or use taxes of the Sellers and;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
pre-closing liabilities for deferred revenue to the extent set forth on the closing statement of net equity. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Excluded Liabilities  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except for the Assumed Liabilities, the Sellers shall retain all, and Buyers shall not have any responsibility for: (i)&nbsp;any Liabilities of the Sellers,
whether or not related to the Acquired Assets or the Business; (ii)&nbsp;any product liabilities (but not any Assumed Warranties) related to or arising in connection with any product manufactured or
sold by the Sellers prior to the Closing Date, (iii)&nbsp;any Liabilities involving asbestos or any asbestos-related products, (iv)&nbsp;any Liabilities arising in connection with the Supply Bond,
and (v)&nbsp;any expenses of the Sellers relating to this Agreement and the transactions contemplated hereunder. </FONT></P>


<P><FONT SIZE=2><I>Closing  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The closing of the sale of the power and process transaction will take place on the second business day following the satisfaction or waiver of all conditions to
closing, or at such other time and date as Qualitrol and Hathaway may mutually agree. We expect the closing to occur before July&nbsp;31, 2002. </FONT></P>

<P><FONT SIZE=2><I>Representations and Warranties of Sellers  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the Asset Purchase Agreement, we represent and warrant to Qualitrol with respect to the matters set forth below, and subject to certain limitations, we have
agreed to indemnify Qualitrol for any breach of the representations and warranties: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>due
organization, existence and good standing;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>authorization
and validity of the Asset Purchase Agreement;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>conflicts
with the Asset Purchase Agreement;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>ownership
of the Sellers;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>financial
statements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>environmental
matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>assets
acquired by Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>real
property matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>intellectual
property matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>accounts
receivable;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>books
and records; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>43</FONT></P>

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<A NAME="page_dq1836_1_44"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>licenses
and permits;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>liabilities;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>material
contracts;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>significant
customers and vendors;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>order
backlog;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>governmental
consents;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>insurance;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>labor
and employment matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>employee
benefit plan matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>conformity
of Sellers' operations with law;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>warranty
and product matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>tax
matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>absence
of changes;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>inventory
matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>no
unlawful payments;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>brokers'
fees;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>government
contracts; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>bank
accounts and powers of attorney. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>For
a complete text of the representations and warranties by Sellers, refer to Section&nbsp;4 of the Asset Purchase Agreement. </FONT></P>

<P><FONT SIZE=2><I>Representations and Warranties of Qualitrol  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the Asset Purchase Agreement, Qualitrol represents and warrants to us with respect to the matters set forth below, and subject to certain limitations,
Qualitrol has agreed to indemnify us for any breach or default of the representations and warranties: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>due
organization, existence and good standing;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>authorization
and validity of the Asset Purchase Agreement; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>conflicts
with the Asset Purchase Agreement. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Covenants  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Buyers and the Sellers each covenant to use their reasonable best efforts to cause conditions in the Asset Purchase Agreement to be satisfied at or prior to
closing. In addition, Sellers covenant to conduct the power and process business in the ordinary course consistent with past practices and not to engage in certain prohibited activities. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Sellers agree not to solicit other proposals for the sale of the power and process business, </FONT><FONT SIZE=2><I>provided that,</I></FONT><FONT SIZE=2> the Sellers may furnish
information and access to a third party if the Hathaway Board determines, after consultation with its local counsel and investment banking firm, that an acquisition proposal is reasonably likely to
result in a transaction that is superior in comparison to the proposed sale to Qualitrol and the terms of the Asset Purchase Agreement, and that failure to take such action </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>44</FONT></P>

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<BR>

<P><FONT SIZE=2>
would result in a breach of the fiduciary duties of Hathaway's Board. In the event the Sellers receive an acquisition proposal or inquiry, they are obliged to inform Qualitrol of such event and the
material terms thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the closing, Qualitrol will offer employment at will and benefits to certain employees of the power and process business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
upon the closing, the "Hathaway" name and related tradenames, trademarks and service marks become the exclusive property of Qualitrol. Prior to the first anniversary of the
closing, each Seller and its affiliates must take all action to change its corporate name to a name that does not include the word "Hathaway," or any name that could be confused or associated with any
Hathaway name. However, the Sellers and their affiliates have a limited right to use the Hathaway name for a period of up to one year following the closing, but not in connection with any products or
services currently manufactured or marketed in connection with the power and process business. This right may be earlier terminated in certain situations. </FONT></P>

<P><FONT SIZE=2><I>Conditions to Closing  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party's obligation to complete the sale and purchase of our power and process segment is subject to the prior satisfaction or waiver of certain conditions.
The following list sets forth those material conditions that have not yet been satisfied and therefore must be satisfied or waived before completion of the power and process transaction. </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>No
action or regulation by a governmental authority which would make the sale illegal may have been enacted and no action to restrain the consummation of a
transaction shall have been undertaken;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Our
shareholders shall have approved the power and process transaction; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
must have benefit plans in place to cover our power and process employees it is hiring, but if such benefit plans are not implemented before the
65<SUP>th</SUP> day following the date of the Asset Purchase Agreement, Qualitrol and the Sellers have agreed to waive this closing condition. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Conditions to Our Obligations  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our obligations to effect the closing are subject to the following additional conditions, any of which may be waived: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>All
representations and warranties made by Qualitrol must be true and correct as of the closing or as of any prior specific date;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
must have performed all obligations to be performed by it prior to the closing;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
must have delivered all items required to be delivered; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>No
action may be pending to prevent consummation of the transaction. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>45</FONT></P>

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<UL>
<UL>
</UL>
</UL>
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<P><FONT SIZE=2><A
NAME="page_dt1836_1_46"> </A> </FONT></P>

<!-- TOC_END -->

<P><FONT SIZE=2><I>Conditions to Obligations of Qualitrol  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of Qualitrol to effect the closing are subject to the satisfaction of the following conditions, any of which may be waived: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>All
representations and warranties made by us shall be true and correct as of the closing or as of any prior specified date;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
must have performed all obligations to be performed by us prior to the closing;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
must shall have performed all obligations to be performed by us prior to the closing;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
must have made due diligence deliveries as required by the Asset Purchase Agreement;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>There
must have been no material adverse change in the rights of Qualitrol in the assets to be acquired;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
must have received evidence that any contracts to which any former employee of the power and process segment was a party has been terminated at no
cost to Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>No
action, suit or proceeding may be pending to prevent consummation of the power and process transaction;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
must have obtained consent to the sale and transfer of the Power interests and Zibo interests to Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
must have provided to Qualitrol satisfactory access to our power and process employees to be hired by Qualitrol, and;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
must have received evidence that we have obtained the required consents to the transaction. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Indemnification  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Section&nbsp;8 of the Asset Purchase Agreement, the Sellers are obligated to indemnify and hold harmless Qualitrol from and against all losses, subject to
certain limitations, Qualitrol incurs in respect of: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>breach
of any of our representations, warranties; covenants or agreements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
operation of the acquired assets prior to the closing date;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>violation
of any contract by us prior to the closing date;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>certain
intellectual property matters;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>non-assumed
liabilities;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>assumed
warranties in excess of the warranty reserve set forth in the closing statement of net equity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>certain
terminations of agreements with certain independent sales representatives;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>liability
of any of Sellers' tax obligations, except for those assumed by Qualitrol in the Asset Purchase Agreement; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>damages
incident to the enforcement of the indemnification provisions. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qualitrol
is obligated to indemnify and hold harmless the Sellers from and against all losses, subject to certain limitations, that any of them incur in respect of: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>breach
of any of Qualitrol's representations, warranties, covenants or agreements; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>46</FONT></P>

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<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Qualitrol
assumed liabilities;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>certain
payments made by the Sellers to satisfy their obligations on a performance bond relating to the Lake Mead project; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>damages
incident to the enforcement of the indemnification provisions. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally,
we have no liability for indemnification until the aggregate amount of damages exceeds two percent of the purchase price, at which point we are obligated to indemnify only
with respect to the aggregate amount of damages which are in excess of such two percent amount. This limitation does not apply to purchase price adjustments, damages in connection with breach of our
covenants, or certain representations and warranties, or our obligations to indemnify Qualitrol for violation of any contract by us prior to the closing date, certain intellectual property matters,
non-assumed liabilities, assumed warranties in excess of the warranty reserve, certain terminations of agreements with our independent sales representatives and liability of the Sellers'
non-assumed tax liabilities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally,
Qualitrol has no liability for indemnification until the aggregate amount of damages exceeds two percent of the purchase price, at which point Qualitrol is obligated to
indemnify us only with respect to the aggregate amount of all damages which are in excess of such two percent amount. However, those limitations do not apply to purchase price adjustments, damages in
connection with breaches of Qualitrol's covenants, or certain representations and warranties, or Qualitrol's obligations to indemnify the Sellers for the assumed liabilities, certain intellectual
property matters, the assumed tax liabilities and certain matters relating to performance of the Lake Mead contract. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
aggregate indemnification obligation is limited to an amount equal to the purchase price, but this limitation does not apply to purchase price adjustments or, generally, to matters
which are not subject to the "two percent basket" described in the preceding paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
aggregate indemnification obligation of Buyers is limited to the purchase price, but this limitation does not apply to damages in connection with breaches of Qualitrol's covenants or
certain representations or warranties of Qualitrol, or Qualitrol's obligations to iondemnify the Sellers for the assumed liabilities, certain intellectual property matters, and the assumed tax
liabilities. </FONT></P>

<P><FONT SIZE=2><I>Termination of Asset Purchase Agreement  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding approval by our shareholders of the Asset Purchase Agreement and the transactions contemplated by the Asset Purchase Agreement, the Asset Purchase
Agreement may be terminated, and the sale of our power and process segment may be abandoned, at any time prior to the closing in any of the following ways: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
the mutual consent of us and Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
either us or Qualitrol if:
<BR><BR></FONT>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>any
governmental authority takes action to prohibit the transaction;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
Asset Purchase Agreement is not approved by the requisite vote of our shareholders; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>The
power and process transaction shall not have been consummated by August&nbsp;17, 2002, unless the failure is the result of a material breach by the
party seeking to terminate. </FONT></DD></DL>
</DD></DL>
<UL>
<BR>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
Qualitrol if we shall have failed to perform in any material respect any agreement to be performed by us;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
Qualitrol if there has been a material breach of any representation and warranty by us;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
us if Qualitrol shall have failed to perform in any material respect any agreement to be performed by them; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>47</FONT></P>

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<A NAME="page_dt1836_1_48"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
us if there has been a material breach of any of the representations and warranties of Qualitrol;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>By
Qualitrol or us if our Board of Directors shall have determined to recommend a superior acquisition proposal, and we have complied with notice
requirements to Qualitrol of events leading to the determination and paid the termination fee described below. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><I>Consequences of Termination  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of termination by us or Qualitrol, the Asset Purchase Agreement will become void and there will be no liability on the part of Qualitrol or us except
for violations of the Agreement which resulted in liability that continues beyond termination, and payment by us of the termination fee, if applicable. </FONT></P>

<P><FONT SIZE=2><I>Termination Fee  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Asset Purchase Agreement is terminated because we fail to get shareholder approval, our Board of Directors does not recommend approval of the Asset
Purchase Agreement or modifies or withdraws approving recommendations made, or we recommend a superior acquisition proposal, then we must pay Qualitrol a termination fee equal to $300,000 and
Qualitrol's aggregate legal expenses, not to exceed $150,000, incurred in connection with the acquisition. If the Asset Purchase Agreement is terminated because it has not been consummated on or
before August&nbsp;17, 2002, and the terminating party is not responsible for the failure to consummate the transaction, if we have failed to perform any of our obligations or if we are in breach of
any of our representations and warranties and within 12&nbsp;months after the date of termination an acquisition proposal is consummated by us, we must also pay the termination fee and legal
expenses to Qualitrol. </FONT></P>

<P><FONT SIZE=2><I>Expenses  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Qualitrol and Sellers each will bear their respective expenses incurred in connection with the sale of the power and process segment. Our expenses include the
cost of our agents, representatives, financial advisors, accountants and counsel incurred in connection with the Agreement, and all fees and expenses associated with Blitzer, Ricketson&nbsp;&amp; Co.
Our expenses also include the costs of preparing, filing with the Securities and Exchange Commission, printing and mailing this proxy statement, in
addition to the proxy solicitation material mailed to shareholders. We may also retain the services of D.F. King&nbsp;&amp; Co.,&nbsp;Inc. in the solicitation of proxies at a cost not expected to
exceed $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, plus expenses. </FONT></P>


<P><FONT SIZE=2><I>Non-Competition and Confidentiality  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Asset Purchase Agreement, if the closing occurs the Sellers will agree that, for a period of four years following the closing date they will not
directly or indirectly compete with any service or product of Qualitrol with respect to the power and process service or products. We also agree that we will not solicit persons who have been, within
two years prior thereto, a customer of Qualitrol with respect to the power and process business. Further, we will agree to not hire away employees or people with a contractual relationship with
Qualitrol. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will also agree that we will not disclose any confidential information with respect to the power and process business. </FONT></P>

<P><FONT SIZE=2><B>ACCOUNTING TREATMENT OF THE POWER AND PROCESS TRANSACTION  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect the sale of the power and process segment to close before the end of July&nbsp;2002. We expect a pretax gain of approximately $2,000,000, subject to
closing adjustments. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>48</FONT></P>

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<A NAME="page_dt1836_1_49"> </A>
<BR>

<P><FONT SIZE=2><B>MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE POWER AND PROCESS TRANSACTION  </B></FONT></P>

<P><FONT SIZE=2><I>General  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summary of the anticipated material Federal income tax consequences to Hathaway of the sale of the power and process segment to Qualitrol is not
intended to be a complete description of the Federal income tax consequences of the proposed power and process transaction. This summary is based upon the Internal Revenue Code of 1986, as amended,
the regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as presently in effect. However, each of these authorities is subject to change, possibly with
retroactive effect; thus, we cannot assure you that future
legislation, regulations, administrative interpretations, or court decisions will not significantly change the Federal income tax consequences discussed herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
rulings have been requested or received from the Internal Revenue Service as to the matters discussed in this proxy statement, and there is no intent to seek any rulings. Accordingly,
we can provide no assurance that the Internal Revenue Service will not challenge the tax treatment of certain matters discussed or, if it does challenge the tax treatment, that it will not be
successful. </FONT></P>

<P><FONT SIZE=2><I>Federal Income Tax Consequences to Hathaway  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to recognize a gain for Federal income tax purposes upon a sale of the assets and transfer of certain liabilities of the power and process segment to
Qualitrol pursuant to the Asset Purchase Agreement. However, the determination of whether gain or loss is recognized will be made with respect to each of the assets to be sold. Accordingly, we may
recognize gain on the sale of some assets and a loss on the sale of others. The amount of gain or loss recognized by Hathaway with respect to the sale of a particular asset will be measured by the
difference between the amount realized by Hathaway on the sale of that asset, and our tax basis in that asset. The amount realized on the sale will include the amount of cash received, plus the amount
of liabilities assumed by Qualitrol. For purposes of determining the amount realized by us with respect to specific assets, the total amount realized will generally be allocated among the assets
according to the rules prescribed under the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
cannot compute the amount of gain that we might recognize as a result of the sale of the power and process assets until gains and losses from other transactions during the taxable
year are known. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
power and process transaction may subject us to state or local income, franchise, sales, use or other tax liabilities in state or local jurisdictions in which the assets of the power
and process segment are located. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dt1836_regulatory_approval"> </A>
<A NAME="toc_dt1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>REGULATORY APPROVAL    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that no regulatory approvals are required in connection with the sale. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dt1836_stockholders_agreement"> </A>
<A NAME="toc_dt1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>STOCKHOLDERS AGREEMENT    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to a separate Stockholders Agreement, Eugene E. Prince, Chairman of the Board of Directors of Hathaway and holder of 16% of the Common Stock, Elizabeth
J. Prince, as Trustee under trusts for
six Prince children, holding 2% of the Common Stock, and Richard D. Smith, chief executive officer and a director of Hathaway, agreed to vote all such shares in favor of the power and process
transaction and to approve the Asset Purchase Agreement. In addition, Eugene E. Prince, Elizabeth J. Prince, and Richard D. Smith have granted to Buyers a proxy to vote their shares in favor of the
power and process transaction and the Asset Purchase Agreement. In addition, each shareholder agreed they will not transfer shares and will not shop the power and process transaction. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>49</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ea1836_1_50"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ea1836_historical_information_about_t__his02748"> </A>
<A NAME="toc_ea1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HISTORICAL INFORMATION ABOUT THE COMBINED POWER AND PROCESS SEGMENT    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ea1836_hathaway_corporation_power_and__hat04938"> </A>
<A NAME="toc_ea1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION POWER AND PROCESS BUSINESS    <BR>    <BR>    COMBINED STATEMENTS OF NET ASSETS TO BE DISPOSED OF    <BR>    <BR>    (In Thousands)<BR>  (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>March 31,<BR>
2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Assets</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Current Assets:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>542</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>564</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>156</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Restricted cash</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>445</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>337</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>240</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Trade receivables, net of allowance for doubtful accounts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3,856</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,450</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,448</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Inventories, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,759</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,166</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,143</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Other current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>312</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>182</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>198</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total Current Assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>7,914</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,699</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,185</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Property and equipment, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>786</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>421</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>667</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Investments in joint ventures, net (Note 2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>129</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,459</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,482</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total Assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>8,829</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,579</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,336</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Liabilities and Stockholders' Investment</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Current Liabilities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Accounts payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,319</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>905</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>938</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Accrued liabilities and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,146</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,961</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,280</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Income taxes payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>186</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>150</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>154</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="58%"><FONT SIZE=2>Product warranty reserve</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>318</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>401</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>399</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total Current Liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3,969</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,417</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,771</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Commitments and Contingencies (Note 4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net Assets of Business to be Disposed of</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4,860</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,162</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,565</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>8,829</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,579</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,336</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>The accompanying notes to combined financial statements are an<BR>
integral part of these combined statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>50</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=55,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=510455,FOLIO='50',FILE='DISK038:[02DEN6.02DEN1836]EA1836A.;7',USER='CJOHNSOC',CD=';7-JUN-2002;02:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ec1836_1_51"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ec1836_hathaway_corporation_power_and__hat04241"> </A>
<A NAME="toc_ec1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION POWER AND PROCESS BUSINESS    <BR>    <BR>    COMBINED STATEMENTS OF OPERATIONS    <BR>    <BR>    (In thousands)    <BR>    <BR>    (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="91%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the nine months<BR>
ended March 31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the fiscal years<BR>
ended June 30,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,920</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,092</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>24,894</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>24,109</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Cost of products sold</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,346</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,758</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14,875</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,269</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,574</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,334</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,019</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,840</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating costs and expenses:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Selling</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,688</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,271</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,111</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,617</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>General and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,395</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,512</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,550</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,583</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Engineering and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,598</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,418</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,598</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,116</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Restructuring charge (Note 5)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>527</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>587</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total operating costs and expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,681</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,728</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,846</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,316</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Operating loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,107</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(2,394</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,827</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(2,476</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Other income (expense), net:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Equity income from investments in joint ventures (Note 2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>771</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,170</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>698</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Gain on sale of investment in joint venture (Note 2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>674</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>126</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="48%"><FONT SIZE=2>Other (expense) income, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(85</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>39</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total other income, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>589</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>766</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,165</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>863</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Loss before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(518</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,628</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(662</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,613</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Provision (benefit) for income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(18</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(560</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,628</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,595</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>The accompanying notes to combined financial statements are an<BR>
integral part of these combined statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>51</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=56,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=886631,FOLIO='51',FILE='DISK038:[02DEN6.02DEN1836]EC1836A.;9',USER='CJOHNSOC',CD=';7-JUN-2002;02:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ee1836_1_52"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ee1836_hathaway_corporation_power_and__hat04214"> </A>
<A NAME="toc_ee1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION POWER AND PROCESS BUSINESS    <BR>    <BR>    COMBINED STATEMENTS OF CASH FLOWS    <BR>    <BR>    (In thousands)    <BR>    <BR>    (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="88%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the nine<BR>
months ended<BR>
March 31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the fiscal years<BR>
ended June 30,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2><B>Cash Flows From Operating Activities:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(560</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,628</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,595</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Adjustments to reconcile net loss to net cash used in operating activities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>209</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>236</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>326</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>342</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Provision for doubtful accounts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>132</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>103</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Equity income from investments in joint ventures (Note 2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(771</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,170</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(698</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Gain on sale of investment in joint venture</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(674</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(126</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>35</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(121</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(77</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Changes in assets and liabilities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>(Increase) decrease in -</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Restricted cash</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(108</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(77</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(97</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(32</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Trade receivables</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>574</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>402</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(134</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(857</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Inventories, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(593</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(615</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(23</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(519</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Other current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(146</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(53</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=2><FONT SIZE=2>Increase (decrease) in -</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Accounts payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>414</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>194</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(33</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(80</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Accrued liabilities and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>185</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,217</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(319</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>738</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Income taxes payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>36</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(22</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="45%"><FONT SIZE=2>Product warranty reserve</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(83</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(213</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Net cash used in operating activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(691</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,009</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(2,103</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(3,010</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2><B>Cash Flows From Investing Activities:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Purchase of property and equipment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(584</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(175</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(125</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(248</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Dividend from joint venture, net of investments</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>193</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>193</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(286</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Proceeds from sale of investment in joint venture (Note 2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3,020</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>143</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Net cash provided by (used in) investing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,436</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>68</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(391</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2><B>Cash Flows From Financing Activities:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Advances from parent company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,247</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,462</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,452</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,894</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Dividend to parent company</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(3,020</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Net cash (used in) provided by financing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,773</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,462</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,452</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,894</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Effect of foreign exchange rate changes on cash</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(23</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Net (decrease) increase in cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(22</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>448</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>408</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(513</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Cash and cash equivalents at beginning of period</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>564</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>156</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>156</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>669</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2>Cash and cash equivalents at end of period</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>542</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>604</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>564</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>156</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>The accompanying notes to combined financial statements are an<BR>
integral part of these combined statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>52</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=57,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=240407,FOLIO='52',FILE='DISK038:[02DEN6.02DEN1836]EE1836A.;6',USER='CJOHNSOC',CD=';7-JUN-2002;02:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_eg1836_1_53"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="eg1836_hathaway_corporation_power_and__hat04938"> </A>
<A NAME="toc_eg1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION POWER AND PROCESS BUSINESS    <BR>    <BR>    COMBINED STATEMENTS OF NET ASSETS TO BE DISPOSED OF    <BR>    <BR>    (In thousands)    <BR>    <BR>    (Unaudited)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="94%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Net<BR>
Assets to be<BR>
Disposed of</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Cumulative<BR>
Translation<BR>
Adjustments</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Total Net<BR>
Assets to be<BR>
Disposed of</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Comprehensive<BR>
Income (Loss)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Balances, June 30, 1999</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,187</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>178</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,365</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Advances from Hathaway</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,894</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,894</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Foreign currency translation adjustment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(99</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(99</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(99</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,595</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,595</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,595</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Comprehensive loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,694</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Balances, June 30, 2000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,486</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>79</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,565</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Advances from Hathaway</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,452</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,452</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Foreign currency translation adjustment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(175</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(175</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(175</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(680</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Comprehensive loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(855</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Balances, June 30, 2001</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,258</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(96</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,162</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Dividend to Hathaway</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(3,020</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(3,020</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Advances from Hathaway</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,247</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,247</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Foreign currency translation adjustment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Net loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(560</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(560</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(560</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="38%"><FONT SIZE=2>Comprehensive loss</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(529</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Balances, March 31, 2002</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,925</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(65</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,860</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><I>The accompanying notes to combined financial statements are an<BR>
integral part of these combined statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>53</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ek1836_hathaway_corporation_power_and__hat03923"> </A>
<A NAME="toc_ek1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>HATHAWAY CORPORATION POWER AND PROCESS BUSINESS    <BR>    <BR>    NOTES TO COMBINED FINANCIAL STATEMENTS (Unaudited)    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  </B></FONT></P>

<P><FONT SIZE=2><B><I>Business  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway Corporation Power and Process Business (the Company) is engaged in the business of designing, manufacturing and selling advanced systems and
instrumentation to the worldwide power and process industries. The Company operates primarily in the United States and Europe and has joint venture investments in China (Note&nbsp;2). The Company is
wholly-owned by Hathaway Corporation (Hathaway). The accompanying combined financial statements include the accounts of the Hathaway's power and process operating segment as historically reported,
with the exclusion of the calibration business. </FONT></P>

<P><FONT SIZE=2><I>Power and Process Instrumentation  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's power instrumentation products help ensure that electric utilities provide high quality service to consumers of electricity. With manufacturing
facilities in Seattle and Belfast, Northern Ireland, and sales and engineering functions in Seattle, Belfast and Denver, the power instrumentation products group produces a comprehensive and
cost-effective range of products designed exclusively for the power industry worldwide. The Company's equipment assists the electric power system operators in operating and maintaining
proper system performance. The products, which are used to monitor and control the power generation, transmission and distribution processes, include fault recording products, fault location products,
condition monitoring (circuit breaker) products and remote terminal units for Supervisory Control and Data Acquisition (SCADA) systems. The Hathaway subsidiary corporations
involved in the power instrumentation products are Hathaway Systems Corporation, a wholly owned subsidiary of Hathaway, which operates out of Denver, Colorado and Seattle, Washington; Hathaway Process
Instrumentation Corporation, a wholly owned subsidiary of Hathaway Systems Corporation, which operates out of Seattle, Washington; and Hathaway Systems,&nbsp;Ltd., which operates out of Belfast,
Northern Ireland. Hathaway Systems,&nbsp;Ltd. is a wholly owned subsidiary of Hathaway Systems (UK) Group,&nbsp;Ltd., a corporation formed under the laws of the United Kingdom, which is a wholly
owned subsidiary of Hathaway Systems Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
process instrumentation products group manufactures and markets products for industrial applications including monitoring systems, called visual annunciators and sequential event
recorders, which provide both visual and audible alarms and are used to control processes in various plants, including electrical generating plants, chemical, petroleum, food and beverage, pulp and
paper, and textiles through Hathaway Process Instrumentation Corporation, a wholly owned subsidiary of Hathaway Systems Corporation, with offices in Seattle, Washington. </FONT></P>


<P><FONT SIZE=2><I>Systems and Automation  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;1996, Hathaway acquired Tate Integrated Systems which has since operated under the name of Hathaway Industrial Automation (Automation), a
wholly-owned subsidiary of Hathaway Systems Corporation. Automation is located near Baltimore, Maryland and is a full service supplier of process automation systems for industrial applications.
Automation has developed a software system for SCADA and distributed control systems. The Automation system has been used to automate such industrial applications as water and wastewater treatment
plants and glass manufacturing plants. The focus of the systems business has shifted from industrial automation applications to the power generation and transmission industry. Hathaway has been
successful at integrating the Automation </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>54</FONT></P>

<HR NOSHADE>
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<A NAME="page_ek1836_1_55"> </A>
<BR>

<P><FONT SIZE=2>
system with certain other Hathaway products and targeting the integrated product at substation automation applications used in the electric power industry. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Automation system provides the user the ability to securely send and receive information to and from intelligent electronic devices in transmission and distribution substations to
help monitor and control the delivery of electricity. In addition, the Automation system is used by organizations responsible for operating the transmission grid and ensuring the reliable delivery of
electricity. It is used to communicate with and control the output of power generators and to securely communicate metering information from such generators to ensure the proper billing for such
electricity. </FONT></P>

<P><FONT SIZE=2><I>China Joint Ventures  </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway has investments in two China joint ventures-a 25% interest in Zibo Kehui Electric Company&nbsp;Ltd. (Kehui) and a 40% interest in Hathaway Power
Monitoring Systems Company,&nbsp;Ltd.
(HPMS). Kehui and HPMS are part of the power and process segment and are included in the power and process transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May&nbsp;20, 2002, Hathaway announced that it had entered into an asset purchase agreement with Qualitrol Power Products, LLC, a Delaware limited liability company (Qualitrol) and
its Affiliate, Danaher UK Industries,&nbsp;Ltd., a company incorporated under the laws of the United Kingdom (DUKI). Qualitrol and DUKI are referred to herein together as "Qualitrol." Qualitrol is a
wholly owned subsidiary of Qualitrol Corporation, which is a leading supplier of instruments, controls and monitoring systems utilized on transmission and distribution equipment in the electric
utility industry. Both Qualitrol and DUKI are direct or indirect subsidiaries of Danaher Corporation. Pursuant to the agreement, Qualitrol will purchase certain assets and assume certain liabilities
from the Company. The agreed upon sale proceeds to Hathaway are $6,550,000, subject to post-closing adjustments based on the net book value of the assets and assumed liabilities as of the
closing date. The closing of this transaction is subject to the approval of Hathaway's shareholders. </FONT></P>

<P><FONT SIZE=2><B><I>Interim Financial Statements  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The interim financial statements for the nine months ended March&nbsp;31, 2002 and 2001 are unaudited and have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. In the opinion of the Company's management, the unaudited interim financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for fair
presentation. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. </FONT></P>

<P><FONT SIZE=2><B><I>Principles of Combination  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying combined financial statements include the accounts of Hathaway's Power and Process Business. All significant inter-division accounts and
transactions are eliminated in combination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments
in joint ventures, in which the ownership is at least 20% but less than 50%, are accounted for using the equity method (Note&nbsp;2). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>55</FONT></P>

<HR NOSHADE>
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<A NAME="page_ek1836_1_56"> </A>
<BR>

<P><FONT SIZE=2><B><I>Cash and Cash Equivalents  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents include instruments which are readily convertible into cash (original maturities of three months or less) and which are not subject to
significant risk of changes in interest rates. Cash flows in foreign currencies are translated using an average rate. </FONT></P>


<P><FONT SIZE=2><B><I>Restricted Cash  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash consists of certificates of deposit that serve as collateral for letters of credit issued on behalf of the Company. </FONT></P>

<P><FONT SIZE=2><B><I>Trade Receivables  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables are net of an allowance for doubtful accounts of $399,000 at March&nbsp;31, 2002, and $412,000 and $427,000 at June&nbsp;30, 2001 and 2000,
respectively. </FONT></P>

<P><FONT SIZE=2><B><I>Inventories  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, valued at the lower of cost (first-in, first-out basis) or market, are as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="54%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>March 31,<BR>
2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Parts and raw materials, net</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,372</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,348</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,053</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Finished goods and work-in-process, net</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,387</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>818</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,090</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,759</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,166</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,143</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reserves
established for anticipated losses on excess or obsolete inventories were approximately $1,270,000, $998,000 and $1,449,000 at March&nbsp;31, 2002, June&nbsp;30, 2001 and
2000, respectively. </FONT></P>

<P><FONT SIZE=2><B><I>Property and Equipment  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment is classified as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="80%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="40%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER"><FONT SIZE=1><B>Useful<BR>
lives</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>March 31,<BR>
2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="40%"><FONT SIZE=2>Machinery, equipment, tools and dies</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2-8 years</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,732</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>2,667</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3,590</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="40%"><FONT SIZE=2>Furniture, fixtures and other</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>3-10 years</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,558</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1,288</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1,568</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>4,290</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3,955</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>5,158</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="40%"><FONT SIZE=2>Less accumulated depreciation and amortization</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3,504</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3,534</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4,491</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>786</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>421</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>667</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
and amortization expense is provided using the straight-line method over the estimated useful lives of the assets. Maintenance and repair costs are charged to
operations as incurred. Major additions and improvements are capitalized. The cost and related accumulated depreciation of retired or sold property are removed from the accounts and any resulting gain
or loss is reflected in earnings. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>56</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
expense was approximately $209,000 and $236,000 for the nine months ended March&nbsp;31, 2002 and 2001, respectively. Depreciation expense was approximately $326,000 and
$342,000 in fiscal years 2001 and 2000, respectively. </FONT></P>

<P><FONT SIZE=2><B><I>Impairment of Long-Lived Assets and Intangibles  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. For assets that are held and used in operations, the asset would be considered to be impaired if the undiscounted future cash flows related to the asset did not exceed its net book
value. The amount of the impairment is assessed using the assets' fair market value, which is estimated using discounted cash flows. </FONT></P>

<P><FONT SIZE=2><B><I>Accrued Liabilities  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities consist of the following (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="54%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>March 31,<BR>
2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>June 30,<BR>
2000</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Compensation and fringe benefits</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>747</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>581</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>660</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>739</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>621</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>800</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Commissions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>429</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>457</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>367</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>Other accrued expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>231</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>302</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>453</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,146</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,961</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,280</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="54%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><B><I>Foreign Currency Translation  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with SFAS No.&nbsp;52, "Foreign Currency Translation," the assets and liabilities of the Company's foreign subsidiaries are translated into U.S.
dollars using current exchange rates. Revenues and expenses are translated at average rates prevailing during the period. The resulting translation adjustments are recorded in the cumulative
translation adjustments component of net assets of business to be disposed in the accompanying combined balance sheets. Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. </FONT></P>

<P><FONT SIZE=2><B><I>Revenue Recognition  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway Industrial Automation, a wholly-owned subsidiary of Hathaway Systems Corporation, undertakes contracts for the installation of integrated process control
systems which are based upon its proprietary software. These contracts typically require substantial customization of this proprietary software. Accordingly, in accordance with Statement of Position
(SOP) 97-2, "Software Revenue
Recognition," the Company recognizes contract revenues by applying the percentage of completion achieved to the total contract sales price. The Company determines the percentage of completion for all
contracts using the "cost-to-cost" method of measuring contract progress. Under this method, actual contract costs incurred to date are compared to total estimated contract
costs to determine the estimated percentage of revenues to be recognized. To the extent these estimates prove to be inaccurate, the revenues and gross margins, if any, reported for the period during
which work on the contract is ongoing may not accurately reflect the final results of the contract, which can only be determined upon contract completion. Provisions for estimated losses on
uncompleted contracts, to the full extent of the estimated loss, are made during the period in which the Company first becomes </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>57</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>
aware that a loss on a contract is probable. The Company's other businesses generally recognize revenue when products are delivered, persuasive evidence of an arrangement exists, selling price is
fixed, and collectibility is reasonably assured. </FONT></P>

<P><FONT SIZE=2><B><I>Comprehensive Income  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from
non-owner sources. It includes all changes in equity during a period except those resulting from investments by and distributions to shareholders. Items of comprehensive income for all
years presented are limited to cumulative translation adjustments from the translation of the financial statements of the Company's foreign subsidiaries. </FONT></P>

<P><FONT SIZE=2><B><I>Fair Values of Financial Instruments  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The carrying amounts reported in the combined balance sheets for cash and cash equivalents, restricted cash, trade receivables, accounts payable and accrued
liabilities approximate fair value because of the immediate or short-term maturities of these financial instruments. </FONT></P>


<P><FONT SIZE=2><B><I>Income Taxes  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's U.S. businesses are included in the consolidated tax returns of Hathaway. The Company records its income taxes as if it were filing a separate tax
return. The current provision for income taxes represents actual or estimated amounts payable or refundable on tax return filings each year. Deferred tax assets and liabilities are recorded for the
estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit
carryforwards. A valuation allowance may be provided to the extent deemed more likely than not that deferred tax assets will not be realized. The change in deferred tax assets and liabilities for the
period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to the tax provision or
benefit in the period of enactment. The ultimate
realization of net deferred tax assets is dependent upon the generation of future taxable income, in the appropriate taxing jurisdictions, during the periods in which temporary differences become
deductible. </FONT></P>

<P><FONT SIZE=2><B><I>Concentration of Credit Risk  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the nine months ended March&nbsp;31, 2002 and 2001 and fiscal years 2001 and 2000, no single customer accounted for more than 10% of the Company's
consolidated revenue from continuing operations or its trade receivables balance. Trade receivables subject the Company to the potential for credit risk. To reduce this risk, the Company performs
evaluations of its customers' financial condition, when necessary. </FONT></P>

<P><FONT SIZE=2><B><I>Use of Estimates  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make certain
estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>58</FONT></P>

<HR NOSHADE>
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<A NAME="page_ek1836_1_59"> </A>
<BR>

<P><FONT SIZE=2><B><I>Recently Issued Accounting Standards  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS No.&nbsp;133, "Derivative Instruments and Hedging Activities," establishes accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities. SFAS No.&nbsp;133 requires that an entity recognize all derivatives as either assets or liabilities and measure those
instruments at fair value. It also specifies the accounting for changes in the fair value of a derivative instrument depending on the intended use of the instrument and whether (and how) it is
designated as a hedge. SFAS No.&nbsp;133 was effective for all fiscal years beginning after June&nbsp;15, 1999. During 1999, the Financial Accounting Standards Board (FASB) issued SFAS
No.&nbsp;137, "Accounting for Derivative Instruments and Hedging Activities&#151;Deferral of the Effective Date of SFAS No.&nbsp;133," which delayed the effective date of SFAS
No.&nbsp;133 until all fiscal years beginning after June&nbsp;15, 2000. Through March&nbsp;31, 2002, the Company had not entered into any transactions involving derivative financial instruments
falling within the scope of SFAS No.&nbsp;133, as amended, and, therefore, the adoption of SFAS No.&nbsp;133 has had no financial statement impact. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December&nbsp;1999, the Securities and Exchange Commission staff released Staff Accounting Bulletin (SAB) No.&nbsp;101, "Revenue Recognition," to provide guidance on the
recognition, presentation and
disclosure of revenue in financial statements. The accounting and disclosures described in SAB No.&nbsp;101 must be applied no later than the fourth fiscal quarter of the Company's fiscal year
ending June&nbsp;30, 2001, retroactive to July&nbsp;1, 2000. The adoption of SAB No.&nbsp;101 has had no material impact on the Company's financial statements. However, implementation guidelines
for this bulletin, as well as potential new pronouncements regarding revenue recognition, could result in unanticipated changes to the Company's current revenue recognition policies. These changes
could affect the timing of the Company's future revenue recognition and results of operations. </FONT></P>

<P><FONT SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENTS IN JOINT VENTURES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through July&nbsp;5, 2001, the Company had three joint venture investments in China&#151;a 20% interest in Hathaway Si Fang Protection and Control
Company,&nbsp;Ltd. (Si Fang), a 25% interest in Zibo Kehui Electric Company&nbsp;Ltd. (Kehui) and a 40% interest Hathaway Power Monitoring Systems Company,&nbsp;Ltd. (HPMS).&nbsp;&nbsp;&nbsp;&nbsp;Si
Fang designs, manufactures and sells a new generation of digital protective relays, control equipment and instrumentation products for substations in power transmission and distribution systems in
China and is now the largest Chinese supplier of digital relays in China. Kehui designs, manufactures and sells cable and overhead fault location products, SCADA systems and other test instruments
within the China market and the Company may sell these products outside of China. HPMS manufactures and sells, under a license from the Company, instrumentation products designed by the Company to
electric power companies in China. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company accounts for its investments in the Chinese joint ventures using the equity method of accounting. At the time of the original investments in the Chinese joint ventures and
until the beginning of fiscal 1998, the Company determined that due to the start-up nature of the entities, their untested products and political uncertainty in China, the realization of
the initial investments and subsequent earnings (which were not significant) was uncertain; and, therefore, the Company wrote down its investments in these joint ventures to their
then-estimated fair value. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>59</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2><A
NAME="page_em1836_1_60"> </A> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operations of these joint ventures have continued to mature, their products have gained significant acceptance, and they have achieved profitability. Because
of sustained positive operating results, offset by the Company's concerns of political and business uncertainty in China, the Company recognized a portion of its share of equity in income from these
joint ventures, totaling $1,170,000 and $698,000 in fiscal years 2001 and 2000, respectively, and $771,000 for the first nine months of fiscal 2001. The Company did not recognize any portion of its
share of equity in income from these joint ventures during the first three quarters of fiscal year 2002. These amounts are included in equity income from investments in joint ventures in the
accompanying combined statements of operations and reflect the Company's share of earnings, net of write-downs, from the joint ventures' operating results for the years ended December&nbsp;31. The
Company will continue to recognize its share of equity in income (loss) from these joint ventures to the extent it believes such amounts are realizable. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
June&nbsp;30, 2001, the Company's investments and ownership interests in these joint ventures were as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="87%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="20%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>Ownership<BR>
Interest</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Investment<BR>
Net of<BR>
Sales</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Cumulative<BR>
Share of<BR>
Income<BR>
(Through<BR>
Dec. 31,<BR>
2000)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Cumulative<BR>
Dividends<BR>
Received</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Cumulative<BR>
Writedowns</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Balance<BR>
at June 30,<BR>
2001</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>Si Fang</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>642</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,625</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(453</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(484</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,330</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>Kehui</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>331</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(28</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(298</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>105</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>HPMS</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>140</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>101</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(217</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>882</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3,057</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(481</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(999</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,459</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has no future commitments relating to its investments in these joint ventures. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summarized
financial information for Si Fang as of December&nbsp;31, 2000 and 1999 (Si Fang is on a calendar fiscal year) is presented as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="79%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="46%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>As of and<BR>
For the Year Ended<BR>
December 31, 2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>As of and<BR>
For the Year Ended<BR>
December 31, 1999</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Current assets</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>34,722</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>25,539</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Non-current assets</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>14,869</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>4,785</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Current liabilities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>27,596</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>20,239</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Non-current liabilities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>6,024</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Revenues</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>48,363</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>32,959</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>12,736</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>6,834</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Net income before income taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>6,291</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>3,940</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>5,580</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT"><FONT SIZE=2>3,352</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summarized
financial information for Kehui and for HPMS is not presented because it is not significant relative to the Company's combined financial statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
fiscal 2000, the Company sold a portion of its investment in Si Fang to another partner in the joint venture, reducing its ownership from 23% to 20%. The Company received $143,000
and recognized a $126,000 gain on the sale. The gain is included in other income in the accompanying combined statement of operations. The Company reinvested the proceeds from the sale plus an </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>60</FONT></P>

<HR NOSHADE>
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<A NAME="page_em1836_1_61"> </A>
<BR>

<P><FONT SIZE=2>
additional $282,000 in cash to maintain its 20% ownership interest due to a capital call by the joint venture. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
July&nbsp;5, 2001, the Company completed the sale of its 20% equity interest in Si Fang for $3,020,000 in cash. The sale became effective upon receipt of the net proceeds in U.S.
dollars and the required approvals from the State Administration of Foreign Exchange in China. The Company sold its interest to Beijing Si Fang Tongchuang Protection and Control Co.,&nbsp;Ltd.
(Tongchuang), a Chinese company. Prior to the sale, Tongchuang held a 22% interest in Si Fang. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company recorded a pretax gain on the sale, net of selling costs, of $674,000 in the nine months ending March&nbsp;31, 2002. This amount is included in other income in the
Company's combined financial statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to the sale, the Company's net cash investment in Si Fang was $39,000. This consisted of the original acquisition of a 25% interest in Si Fang in 1994 for $175,000, subsequent
capital contributions made and proceeds received in two partial sale transactions, netting to an additional $317,000 investment and dividends received of $453,000. Since inception, the Company has
recognized equity income of $2,291,000 and gain on sales of $849,000. During fiscal years ended June&nbsp;30, 2001 and 2000, the Company recognized equity income of $1,116,000 and $670,000,
respectively. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following presents the Company's unaudited pro forma financial information for the nine months ended March&nbsp;31, 2001 and fiscal years ended June&nbsp;30, 2001 and 2000. The
pro forma statements of operations give effect to the sale of the Company's joint venture investment in Si Fang as if it had occurred at the beginning of each fiscal period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pro forma financial information is for informational purposes only and does not purport to present what the Company's results would actually have been had these transactions actually
occurred on the dates presented or to project the Company's results of operations or financial position for any future period. The gain on the sale of Si Fang is not reflected in the pro forma
financial information as it is a non-recurring item. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="53%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the nine months<BR>
ended March 31,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the fiscal year<BR>
ended June 30,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="53%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2002</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="53%"><FONT SIZE=2>Net loss, in thousands</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,005</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(2,131</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,411</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(2,034</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;INCOME TAXES  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The benefit (provision) for income taxes is based on income (loss) before income taxes as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="65%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="60%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the fiscal years ended June 30,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="60%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="60%"><FONT SIZE=2>Domestic</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(529</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,013</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="60%"><FONT SIZE=2>Foreign</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>378</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(376</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="60%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="60%"><FONT SIZE=2>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(151</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,389</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="60%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>61</FONT></P>

<HR NOSHADE>
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<A NAME="page_em1836_1_62"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Components
of the provision for income taxes are as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="65%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>For the fiscal years ended June 30,</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2001</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>2000</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Current provision (benefit):</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="57%"><FONT SIZE=2>Domestic</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="57%"><FONT SIZE=2>Foreign</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total current provision</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Deferred provision&#151;domestic</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Provision for income taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provision for income taxes differs from the amount determined by applying the federal statutory rate due to state taxes, differences in foreign tax rates and changes in the valuation
allowance. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has recorded a valuation allowance for all existing deferred tax assets due to the uncertainty related to the realization of certain deferred tax assets existing at each
balance sheet date. </FONT></P>

<P><FONT SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;COMMITMENTS AND CONTINGENCIES  </B></FONT></P>

<P><FONT SIZE=2><B><I>Leases  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2001, the Company maintained leases for certain facilities and equipment. Minimum future rental commitments under all
non-cancelable operating leases are as follows (in thousands): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="67%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="84%" ALIGN="LEFT"><FONT SIZE=1><B>Fiscal Year<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Amount</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>2002</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>548</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>2003</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>198</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>2004</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>253</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>2005</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>238</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>244</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>Thereafter</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>248</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1,729</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental
expense was $453,000 and $430,000 for the nine months ended March&nbsp;31, 2002 and 2001, respectively, and $567,000 and $568,000 in fiscal years 2001 and 2000, respectively. </FONT></P>

<P><FONT SIZE=2><B><I>Severance Benefit Agreements  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into annually renewable severance benefit agreements with certain key employees which, among other things, provide inducement to the
employees to continue to work for the Company during and after any period of threatened takeover. The agreements provide the employees with specified benefits upon the subsequent severance of
employment in the event of change in control of the Company and are effective for 24&nbsp;months thereafter. The maximum amount of salary that could be required to be paid under these contracts, if
such events occur, totaled approximately $643,400 as of June&nbsp;30, 2001. In addition to salary, severance benefits include the cost of life, disability, accident and health insurance for
24&nbsp;months, a pro-rata calculation of bonus for the current year and a gross-up payment for all federal, state and excise taxes due on the severance payment. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>62</FONT></P>

<HR NOSHADE>
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<A NAME="page_em1836_1_63"> </A>
<BR>

<P><FONT SIZE=2><B><I>Litigation  </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is involved in certain actions that have arisen out of the ordinary course of business. Management believes that resolution of the actions will not
have a significant adverse affect on the Company's combined financial position or results of operations. </FONT></P>

<P><FONT SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;RESTRUCTURING CHARGE  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of changing business conditions in the process instrumentation business, the Company restructured its process instrumentation operations in Dallas.
The restructuring consisted of Hathaway retaining a portion of the business in Dallas, moving the manufacturing of two products lines to the Company's manufacturing facility in Seattle and selling the
remaining two product lines. The costs associated with the restructuring were $587,000 for the fiscal year 2001, which includes $282,000 of employee termination expenses related to 15 employees, and
closure and moving costs of $305,000. All restructuring costs have been incurred as of June&nbsp;30, 2001. </FONT></P>

<P><FONT SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;RELATED PARTY TRANSACTIONS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hathaway provides various administrative services to the Company. The amounts charged to the Company were $984,000 and $952,000 for the nine months ended
March&nbsp;31, 2002 and 2001, respectively and $1,166,000 and $1,292,000 for the years ended June&nbsp;30, 2001 and 2000, respectively. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>63</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_eq1836_1_64"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="eq1836_other_matters_(item_2)"> </A>
<A NAME="toc_eq1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>OTHER MATTERS<BR>  (ITEM 2)    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors knows of no business to be presented for action at the Special Meeting except as described above. If other matters are properly presented
for a vote, the proxies will be voted upon such matters (including matters incident to the conduct of the meeting) in accordance with the judgment of the persons acting under the proxies. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="eq1836_independent_public_accountants"> </A>
<A NAME="toc_eq1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>INDEPENDENT PUBLIC ACCOUNTANTS    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arthur Andersen LLP served as independent auditors of the Company for the fiscal year ended June&nbsp;30, 2001. A representative of Arthur Andersen LLP is
expected to be present at the Special Meeting. He will have an opportunity to make a statement if he so desires, and is expected to be available to respond to appropriate questions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has selected Arthur Andersen LLP to audit fiscal year 2002. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="eq1836_shareholders__proposals_for_2002_annual_meeting"> </A>
<A NAME="toc_eq1836_3"> </A>
<BR></FONT><FONT SIZE=2><B>SHAREHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders' proposal for the 2002 annual meeting of shareholders had to be submitted in writing to the Secretary at the address set forth on the first page of
this proxy statement no later than May&nbsp;24, 2002, in order to be presented at the annual meeting or be considered for inclusion in the Company's 2002 proxy statement and proxy card. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>PLEASE SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY CARD.  </B></FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="49%"><HR NOSHADE><FONT SIZE=2>&nbsp;, 2002</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" ALIGN="RIGHT"><FONT SIZE=2>Hathaway Corporation</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>64</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ja1836_1_65"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ja1836_glossary_of_terms"> </A>
<A NAME="toc_ja1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>GLOSSARY OF TERMS    <BR>  </B></FONT></P>

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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=1><B>Term Used in Proxy Statement<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=1><B>Definition<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>1933 Act</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Securities Act of 1933, as amended</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
1934 Act</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Securities Exchange Act of 1934, as amended</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
1991 Stock Option Plan</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
1991 Incentive and Non-Statutory Stock Option Plan</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
2000 Stock Option Plan</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
2000 Stock Incentive Plan</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Agreement; Asset Purchase Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The Asset Purchase Agreement between Qualitrol and Sellers, copy of which is attached hereto as Appendix A.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Board; Board of Directors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The Board of Directors of Hathaway</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Business</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The production of power and process products involving power instrumentation and system automation, except the calibration instrumentation products presently conducted by Hathaway Process Instrumentation Corporation out of its Dallas, Texas
facility.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Common Stock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Common Stock, no par value, of Hathaway Corporation</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Danaher</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Danaher Corporation is a Delaware corporation with principal executive offices located at 2099 Pennsylvania Avenue, N.W., 12th Floor, Washington D.C. 20006-1813. Danaher's telephone number is (202) 828-0850. Danaher Corporation is a leading
manufacturer of Process/Environmental Controls and Tools and Components. Danaher is the ultimate parent of Qualitrol, Qualitrol Corporation and DUKI.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
GMB</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Green, Manning &amp; Bunch, Ltd. GMB is an investment banking firm, which was founded in 1988, and is located in Denver, Colorado. GMB provides financial advisory services to its clients, with an emphasis on mergers and acquisitions and institutional
private placements of debt and equity. GMB is wholly owned by CoBiz, a financial holding company.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Hathaway</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Hathaway Corporation, a Colorado corporation</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Hathaway Name</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The business name, brand name, trade name, trademark, service mark and domain name, Hathaway and any business name, brand name, trade name, trademark, service mark and domain name that includes the word "Hathaway" and any and all derivatives thereof
including, without limitation, any registration and/or application for registration of the foregoing.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<P ALIGN="CENTER"><FONT SIZE=2>65</FONT></P>

<HR NOSHADE>
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<A NAME="page_ja1836_1_66"> </A>
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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Motion Control Segment</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
A wide range of products used in the telecommunications, semi-conductor processing, industrial, medical, military and aerospace industries in the manufacturing of analytical instruments and computer peripherals. Products using motion control
technology include tunable lasers, wavelength meters and spectrum analyzers for the fiber optic industry, robotic systems for the semi-conductor industry, anti-lock braking transducers, satellite tracking systems, MRI scanners and high-definition
printers. These products are manufactured by Hathaway and its wholly owned subsidiary, Hathaway Motion Control Corporation, and its wholly owned subsidiaries, Emoteq Corporation and Computer Optical Products, Inc.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Power</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Hathaway Power Monitoring Systems Company, Ltd., an entity formed under the laws of China</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Power and Process Segment</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The Power and Process business conducted by Hathaway through four subsidiary corporations which are Hathaway Systems Corporation, Hathaway Process Instrumentation Corporation, Hathaway Systems Ltd., and Hathaway Industrial Automation, which includes
our power instrumentation products, systems and automation products, and process instrumentation products. The power and process segment includes the calibration business conducted by Hathaway Process Instrumentation Corporation, even though that
business is not being sold to Buyers, but will be sold in a separate transaction.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Power and Process Transaction</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The sale of all the power and process segment (except the calibration business) to Buyers in the transaction described in this proxy statement pursuant to the Asset Purchase Agreement attached hereto as Appendix A.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Qualitrol</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Qualitrol Power Products, LLC, a Delaware limited liability company and wholly-owned subsidiary of Qualitrol Corporation, a New York corporation, and indirect wholly-owned subsidiary of Danaher Corporation, a Delaware corporation, and Danaher UK
Industries, Ltd., incorporated under the laws of the United Kingdom, and an indirect wholly-owned subsidiary of Danaher corporation.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>66</FONT></P>

<HR NOSHADE>
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<A NAME="page_ja1836_1_67"> </A>
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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Record Date</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Sellers</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Hathaway Corporation, in the sense that all the assets being sold to Buyers are owned by Hathaway; but more specifically, Sellers means Hathaway, with respect to joint venture interests of Zibo and Power, both formed under the laws of China and four
direct and indirect subsidiary corporations of Hathaway which own the assets being sold to Buyers pursuant to the Asset Purchase Agreements, the subsidiary corporations being Hathaway Systems Corporation, Hathaway Industrial Automation, Inc.,
Hathaway Process Instrumentation Corporation (except for its calibration products), and Hathaway Systems, Ltd.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Shareholder</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Any Holder of Common Stock of Hathaway</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Special Meeting</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
The Special Meeting of Shareholders of Hathaway to be held on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002, at Lone Tree Country Club, 9808 Sunningdale Blvd., Littleton, Colorado, at 2:00 p.m.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Zibo</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Zibo Kehui Electric Company Ltd., an entity formed under the laws of China</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>67</FONT></P>

<HR NOSHADE>
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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="kc1836_appendix_a"> </A>
<A NAME="toc_kc1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>APPENDIX&nbsp;A    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ASSET PURCHASE AGREEMENT  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> By and Among  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> QUALITROL POWER PRODUCTS,&nbsp;LLC,  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> DANAHER UK INDUSTRIES LIMITED,  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> HATHAWAY SYSTEMS CORPORATION,  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> HATHAWAY INDUSTRIAL AUTOMATION,&nbsp;INC.,  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> HATHAWAY PROCESS INSTRUMENTATION CORPORATION,  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> HATHAWAY SYSTEMS,&nbsp;LTD.  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> and  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> HATHAWAY CORPORATION  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> <BR>
<BR>
<BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> made effective as of May&nbsp;17, 2002  </B></FONT></P>

<HR NOSHADE>
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<A NAME="page_kc1836_1_1"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kc1836_table_of_contents"> </A>
<A NAME="toc_kc1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>  </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="80%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I>SECTION&nbsp;1 ASSET PURCHASE AND CLOSING</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
1.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Definitions</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>1.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Acquired Assets</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>1.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Retained Assets</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>1.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Assumed Liabilities</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>1.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Excluded Liabilities</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>1.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Transfer of Contracts.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;2 PURCHASE PRICE</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
2.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Purchase Price</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>2.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Post-Closing Adjustment</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>2.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Allocation of Consideration</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>2.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Accounting Terms</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;3 CLOSING</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
3.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Location and Date</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>3.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Closing Deliveries</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;4 REPRESENTATIONS AND WARRANTIES OF THE SELLERS</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
15</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
4.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Due Organization</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
15</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Authorization; Validity</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>No Conflicts</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Capital Stock</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Financial Statements</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Environmental Matters</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.7</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Acquired Assets</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.8</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Real Property</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.9</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Intellectual Property</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.10</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Accounts Receivable</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.11</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Books and Records</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.12</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Licenses and Permits</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.13</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Liabilities.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.14</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Material Contracts</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.15</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Significant Customers and Vendors</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.16</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Backlog</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.17</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Governmental Consents</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.18</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Insurance</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.19</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Labor and Employment Matters</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.20</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Employee Benefit Plans</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.21</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Conformity with Law</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.22</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Litigation</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.23</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Warranties; Products</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.24</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Taxes</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>29</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.25</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Absence of Changes</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.26</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>[Reserved]</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.27</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Inventories</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.28</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Unlawful Payments</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=2,SEQ=74,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=555460,FOLIO='i',FILE='DISK038:[02DEN6.02DEN1836]KC1836A.;8',USER='CJOHNSOC',CD=';7-JUN-2002;02:35' -->
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.29</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Brokers' Fees</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.30</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Government Contracts</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.31</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Disclosure</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.32</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Bank Accounts; Powers of Attorney.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.33</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Electric Power.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>4.34</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Guarantee Assets.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;5 REPRESENTATIONS AND WARRANTIES OF BUYERS</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
33</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
5.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Due Organization</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
33</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>5.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Authorization; Validity</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>5.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>No Conflicts</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;6 COVENANTS</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
6.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Cause Conditions to be Satisfied</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Further Assurances</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Conduct of Business Pending Closing</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Prohibited Activities</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>35</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>No Solicitation.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>36</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Notification of Certain Matters</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.7</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Cooperation in Litigation</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.8</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Compliance with Bulk Sales Law</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.9</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Tax Matters</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.10</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>No Improper Payments</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.11</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Cooperation in Transfer of Web Site Content</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.12</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Customer Inquiries; Internet Link</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>39</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.13</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Performance Guarantees and the Lake Mead Contract.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>39</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.14</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Employees.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.15</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Shareholder Meeting.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.16</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Leases.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.17</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>"Hathaway" Name</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.18</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Holdbacks</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.19</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>[Reserved].</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.20</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Outstanding Checks; Post-Closing Payments.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.21</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Chinese Governmental Consent.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.22</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Required Consents.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.23</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Deferred Revenue.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.24</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Oral Agreements.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.25</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Access to Properties.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>6.26</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Schedules</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;7 CONDITIONS TO CLOSING</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
45</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
7.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Conditions to Obligations of Each Party to Effect the Closing</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
45</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>7.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Conditions Precedent to the Obligations of the Sellers</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>7.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Conditions Precedent to the Obligations of Buyers</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;8 INDEMNIFICATION</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
48</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
8.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
General Indemnification by the Sellers</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
48</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>8.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>General Indemnification by Buyers</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>8.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Limitation and Survival of Indemnification Obligations.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>50</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>8.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Survival and Expiration of Representations, Warranties and Covenants</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>51</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=3,SEQ=75,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1",CHK=788736,FOLIO='ii',FILE='DISK038:[02DEN6.02DEN1836]KC1836A.;8',USER='CJOHNSOC',CD=';7-JUN-2002;02:35' -->
<A NAME="page_kc1836_1_3"> </A>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>8.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Indemnification Procedures</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>52</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>8.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>No Right to Set Off</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;9 NONCOMPETITION AND CONFIDENTIALITY</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
55</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
9.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Prohibited Activities</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
55</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>9.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Confidentiality</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>9.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Reasonable Restraint</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>9.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Severability; Reformation</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>9.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Independent Covenant</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>9.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Materiality</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;10 TERMINATION, AMENDMENT AND WAIVER</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
56</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
10.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Termination</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
56</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>10.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Effect of Termination</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>58</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>10.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Amendment</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>58</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>10.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Waiver</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>58</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>10.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Termination Fee.</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>58</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><I><BR>
SECTION&nbsp;11 GENERAL PROVISIONS</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I><BR>
11.1</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I><BR>
Successors and Assigns</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><I><BR>&nbsp;</I></FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.2</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Entire Agreement</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.3</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Counterparts</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.4</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Expenses and Fees</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.5</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Specific Performance; Remedies</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.6</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Notices</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.7</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Governing Law</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>60</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.8</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Selection of a Forum</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>60</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.9</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Severability</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.10</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Absence of Third Party Beneficiary Rights</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.11</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Further Representations</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.12</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Schedules</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.13</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Public Disclosure; Press Announcements</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2><I>11.14</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP"><FONT SIZE=2><I>Interpretation</I></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>iii</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kd1836_asset_purchase_agreement"> </A>
<A NAME="toc_kd1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>ASSET PURCHASE AGREEMENT    <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>THIS ASSET PURCHASE AGREEMENT</B></FONT><FONT SIZE=2> the ("</FONT><FONT SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>") is made and
entered into this 17th day of May, 2002, by and among Qualitrol Power Products,&nbsp;LLC, a Delaware limited liability company ("</FONT><FONT SIZE=2><I>Buyer</I></FONT><FONT SIZE=2>"), Danaher UK
Industries Limited, a company incorporated under the laws of the United Kingdom ("</FONT><FONT SIZE=2><I>DUKI</I></FONT><FONT SIZE=2>", and together with Buyer, the
"</FONT><FONT SIZE=2><I>Buyers</I></FONT><FONT SIZE=2>"), Hathaway Systems Corporation, a Colorado corporation and a wholly-owned subsidiary of Parent
("</FONT><FONT SIZE=2><I>Systems</I></FONT><FONT SIZE=2>"), Hathaway Industrial Automation,&nbsp;Inc., a Colorado corporation and a wholly-owned subsidiary of Systems
("</FONT><FONT SIZE=2><I>Automation</I></FONT><FONT SIZE=2>"), Hathaway Process Instrumentation Corporation, a Colorado corporation and a wholly-owned subsidiary of Parent
("</FONT><FONT SIZE=2><I>Instrumentation</I></FONT><FONT SIZE=2>"), Hathaway Systems,&nbsp;Ltd. ("</FONT><FONT SIZE=2><I>Systems (Ireland)</I></FONT><FONT SIZE=2>"), a company incorporated under
the laws of the United Kingdom and a wholly-owned subsidiary of Hathaway Systems (UK) Group,&nbsp;Ltd. ("</FONT><FONT SIZE=2><I>Systems (UK)</I></FONT><FONT SIZE=2>"), a company incorporated under
the laws of the United Kingdom and a wholly-owned subsidiary of Systems, and Hathaway Corporation, a Colorado corporation ("</FONT><FONT SIZE=2><I>Parent</I></FONT><FONT SIZE=2>"). Each of Systems,
Automation, Instrumentation, Systems (Ireland), and Parent is individually referred to as a "</FONT><FONT SIZE=2><I>Seller</I></FONT><FONT SIZE=2>" and collectively as the
"</FONT><FONT SIZE=2><I>Sellers</I></FONT><FONT SIZE=2>". </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>RECITALS  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, the Sellers are collectively in the business of producing power and process products involving power
instrumentation and system automation (the "</FONT><FONT SIZE=2><I>Business</I></FONT><FONT SIZE=2>;" </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, such term does not include the
business of producing or selling calibration instrumentation, which calibration business is presently conducted by Instrumentation out of its Dallas, Texas facility); and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, Parent owns joint venture interests in Zibo Kehui Electric Co.,&nbsp;Ltd., a company formed under the laws of China
("</FONT><FONT SIZE=2><I>Zibo</I></FONT><FONT SIZE=2>"), and Wuhan Hathaway Power Monitoring Systems Company,&nbsp;Ltd., a company formed under the laws of China
("</FONT><FONT SIZE=2><I>Power</I></FONT><FONT SIZE=2>"), and Systems (Ireland) owns capital stock in Electric Power Research Limited, a company incorporated under the laws of the United Kingdom
("</FONT><FONT SIZE=2><I>Electric Power</I></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, the Sellers desire to sell to Buyers, and Buyers desire to purchase from the Sellers, the Business, as represented by certain
assets of Parent and substantially all of the assets of the other Sellers, including all of the joint venture interests in Zibo and Power owned by Parent and the capital stock of Electric Power owned
by Systems (Ireland) (the "</FONT><FONT SIZE=2><I>Transaction</I></FONT><FONT SIZE=2>"); and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS</B></FONT><FONT SIZE=2>, in order to induce Buyers to enter into this Agreement and to satisfy a condition to Buyers entering into this Agreement and
incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement certain of the Shareholders are entering into a Shareholder Agreement dated as of the date hereof (the "</FONT><FONT SIZE=2><I>Shareholder
Agreement</I></FONT><FONT SIZE=2>") in the form of the attached </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2>, with Buyers pursuant to which they have each agreed, among other
things, to vote for the Transaction and grant an irrevocable proxy to officers of Buyers with respect to the Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NOW, THEREFORE,</B></FONT><FONT SIZE=2> in consideration of the premises and of the representations, warranties, covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kd1836_section_1_asset_purchase_and_closing"> </A>
<A NAME="toc_kd1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;1<BR>  </B></FONT><FONT SIZE=2><B><I>ASSET PURCHASE AND CLOSING</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Definitions.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The capitalized terms used in this Agreement
and not otherwise defined shall have the following meanings (unless the context otherwise requires, such capitalized terms shall include the singular and plural and the conjunctive and disjunctive
forms of the terms defined): </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Accounts Receivable</I></FONT><FONT SIZE=2>" means all accounts and notes receivable of any of the Sellers with respect to the Business that are reflected on the
Books and Records of any of the Sellers as of the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Actual Costs</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Actual Revenue</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23(a). </FONT></P>

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<A NAME="page_kd1836_1_2"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Acquired Assets</I></FONT><FONT SIZE=2>" means all assets, properties, rights, privileges, claims, bank accounts, contracts and interests of every kind and
description, real or personal, tangible or intangible, absolute or contingent, wherever situated, whether or not carried or reflected on the Books and Records of Sellers now owned
by, registered in the name of, used or held for use, or contemplated to be used, by any of the Sellers; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the "Acquired Assets"
shall not include any Retained Assets. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Affiliate</I></FONT><FONT SIZE=2>" means, with respect to any Person, (i)&nbsp;any Person that, directly or indirectly through one or more entities, controls
or is controlled by, or is under common control with, such Person, or (ii)&nbsp;any director, officer, partner, member, manager or trustee of such Person, or (iii)&nbsp;any Person who is an
officer, director, partner, member, manager or trustee of any Person described in clauses&nbsp;(i) or (ii) of this sentence. As used herein, "controls," "control" and "controlled" means the
possession, direct or indirect, of the power to direct the management and policies of a Person, whether through the ownership of 50% or more of the voting interests of such Person or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Acquisition Proposal</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.5(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Assumed Contracts</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Assumed Liabilities</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Assumed Warranties</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(d). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Automation</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Belfast Lease</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.16(b). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Books and Records</I></FONT><FONT SIZE=2>" means all books, records, ledgers, files, documents, correspondence, lists, plats, drawings, creative materials,
advertising and promotional materials, studies, reports, sales order files, engineering order files, purchase order files, warranty and repair files, supplier lists, customer lists, dealer,
representative and distributor lists, books of account, invoices, surveys, analyses, strategies, plans, forms, designs, diagrams, specifications, technical data, production and quality control
records, manufacturing records and formulations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Business</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Business Holdback</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.1(b)(i). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Business Internet Site</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.12. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyer</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Assumed Operating Taxes</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(i). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Assumed Payroll Taxes</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(h). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Assumed Taxes</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(i). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Indemnification Threshold</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.3(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Indemnified Parties</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Buyers Material Adverse Effect</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;5.1(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Charter Documents</I></FONT><FONT SIZE=2>" with respect to any Person, means the certificate of incorporation, certificate of formation, bylaws, operating
agreements and all comparable organizational documents of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Checking Accounts</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.20(a). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Chosen Court</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;11.8. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Claim</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;3.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Date</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;3.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Net Equity</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.2(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Statement of Net Equity</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.2(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Code</I></FONT><FONT SIZE=2>" means the Internal Revenue Code of 1986, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Company Hazardous Materials Activities</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.6. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Confidential Information</I></FONT><FONT SIZE=2>" means, without limitation, information that none of the Sellers or Buyers has disclosed to the public or to the
trade with respect to present or future business, operations, services, products, research, inventions, discoveries, drawings, designs, plans, processes, models, technical information, facilities,
methods, trade secrets, copyrights, software, source code, systems, patents, procedures, manuals, specifications, any other intellectual property, confidential reports, price lists, pricing formulas,
customer lists, financial information (including the revenues, costs, or profits associated with any products or services of any of the Sellers or Buyers), business plans, lease structure,
projections, prospects, opportunities or strategies, acquisitions or mergers, advertising or promotions, personnel matters, legal matters, any other confidential and proprietary information, and any
other information not generally known outside the Sellers that may be of value to any of the Sellers or Buyers but excludes any information already properly in the public domain. "Confidential
Information" also includes confidential and proprietary information and trade secrets that third parties entrust to any of the Sellers or to Buyers in confidence. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Contracts</I></FONT><FONT SIZE=2>" means all contracts, contractual rights, understandings, commitments, notes, bonds, bids, quotes, proposals, indentures, deeds
of trust, mortgages, pledges, conditional sale or title retention agreements, equipment obligations, purchase agreements, loan or credit agreements, instruments of indebtedness, distributor
agreements, representative or agent agreements, supply agreements, and all other documents, instruments, obligations and agreements, whether oral or written. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Contracts Dispute Act</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.30(d). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Damages</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.1(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Danaher 401(k) Plan</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.14(e). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Deferred Revenue Liability</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.4(j). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Denver Facility</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.16(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Denver Facility Lease</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.16(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>DUKI</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Electric Power</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Electric Power Shares</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.4(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Environmental Permits</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.6. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Estimated Costs</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excluded Liabilities</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Expected Revenue</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23(a). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Expired Guarantees</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.13(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Frankfort Project</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>GAAP</I></FONT><FONT SIZE=2>" means United States generally accepted accounting principles applied on a consistent basis throughout the periods indicated. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Government Contract</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.30. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Governmental Authority</I></FONT><FONT SIZE=2>" means a foreign, United States, state, local or other governmental entity or municipality or subdivision thereof
or any authority, department, commission, board, bureau, agency, court or instrumentality. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Governmental Consents</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.17. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guarantee Assets</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.13. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guarantor Banks</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.13. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Hathaway Name</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.17(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Hathaway 401(k) Plan</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.14(e). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Hazardous Material</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.6(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" shall mean, with respect to any Person, without duplication, (a)&nbsp;all obligations of such Person for borrowed money,
or with respect to deposits or advances of any kind to such Person, (b)&nbsp;all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c)&nbsp;all
obligations of such Person upon which interest charges are customarily paid, (d)&nbsp;all obligations of such Person under conditional sale or other title retention agreements relating to property
purchased by such Person, (e)&nbsp;all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of such person's business), (f)&nbsp;all capitalized lease obligations of such Person, (g)&nbsp;all obligations of
others secured by any Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (h)&nbsp;all obligations of such Person under
interest rate or currency swap transactions (valued at the termination value thereof), (i)&nbsp;all letters of credit issued for the account of such Person, (j)&nbsp;all obligations of such Person
to purchase securities (or other property) which arises out of or in connection with the sale of the same or substantially similar securities or property, and (k)&nbsp;all guarantees and
arrangements having the economic effect of a guarantee by such Person of any indebtedness of any other person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Initial Payment</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.1(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Instrumentation</I></FONT><FONT SIZE=2>" shall have the meaning provided in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Intellectual Property</I></FONT><FONT SIZE=2>" shall mean any or all of the following and all rights in, arising out of, or associated therewith: (i)&nbsp;all
United States, international and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii)&nbsp;all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary or Confidential
Information, formulas, compositions, ideas, know-how, technology, products, processes, techniques, methods, research and development information, plans, proposals, technical data and
financial, marketing, business, customer, prospect and supplier lists and date pricing and cost information, business and marketing plans, and all documentation relating to any of the foregoing;
(iii)&nbsp;all copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv)&nbsp;all industrial designs and any
registrations and applications therefor throughout the world; (v)&nbsp;all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications
therefor throughout the world; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>
(vi)&nbsp;all databases and data collections and all rights therein throughout the world; (vii)&nbsp;all moral and economic rights of authors and inventors, however denominated, throughout the
world, (viii)&nbsp;domain names, web-sites and the content thereof, uniform resource locators and other names and locators associated with the Internet; (ix)&nbsp;all software,
computer programs, computer systems, modules, and related data, (x)&nbsp;all goodwill relating to any of the foregoing, and (xi)&nbsp;any similar or equivalent rights to any of the foregoing
anywhere in the world and any other intellectual property (including without limitation all rights and remedies against any past, current or future infringement of any of the foregoing and rights of
protection of interest therein under the laws of all jurisdictions). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interests</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.4(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interim Balance Sheets</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interim Financials</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Inventories</I></FONT><FONT SIZE=2>" means all inventories, including without limitation inventories of products, work-in-process,
finished goods, raw materials, supplies, equipment, parts, labels and packaging (including rights and interests in goods in transit, consigned inventory, inventory sold on approval and rental
inventory) and all returned products, samples and obsolete and nonsaleable inventory. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Item&nbsp;4 Claim</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.5(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Knowledge</I></FONT><FONT SIZE=2>," "</FONT><FONT SIZE=2><I>Known</I></FONT><FONT SIZE=2>" or similar words, when used with reference to any or all of the
Sellers shall mean the actual knowledge of Richard Smith, William Shaw, John Merron, Philip Gale Richard Lord, Dechlan Haughian and Tony Jacobson (who are the Presidents, General Managers or
Controllers of Parent, Systems, Automation, Instrumentation and Systems (Ireland), respectively) or Charles Dohnalek after due and reasonable investigation; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, the Sellers shall have no obligation to make inquiries of any customers or vendors of the Business or any other third parties, except for the Sellers' employees and
Affiliates and professional consultants, advisors or brokers to the Business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Lake Mead</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.2(a)(vi). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Lake Mead Contract</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Item&nbsp;1 on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.14(a)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Landlord</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.16(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Laws</I></FONT><FONT SIZE=2>" means all laws, orders, judgments, rules, codes, regulations, requirements, variances, decrees or ordinances of any Governmental
Authority. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Liability</I></FONT><FONT SIZE=2>" means any indirect or direct liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, either accrued, absolute, contingent, mature, unmatured or otherwise and whether known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated,
secured or unsecured. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>License</I></FONT><FONT SIZE=2>" means a license, franchise, concession, certificate, or registration. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Lien</I></FONT><FONT SIZE=2>" means any mortgage, security interest, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge, preference, priority or other security agreement, option, warrant, attachment, right of first refusal, preemptive, conversion, put, call or other claim or right, restriction on
transfer, or preferential arrangement of any kind or nature whatsoever (including any restriction on the transfer of any assets, any conditional sale or other title retention agreement, any financing
lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under any applicable Law). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Management Incentive Plan</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.19. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Manager</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.14(g). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Adverse Effect</I></FONT><FONT SIZE=2>" shall have the meaning set for in Section&nbsp;4.1. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Contracts</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.14(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Licenses</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.12. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Permits</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.12. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Name Holdback</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.1(b)(ii). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Neutral Accountant</I></FONT><FONT SIZE=2>" means the Chicago, Illinois office of PricewaterhouseCoopers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Occupied Area</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.16(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Oral Agreements</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.24. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Outstanding Checks</I></FONT><FONT SIZE=2>" means all obligations of the Sellers in the form of outstanding checks or other withdrawals against each Checking
Account as of 12:01&nbsp;a.m. the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Outstanding Checks Cash</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.2(j). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Outstanding Checks Statement</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.20(a) </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Parent</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Contracts</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.13(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Performance Guarantees</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.13(a). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permit</I></FONT><FONT SIZE=2>" means any permit, consent, authorization, approval or License from or with a Governmental Authority (including without limitation
permits, titles, Licenses, franchises or import permits necessary for the present conduct of the Business). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Person</I></FONT><FONT SIZE=2>" means a corporation (either stock or non-stock, for or non-profit), limited liability company,
association, partnership, organization, trust, joint venture or other legal entity, any individual, group of individuals or a Governmental Authority. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Personal Property</I></FONT><FONT SIZE=2>" means all of the equipment, office furniture, furnishings, office equipment, computer hardware and software,
machinery, motorized and non-motorized equipment, tools, dies, spare parts, castings, forklifts, fixtures, promotional and advertising materials (including all catalogs, brochures, videos,
plans, manuals, handbooks, and equipment), website content, leasehold and other improvements and all other tangible personal property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Power</I></FONT><FONT SIZE=2>" shall have the meaning provided in the recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Power Agreement</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.4(b). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Prime Rate</I></FONT><FONT SIZE=2>" shall mean the rate of interest announced publicly by Bank of America, from time to time, as Bank of America's "prime rate." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Purchase Price</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Purchase Price Adjustment</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.2(d). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Quotient</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Real Property</I></FONT><FONT SIZE=2>" means all interests in real property, including without limitation fee estates, leaseholds, subleaseholds, purchase
options, easements, and all buildings and other improvements thereon, together with any additions thereto or replacements thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Registered Intellectual Property</I></FONT><FONT SIZE=2>" means all United States, international and foreign: (i)&nbsp;patents and patent applications
(including provisional applications); (ii)&nbsp;registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications
related to trademarks; (iii)&nbsp;registered copyrights and applications for copyright registration; (iv)&nbsp;any other Intellectual Property that is the subject of an application, certificate,
filing, registration or other document issued, filed with, or recorded by any Governmental Authority; and (v)&nbsp;any domain name. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Required Consents</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.22. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2><A
NAME="page_ke1836_1_7"> </A> </FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT SIZE=2><I>Restricted Affiliates</I></FONT><FONT SIZE=2>" means all Affiliates of any Seller other than former employees of any Seller who would be deemed Affiliates solely
due to their former employment with such Seller. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Restricted Information</I></FONT><FONT SIZE=2>" means Confidential Information: (a)&nbsp;resulting from or arising in connection with the Sellers'
(i)&nbsp;ownership or use of the Acquired Assets or (ii)&nbsp;operation of the Business; or (b)&nbsp;provided by Buyers to the Sellers in connection with this Agreement or the transactions
contemplated herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Retained Assets</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;1.3. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revenue Projects</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.23(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sales Rep Agreements</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.1(a)(viii). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Seattle Transferred Employees</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.14(d). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Securities</I></FONT><FONT SIZE=2>" shall mean, with respect to any non-individual Person, all membership interests, units, securities, capital
stock, equity interests or other evidence of ownership in or of such Person, and all rights and interests convertible into, or exercisable or exchangeable for, or evidencing the right to subscribe for
any such membership interests, units, securities, capital stock, equity interests or other evidence of ownership. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>SEC</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.15(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Seller</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>Sellers</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the introductory paragraph. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Financial Statements</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Indemnification Threshold</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.3(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Indemnified Parties</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.2. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Intellectual Property</I></FONT><FONT SIZE=2>" shall mean all Intellectual Property now owned by, registered in the name of, or used or held for use by,
or contemplated to be used by, any of the Sellers or Electric Power, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
"Sellers' Intellectual Property" shall not include any Retained Assets. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Internet Sites</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.12. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers' Registered Intellectual Property</I></FONT><FONT SIZE=2>" means all of the Registered Intellectual Property included in the Sellers' Intellectual
Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Seller Transfer Taxes</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.9(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Shareholders</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.5(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Shareholder Agreement</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the Recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Shareholder Approval</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.2. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Shareholder Meeting</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.15(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Significant Customers</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.15(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Significant Vendors</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.15(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Superior Proposal</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;6.5(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Supply Bond</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;8.2(a)(vi). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Systems</I></FONT><FONT SIZE=2>" shall have the meaning provided in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Systems (Ireland)</I></FONT><FONT SIZE=2>" shall have the meaning provided in the introductory paragraph. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Systems (UK)</I></FONT><FONT SIZE=2>" shall have the meaning provided in the introductory paragraph. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
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<A NAME="page_ke1836_1_8"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Target Amount</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;2.2(d). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tax</I></FONT><FONT SIZE=2>" means any tax or similar charge, impost, or levy imposed by a Governmental Authority (including, without limitation, any federal,
state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever) together with any interest, penalties, fines, or additions thereto, whether disputed or not. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tax Return</I></FONT><FONT SIZE=2>" means any return (including information return), report, statement, schedule, notice, form, estimate or declaration of
estimated tax relating to or required to be filed with any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Territory</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;9.1(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Third Party Consents</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.14(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Transaction</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>20-Day Period</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.2(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Year-End Financials</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.5. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Zibo</I></FONT><FONT SIZE=2>" shall have the meaning set forth in the recitals. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Zibo Agreement</I></FONT><FONT SIZE=2>" shall have the meaning set forth in Section&nbsp;4.4(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Acquired Assets</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon and subject to the terms and
conditions of this Agreement, at the Closing, Sellers shall convey, sell, assign, transfer and deliver to Buyers, and Buyers shall purchase and acquire from the Sellers, all of the Acquired Assets,
free and clear of all Liens (except for the Liens set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.7(a)&nbsp;(ii)</I></FONT><FONT SIZE=2>). Without limiting the generality of the foregoing,
the Acquired Assets shall include each of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all
Personal Property; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;all
Sellers' Intellectual Property, including the items listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.2(b)</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;all
Inventory; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;all
Accounts Receivable, including all Accounts Receivable that are reflected on the Books and Records of any of the Sellers as of the Closing Date; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;all
Books and Records; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;all
Licenses, including the Material Licenses, to the extent transferable; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;all
Permits, including the Material Permits, to the extent transferable; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;all
rights and benefits under any Contracts; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the
leaseholds set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.2(i)</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;cash
sufficient to cover the Sellers' obligations pursuant to Section&nbsp;6.20(a) (the "</FONT><FONT SIZE=2><I>Outstanding Checks Cash</I></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;the
bank accounts set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.32</I></FONT><FONT SIZE=2>; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, the Acquired Assets shall not include any
cash balances other than the Outstanding Checks Cash; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;the
Zibo and Power Interests; and </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<A NAME="page_ke1836_1_9"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;the
Electric Power Shares. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Retained Assets</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of this
Agreement, Sellers shall retain, and the Acquired Assets shall not include (a)&nbsp;any cash (except for the Outstanding Checks Cash) or cash equivalents, including, without limitation, balances in
any savings, checking, banking or investment accounts (any such accounts), (b)&nbsp;any deposits, certificates of deposit, collateral or performance bonds held by any customers or other Persons in
respect of the Business, (c)&nbsp;those assets, Contracts, bonus plans and other arrangements listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.3 </I></FONT><FONT SIZE=2>and (d)&nbsp;and those
assets used by Parent or Instrumentation exclusively in connection with any business other than the Business (such assets referred to in clauses&nbsp;(a), (b), (c) and (d) being collectively
referred to hereinafter as the "</FONT><FONT SIZE=2><I>Retained Assets</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Assumed Liabilities</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;At the Closing, Buyers shall assume the
following liabilities and obligations of the Sellers (collectively, the "</FONT><FONT SIZE=2><I>Assumed Liabilities</I></FONT><FONT SIZE=2>"): </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all
Liabilities of the Sellers arising under the Contracts set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.4(a) </I></FONT><FONT SIZE=2>attached hereto, which
accrue after the Closing Date (collectively, the "</FONT><FONT SIZE=2><I>Assumed Contracts</I></FONT><FONT SIZE=2>"); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
notwithstanding the foregoing Buyers shall not assume or be responsible for any Liabilities which arise from defaults thereunder or
breaches thereof by any of the Sellers or any of their respective Affiliates prior to the Closing Date (whether a claim for any such default or breach is made before or after the Closing); </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;all
Liabilities of the Sellers arising under the severance or deferred compensation Contracts and the guaranty agreements with William T. Shaw, John Merron and Philip
Gale set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.4(b)</I></FONT><FONT SIZE=2>, which are also Assumed Contracts; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for trade payables, to the extent set forth on the Closing Statement of Net Equity; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, the Sellers
shall retain and Buyers shall not assume Liabilities of the Sellers for
any trade payables relating to CSD (Amerique du Nord)&nbsp;Inc. or CSD (Hathaway) GmbH; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for product warranty obligations relating to the Business ("</FONT><FONT SIZE=2><I>Assumed
Warranties</I></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for accrued and payable commissions relating to the Business to the extent set forth on the Closing Statement of
Net Equity; </FONT><FONT SIZE=2><I>provided however</I></FONT><FONT SIZE=2>, Buyers shall assume no Liabilities with respect to any Management Incentive Plan; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for accrued expenses relating to the Business, to the extent set forth on the Closing Statement of Net Equity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for accrued payroll and accrued fringe benefits relating to the Business, to the extent set forth on the Closing
Statement of Net Equity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for accrued payroll Taxes relating to the Business for any taxable period that includes but does not end on the
Closing Date, to the extent set forth on the Closing Statement of Net Equity (the "</FONT><FONT SIZE=2><I>Buyers Assumed Payroll Taxes</I></FONT><FONT SIZE=2>"); </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for accrued Taxes relating to the Business for any taxable period that includes but does not end on the Closing
Date, to the extent set forth on the Closing Statement of Net Equity (other than Buyers Assumed Payroll Taxes, income Taxes of the Sellers, sales or use Taxes of the Sellers relating to CSD (Amerique
du Nord)&nbsp;Inc. or CSD (Hathaway) GmbH, and Seller Transfer Taxes payable pursuant to Section&nbsp;6.9) (the "</FONT><FONT SIZE=2><I>Buyers Assumed Operating Taxes</I></FONT><FONT SIZE=2>",
and together with Buyers Assumed Payroll Taxes, the "</FONT><FONT SIZE=2><I>Buyers Assumed Taxes</I></FONT><FONT SIZE=2>"); and </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
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<A NAME="page_ke1836_1_10"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;all
pre-Closing Liabilities of the Sellers for deferred revenue relating to the Business, to the extent set forth on the Closing Statement of Net Equity
("</FONT><FONT SIZE=2><I>Deferred Revenue Liability</I></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Excluded Liabilities</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the
contrary, except for the Assumed Liabilities, the Sellers shall retain all, and Buyers shall not have any responsibility for: (i)&nbsp;any Liabilities of any of the Sellers, whether or not relating
to the Acquired Assets or the Business, (ii)&nbsp;any product liability (but not any Assumed Warranties) related to or arising in connection with any product manufactured or sold by the Sellers
prior to the Closing Date, (iii)&nbsp;any Liabilities involving asbestos or any asbestos-related products, (iv)&nbsp;any Liabilities arising in connection with the Supply Bond and (v)&nbsp;any
expenses of the Sellers relating to this Agreement and the transactions contemplated hereunder (collectively referred to hereinafter as the "</FONT><FONT SIZE=2><I>Excluded
Liabilities</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.6</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Transfer of Contracts</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;With
respect to any Contract that is an Acquired Asset and any claim, right or benefit arising thereunder or resulting therefrom, promptly after the date hereof, to the
extent requested by Buyers and required by the terms of the Contract that is an Acquired Asset, each Seller, as applicable, will use commercially reasonable efforts to obtain the written consent of
the other parties to any such Contract that is an Acquired Asset for the assignment thereof to Buyers in form and substance reasonably satisfactory to Buyers. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;If
such consent is not obtained with respect to any such Contract that is an Acquired Asset and Buyers elect to consummate the Closing, each Seller (as applicable) and
Buyers shall cooperate in an arrangement reasonably satisfactory to Buyers and each Seller (as applicable) under which Buyers would obtain, to the extent practicable, the claims, rights and benefits
thereunder in accordance with this Agreement, including subcontracting, sublicensing or sub-leasing to Buyers, or under which each Seller (as applicable) would enforce for the benefit of
Buyers any and all claims, rights and benefits of Seller against a third party thereto. Each Seller (as applicable) will promptly pay to Buyers all monies received by the applicable Seller under any
Contract that is an Acquired Asset or any claim, right or benefit arising thereunder not transferred to Buyers pursuant to this Section&nbsp;1.6. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke1836_section_2_purchase_price"> </A>
<A NAME="toc_ke1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;2<BR>  </B></FONT><FONT SIZE=2><B><I>PURCHASE PRICE</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.1</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Purchase Price</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In reliance on the representations,
warranties and covenants set forth herein and in full consideration of the sale, assignment, transfer and delivery of the Acquired Assets by the Sellers to Buyers, Buyers shall pay to Parent for its
own account and the account of each of the other Sellers aggregate cash consideration in an amount equal to $6,550,000 plus the amount of the Guarantee Assets as converted into U.S. dollars at the
applicable exchange rate as reported in the Wall Street
Journal published three (3)&nbsp;business days prior to the Closing, subject to increase or decrease pursuant to Section&nbsp;2.2 (the "</FONT><FONT SIZE=2><I>Purchase
Price</I></FONT><FONT SIZE=2>"), payable as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;at
Closing, Buyers shall pay to Parent for its own account and the account of each of the other Sellers, $5,800,000 plus the amount of the Guarantee Asset as converted
into U.S. dollars at the applicable exchange rate as reported in the Wall Street Journal published three (3)&nbsp;business days prior to the Closing by wire transfer of immediately available funds,
which amount represents an aggregate sum equal to the Purchase Price less the Business Holdback and the Name Holdback (the "</FONT><FONT SIZE=2><I>Initial Payment</I></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;at
Closing, Buyers shall: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;retain
$700,000 of the Purchase Price (the "</FONT><FONT SIZE=2><I>Business Holdback</I></FONT><FONT SIZE=2>") as a source for (A)&nbsp;effecting the adjustments of
the Purchase Price set forth in Section&nbsp;2.2 and (B)&nbsp;the payment and discharge of any indemnification obligations of the Sellers as set forth in </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>
Section&nbsp;8; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the parties agree that the Business Holdback is not an
exclusive source of recovery for such obligations and, to the extent such obligations exceed the Business Holdback, the Sellers shall pay to Buyers such amounts as set forth in this Agreement; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, Buyers shall have the option to seek indemnification pursuant to Section&nbsp;8 or
deduct funds from the Business Holdback to cover any amounts owing to Buyers pursuant to Section&nbsp;6.23; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;retain
$50,000 of the Purchase Price (the "</FONT><FONT SIZE=2><I>Name Holdback</I></FONT><FONT SIZE=2>") in connection with Parent's obligation to obtain Shareholder
approval of the change of Parent's corporate name pursuant to Section&nbsp;6.17(f). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;upon
the conclusion of the post-Closing adjustment process described in Section&nbsp;2.2, $200,000 of the Business Holdback, less any portion thereof
utilized to satisfy the amounts described in clauses&nbsp;(b)(i)(A) and (b)(i)(B) of this Section&nbsp;2.1 or deducted from the Business Holdback pursuant to the last clause of
Section&nbsp;2.1(b)(i), shall be paid by Buyers to Parent for its own account and the account of each of the other Sellers, in immediately available funds, together with interest thereon from the
Closing Date to the date of payment at the Prime Rate; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;upon
approval of the change of Parent's corporate name as contemplated in Section&nbsp;6.17(f) of this Agreement by the Shareholders, Buyers shall pay the Name
Holdback to Parent for its own account and the account of each of the other Sellers, in immediately available funds, together with interest thereon from the Closing Date to the date of payment at the
Prime Rate; </FONT><FONT SIZE=2><I>provided however</I></FONT><FONT SIZE=2>, Buyers shall have no obligation to pay the Name Holdback if the Shareholders do not approve the change of Parent's name as
contemplated in Section&nbsp;6.17(f). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;upon
the first anniversary of the Closing Date, the Business Holdback, less any portion thereof utilized to satisfy the amounts described in clauses&nbsp;(b)(i)(A) and
(b)(i)(B) of this Section&nbsp;2.1 or deducted from the Business Holdback pursuant to the last clause of Section&nbsp;2.1(b)(i) or previously paid pursuant to clause&nbsp;(c) of this
Section&nbsp;2.1, shall be paid by Buyers to Parent for its own account and the account of each of the other Sellers, in immediately available funds, together with interest thereon from the Closing
Date to the date of payment at the Prime Rate. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.2</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Post-Closing Adjustment</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Within
forty-five (45)&nbsp;days of the Closing Date, Buyer shall prepare and deliver to Parent an unaudited, pro forma statement of net equity as of the
Closing Date setting forth the Acquired Assets and the Assumed Liabilities (the "</FONT><FONT SIZE=2><I>Closing Statement of Net Equity</I></FONT><FONT SIZE=2>"), as well as the value of the Acquired
Assets net of the Assumed Liabilities as of the Closing Date, excluding all intercompany and related party loans, receivables and transactions and the Outstanding Checks Cash (the
"</FONT><FONT SIZE=2><I>Closing Net Equity</I></FONT><FONT SIZE=2>"). The Closing Statement of Net Equity shall: (i)&nbsp;be prepared in the format and according to the methodology that has been
consistently followed by the Sellers prior to the Closing Date; (ii)&nbsp;reflect the accounting principles set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;2.2</I></FONT><FONT SIZE=2>; and
(iii)&nbsp;to the extent consistent with the foregoing be in accordance with GAAP. All departures from GAAP on the Closing Statement of Net Equity are set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;2.2</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
Closing Statement of Net Equity shall be final and binding on each of the parties hereto and their respective Affiliates unless Parent objects, by giving written
notice within twenty (20)&nbsp;days after Parent's receipt of the Closing Statement of Net Equity (the "</FONT><FONT SIZE=2><I>20-Day Period</I></FONT><FONT SIZE=2>"), to the
computation of Closing Net Equity. Such notice shall state in reasonable detail the item or items in dispute, and shall state the amount, if any, of any adjustment that should be made to the Closing
Net Equity. Any Purchase Price Adjustment that would result from any item or items not in dispute will be paid (i)&nbsp;by the Sellers, jointly and severally, to Buyers (which payment shall first
come from the Business Holdback and thereafter, if necessary, from Sellers), or (ii)&nbsp;by Buyers to Parent for its own account and the account of each of the other Sellers, as the case may be </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>
pursuant to Section&nbsp;2.2(d), on the fifth (5th) business day following delivery of Parent's written notice of dispute, or, if Parent does not deliver notice of dispute within the
20-Day Period, on the fifth (5th) day following the end of the 20-Day Period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;In
the event of a dispute, Buyer and Parent will use their reasonable efforts to resolve any such objections and any resolution by them shall be final and binding on
them. If Buyer and Parent do not resolve any such dispute within thirty (30)&nbsp;days after receipt of Parent's written notice of dispute, then Buyer and Parent shall, within five
(5)&nbsp;business days, submit any such unresolved dispute to the Neutral Accountant which firm shall, within thirty (30)&nbsp;days of such submission, resolve such remaining dispute in accordance
with the terms of this Agreement (including, without limitation, Section&nbsp;1.4) and such resolution shall be binding and conclusive on the parties. The fees and expenses of the Neutral Accountant
shall be shared equally by Buyers, on the one hand, and the Sellers on the other hand. If issues in dispute are submitted to the Neutral Accountant for resolution, each party will furnish to the
Neutral Accountant such workpapers and other documents and information relating to the disputed issues as the Neutral Accountant may request and are available to that party, and each party will be
afforded the opportunity to present to the Neutral Accountant any material relating to the determination and to discuss the determination with the Neutral Accountant. The determination by the Neutral
Accountant of the Closing Statement of Net Equity and the Closing Net Equity as set forth in a notice delivered by the Neutral Accountant to both Buyer and Parent will be final and binding on the
parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;If
the Closing Net Equity is less than $4,009,313 (the "</FONT><FONT SIZE=2><I>Target Amount</I></FONT><FONT SIZE=2>"), the Purchase Price shall be reduced by an amount
equal to the amount by which the Closing Net Equity is less than the Target Amount. If the Closing Net Equity is greater than the Target Amount, the Purchase Price shall be increased by an amount
equal to the amount by which the Closing Net Equity is greater than the Target Amount. Any adjustment pursuant to this Section&nbsp;2.2(d) is referred to as a "</FONT><FONT SIZE=2><I>Purchase Price
Adjustment</I></FONT><FONT SIZE=2>". </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;Any
Purchase Price Adjustment shall be paid (i)&nbsp;by the Sellers, jointly and severally, to Buyers or (ii)&nbsp;by Buyers to Parent for its own account and the
account of each of the other Sellers, as the case may be (taking into account any payments made pursuant to Section&nbsp;2.2(b)), on the fifth (5th) day following final determination of the Closing
Statement of Net Equity and the Closing Net Equity, by wire transfer of immediately available funds; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that any Purchase Price Adjustment
due Buyers shall come first from the Business Holdback. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.3</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Allocation of Consideration</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within ninety (90)&nbsp;days
after Closing, the parties shall mutually agree in writing to the allocation of the Purchase Price and the Assumed Liabilities are to be allocated among the Acquired Assets in accordance with the
principles set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;2.3</I></FONT><FONT SIZE=2>. Such allocation shall be conclusive and binding upon all parties for all purposes, and no party shall file
any Tax Return or other document with, or make any statement or declaration to, any Governmental Authority that is inconsistent with such allocation. The parties hereto covenant and agree with each
other that none of them will take a position on any income tax return (including IRS Form&nbsp;8594 (Asset Allocation Statement) if required), before any Governmental Authority charged with the
collection of any income tax, or in any audit or judicial proceeding that is in any manner inconsistent with the terms of such allocation without the prior written consent of the other parties to this
Agreement, which consent shall not be unreasonably withheld. If the parties do not reach agreement as to the allocation by the end of the prescribed period, any dispute over such allocation shall be
resolved by the Neutral Accountant. The fees and expenses of the Neutral Accountant shall be borne equally by the parties. The parties (and their Affiliates) shall timely file all forms and Tax
Returns required to be filed in connection with such allocation. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.4</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Accounting Terms</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise expressly provided
herein, all accounting terms used in this Agreement shall be interpreted, and all financial statements and certificates and reports as to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>
financial matters required to be delivered hereunder shall be prepared, in accordance with GAAP consistently applied and consistent with Sellers' past practices. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke1836_section_3_closing"> </A>
<A NAME="toc_ke1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;3<BR>  </B></FONT><FONT SIZE=2><B><I>CLOSING</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.1</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Location and Date</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The closing of the transactions
contemplated by this Agreement (the "</FONT><FONT SIZE=2><I>Closing</I></FONT><FONT SIZE=2>") shall take place at the offices of Wilmer, Cutler&nbsp;&amp; Pickering, 2445 M Street, N.W., Washington,
D.C. 20037, on the second business day following the satisfaction or waiver of all conditions to Closing or at such other time and date as Buyer and Parent may mutually agree, which date shall be
referred to as the "</FONT><FONT SIZE=2><I>Closing Date</I></FONT><FONT SIZE=2>." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.2</B></FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B><I>Closing Deliveries</I></B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Upon
the terms and subject to the conditions contained herein, the Sellers shall deliver or cause to be delivered to Buyers the following at or prior to the Closing (or
prior to if so specified): </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment and Assumption Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;a duly executed Assignment and Assumption Agreement in the form
attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Bill of Sale.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;a duly executed bill of sale and assignment conveying, selling, transferring and assigning
the Acquired Assets to Buyers, free and clear of any and all Liens (except for the Liens set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.7(a)(ii)</I></FONT><FONT SIZE=2>), in the form attached
hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2>; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lien Releases.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;such releases and termination statements as are necessary for the termination and release
of any and all Liens (except for the Liens set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.7(a)(ii)</I></FONT><FONT SIZE=2>) on the Acquired Assets; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Patents and Trademarks.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;to the extent applicable, patent and trademark assignments, including the
assignment contemplated pursuant to Section&nbsp;3.2(a)(x), in form and substance reasonably satisfactory to Buyers; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Opinions of Counsel.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;opinion from counsel to the Sellers in a form reasonably acceptable to Buyers, dated as
of the Closing Date and an opinion from Kenyon&nbsp;&amp; Kenyon relating to Item&nbsp;4 on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consents and Approvals.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;evidence of the Required Consents; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Secretary's Certificate.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;certificates executed by the respective Secretaries of each Seller certifying
(a)&nbsp;copies of the Charter Documents of such Seller as in effect as of the Closing Date, including a copy of such Seller's articles of incorporation or comparable organizational document
certified by an appropriate authority in Seller's jurisdiction of incorporation, (b)&nbsp;duly enacted resolutions of the directors and stockholders of such Seller approving this Agreement and the
other documents and transactions contemplated hereby and authorizing the execution and delivery thereof, and (c)&nbsp;specimen signatures of the officers of such Seller authorized to sign this
Agreement and the other documents contemplated hereby; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Good Standing Certificates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;good standing certificates of each Seller certifying as of a date no more
than twenty (20)&nbsp;days prior to the Closing Date that each such Seller is in good standing under the laws of the jurisdiction of its incorporation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Patent Application License Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;duly executed patent application license agreement granting Buyers a
nonexclusive, fully-paid, royalty-free, perpetual, irrevocable, sublicensable, and fully transferable license to make, have made, use, offer to sell, sell, import, lease, or
otherwise dispose of any products or methods covered by a claim in any patents that </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<UL>
<UL>
<BR>

<P><FONT SIZE=2>
issue from or otherwise relate to the patent application for "Capacitor Coupled Voltage Transformers" having Serial No.&nbsp;GB 0010720.1 (and the related case having International Publication
No.&nbsp;WO 01/84164) and including, without limitation, any patent claiming priority to such applications and all divisional, continuation, continuation-in-part
applications, and all patents or reexaminations or reissues of patents which issue from or otherwise claim priority to, any of the applications identified above and all counterparts thereof, be they
in the United States or otherwise to the extent Dr.&nbsp;Ghassemi is a listed inventor in any such patent or application; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Trademark Application Assignment Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;duly executed trademark application assignment agreement
transferring to Buyers all title, rights and interests in Parent's trademark application relating to the name "Hathaway" and all goodwill associated with said name; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Outstanding Checks Statement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Parent shall deliver to Buyers the Outstanding Checks Statement; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Insurance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;evidence that Buyers have been added as additional named insureds on all liability insurance
policies included in the Acquired Assets; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Stock Certificates and Stock Powers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Stock certificates representing the Electric Power Shares, duly
endorsed in blank for transfer or accompanied by duly executed stock powers assigning the Electric Power Shares in blank, and any other documents necessary to transfer to Buyers good, valid, insurable
and marketable title to the Electric Power Shares free and clear of all Liens; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;all other consents, certificates, documents, instruments and other items reasonably
required to be delivered by any of the Sellers pursuant to this Agreement, and all such other documents, certificates and instruments as shall be reasonably requested by Buyers in order to give effect
to the transactions contemplated hereby. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Upon
and subject to the terms and conditions contained herein, Buyers shall deliver or cause to be delivered to the Sellers the following at the Closing (or prior to is
so specified): </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment and Assumption Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;a duly executed Assignment and Assumption Agreement in the form
attached hereto as Exhibit&nbsp;B; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Opinion of Counsel.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;an opinion from counsel to Buyers in a form reasonably acceptable to Parent, dated as
of the Closing Date; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consents and Approvals.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;evidence of all consents of Persons which Buyers are responsible for obtaining
pursuant to the terms of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Secretary's Certificate.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;certificate executed by the respective Secretaries of each Buyer certifying
(a)&nbsp;copies of the Charter Documents of such Buyer as in effect as of the Closing Date, including a copy of such Buyer's articles of incorporation or comparable organizational document certified
by an appropriate authority in such Buyer's jurisdiction of incorporation, (b)&nbsp;duly enacted resolutions of the directors, and stockholders if necessary, of such Buyer approving this Agreement
and the other documents and transactions contemplated hereby and authorizing the execution and delivery thereof, and (c)&nbsp;specimen signatures of the officers of such Buyer authorized to sign
this Agreement and the other documents contemplated hereby; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Initial Payment.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;the Initial Payment; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;all consents, certificates, documents, instruments and other items reasonably required to
be delivered by Buyers pursuant to this Agreement, and all such other documents, certificates and instruments as shall be reasonably requested by Parent in order to give effect to the transactions
contemplated hereby. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
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<UL>
</UL>
</UL>
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NAME="page_kf1836_1_15"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf1836_section_4_representatio__kf102287"> </A>
<A NAME="toc_kf1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;4<BR>  </B></FONT><FONT SIZE=2><B><I>REPRESENTATIONS AND WARRANTIES OF THE SELLERS</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
induce Buyers to enter into this Agreement and consummate the transactions contemplated hereby, each of the Sellers (for purposes of this Section&nbsp;4 "Sellers" includes Electric
Power), jointly and severally, represents and warrants to Buyers as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Due Organization.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Parent is duly organized, validly existing
and in good standing under the laws of the State of Colorado. Systems is duly organized, validly existing and in good standing under the laws of the State of Colorado. Instrumentation is duly
organized, validly existing and in good standing under the laws of the State of Colorado. Automation is duly organized, validly existing and in good standing under the laws of the State of Colorado.
Systems (UK) is duly organized, validly existing and in good standing under the laws of the United Kingdom. Systems (Ireland) is duly organized, validly existing and in good standing under the laws of
the United Kingdom. Electric Power is duly organized, validly existing and in good standing under the laws of the United Kingdom. Zibo is duly organized, validly existing and in good standing under
the laws of China. Power is duly organized, validly existing and in good standing under the laws of the China. Each of the Sellers and each of Zibo and Power is duly authorized and qualified to do
business under all applicable Laws to own, lease and operate its respective properties and to carry on its respective business in the places and manner now conducted, except where the failure to be so
authorized or qualified does not and will not, individually or in the aggregate, have a material adverse effect (i) on the rights of Buyer hereunder, on the Acquired Assets or Assumed Liabilities or
on the operations, affairs, prospects (to the Knowledge of any Seller and other than general economic or industry conditions or eventual technological obsolescence of products), properties, assets,
liabilities, or condition (financial or otherwise) of the Business or (ii) on the ability of the Sellers to consummate the transactions contemplated hereby or to perform their respective obligations
hereunder (a "</FONT><FONT SIZE=2><I>Material Adverse Effect</I></FONT><FONT SIZE=2>"). </FONT><FONT SIZE=2><I>Schedule&nbsp;4.1</I></FONT><FONT SIZE=2> hereto contains a list of all jurisdictions
in which Parent (with respect to the Business) or any of the other Sellers is authorized or qualified to do business. Parent has delivered to Buyer true, complete and correct copies of the respective
Charter Documents of each Seller. Neither Zibo, Power nor any Seller is in violation of, in conflict with or in default under any of their respective Charter Documents, and there exists no condition
or event which, after notice or lapse of time or both, would result in any such violation, conflict or default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Authorization; Validity.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Seller and each of Zibo and
Power has full legal right and all requisite corporate power and authority to operate and carry on its respective business as presently conducted. Each Seller has the full legal right, power and
authority to enter into, make and perform this Agreement and the transactions and other agreements and instruments contemplated hereby, subject to obtaining the requisite approval of the Shareholders
("</FONT><FONT SIZE=2><I>Shareholder Approval</I></FONT><FONT SIZE=2>"). This Agreement and all other agreements and instruments to be executed and delivered by any of the Sellers in connection
herewith, when executed and delivered by such Person(s) shall have been duly and validly authorized, executed and delivered. The execution and delivery of this Agreement and other agreements and
instruments contemplated hereby, the performance of the obligations hereunder and the consummation of the transaction by each of the Sellers have been duly and validly approved by the Board of
Directors of Parent and by the Board of Directors and stockholders of each of the Sellers (other than Parent), and constitute, or upon delivery in accordance herewith shall constitute, the valid and
binding obligations of each of the Sellers, respectively, enforceable in accordance with their respective terms. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;No Conflicts.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to obtaining Shareholder Approval and
the approvals or consents set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.3</I></FONT><FONT SIZE=2> or on other Schedules to this Agreement, the execution, delivery and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>
performance of this Agreement and all other agreements and instruments contemplated hereby and the consummation of the transactions contemplated hereby and thereby by the Sellers will not: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;conflict
with, result in a breach or violation of, or require any consent, approval or authorization under, any of the Charter Documents of Sellers, Zibo or Power; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;conflict
with, result in a default or termination under, give any Person a right of termination, cancellation, acceleration, suspension or revocation under, result in
the loss of a material benefit under, or require any consent, approval or authorization under, any Material Contract to which any of the Sellers is a party or by which any of the Sellers or any of
their respective properties, rights or assets are bound, or any Material License or Material Permit that is included in the Acquired Assets; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;result
in the creation or imposition of any Lien on the Business, the Acquired Assets or the Assumed Contracts; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;violate
any Law to which any of the Sellers or any of their respective properties, rights or assets are subject or by which any of the Sellers or any of their respective
properties, rights or assets are bound; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;constitute
an event which, after notice or lapse of time or both, would result in any conflict, breach, violation, default, requirement, loss, creation or imposition of
any Lien, termination or impairment or similar event described in Section&nbsp;4.3(a) through (d). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Capital Stock.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
authorized capital stock of Systems consists solely of 1,000,000 shares of common stock, of which 1,000 shares are issued and outstanding. All of the issued and
outstanding shares of common stock, as well as all securities convertible into or exchangeable for shares of Systems common stock, are held beneficially and of record by Parent. The authorized capital
stock of Automation consists solely of 50,000 shares of common stock, of which 100 shares are issued and outstanding. All of the issued and outstanding shares of Automation common stock, as well as
all securities convertible into or exchangeable for shares of Automation common stock, are held beneficially and of record by Systems. The authorized capital stock of Instrumentation consists solely
of 1,000 shares of common stock, of which 1,000 shares are issued and outstanding. All of the issued and outstanding shares of Instrumentation common stock, as well as all securities convertible into
or exchangeable for shares of Instrumentation common stock, are held beneficially and of record by Parent. The authorized capital stock of Systems (Ireland) consists solely of 5,000,000 shares of
common stock, of which 10,206 shares are issued and outstanding. All of the issued and outstanding shares of Systems (Ireland) common stock, as well as all securities convertible into or exchangeable
for shares of Systems (Ireland) common stock, are held beneficially and of record by Systems (UK). The authorized capital stock of Electric Power consists solely of 100 shares of common stock, of
which 100 shares are issued and outstanding. Systems (Ireland) holds beneficially and of record 60 of the issued and outstanding shares of Electric Power (the "</FONT><FONT SIZE=2><I>Electric Power
Shares</I></FONT><FONT SIZE=2>"). Dr.&nbsp;Foroozan Ghassemi holds beneficially and of record 40 of the issued and outstanding shares of Electric Power. All of the issued and outstanding shares of
Electric Power common stock are held beneficially and of record by either Systems (Ireland) or Dr.&nbsp;Foroozan Ghassemi. No securities convertible into or exchangeable for shares of Electric Power
common stock exist. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Parent
holds of record and owns beneficially the joint venture interests (the "</FONT><FONT SIZE=2><I>Interests</I></FONT><FONT SIZE=2>") in Zibo and Power set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.4(b)</I></FONT><FONT SIZE=2>, as determined
pursuant to the Power Agreement and Zibo Agreement (as defined below) identified on such Schedule and previously
delivered by Parent to Buyers. Parent owns such Interests free and clear of any restrictions on transfer, taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities, claims and
demands, except as </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>
set forth in the Zibo Agreement and Power Agreement. Parent is not a party to any option, warrant, purchase right, or other contract or commitment that could require Parent to sell, transfer, or
otherwise dispose of any such Interests in Zibo or Power or obtain consent or approval of any Person in connection with the sale of the Interests, except (i)&nbsp;as set forth in section&nbsp;5.06
of the Joint Venture Contract between Wuhan Electric Power Instrument Factory, Beijing Huadian Electric Power Automation Corporation and Parent dated June&nbsp;12, 1995, as amended August&nbsp;30,
1995 (the "</FONT><FONT SIZE=2><I>Power Agreement</I></FONT><FONT SIZE=2>") or Article&nbsp;13 of the joint venture agreement between Zibo Kehui Electric Company and Hathaway
Instruments&nbsp;Co.&nbsp;Ltd dated July&nbsp;25, 1993, and assigned to Parent on February&nbsp;14, 1997 (the "</FONT><FONT SIZE=2><I>Zibo Agreement</I></FONT><FONT SIZE=2>"), (ii)&nbsp;for
this Agreement and (iii)&nbsp;for any required consent by a Chinese Governmental Authority. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.4(b)</I></FONT><FONT SIZE=2>, Parent is
not a party to any contract or commitment that could require Parent to make a capital contribution or any similar payment to Zibo or Power, and all capital contributions or similar payments required
to be made by Parent to Zibo or Power have been made by Parent. Parent has the full power and authority to convey such Interests free and clear of any Liens, except as set forth in the Power Agreement
and Zibo Agreement and subject to any required consent by a Chinese Governmental Authority. Subject to obtaining the consents or approvals sets forth in section&nbsp;5.06 of the Power Agreement and
Article&nbsp;13 of the Zibo Agreement and any required consent by a Chinese Governmental Authority, Parent will convey to Buyers good and valid title to the Interests free and clear of any Liens,
(except for the Liens set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.7(a)(ii)</I></FONT><FONT SIZE=2>). Parent is not a party to any voting trust, proxy, or other agreement or understanding
with respect to the voting of any such Interests in Zibo or Power. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Systems
(Ireland) owns the Electric Power Shares free and clear of any restrictions on transfer, taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims and demands. Systems (Ireland) is not a party to any option, warrant, purchase right, or other contract or commitment that could require Systems (Ireland) to sell,
transfer, or otherwise dispose of the Electric Power Shares or obtain consent or approval of any Person in connection with the sale of the Electric Power Shares. Systems (Ireland) is not a party to
any contract or commitment that could require Systems (Ireland) to make a capital contribution or any similar payment to Electric Power and all capital contributions or similar payments required to be
made by Systems (Ireland) to Electric Power have been made by Systems (Ireland). Systems (Ireland) has the full power and authority to convey the Electric Power Shares free and clear of any Liens.
Systems (Ireland) will convey to Buyers good and valid title to the Electric Power Shares free and clear of any Liens. Systems (Ireland) is not a party to any voting trust, proxy, or other agreement
or understanding with respect to the voting of the Electric Power Shares. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial
Statements.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;4.5</I></FONT><FONT SIZE=2> includes (i)&nbsp;true and complete copies of the consolidated, unaudited Balance
Sheets for the Business as of June&nbsp;30, 2000 and June&nbsp;30, 2001 and consolidated, unaudited statements of income, cash flow and stockholders' equity of the Business for the years ended
June&nbsp;30, 2000 and June&nbsp;30, 2001 (collectively, the "</FONT><FONT SIZE=2><I>Year-End Financials</I></FONT><FONT SIZE=2>"), and (ii)&nbsp;true and complete copies of the
consolidated, unaudited Balance Sheets of the Business as of September&nbsp;30, 2001, November&nbsp;30, 2001, December&nbsp;31, 2001 and March&nbsp;31, 2002 (the
"</FONT><FONT SIZE=2><I>Interim Balance Sheets</I></FONT><FONT SIZE=2>") and consolidated, unaudited statements of income, cash flow and stockholders' equity for the Business for the three-month
period, five-month period, six-month period and nine-month period then ended (collectively, the "</FONT><FONT SIZE=2><I>Interim
Financials</I></FONT><FONT SIZE=2>," and together with the Year-End Financials, the "</FONT><FONT SIZE=2><I>Sellers' Financial Statements</I></FONT><FONT SIZE=2>"). The Sellers' Financial
Statements have been prepared in accordance with GAAP consistently applied, (x)&nbsp;subject, in the case of the Interim Financials, to normal year-end audit adjustments, which
individually or in the aggregate will not be material, and (y)&nbsp;subject, in the case of all of the Sellers' Financial Statements, to the omission of footnote information. Each Balance Sheet
included in the Sellers' Financial Statements presents fairly the consolidated financial condition of the Sellers with respect to the Business as of the date indicated thereon, and each of the
statements of income, cash flow and stockholders' equity included in the Sellers' Financial Statements presents fairly </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>
the results of the Sellers' consolidated operations with respect to the Business for the periods indicated thereon. Since the dates of the Sellers' Financial Statements, there have been no material
changes in the accounting policies of any of the Sellers (including any change in depreciation or amortization policies or rates) with respect to the Business and no revaluation of any of the Acquired
Assets by any of the Sellers. Parent has delivered to Buyers true and complete copies of all management letters, if any, relating to any audit or review of the financial statements or books of any of
the Sellers with respect to the Business, and all other letters or documentation, if any, relating to the internal controls and/or other accounting practices of any of the Sellers with respect to the
Business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.6</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Environmental Matters.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Hazardous Material.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.6</I></FONT><FONT SIZE=2>, no underground storage tanks and no amount of any substance
that has been designated by any Governmental Authority or by applicable
Law to be
radioactive, toxic, hazardous or otherwise a danger to health or the environment, including, without limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, defined as a hazardous waste pursuant to the Resource Conservation and
Recovery Act of 1976, as amended, the regulations promulgated pursuant to said laws, and addressed by the analogous state and local laws and the regulations promulgated thereunder, but excluding
office and janitorial supplies properly and safely maintained (a "</FONT><FONT SIZE=2><I>Hazardous Material</I></FONT><FONT SIZE=2>"), are present in, on or under any Real Property, including the
land and the improvements, ground water and surface water thereof, that any of the Sellers have at any time owned, occupied or leased, the presence of which in, on or under such Real Property could
reasonably be expected to give rise to liability under applicable environmental Law. No underground or aboveground storage tanks are located on Real Property owned or leased by any of the Sellers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Hazardous Materials Activities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To the Knowledge of Sellers, none of the Sellers has transported, stored,
used, manufactured, disposed of or released, or exposed its employees or others to, Hazardous Materials in violation of any Law in effect on or before the Closing Date, nor have any of the Sellers
disposed of, transported, sold, or manufactured any product containing a Hazardous Material (collectively, "</FONT><FONT SIZE=2><I>Company Hazardous Materials Activities</I></FONT><FONT SIZE=2>") in
material violation of any Laws in effect prior to or as of the date hereof to prohibit, regulate or control Hazardous Materials or any Hazardous Material Activity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Permits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Sellers holds all environmental and health Permits (the
"</FONT><FONT SIZE=2><I>Environmental Permits</I></FONT><FONT SIZE=2>") necessary for the conduct of their respective Hazardous Material Activities and other business of such Seller as such
activities and business are currently being conducted. All Environmental Permits are in full force and effect. To the Knowledge of Sellers, each of the Sellers (i)&nbsp;is in compliance in all
material respects with all terms and conditions of the Environmental Permits and (ii)&nbsp;is in compliance in all material respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in all applicable Laws relating to pollution or protection of health or the environment or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered, promulgated or approved thereunder. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.6</I></FONT><FONT SIZE=2>, to the Knowledge of each Seller, there are no
circumstances that may prevent or interfere with such compliance in the future. No
Seller currently holds any Environmental Permits in connection with the Business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Environmental Liabilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.6</I></FONT><FONT SIZE=2>, no action, proceeding, revocation proceeding,
amendment procedure, writ, injunction or claim is pending, or to the Knowledge of the
Sellers, threatened concerning any Environmental Permit, Hazardous Material or any Company Hazardous Materials Activity. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.6</I></FONT><FONT SIZE=2>, to the </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>
Knowledge of Sellers, there are no past or present actions, activities, circumstances, conditions, events, or incidents that could reasonably be expected to involve any of the Sellers (or any Person
whose Liability any of the Sellers have retained or assumed, either by contract or operation of law) in any environmental or health litigation, or impose upon any of the Sellers (or any Person whose
Liability any of the Sellers have retained or assumed, either by contract or operation of law) any material environmental, health or safety Liability including, without limitation, common law tort
liability. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.7</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Acquired Assets.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
Sellers as a group have good, valid and marketable title to all of the Acquired Assets, free and clear of all Liens other than (i)&nbsp;Liens set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.7(a)(i)</I></FONT><FONT SIZE=2> each of which the
Sellers shall terminate as of the Closing, and (ii)&nbsp;Liens set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.7(a)(ii)</I></FONT><FONT SIZE=2>. The Acquired Assets constitute all of the assets, properties, rights, privileges, claims, contracts
and interests of every
kind and description, real or personal, tangible or intangible, absolute or contingent, wherever situated, whether or not carried or reflected on the Books and Records of Sellers, now owned by,
registered in the name of, used or held for use or contemplated to be used, by any of the Sellers, other than the Retained Assets. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.7(a)(iii)</I></FONT><FONT SIZE=2>, there are no assets
used, or contemplated to be used, in the Business by any of Sellers that are not an Acquired Asset. All
leases and subleases included in the Acquired Assets are valid and enforceable in accordance with their respective terms, are in full force and effect, and there is not under any such lease any
material default by any of the Sellers or, to the Sellers' Knowledge, by any other Person under any such lease, or any condition, event or act which would constitute such a material default. No
Affiliate of any Seller, other than the other Sellers, Zibo, Power and Electric Power engage in the Business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;All
of the tangible Acquired Assets have been maintained in a reasonably prudent manner, are in good operating condition and repair, and no maintenance with respect
thereto has been deferred or delayed, except in each case where the failure to so maintain or such deferral or delay, as applicable, has not resulted in and is not reasonably likely to result in a
Material Adverse Effect. Except for evaluation and demo equipment, which is located on customer sites and does not, in the aggregate, exceed a fair market value of $350,000, all tangible Acquired
Assets are located on Sellers' Real Property. </FONT><FONT SIZE=2><I>Schedule&nbsp;4.7(b)</I></FONT><FONT SIZE=2> sets forth an accurate list of (i)&nbsp;all Acquired Assets included on the
December&nbsp;31, 2001 Interim Balance Sheet, and (ii)&nbsp;all other Acquired Assets with an individual book value in excess of $20,000 acquired since December&nbsp;31, 2001. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.8</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Real Property.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.8(a)</I></FONT><FONT SIZE=2> contains a complete and accurate description of all Real Property now used or held for use by any
of the Sellers in connection with the Business or the Acquired Assets (collectively, the "</FONT><FONT SIZE=2><I>Sellers' Real Property</I></FONT><FONT SIZE=2>"). The Sellers do not own any Real
Property. The Sellers as a group possess legally enforceable and transferable (subject to consent of lessors and/or sublessors) rights to use Seller's Real Property under valid and subsisting written
lease or sublease agreements. There are no Persons other than the Sellers in possession of any Sellers' Real Property or any portion thereof. The Sellers have obtained all material Permits (including
without limitation certificates of use and occupancy) required in connection with Sellers' use, occupation and operation of the Sellers' Real Property. The Sellers' Real Property and its continued
use, occupancy and operation as used, occupied and operated by Sellers in connection with the Business or the Acquired Assets do not constitute a nonconforming use and are not the subject of a special
use Permit under any applicable Law. To Sellers' Knowledge, no condemnation or similar proceeding is pending or threatened that would preclude or impair the use of any Sellers' Real Property for the
purposes for which it is currently used. None of the Sellers has received any notice claiming any material violation of any Law, or requiring or calling attention to the need for </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>
any material work, repairs, maintenance, construction, alterations, or installations on or in connection with any of the Sellers' Real Property that has not been complied with. To Sellers' Knowledge,
all buildings, structures, appurtenances, mechanical, plumbing, electrical and other improvements and building systems situated on the Sellers' Real Property are in good operating condition and have
no patent or latent structural defects, including without limitation any defects in the roof, structure or foundation. All facilities located on the Sellers' Real Property are supplied with utilities
and other services necessary for the operation of such facilities as currently operated by Sellers, including gas, electricity, water, telephone, sanitary sewer and storm sewer, all of which services
are adequate. Each parcel of Sellers' Real Property abuts on and has direct vehicular access to a public road, or, to Sellers' Knowledge, has access to a public road via a permanent, irrevocable,
appurtenant easement benefiting the parcel of real property, and to Sellers' Knowledge, access thereto is provided by paved public right-of-way with adequate curb cuts
available. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;With
respect to each item of Sellers' Real Property not owned by one of the Sellers (the "</FONT><FONT SIZE=2><I>Leased Real Property</I></FONT><FONT SIZE=2>"):
(i)&nbsp;true and complete copies of all Contracts relating to Sellers' leases of the Leased Real Property (or summaries if oral leases) have been made available to Buyers; (ii)&nbsp;the Sellers
as a group have a valid and existing lease or sublease for each property subsumed within the Leased Real Property, free and clear of all Liens, except for such Liens as may be set forth in the
Contracts; (iii)&nbsp;all Contracts covering any of the Leased Real Property are valid and enforceable in accordance with their respective terms, are in full force and effect, and there is not under
any such Contract any material default by any of the Sellers or, to the Sellers' Knowledge, any other Person under any such Contract, or any condition, event or act which would constitute such a
default with the giving of notice or the passage of time, or both. </FONT><FONT SIZE=2><I>Schedule&nbsp;4.8(a)</I></FONT><FONT SIZE=2> describes all of the Leased Real Property. Except as set forth
on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.8(b)</I></FONT><FONT SIZE=2>, no landlord or other third party consent is required in respect of the Leased Real Property with respect to the transactions
contemplated hereby. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.9</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Intellectual Property.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
Sellers' Intellectual Property includes all of the Intellectual Property now owned by, registered in the name of, or used or held for use, or contemplated to be
used, by any of the Sellers, other than the Retained Assets (the "</FONT><FONT SIZE=2><I>Sellers' Intellectual Property Rights</I></FONT><FONT SIZE=2>"). No material Sellers' Intellectual Property or
product or service of any of the Sellers is, or has been, subject to any litigation, proceeding or order restricting in any manner the use, transfer, or licensing thereof by the Sellers, or which may
affect the validity, use or enforceability of such Sellers' Intellectual Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.9(b)</I></FONT><FONT SIZE=2> sets forth a complete and accurate list of all Sellers' Registered Intellectual Property and
specifies, where applicable, the jurisdictions in which each such item of Sellers' Registered Intellectual Property has been issued or registered along with the serial number or registration number,
the title and/or subject matter, the registration or issue date and the expiration date and lists any proceedings or actions Known to Sellers before any Governmental Authority (including the United
States Patent and Trademark Office or equivalent Governmental Authority anywhere in the world) related to any of the Sellers' Registered Intellectual Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Each
item of Sellers' Registered Intellectual Property is valid and subsisting, all necessary registration, maintenance and renewal fees currently due in connection with
such Sellers' Registered Intellectual Property have been made and all necessary documents, recordations and certificates in connection with such Sellers' Registered Intellectual Property have been
filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Sellers' Registered
Intellectual Property. To Sellers' Knowledge, there are no pending or threatened interferences, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2>
re-examinations, oppositions, cancellation proceedings or the foreign equivalent thereof of any of the Seller Intellectual Property. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, the Sellers'
Intellectual Property Rights are in full force and effect and are enforceable. To Sellers' Knowledge, no Sellers'
Intellectual Property Rights have been cancelled, adjudicated invalid, lapsed or are subject to any outstanding judgment, order, decree, ruling, injunction, writ or consent restricting their use or
adversely affecting any of the Sellers' rights thereto. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, to Sellers' Knowledge, no claim is pending or
threatened, and no notice or invitation to license has been received that questions the Sellers' title to, claims any ownership of or any rights to any Sellers' Intellectual Property Rights, or claims
or at all indicates that the present or past operations of the Sellers or their respective businesses infringes upon or conflicts with the rights of any third party intellectual property. To Sellers'
Knowledge, no claim is pending or threatened to the effect that any Seller Intellectual Property is invalid or unenforceable. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(d)</I></FONT><FONT SIZE=2>, the Sellers as a group own and have good, marketable and valid title to,
or possess legally enforceable and transferable rights to use under valid and subsisting written license agreements, each item of Sellers' Intellectual Property, in each case free and clear of any
Liens (excluding licenses and related restrictions and any Liens set forth on Schedule&nbsp;4.7(a)(ii), and such title and rights will continue to be valid title and rights of Buyer following the
execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, subject to obtaining the consents set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.9(d)</I></FONT><FONT SIZE=2>. Except as set
forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(d)</I></FONT><FONT SIZE=2>, with respect to each item of
Sellers' Intellectual Property not owned by one of the Sellers: (i)&nbsp;the license, sublicense or other agreement covering such item is legal, valid, binding, enforceable and in full force and
effect with respect to the Sellers and, to Sellers' Knowledge, each other party thereto; (ii)&nbsp;neither Seller nor, to Sellers' Knowledge, any other party thereto is in breach or default
thereunder, and, to the Sellers' Knowledge, no event has occurred which with notice or lapse of time would constitute a material breach or default thereunder or permit termination, modification or
acceleration thereunder by the other party thereto; (iii)&nbsp;to the Sellers' Knowledge, such item is not subject to any Lien that materially interferes with or may reasonably be expected to
materially interfere with the rights granted to the Sellers with respect to such item; and (iv)&nbsp;there are no royalty, commission or other executory payment agreements, arrangements or
understanding relating to any such item. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;No
Seller has transferred ownership of, or granted any exclusive license with respect to, any Intellectual Property that is or was part of Sellers Intellectual Property,
to any third party, or knowingly permitted the rights of the Sellers in such material Sellers' Intellectual Property to lapse or enter the public domain. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, to Sellers' Knowledge, neither the existence nor the sale, license, lease,
transfer, use, reproduction, distribution, modification or other exploitation by the Sellers of any Sellers' Intellectual Property, as the same is or was, or is currently contemplated to be, sold,
licensed, leased, transferred, used or otherwise exploited by such Persons, does, did or will (i)&nbsp;infringe on any Intellectual Property of any Person, (ii)&nbsp;constitute a misuse or
misappropriation of any Intellectual Property of any other Person, or (iii)&nbsp;entitle any other Person to any interest therein, or right to compensation from any of the Sellers or any of their
respective successors or assigns, by reason thereof. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, to Sellers' Knowledge, none of the operations of the
Sellers (including any and all products and services of each Seller) or their respective businesses, as now or presently contemplated to be conducted, or performance of any Contract as it has been, or
as is currently being, conducted, infringes or, will infringe, upon any third party intellectual property. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, to Sellers' Knowledge, no Seller has received any
complaint, assertion, threat or allegation or otherwise has notice of any
claim, litigation or proceeding involving matters of the type contemplated by the immediately preceding sentence or has Knowledge of any facts or </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<BR>

<P><FONT SIZE=2>
circumstances that could reasonably be expected to give rise to any such claim, litigation or proceeding. No Seller has any current development effort or current development project in progress that
currently causes or upon completion would cause the Business to be in violation of or infringe upon the Intellectual Property of any Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;No
Person has infringed or misappropriated or is infringing or misappropriating any Sellers' Intellectual Property, and no claim, litigation or proceeding brought by any
of the Sellers with respect to any of the Sellers' Intellectual Property is pending against any Person. There has been no unauthorized disclosure of or use of any proprietary rights of the Sellers. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;Neither
this Agreement nor the transactions contemplated by this Agreement, including the assignment to Buyers of any Contracts to which any of the Sellers is a party,
will result in (i)&nbsp;any Seller granting to any Person any right to or with respect to any material Intellectual Property right owned by, or licensed to, any Seller, (ii)&nbsp;Buyers being
bound by, or subject to, any non-compete or other material restriction on the operation or scope of their respective businesses, or (iii)&nbsp;impairment of any Intellectual Property
Right. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(d)</I></FONT><FONT SIZE=2>, no Seller has any obligation to compensate any third party for any Seller
Intellectual Property rights. No Seller has agreed to indemnify any Person for or against any interference, infringement, misappropriation or other violation with respect to the any Intellectual
Property. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.10</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Accounts Receivable included in
the Acquired Assets represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business. The pricing and invoices for each
of the products sold by any of the Sellers represent the full amounts due in connection with the sale of such products and no payment or remuneration for such products is to be made to any Person or
entity other than one of the Sellers. The Accounts Receivable included in the Acquired Assets are or will be as of the Closing Date collectible (as set forth below) net of any respective reserves
shown on the Closing Statement of Net
Equity (which reserves shall be calculated in accordance with GAAP and consistent with Sellers' past practices). Subject to such reserves, each of the Accounts Receivable included in the Acquired
Assets either has been or will be collected in full, without any set-off, within one year after the Closing Date, except for such amounts thereof which, by the terms of their respective
contracts or purchase orders, are not due within such one-year period. Any such amounts due after such one-year period will be collected in full, without any
set-off, in accordance with the terms of their respective contracts or purchase orders. There is no contest, claim, or right of set-off, other than rebates and returns in the
ordinary course of business, under any Contract with any maker of any such Accounts Receivable relating to the amount or validity of such Accounts Receivable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.11</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Books and Records.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Seller has maintained Books and
Records which, in reasonable detail, accurately and fairly reflect all material transactions entered into by any Seller, or to which any Seller is a party and which relate to the Business or the
Acquired Assets. None of the Sellers has engaged in any transaction, maintained any bank account or used any corporate funds, in each case with respect to the Business and the Acquired Assets, except
for transactions, bank accounts and funds which have been and are reflected in all material respects in its normally maintained Books and Records. Complete copies of the Books and Records of each
Seller have been made available to Buyers. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_kg1836_1_23"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>4.12</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Licenses and Permits.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Sellers as a group own or hold
all Licenses and Permits the absence or loss of any of which, individually or in the aggregate, would have a Material Adverse Effect (respectively, the "</FONT><FONT SIZE=2><I>Material
Licenses</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>Material Permits</I></FONT><FONT SIZE=2>"). </FONT><FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT SIZE=2> sets forth a list of all
Licenses and Permits held by each of the Sellers. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT SIZE=2>, (a)&nbsp;no consents, waivers or approvals from any
Persons (including any Governmental Authority) are required to transfer the Licenses and Permits from the Sellers to Buyer and, (b)&nbsp;upon the Closing, Buyers shall be entitled to all rights and
benefits granted pursuant to the Licenses and Permits in the same manner that the Sellers were entitled to such rights and benefits immediately prior to the Closing. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT
SIZE=2>, all fees required to be paid in connection with the Material Licenses and Material Permits as of, or within sixty (60)&nbsp;days
after, the Closing Date have been paid. The Material Licenses and Material Permits are valid, and neither Parent nor any Seller has received any notice nor has Knowledge that any Governmental
Authority intends to modify, cancel, terminate or not renew any of the Material Licenses and Material Permits. No present or former stockholder, officer, manager, member or employee of any of the
Sellers, or any other Person other than a Seller, owns or has any proprietary, financial or other interest (direct or indirect) in any of the Material Licenses or Material Permits. Each of the Sellers
has conducted and is conducting the Business, and has owned and now owns the Acquired Assets, in compliance with all of the requirements, standards, criteria and conditions set forth in the Material
Licenses and Material Permits and is not in violation of any of the foregoing. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT SIZE=2>, the transactions
contemplated by this Agreement will not result in a default under or a breach or violation of, or adversely affect the rights and benefits afforded to any of the Sellers by, any of the Material
Licenses and Material Permits. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT SIZE=2>, following the Closing, Buyers will have the right to own and operate,
without any material restrictions or expense, the Business and the Acquired Assets (including the Sellers' Real Property) in substantially the same manner as the same were owned and operated prior to
the Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.13</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Liabilities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither the Business nor any of the Acquired
Assets is liable for or subject to any Liabilities except for (i)&nbsp;those Liabilities reflected on the December&nbsp;31, 2001 Interim Balance Sheet and not previously paid or discharged and
(ii)&nbsp;those Liabilities incurred since December&nbsp;31, 2001 in the ordinary course of business and consistent with past practice. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.14</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Material Contracts.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.14(a)</I></FONT><FONT SIZE=2> sets forth a true and complete list of all Contracts which are material to the condition
(financial or otherwise), results of operations, assets, liabilities, properties, prospects (to the Knowledge of any Seller and other than general economic or industrial conditions or eventual
technological obsolescence of products) or commercial relationships of the Business or any of the Acquired Assets, and to which any of the Sellers is a party or by which any of the Sellers or the
Acquired Assets are bound (collectively, "</FONT><FONT SIZE=2><I>Material Contracts</I></FONT><FONT SIZE=2>"), including without limitation any Contracts: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;that
have a value, or may give rise to obligations, liabilities or benefits, in each case exceeding $25,000 (or the equivalent value in the applicable currency); </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;to
which a current or former officer, director, stockholder, manager, member or employee of any of the Sellers or any current or former Affiliate of such Persons or of
any of the Sellers is the other or another party (including without limitation all Contracts relating to club dues, housing and other perquisites); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;pursuant
to which any of the Sellers sell or distribute their respective products relating to the Business or the Acquired Assets (including without limitation all
Contracts between any of the Sellers and any of the Significant Customers or Significant Vendors); </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;which
contain any non-solicitation, non-competition, confidentiality or similar obligations or which otherwise prohibit any of the Sellers from
freely providing services or supplying products to any customer or potential customer; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;are
for the cleanup, abatement or other actions in connection with any Hazardous Material, the remediation of any existing environmental liabilities, violation of any
environmental Laws or relating to the performance of any environmental audit or study; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;which
relate to joint ventures, partnerships or similar Contracts; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;which
relate to any Leased Real Property. </FONT></P>

</UL>

<P><FONT SIZE=2>Prior
to the date hereof, the Sellers have delivered to Buyers true and complete copies of each of the Material Contracts. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Each
Material Contract is in full force and effect and is a legal, valid, binding and enforceable obligation of or against each of the Sellers and, to Sellers'
Knowledge, each of the other parties
thereto. None of the Sellers nor, to Sellers' Knowledge, any other party to any Material Contract is currently in breach of or in default in any material respect under, or has improperly terminated
any Material Contract, and there exists no condition or event with respect to any Seller, nor, to Sellers' Knowledge, any other party thereto, which, after notice or lapse of time or both, would
constitute any such breach, default or termination. None of the Sellers has received notice of default under any Material Contract, and there are no material maintenance or capital improvement
obligations thereon in an amount over $25,000 (or the equivalent value in the applicable currency). No Material Contract is subject or subordinate to any Lien other than the Liens set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.7(a)(ii)
</I></FONT><FONT SIZE=2>. There are no Material Contracts that were not negotiated at arm's length. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.14(c)</I></FONT><FONT SIZE=2>, no consents, waivers or approvals from any Persons are required in
connection with the execution, delivery or performance of this Agreement by each of the Sellers or the consummation by each of the Sellers of the transactions contemplated herein in order that any
Material Contract remain in effect without modification after the transactions contemplated hereby and not give rise to any right to termination, cancellation, or acceleration or loss of any right or
benefit of any of the Sellers (the consents set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.14(c)</I></FONT><FONT SIZE=2> are hereafter referred to as the "</FONT><FONT SIZE=2><I>Third Party
Consents</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Within
the past two (2)&nbsp;years none of the Sellers has been a party to any Material Contract with any of the current or former officers, directors, stockholders,
managers, members or employees of any of the Sellers or any current or former Affiliate of such Persons or of any of the Sellers. There are no outstanding balance on any loans, credit agreements,
guarantees, and similar Contracts between any of the Sellers, on the one hand, and any current or former officer, director, stockholder, manager, member or employee of any of the Sellers or any
current or former Affiliate of any such Person or of any of the Sellers, on the other hand. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;All
Contracts with dealers, distributors and/or manufacturers' representatives of the Business which are included in the Acquired Assets can be terminated by Sellers
upon no more than sixty (60)&nbsp;days' prior written notice, with or without cause, without liability, penalty or premium of any nature and such termination will not cause a violation of any Law. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.15</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Significant Customers and Vendors.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.15(a)</I></FONT><FONT SIZE=2> is a true and correct list showing (i)&nbsp;the twenty (20)&nbsp;largest customers by gross
purchases from the Sellers for the Business as a whole during (w)&nbsp;the twelve-month period ending on June&nbsp;30, 2001 (the "</FONT><FONT SIZE=2><I>Significant
Customers</I></FONT><FONT SIZE=2>") and (x)&nbsp;the twelve-month period ending on June&nbsp;30, 2000 (y)&nbsp;the six-month period ending on December&nbsp;31, 2001 and
(z)&nbsp;the six-month period ending on December&nbsp;31, 2000, and (ii)&nbsp;the location of each of the Significant Customers; and a </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<P><FONT SIZE=2>
true and correct list showing (x)&nbsp;the twenty (20)&nbsp;largest vendors and suppliers by gross sales to the Sellers during the six-month period ending on December&nbsp;31, 2001
for the Business as a whole, as well as all vendors and suppliers of any of the Sellers who are the sole source of such supply where the parts
supplied are not readily available from another source, (collectively, the "</FONT><FONT SIZE=2><I>Significant Vendors</I></FONT><FONT SIZE=2>") and (y)&nbsp;the location of each of the Significant
Vendors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Since
December&nbsp;31, 2001, no Significant Customer or Significant Vendor has: (i)&nbsp;stopped or indicated an intention to stop trading with or supplying any of
the Sellers outside of the ordinary course of business consistent with such Significant Customer's or Significant Vendor's past practices, (ii)&nbsp;reduced, or indicated an intention to reduce, its
trading with or provision of goods or services to any of the Sellers outside of the ordinary course of business consistent with such Significant Customer's or Significant Vendor's past practices, or
(iii)&nbsp;changed, or indicated an intention to change, materially the terms and conditions on which it is prepared to trade with or supply any of the Sellers outside of the ordinary course of
business consistent with such Significant Customer's or Significant Vendor's past practices. To the Knowledge of the Sellers, no Significant Customer or Significant Vendor is reasonably likely, as a
result of the transactions contemplated by this Agreement, to: (x)&nbsp;not trade with or supply the Business, (y)&nbsp;reduce substantially its trading with or provision of goods or services to
the Business, or (z)&nbsp;change the terms and conditions on which it is prepared to trade with or supply the Business. No Seller has any Knowledge of any facts, conditions or events which might
give rise to a claim by any of the Sellers against any Significant Customer or Significant Vendor or any claim by a Significant Customer or Significant Vendor against any of the Sellers. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.16</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Backlog.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;4.16</I></FONT><FONT SIZE=2>
lists all pending customer orders for each of the Sellers as of April&nbsp;30, 2002. All such customer orders and contracts were entered into in the ordinary course of business, consistent with past
practice. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.17</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Governmental Consents.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.17</I></FONT><FONT SIZE=2>, no consent,
waiver, approval, order or authorization of or from, or registration, notification, declaration or filing with any
Governmental Authority is required in connection with the execution, delivery or performance of this Agreement by Parent and each of the Sellers or the consummation by each of the Sellers of the
transactions contemplated herein (collectively, the "</FONT><FONT SIZE=2><I>Governmental Consents</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.18</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Insurance.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;4.18</I></FONT><FONT SIZE=2>
sets forth an accurate list of all insurance policies carried by any of the Sellers and all insurance loss runs or workmen's compensation claims received for the past policy year relating to the
Acquired Assets. No product liability claims in excess of $50,000 under such insurance policies have been made or pending since January&nbsp;1, 1997. All premiums payable under all such policies
have been paid and each of the Sellers is otherwise in full compliance with the terms of such policies. Such policies of insurance provide adequate insurance for the Acquired Assets and comply with
all applicable Laws. To the Knowledge of the Sellers, there have been no threatened terminations of any such policies. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.19</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Labor and Employment Matters.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With respect to employees of
each of the Sellers: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;each
of the Sellers is and, except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(a)</I></FONT><FONT SIZE=2>, has been during the three (3)&nbsp;years
prior to the date hereof in compliance in all material respects with all applicable domestic and foreign
Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such Laws respecting employment discrimination, employee
classification, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and has complied with all employment
agreements, and no claims, controversies, investigations or suits are pending or, to the Sellers' Knowledge, threatened with respect to such laws, either by private individuals or by government
agencies and, except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(a)</I></FONT><FONT SIZE=2>, all employees are at-will; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;each
of the Sellers is and has been during the three (3)&nbsp;years prior to the date hereof in compliance in all material respects with all applicable domestic and
foreign Laws concerning employer contributions to any trade union, housing, unemployment, retirement, bonus and welfare funds and all other funds to which an employer is required by Law to contribute; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(c)</I></FONT><FONT SIZE=2>, no Seller is or has been engaged during the three (3)&nbsp;years prior
to the date hereof in any unfair labor practice, and there is not now, nor within the past three years has there been, any unfair labor practice complaint against the Sellers pending or, to the
Knowledge of the Sellers, threatened, before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;each
of the Sellers has entered into and complied during the three (3)&nbsp;years prior to the date hereof in all material respects with any employment contracts,
individual labor contracts, collective labor contracts and similar agreements to the extent required by applicable domestic and foreign Laws, and the Sellers have delivered to Buyers prior to the date
hereof true and complete copies of all employment contracts, individual labor contracts, collective labor contracts and similar agreements, whether written or oral, to which any of the Sellers is a
party; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(e)</I></FONT><FONT SIZE=2>, no labor union represents or, during the three (3)&nbsp;years prior to
the date hereof, has represented the Sellers' employees and no collective bargaining agreement is or, during the three (3)&nbsp;years prior to the date hereof, has been binding against the Sellers.
Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(e)</I></FONT><FONT SIZE=2>, no grievance or arbitration proceeding arising out of or under collective bargaining agreements or
employment relationships is pending, and no claims therefore exist or have, to the Sellers' Knowledge, been threatened during the three (3)&nbsp;years prior to the date hereof; no labor strike,
lock-out, slowdown, or work stoppage is or has been pending or, to Sellers' Knowledge, threatened against or directly affecting the Sellers; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.19(f)</I></FONT><FONT SIZE=2>, to Sellers' Knowledge, all persons who are or were performing services
for the Sellers during the three (3)&nbsp;years prior to the date hereof and are or were classified as independent contractors during the three (3)&nbsp;years prior to the date hereof do or did
satisfy and have satisfied the requirements of law to be so classified. Sellers have fully and accurately reported
their compensation on IRS Forms 1099 or other applicable tax forms for independent contractors when required to do so. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.20</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Employee Benefit Plans.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Definitions.
</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Benefit Arrangement</I></FONT><FONT SIZE=2>" means any benefit arrangement, obligation, or practice, whether or not legally enforceable, to
provide benefits (other than merely as salary or under a Benefit Plan), as compensation for services rendered, to present or former directors, employees, agents, or independent contractors, including,
but not limited to, employment or consulting agreements, severance agreements or pay policies, stay or retention bonuses or compensation, executive or incentive compensation programs or arrangements,
sick leave, vacation pay, plant closing benefits, salary continuation for disability, workers' compensation, retirement, deferred compensation, bonus, stock option or purchase plans or programs,
tuition reimbursement or scholarship programs, employee discount programs, meals, travel, or vehicle allowances, any plans subject to Code Section&nbsp;125, and any plans providing benefits or
payments in the event of a change of control, change in ownership or effective control or sale of a substantial portion (including all or substantially all) of the assets of any business or portion
thereof, in each case with respect to any present or former employees, directors, or agents. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Benefit Plan</I></FONT><FONT SIZE=2>" has the meaning given in ERISA Section&nbsp;3(3), together with plans or arrangements that would be so
defined if they were not (i)&nbsp;otherwise exempt from ERISA by </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

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<UL>
<UL>
<BR>

<P><FONT SIZE=2>
that or another section, (ii)&nbsp;maintained outside the United States, or (iii)&nbsp;individually negotiated or applicable only to one person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers Benefit Arrangement</I></FONT><FONT SIZE=2>" means any Benefit Arrangement the Sellers sponsor or maintain or with respect to which
the Sellers have or may have any current or future liability (whether actual, contingent, with respect to any of its assets or otherwise), in each case with respect to any present or former directors,
officers, or employees of or service providers to the Sellers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sellers Plan</I></FONT><FONT SIZE=2>" means any Benefit Plan that the Sellers maintain or have previously maintained or to which the Sellers
are obligated to make payments or has or may have any liability, in each case with respect to any present or former employees of the Sellers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>ERISA</I></FONT><FONT SIZE=2>" means the Employee Retirement Income Security Act of 1974, as amended, and all regulations and rules issued
thereunder, or any successor law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>ERISA Affiliate</I></FONT><FONT SIZE=2>" means any person or entity that, together with the entity referenced, would be or was at any time
treated as a single employer under Code Section&nbsp;414 or ERISA Section&nbsp;4001. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Multiemployer Plan</I></FONT><FONT SIZE=2>" means any Benefit Plan described in ERISA Section&nbsp;3(37). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pension Plan</I></FONT><FONT SIZE=2>" means any Benefit Plan subject to Code Section&nbsp;412 or ERISA Section&nbsp;302 or
Title&nbsp;IV (including any Multiemployer Plan) or any comparable plan not covered by ERISA. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Qualified Plan</I></FONT><FONT SIZE=2>" means any Benefit Plan intended to meet the requirements of Code Section&nbsp;401(a), including any
already terminated plan. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.20(b)</I></FONT><FONT SIZE=2> contains a complete and accurate list of all Benefit Plans and Benefit Arrangements covering
employees, directors, officers, agents or independent contractors of Sellers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;With
respect, as applicable, to Benefit Plans and Benefit Arrangements: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;The
Sellers have delivered true, correct, and complete copies of each Sellers Plan and Sellers Benefit Arrangement set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.20(b)</I></FONT><FONT SIZE=2> to the Buyers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;The
only Qualified Plans currently in operation are the Hathaway Corporation 401(k) Tax Advantaged Investment Plan and Trust and the Hathaway Corporation Employees'
Stock Ownership Plan and Trust. The Qualified Plans have received a determination letter or is subject to a notification letter from the Internal Revenue Service and qualify under Code
Section&nbsp;401(a), and to the Knowledge of Sellers, nothing has occurred with respect to the operation of any Qualified Plans that could cause the loss of such qualification or exemption or the
imposition of any liability, lien, penalty or tax under ERISA or the Code; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;Except
as set forth in </FONT><FONT SIZE=2><I>Schedule&nbsp;4.20(c)(iii)</I></FONT><FONT SIZE=2> with respect to payments in excess of $25,000, no Sellers Plan or
Sellers Benefit Arrangement contains any provision or is subject to any law that would accelerate or vest any benefit or require severance, termination or other payments or trigger any liabilities as
a result of the transactions this Agreement contemplates; the Sellers have not declared or paid any bonus or incentive compensation related to the transactions this Agreement contemplates; and no
payments under any Sellers Plan or Sellers Benefit Arrangement would, individually or collectively, be nondeductible under Code Section&nbsp;280G; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;All
group health plans of the Sellers and its ERISA Affiliates materially comply with the requirements of Part&nbsp;6 of Title&nbsp;I of ERISA
("</FONT><FONT SIZE=2><I>COBRA</I></FONT><FONT SIZE=2>"), Code Section&nbsp;5000, and the Health Insurance Portability and Accountability Act and any other comparable domestic or </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

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<P><FONT SIZE=2>
foreign Laws; no employee or former employee (or beneficiary of either) of the Sellers are entitled to receive any benefits, including, without limitation, death or medical benefits (whether or not
insured) beyond retirement or other termination of employment, other than as applicable law requires. No flexible spending account programs are currently maintained by the Sellers, and the Sellers
have no outstanding obligations with respect to any prior flexible spending account program. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;Buyers
will have no liability with respect to any Sellers Plans or Sellers Benefit Arrangements, except for Assumed Liabilities specified in Section&nbsp;1.4. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.20(d)</I></FONT><FONT SIZE=2> contains the most recent quarterly listing of workers' compensation claims and a schedule of
workers' compensation claims of the Sellers for the last three fiscal years. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Schedule&nbsp;4.20(e)</I></FONT><FONT SIZE=2> sets forth an accurate list, as of the date hereof, of all employees of the Sellers who earned
more than $50,000 in 2001 or who may earn more than $50,000 in 2002, all officers and all directors, and all employment agreements with such employees, officers, and directors and the rate of
compensation (and the portions thereof attributable to salary, bonus, and other compensation respectively) of each such person as of (i)&nbsp;December&nbsp;31, 2001 and (ii)&nbsp;the date of
this Agreement. The schedule also shows totals accrued for vacation, sick leave, and incentive bonuses for all employees. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.21</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Conformity with Law.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Sellers is, and has been
in the four (4)&nbsp;years preceding the date of this Agreement, in compliance in all material respects with, and has conducted the Business and owned, used, operated and maintained its respective
properties, rights and assets (including the Acquired Assets) in compliance in all material aspects with, all applicable Laws. None of the Sellers or the Business (a)&nbsp;is now in material
violation of any applicable Laws, or (b)&nbsp;has received notice of any alleged or has Knowledge of any threatened claims, violation of, liability or potential responsibility under any Law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.22</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Litigation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.22</I></FONT><FONT SIZE=2>, there are no claims, actions,
 suits, proceedings, arbitrations, governmental investigations or inquiries pending or, to the
Knowledge of Sellers, threatened against or affecting the Business, any of the Sellers, any of their respective assets, rights or properties (including the Acquired Assets), or seeking to prevent or
delay the transactions contemplated under this Agreement and no notice of any claim, action, suit, proceeding, governmental investigation or inquiry, whether pending or threatened, has been received
by any of the Sellers. There are no judgments, orders, injunctions, decrees, stipulations or awards (whether rendered by a Governmental Authority, by arbitration or otherwise) against the Business,
any of the Acquired Assets or any of the Sellers relating to the Business or the Acquired Assets. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.22</I></FONT><FONT SIZE=2>, all
litigation, claims and other matters identified on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.22</I></FONT><FONT SIZE=2> are covered in full by
the liability insurance of one of the Sellers (subject to applicable deductibles, which have been reserved for in the Financial Statements in accordance with GAAP) and are being defended by and at the
sole cost of the liability insurance carrier of one of the Sellers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.23</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Warranties;
Products.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;4.23</I></FONT><FONT SIZE=2> sets forth a description of all product warranties and guarantees given by any of
the Sellers to any customer in connection with the sale or distribution of any products related to the Business or any of the Acquired Assets. Each of the products sold by any of the Sellers meets, in
all material respects, all standards for quality and workmanship prescribed by Law, product markings or designations, contractual agreements or the product literature of any of the Sellers. Except as
described on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.23</I></FONT><FONT SIZE=2>, (i)&nbsp;within the three (3)&nbsp;years preceding the date of this Agreement, no claims have been made to
Sellers or are, to the Knowledge of Sellers, threatened under the product warranties of any of the Sellers, (ii)&nbsp;to Sellers' Knowledge, there exists no event or circumstance, which after notice
or the passage of time or both, might create or result in liabilities or obligations under any of the product warranties of any of the Sellers in excess of the warranty reserve set forth on the
Closing Statement of Net Equity, (iii)&nbsp;there are no statements, citations or decisions by </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

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<P><FONT SIZE=2>
any Governmental Authority or any product testing laboratory stating that any product of any of the Sellers is unsafe or fails to meet any standards promulgated by such Governmental Authority or
testing laboratory (iv)&nbsp;to Sellers' Knowledge, there is no design, manufacturing or other defect in any model or type of product or product specification of any of the Sellers and,
(v)&nbsp;to Sellers' Knowledge there have not been any mandatory or voluntary product recalls with respect to any products of any of the Sellers and there is no fact relating to any product of any
of the Sellers that may impose a duty on any of the Sellers to recall any product or warn customers of a defect in any product of any of the Sellers. The warranty reserves reflected on the Sellers'
Financial Statements have been computed in accordance with GAAP, consistent with Sellers' past practices and such reserves are adequate for all warranty claims relating to products manufactured by the
Sellers prior to the Closing Date. The warranty analysis for the Business for each of the fiscal years ended June&nbsp;30, 1999, 2000 and 2001 and the six (6)&nbsp;months ended December&nbsp;31,
2001 set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.23</I></FONT><FONT SIZE=2> is true, complete and correct in all material respects. All product liability claims relating to the Business or
any of the Acquired Assets involving amounts in excess of $25,000 (or the equivalent value in the applicable currency) that have occurred and for which notice has been received by any of the Sellers
within the past three (3)&nbsp;years are listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.23</I></FONT><FONT SIZE=2> attached hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.24</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;All
Tax Returns required to be filed by, on behalf of, or with respect to Sellers through the Closing Date have been or will be filed, and all such Tax Returns have
been, or will be, true, correct, and complete in all material respects. All Taxes owed by or with respect to Sellers due on or before the Closing Date (whether or not shown on any Tax Return) have
been paid, or will be paid as of the Closing, in full on a timely basis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Except
as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.24</I></FONT><FONT SIZE=2>, no deficiencies for any Taxes, assessment or other governmental charges have
been asserted in writing or assessed against any Seller. The provisions made for Taxes (excluding reserves for deferred taxes) on the Interim Financials reflect all unpaid Taxes of Sellers or
for which Sellers are liable, whether or not disputed, and are in conformity with GAAP. Sellers are entitled to any refunds applicable to periods prior to the Closing Date. Except as set forth on </FONT> <FONT
SIZE=2><I>Schedule&nbsp;4.24</I></FONT><FONT SIZE=2>, no Seller is under audit or investigation with respect to any Taxes, and no notice has been received of the expected commencement
of such an audit or investigation. Except as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.24</I></FONT><FONT SIZE=2>, no claim has been made during the three (3)&nbsp;years prior to the
Closing Date by a Governmental Entity in a jurisdiction where any Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. No Seller is presently bound by any
agreements extending or waiving the statute of limitations with respect to any Taxes. Each Seller has (i)&nbsp;duly and timely withheld or otherwise collected, or will collect as of the Closing, all
Taxes or amounts it was or will be required to withhold or collect on or before the Closing Date in connection with amounts paid to any employee, independent contractor, creditor or third party, and
(ii)&nbsp;paid over, or will pay over as of the Closing, to the proper Governmental Entity all Taxes or amounts it was or will be required to pay over on or before the Closing Date in connection
with amounts paid to any employee, independent contractor, creditor or third party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;There
are (and immediately following the Closing there will be) no Liens or similar encumbrances on the Acquired Assets relating to or attributable to Taxes, except for
Taxes not yet due and payable. No Seller has any knowledge of any basis for the assertion of any claims that, if adversely determined, would result in a Lien or similar encumbrance on the Acquired
Assets or otherwise adversely affect Buyers or the Acquired Assets. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Sellers
(i)&nbsp;have collected, or will collect as of the Closing, all material sales and use Taxes required to be collected, and have remitted, or will remit, such
Taxes that are required to be remitted on or before the Closing as required by all applicable statutes and regulations, and (ii)&nbsp;regarding all exempt transactions for all periods open under the
applicable statute of </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

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<BR>

<P><FONT SIZE=2>
limitations as of the Closing Date, have maintained all such records and supporting documents, in all material respects in substantial compliance with all applicable sales and use Tax statutes and
regulations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;No
Seller is a party to a Tax sharing or indemnity agreement with any other person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;None
of the Acquired Assets is "tax exempt use property" within the meaning of section&nbsp;168(h) of the Code. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.25</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Absence of Changes.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Since September&nbsp;30, 2001, each
of the Sellers has conducted the Business and owned and operated the Acquired Assets in the ordinary course consistent with past practice and except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.25</I></FONT><FONT SIZE=2>, there has not
been: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;any
change that by itself or together with other changes, has had or could have a Material Adverse Effect (other than general economic or industry conditions); </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;any
damage, destruction or loss (whether or not covered by insurance) that has had or could have, individually or in the aggregate, a Material Adverse Effect; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;any
declaration or payment of any dividend or distribution in respect of the capital stock, or any direct or indirect redemption, purchase or other acquisition of any of
the capital stock, of any of the Sellers, except in respect of Retained Assets; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;any
increase in the compensation, bonus, sales commissions or fee arrangements payable or to become payable by any of the Sellers to any of their respective officers,
directors, stockholders, employees, consultants or agents, except for ordinary and customary bonuses and salary increases for employees in accordance with past practice; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;any
work interruptions, labor grievances or claims filed, or any similar event or condition of any character; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any
sale or transfer, or any agreement to sell or transfer, any or all of the Business or the Acquired Assets of the Sellers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;any
purchase or acquisition of, or agreement, plan or arrangement to purchase or acquire, any material property, rights or assets of, or securities or other interests
in, any Person; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;any
cancellation, or agreement to cancel, any indebtedness or other obligation owing to any of the Sellers, including without limitation any indebtedness or obligation
of any current or former officer, director, manager, member, stockholder or employee of any of the Sellers or any Affiliate thereof or of any of the Sellers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any
breach, amendment, termination or non-renewal of any Material Contract, Material License or Material Permit; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;any
transaction by any of the Sellers outside the ordinary course of business; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;any
capital expenditure or entry into any commitment or contract by any of the Sellers, either individually or in the aggregate, involving an obligation of more than US
$20,000 (or the equivalent value in the applicable currency); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;any
incurrence, creation, or placement of any Lien on all or any part of the Business or the Acquired Assets, or the allowance or permission of the same, except to the
extent not material, individually or in the aggregate; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;any
change in accounting or tax accounting methods or practices (including any change in depreciation, amortization or capitalization rates or policies or any change to
policies concerning reserves for excess or obsolete inventory or uncollectible accounts receivable) by any of the Sellers or the revaluation by any of the Sellers of any of the Business or the
Acquired Assets; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;any
loan by any of the Sellers to any Person, incurring by any of the Sellers of any indebtedness, guaranteeing by any of the Sellers of any indebtedness, issuance or
sale of any debt securities of any of the Sellers or guaranteeing of any debt securities of others, except in the ordinary course of business and, except in each case where the results of which would
not, individually or in the aggregate, have a Material adverse Effect; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;the
commencement of or notice to or, to the Knowledge of any Seller, the threat of commencement of any lawsuit or proceeding against or investigation of any of the
Sellers, the Business or the Acquired Assets, except in the ordinary course of business and, except in each case where the results of which would not, individually or in the aggregate, have a Material
adverse Effect; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;negotiation
or agreement by any of the Sellers or any officer, director, employee or agent thereof to do any of the things described in the preceding clauses&nbsp;(a)
through (o) (other than negotiations with Buyers and their representatives regarding the transactions contemplated by this Agreement). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.26</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;[Reserved].</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.27</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Inventories.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.27</I></FONT><FONT SIZE=2>, all inventories of the
Sellers relating to the Business (net of the reserves for obsolete, slow moving and defective inventory
shown in the Sellers' Financial Statements and determined in the ordinary course of business consistent with Sellers' past practices) consist of items of merchantable quality and quantity usable or
salable in the ordinary course of Sellers' historical business, are salable at prevailing market prices that are not less than the book value amounts thereof or the price customarily charged by the
applicable Seller therefor, conform to the specifications established therefor, and have been manufactured in accordance with applicable regulatory requirements. Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.27</I></FONT><FONT
SIZE=2>, the quantities of all inventories, materials, and supplies of the Sellers (net of the reserves for obsolete, slow moving and
defective inventory shown in the Sellers' Financial Statements and determined in the ordinary course of business in accordance with GAAP and consistent with Sellers' past practices) are not obsolete,
damaged, slow-moving, defective or excessive in the circumstances of the Sellers' historical business. For purposes of this section,
"</FONT><FONT SIZE=2><I>Inventory</I></FONT><FONT SIZE=2>" means all of the items of inventory and supplies of the Sellers relating to the Business, including without limitation raw materials and
supplies, work-in-process, finished goods, returned products and samples, equipment, parts, labels and packaging (including all rights and interests in goods in transit,
consigned inventory, inventory sold on approval and rental inventory), and all returned products, samples and obsolete and nonsaleable inventory. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.28</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Unlawful Payments.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Seller nor any director, officer,
employee or stockholder of any Seller, has directly or indirectly, with respect to the Business, (a)&nbsp;made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of what form, whether in money, property, or services (i)&nbsp;to obtain favorable treatment for the Business or contracts secured,
(ii)&nbsp;to pay for favorable treatment for business or contracts secured, (iii)&nbsp;to obtain special concessions or for special concessions already obtained, or (iv)&nbsp;in violation of any
legal requirement, or (b)&nbsp;established or maintained any fund or asset that has not been recorded in the Books or Records of the Sellers. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.29</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Brokers' Fees.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except for Blitzer, Ricketson&nbsp;&amp; Co.,
no Seller has any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.30</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Government Contracts.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.30</I></FONT><FONT SIZE=2>, the Sellers are
not a party to any Government Contract or Government Bid. "</FONT><FONT SIZE=2><I>Government
Contract</I></FONT><FONT SIZE=2>" means a written agreement with (A)&nbsp;any U.S. Federal Governmental Entity, (B)&nbsp;any prime contractor of any U.S. Federal Governmental Entity, or
(C)&nbsp;any subcontractor, at any tier level, in each case that obligates any person </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

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<BR>

<P><FONT SIZE=2>
to furnish products or services to a U.S. Federal Governmental Entity. The term "</FONT><FONT SIZE=2><I>Government Bid</I></FONT><FONT SIZE=2>" shall mean any written quotations, bids, or proposals
that, if accepted, would bind any person to perform the resultant Government Contract. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;With
respect to any Government Contract or Government Bid, the Sellers have complied in all material respects with all terms and conditions of each Government Contract
or Government Bid; the Sellers have complied in all material respects with the requirements of all applicable laws, written directives, including without limitation the Bonneville Purchasing
Instructions, and agreements pertaining to each Government Contract or Government Bid and to such party's performance on its Government Contracts. All representations and certifications executed,
acknowledged or set forth in, or pertaining to each Government Contract or Government Bid were, when given, complete and correct in all material respects, and the Sellers have complied in all material
respects with all such representations and certifications. There has been no misstatement or omission or other possible violation of law arising under or relating to any Government Contract or
Government Bid that has led or reasonably could be expected to lead to a Material Adverse Effect, and the Sellers have not, within the last three (3)&nbsp;years, made a voluntary disclosure to any
Governmental Authority pertaining thereto. No Seller has engaged in any conduct relating to mischarging, fraud, false claims, and false certifications that reasonably could be expected to lead to a
Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;No
Seller has received from a party to a Government Contract any written show-cause notice, stop-work order, cure notice, notice of termination,
or termination concerning a Government Contract presently in effect or for which there are or reasonably could be expected to be outstanding performance obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Neither
the Sellers, nor any of their directors, officers or employees (nor, to the knowledge of Sellers, any consultants or agents to the extent acting for or on behalf
of any of the same): (i)&nbsp;are (or for the last six (6)&nbsp;years have been) suspended or debarred or proposed in writing to be suspended or debarred or declared ineligible from doing business
with any Governmental Entity; (ii)&nbsp;are (or for the last three (3)&nbsp;years have been) under investigation, indictment, or similar government charge regarding alleged misstatements or
omissions or other possible violations of law pertaining to a Government Contract or Government Bid; or (iii)&nbsp;are (or within the last three (3)&nbsp;years have been) the subject of a finding
of nonresponsibility or ineligibility for contracting with any Government Entity. There are no existing circumstances warranting suspension, debarment or the finding of nonresponsibility. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;There
exist no (i)&nbsp;outstanding Claims or requests for equitable adjustment or other contractual action for relief against the Sellers arising or relating to any
Government Contract or Government Bid, or (ii)&nbsp;disputes between Seller(s) and the U.S. Government under the Contract Disputes Act of 1978, as amended (the "</FONT><FONT SIZE=2><I>Contract
Disputes Act</I></FONT><FONT SIZE=2>") or material disputes between the Seller(s) and any prime contractor, subcontractor, vendor or other person arising under or relating to any Government Contract
or Government Bid. There are no facts that constitute the basis for and could reasonably be expected to result in a claim or dispute under clause&nbsp;(i) or (ii) of the immediately preceding
sentence. No Seller is aware of any claim asserted by any Governmental Entity against the Seller(s) within the last three (3)&nbsp;years pertaining to alleged defective pricing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;The
Sellers have not received within the last three (3)&nbsp;years any final audits, inspections or investigations from any Governmental Entity or prime contractor
pertaining to a Government Contract or Government Bid. There are no settlement agreements relating to a Government Contract that currently have, or are expected to have, a binding effect after the
Closing Date, and under which any Seller has material unperformed obligations with respect thereto. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.31</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Disclosure.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except for financial projections, all written
agreements, lists, Schedules, instruments, exhibits, documents, certificates, reports, statements (except for the Sellers' Financial </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

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<A NAME="page_kh1836_1_33"> </A>

<P><FONT SIZE=2>
Statements), writings and other information furnished to Buyers pursuant hereto or in connection with this Agreement or the transactions contemplated hereby, are complete and accurate in all material
respects. No representation or warranty by the Sellers contained in this Agreement, in the Schedules attached hereto or in any certificate furnished pursuant to SECTION 7 hereof by the Sellers to
Buyers in connection herewith contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary in order to make any statement contained
herein or therein not misleading. There is no fact Known to any of the Sellers that has specific application to the Business or any of the Acquired Assets (other than general economic or industry
conditions or eventual technological obsolescence of products) that is reasonably likely to have a Material Adverse Effect on the assets, liabilities, prospects, condition (financial or otherwise), or
results of operations of the Business or the Acquired Assets that has not been set forth in this Agreement or any Schedule hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.32</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Bank Accounts; Powers of Attorney.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Schedule&nbsp;4.32
sets forth a true and complete list of all bank accounts, safe deposit boxes and lock boxes of each of the Sellers with respect to the Business, with
respect to each such account and lock box, the names in which such accounts or boxes are held and identification of all Persons authorized to draw thereon or have access thereto. Schedule&nbsp;4.32
also sets forth the name of each Person holding a general or special power of attorney from each Seller and a description of the terms of such power. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.33</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Electric Power.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Electric Power's sole asset is a patent
application for "Improvement Relating to Electrical Power Measurement" as set forth as Item&nbsp;6 on Schedule&nbsp;4.9(b). Electric Power has no Liabilities. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.34</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Guarantee Assets.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Schedule&nbsp;6.13 sets forth a true,
complete and correct list of the Guarantee Assets. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kh1836_section_5_representations_and_warranties_of_buyers"> </A>
<A NAME="toc_kh1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;5<BR>  </B></FONT><FONT SIZE=2><B><I>REPRESENTATIONS AND WARRANTIES OF BUYERS</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
induce Sellers to enter into this Agreement and consummate the transactions contemplated hereby, Buyers represent and warrant to Sellers as follows: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>5.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Due Organization.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Buyer
is duly formed, validly existing and in good standing under the laws of the State of Delaware. DUKI is duly organized, validly existing and in good standing under
the laws of the United Kingdom. Each of the Buyers is duly authorized and qualified to do business under all applicable Laws, regulations, ordinances and orders of public authorities to own, lease and
operate its properties and to carry on its business in the places and in the manner as now conducted, except where the failure to be so authorized or qualified would not have a material adverse effect
on the collective rights the Sellers hereunder (a "</FONT><FONT SIZE=2><I>Buyers Material Adverse Effect</I></FONT><FONT SIZE=2>"). Each Buyer is in good standing as a foreign corporation or limited
liability company in each jurisdiction in which it does business, except where the failure to be so qualified would not have a Buyers Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Buyers
have delivered to the Sellers true, complete and correct copies of each Buyer's Charter Documents. Neither Buyer is in violation of, in conflict with or in
default under any of such Buyer's Charter Documents, and there exists no condition or event which, after notice or lapse of time or both, would result in any such violation, conflict or default. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>5.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Authorization; Validity.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Buyer has the full legal
right, power and authority to enter into, make and perform this Agreement and the transactions and other agreements and instruments contemplated hereby. This Agreement and all other agreements and
instruments to be executed and delivered by
each Buyer in connection herewith, when executed and delivered by such Person(s) shall have been duly and validly authorized, executed and delivered by each Buyer. The execution and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

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<P><FONT SIZE=2>
delivery of this Agreement and other agreements and instruments contemplated hereby, the performance of the obligations hereunder and the consummation of the transaction by each Buyer has been duly
and validly approved by the sole member of Buyer and the Board of Directors of DUKI, and constitute, or shall constitute, the valid and binding obligations of each Buyer, enforceable in accordance
with their respective terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>5.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;No Conflicts.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and performance of
this Agreement and all other agreements and instruments contemplated hereby by each Buyer, and the consummation of the transactions contemplated hereby and thereby by each Buyer, will not: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;conflict
with, result in a breach or violation of, or require any consent, approval or authorization under, any of such Buyer's Charter Documents; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;conflict
with, result in a default or termination under, give any Person right of termination, cancellation, acceleration, suspension or revocation under, result in the
loss of a material benefit under, or require any consent, approval or authorization under, any Contract to which such Buyer is a party or by which such Buyer or any of its properties, rights or assets
are bound; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;violate
any Law to which such Buyer or any of its properties, rights or assets are subject or by which such Buyer or any of its properties, rights or assets are bound;
or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;constitute
an event which, after notice or lapse of time or both, would result in any conflict, breach, violation, default, requirement, loss, termination, impairment or
similar event described in Section&nbsp;5.3(a) through (c). </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kh1836_section_6_covenants"> </A>
<A NAME="toc_kh1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;6<BR>  </B></FONT><FONT SIZE=2><B><I>COVENANTS</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Cause Conditions to be Satisfied.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers and, subject to
Section&nbsp;6.5, each of the Sellers will use their respective reasonable best efforts to cause each of the conditions set forth in SECTION&nbsp;6 and SECTION&nbsp;7 hereof to be satisfied at
or prior to Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Further Assurances.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From time to time after the Closing
Date, upon request of any party and without further consideration, each party hereto shall execute, acknowledge and deliver all such other instruments and documents and shall take all such other
actions required to consummate and make effective the transactions contemplated by this Agreement. In connection therewith, if required, the president or chief financial officer of each Buyer or each
Seller, as the case may be, will execute any documentation reasonably required by Parent's or Buyer's, as the case may be, independent public accountants (in connection with such accountant's audit of
the Sellers). Buyers and the Sellers, as the case may be, will also cooperate and use their commercially reasonable efforts to have each of their respective present officers, directors and employees
cooperate with Parent or Buyer, as the case may be, on and after the Closing Date in furnishing information, evidence, testimony and other assistance in connection with any Tax Return filing
obligations, actions, proceedings, arrangements or disputes of any nature with respect to matters pertaining to all periods prior to the Closing Date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Conduct of Business Pending Closing.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Between the date hereof
and the Closing Date (except as otherwise requested or consented to in writing by Buyers), each of the Sellers will and shall cause Electric Power to: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;own
and operate the Business and the Acquired Assets in all respects in the ordinary course of business, consistent with past practice; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;maintain
the Acquired Assets and assets and properties held pursuant to leases in accordance with Sellers' historical practices; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;keep
in full force and effect their respective present insurance policies or other comparable insurance coverage; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;use
reasonable efforts to maintain and preserve their respective business organizations intact, retain their respective present officers and key employees and maintain
their respective relationships with suppliers, vendors, customers, creditors and others having business relations with them; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;comply
in all material respects with and perform in all material respects all of their respective obligations under all Contracts, all applicable Laws and all Licenses
and Permits held by any of the Sellers or related to or used or useful in connection with the Business or the Acquired Assets. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Prohibited Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to Section&nbsp;6.5,
between the date hereof and the Closing Date (except as otherwise requested or consented to in writing by Buyers), the Sellers will not and shall cause Electric Power not to: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;change
any of their respective Charter Documents, or authorize or propose the same; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;issue,
deliver or sell or authorize or propose the issuance, delivery or sale of any securities of any of the Sellers or Electric Power or any options, warrants, calls,
conversion rights or commitments relating to such securities, or authorize or propose any change in the equity capitalization of any of the Sellers or Electric Power, or issue or authorize the
issuance of any debt securities; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;enter
into any Contract outside the normal course of business, or make any capital expenditures in excess of $30,000 (or the equivalent value in the applicable
currency), or incur or agree to incur any Liability or guarantee any indebtedness, in each case involving an obligation in excess of $30,000 (or the equivalent value in the applicable currency); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;increase
the compensation payable or to become payable to any officer, director, stockholder, employee, agent, representative or independent contractor, except in the
ordinary course of business consistent with past practice, or make any bonus, management fee payment, loans or advances to any such Person, or adopt or amend any Company Plan or Company Benefit
Arrangement, or grant any severance or termination pay; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;create,
assume, or permit the placement of any Lien on any of the Acquired Assets or the Assumed Liabilities, whether now owned or hereafter acquired; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;sell,
assign, lease, pledge or otherwise transfer or dispose of any Acquired Assets except in the ordinary course of business consistent with past practice; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;acquire
or negotiate for the acquisition of any business or the start-up of any new business, or otherwise acquire or agree to acquire any assets that are
material, individually or in the aggregate, to any of the Sellers or Electric Power; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;merge
or consolidate or agree to merge or consolidate with or into any other Person; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;breach,
amend, modify or terminate any Contract, License or Permit; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;enter
into any transaction that is (i)&nbsp;not negotiated at arm's length, (ii)&nbsp;outside the ordinary course of business consistent with past practice or
(iii)&nbsp;otherwise prohibited hereunder; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;commence
a lawsuit or any other proceeding other than for routine collection of bills; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;revalue
any or all of the Business or Acquired Assets, including without limitation, writing down or writing off the value of Inventory or writing off notes or accounts
receivable other than in the ordinary course of business consistent with past practice; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

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<UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;make
any change to policies concerning reserves for excess or obsolete inventory or uncollectible accounts receivable; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;make
any Tax election other than in the ordinary course of business and consistent with past practice, change any Tax election, adopt any accounting or Tax accounting
method other than in the ordinary course of business and consistent with past practice, change any accounting or Tax accounting method, file any Tax Return (other than any estimated Tax Returns,
payroll Tax Returns or sale Tax Returns) or any amendment to a Tax Return, enter into any closing agreement, settle any Tax claim or assessment, or consent to any Tax claim or assessment; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;except
for the employees identified on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.4(n)</I></FONT><FONT SIZE=2>, terminate or reduce the compensation of any employee of
the Sellers or Electric Power who occupies the position or title of manager or any other superior position or title; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;take,
or agree (in writing or otherwise) to take, any of the actions described in this Section&nbsp;6.4, or any action which would make any of the representations and
warranties of any of the Sellers contained in this Agreement untrue or result in any of the conditions set forth in SECTION&nbsp;7 not being satisfied. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;No Solicitation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Each
Seller shall not, nor shall it permit any of its respective subsidiaries to, nor shall it authorize or permit any shareholder, officer, director or employee of or
any financial advisor, attorney or other advisor or representative of the Parent or any Seller to, (i)&nbsp;solicit, initiate or knowingly encourage the
submission of, any Acquisition Proposal (as defined herein), (ii)&nbsp;enter into any agreement with respect to or approve or recommend any Acquisition Proposal, (iii)&nbsp;participate in any
discussions or negotiations regarding, or furnish to any Person any information with respect to any Seller in connection with, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal, (iv)&nbsp;enter into any agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Acquisition or any other transactions contemplated in this Agreement or (v)&nbsp;take any other action inconsistent with the obligations and commitments assumed by each Seller
pursuant to this Section&nbsp;6.5; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that nothing contained in this Section&nbsp;6.5 shall prohibit Parent or its Board of
Directors or the Sellers from furnishing information and access to, or preliminarily negotiating with, a third party, in each case only in response to an unsolicited bona fide written proposal for an
Acquisition Proposal only to the extent that Parent has complied with the procedures contained in this Section&nbsp;6.5 and only to the extent that Parent's Board of Directors determines in its
reasonable, good faith judgment by a majority vote, after such consultation with its outside legal counsel and its investment banking firm, that (1)&nbsp;such Acquisition Proposal is reasonably
likely to result in a transaction that is superior in comparison to the Acquisition and the terms of this Agreement to Parent's stockholders (the
"</FONT><FONT SIZE=2><I>Shareholders</I></FONT><FONT SIZE=2>") from a financial point of view and to Parent, taking into account the terms and conditions thereof, the likelihood of consummation and
the time required to complete such transaction (a "</FONT><FONT SIZE=2><I>Superior Proposal</I></FONT><FONT SIZE=2>"), and (2)&nbsp;failing to take such action would result in a breach of the
fiduciary duties of Parent's Board of Directors under applicable Law. Prior to furnishing any non-public information to, or negotiating with, any such third party, Parent (i)&nbsp;shall
have entered into a confidentiality agreement with such third party that contains terms at least as favorable to Parent as those of the Confidentiality Agreement entered into by and between Parent and
Buyer and (ii)&nbsp;shall provide Buyer copies of all proposed written agreements, arrangements, or understandings, including the forms of any agreements supplied by third parties, and all
applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto). For purposes of
this Agreement, "</FONT><FONT SIZE=2><I>Acquisition Proposal</I></FONT><FONT SIZE=2>" means any proposal for a merger, liquidation, recapitalization, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

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<P><FONT SIZE=2>
consolidation or other business combination involving any Seller or Electric Power or any proposal or offer to acquire in any manner, directly or indirectly, an equity interest in, any voting
securities of, or a substantial portion of the assets of any Seller or Electric Power or any combination of any of the foregoing, in each case involving a change in ownership or control of the
Business or the Acquired Assets, other than the transactions contemplated by this Agreement. Each Seller shall, and shall cause each of its respective subsidiaries and each of its and their respective
officers, directors, controlled affiliates, employees, agents, investment bankers, attorneys and other advisors and representatives to, immediately cease any and all existing activities, discussions
or negotiations with any persons with respect to, or that could reasonably be expected to lead to, any Acquisition Proposal and, to the fullest extent permitted by any confidentiality agreement or
other contract with such person or persons, each Seller shall use commercially reasonable efforts to enforce the right to recover or cause to be destroyed all information regarding any Seller in the
possession of such person or persons and their respective affiliates, representatives and advisors. Without limiting the foregoing, any violation of the restrictions set forth in this
Section&nbsp;6.5 by any officer, director, controlled affiliate, employee, agent, financial advisor, attorney or other advisor or representative of any Seller shall be deemed to be a breach of this
Section&nbsp;6.5 by each Seller. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Each
Seller shall as promptly as possible, but in no event later than seventy-two (72)&nbsp;hours following receipt of such Acquisition Proposal or
inquiry, advise Buyer in writing of: (i)&nbsp;any Acquisition Proposal or any inquiry with respect to any Acquisition Proposal received, directly or indirectly, by any officer, director, affiliate,
employee, agent, financial advisor, attorney or other advisor or representative of any
Seller, and of any discussions, negotiations or proposals relating to an Acquisition Proposal, (ii)&nbsp;the material terms of such Acquisition Proposal (including a copy of any written proposal or
agreement), and (iii)&nbsp;the identity of the person making any such Acquisition Proposal or inquiry. Each Seller shall promptly advise Buyer of all developments relating to such proposal,
including the results of any discussions or negotiations with respect thereto. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.6</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Notification of Certain Matters.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party hereto shall
give prompt notice to the other parties hereto of (a)&nbsp;the Known (or known, in the case of Buyers) occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause any representation or warranty contained herein to be untrue or inaccurate in any material respect at or prior to the Closing, or which
could result in a Material Adverse Effect or Buyers Material Adverse Effect, and (b)&nbsp;any Known (or known, in the case of Buyers) material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such party hereunder. The delivery of any notice pursuant to this Section&nbsp;6.6 shall not, without the express written consent
of each of the other parties hereto (which consent may be withheld in their respective sole discretion) be deemed to (w)&nbsp;modify the representations, warranties, covenants or agreements
hereunder of the party delivering such notice, (x)&nbsp;modify any of the conditions set forth in SECTION&nbsp;7, (y)&nbsp;cure or prevent any such inaccuracy or failure, or (z)&nbsp;limit or
otherwise affect the remedies available hereunder to the party receiving such notice. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.7</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Cooperation in Litigation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From and after the Closing Date,
each party hereto shall, subject to SECTION&nbsp;8, fully cooperate with the other in the defense or prosecution of any litigation or examination, audit, or other proceeding already instituted or
which may be instituted hereafter against or by such other party relating to or arising out of the conduct of the Business prior to or after the Closing Date (other than litigation among the parties
and/or their respective Affiliates arising out of the transactions contemplated by this Agreement or any of the other documents, instruments or agreements to be delivered in connection herewith). The
party requesting such cooperation shall, subject to SECTION&nbsp;8, pay the reasonable out-of-pocket expenses incurred in providing such cooperation (including legal fees and
disbursements) by the party providing such cooperation and by its officers, directors, employees and agents, but shall not be responsible for reimbursing such party or its officers, directors,
employees and agents, for their time spent in such cooperation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>6.8</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Bulk Sales Law.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In reliance upon its
indemnification rights in Section&nbsp;8.1, Buyers waive compliance by the Sellers with the provisions of any applicable bulk sales, bulk transfer, or similar laws. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.9</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
Sellers shall, and shall cause Electric Power to, timely pay all Taxes and file all relevant Tax Returns of the Sellers or Electric Power for all Taxes that relate
to the Business or the Acquired Assets and that were incurred in or are attributable to any taxable period (or portion thereof) ending on or before the Closing Date and are not shown on the Closing
Statement of Net Equity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;To
the extent required by applicable law, the Sellers shall, and shall cause Electric Power to, timely pay all Buyers Assumed Taxes and file all relevant Tax Returns of
the Sellers or Electric Power for all Buyers Assumed Taxes. Upon the Buyers' receipt of a reasonably documented request for any reimbursement therefor, the Buyers shall reimburse the Sellers the
amount of any Buyers Assumed Taxes shown as due on such Tax Returns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Any
transfer, documentary, sales, use, value-added, excise, stamp or other Taxes assessed upon or with respect to the transfer of the Acquired Assets to Buyers and any
recording or filing fees with respect thereto shall be the responsibility of the Sellers ("</FONT><FONT SIZE=2><I>Seller Transfer Taxes</I></FONT><FONT SIZE=2>"; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that Seller Transfer Taxes shall not include any United Kingdom value added tax
arising due to the Buyers' failure to operate the acquired business in the United Kingdom as a going concern for one year following the Closing Date). Each of the Sellers, jointly and severally,
hereby indemnifies and agrees to hold Buyers harmless from, against and in respect of any Seller Transfer Taxes (including interest and penalties), if any, incurred by or imposed upon Buyers resulting
from or as a consequence of the transactions contemplated hereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;To
the extent relevant to the Business or the Acquired Assets, the Sellers shall (i)&nbsp;provide Buyers with such assistance as may reasonably be required in
connection with the preparation of any Tax Returns, the conduct of any audit or other examination by any taxing authority or judicial or administrative proceedings relating to any liability for Taxes
and (ii)&nbsp;retain and provide Buyers with all records or other information that may be relevant to the preparation of any Tax Returns, the conduct of any audit or examination or other Tax
proceeding. After the Closing Date, each of the parties will make available to the others, as reasonably requested, all information, records or documents relating to
the Liability for Taxes of the Sellers for all periods prior to or including the Closing Date and will preserve such information, records, or documents until the expiration of any applicable statute
of limitations or extensions thereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.10</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;No Improper Payments.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From date hereof through the Closing
Date, each of the Sellers agrees not to, and agrees to cause each of their respective subsidiaries, directors, officers, employees, and shareholders not to, directly or indirectly, with respect to the
Business, (a)&nbsp;make any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person or entity, private or public, regardless of what form, whether in
money, property, or services (i)&nbsp;to obtain favorable treatment for business secured, (ii)&nbsp;to pay for favorable treatment for business secured, (iii)&nbsp;to obtain special concessions
or for special concessions already obtained, or (iv)&nbsp;in violation of any legal requirement, or (b)&nbsp;establish or maintain any fund or asset that is not recorded in the Books and Records
of such persons or entities. From the date hereof through the Closing Date, each of the Sellers and all of their respective subsidiaries, officers, directors, employees, and shareholders are and shall
be in full compliance, with respect to the Business, with the Foreign Corrupt Practices Act of 1977, codified as amended at 15 U.S.C. &sect;&sect; 78m(b)(2), 78dd-1,
78dd-2, and 78ff(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.11</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Cooperation in Transfer of Web Site Content.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as
practicable, and in any event no later than thirty (30)&nbsp;days, after the Closing Date, the Sellers will transfer all their respective web site </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

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<P><FONT SIZE=2>
content directly relating to the Business to Buyers at no additional cost to Buyers, electronically or in such other form as Buyers shall reasonably request. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.12</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Customer Inquiries; Internet Link.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For a period of two
(2)&nbsp;years following the Closing: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Sellers
shall use good faith efforts to notify Buyer of customer inquiries, requests and orders, whether received telephonically, electronically or through the mail,
relating to the Business and refer such customers inquiries directly to Buyer; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Sellers
shall maintain a hypertext link on the Sellers' Internet Sites that link customers of the Business directly to the Business Internet Site. The size, design, and
location of the hypertext link shall be mutually agreed upon by Buyer and Parent. For purposes of this Section&nbsp;6.12, "</FONT><FONT SIZE=2><I>Business Internet Site</I></FONT><FONT SIZE=2>"
shall mean the site operated by either Buyer on the World Wide Web portion of the Internet at such addresses as Buyer may designate upon notice to Parent. For purposes of this Section&nbsp;6.12,
"</FONT><FONT SIZE=2><I>Sellers' Internet Sites</I></FONT><FONT SIZE=2>" shall mean the sites operated by the Sellers following the Closing on the World Wide Web portion of the Internet as their
primary web sites on the World Wide Web. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.13</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Performance Guarantees and the Lake Mead Contract.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Prior
to the Closing, the Sellers shall provide written notification to each of the banks (the "</FONT><FONT SIZE=2><I>Guarantor Banks</I></FONT><FONT SIZE=2>") that
have issued the performance guarantees set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.13(a) </I></FONT><FONT SIZE=2>(the "</FONT><FONT SIZE=2><I>Performance
Guarantees</I></FONT><FONT SIZE=2>"), which are still current and have not expired by their terms or the terms of the applicable Performance Contracts (regardless of any delay in collection of amounts
owing under the Performance Guarantees by the Sellers), stating that the Sellers (i)&nbsp;assign all right, title and interest to any asset held by the Guarantor Banks as a deposit against, as
collateral for, or otherwise owed or that may become owed by the Guarantor Banks to the Sellers in connection with, the Performance Guarantees (the "</FONT><FONT SIZE=2><I>Guarantee
Assets</I></FONT><FONT SIZE=2>") to Buyers, (ii)&nbsp;authorize the Guarantor Banks to pay, or otherwise transfer possession to, the Guarantee Assets, to Buyers in lieu of Sellers upon termination
of the Performance Guarantees and (iii)&nbsp;release any and all claims Sellers may have against the Guarantor Banks in connection with the Guarantee Assets. Sellers shall promptly pay, or otherwise
transfer possession to, any Guarantee Assets that Sellers may collect to Buyers. Buyers agree to perform the contracts set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.13(a)  </I></FONT><FONT SIZE=2>pursuant to which the Performance Guarantees
were issued (the "</FONT><FONT SIZE=2><I>Performance Contracts</I></FONT><FONT SIZE=2>") with commercially reasonable efforts
consistent with the Sellers' past performance of the Performance Contracts. The Sellers shall amend </FONT><FONT SIZE=2><I>Schedule&nbsp;6.13(a) </I></FONT><FONT SIZE=2>three (3)&nbsp;business
days prior to the Closing for the purpose of deleting all references to any Performance Guarantee, which by its terms, or the terms of the applicable Performance Contract, has expired (or will expire)
prior to the Closing (regardless of any delay in collection of amounts owing under the Performance Guarantees by the Sellers). Prior to the Closing, the Sellers shall not perform or agree to perform
any job with respect to the Business that would require a performance guarantee without Buyers' prior consent. If Buyers consent to the action contemplated pursuant to the immediately preceding
sentence, Buyer and Parent shall amend </FONT><FONT SIZE=2><I>Schedule&nbsp;6.13(a) </I></FONT><FONT SIZE=2>to account for any such additional Performance Guarantees. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Schedule&nbsp;6.13(b)
sets forth a list of Performance Guarantees that have expired by their terms (or the terms of the applicable Performance Contract) and under
which the Sellers have not yet collected any amounts or assets owing from the applicable Guarantor Bank ("</FONT><FONT SIZE=2><I>Expired Guarantees</I></FONT><FONT SIZE=2>"). Following the Closing,
Buyers shall remit to the Parent (for its account and the account of each of the other Sellers) any monies that Buyers receive with respect to the Expired Guarantees from the Guarantor Banks less any
expenses incurred by the Buyers in connection with such collection and remittance. The Sellers shall amend </FONT><FONT SIZE=2><I>Schedule&nbsp;6.13(b)</I></FONT><FONT SIZE=2> three
(3)&nbsp;business days prior to the Closing for the purposes of inserting those Performance Guarantees that have become, or will become, Expired Guarantees prior to the Closing, and deleting all
references to any </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

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<P><FONT SIZE=2>
Expired Guarantees for which the Sellers have received full payment from the applicable Guarantor Bank. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Following
the Closing, Buyers agree to perform the Sellers' obligations arising under the Lake Mead Contract as a subcontractor to the Sellers with efforts consistent
with the Sellers' past performance of the Lake Mead Contract. The Sellers agree to promptly pay to Buyers all monies received under the Lake Mead Contract for Buyers' performance as a subcontractor
pursuant to the Lake Mead Contract following the Closing. Further, the Sellers agree that the Sellers will not charge Buyers any fees, surcharges or other additional charges in connection with this
Section&nbsp;6.13(c). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.14</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Employees.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Buyers
will offer employment at will and benefits, commencing on or before the Closing Date, to the employees of the Business identified by Buyers on </FONT> <FONT SIZE=2><I>Schedule&nbsp;6.14</I></FONT><FONT SIZE=2>, who are actively at work or on vacation,
 and who were employed by the Business immediately prior to Closing. Those persons who
accept Buyers' offer of employment and commence working with Buyers on the Closing Date shall hereafter be referred to as "</FONT><FONT SIZE=2><I>Transferred Employees.</I></FONT><FONT SIZE=2>" The
parties hereto agree that nothing in this Agreement shall limit Buyers' ability after the Closing Date to modify or terminate (A)&nbsp;the employment of any Transferred Employee or (B)&nbsp;any
benefit policy, plan or program offered to or covering any Transferred Employee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Prior
to the Closing Date, during normal business hours, Buyers will have access to the Transferred Employees to enroll such Transferred Employees in the Benefit Plans
provided by Buyers. The Sellers shall use their best efforts to cooperate with Buyers to ensure the completion of the enrollment process in an efficient and timely manner. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Except
as otherwise provided in Section&nbsp;6.14, the Sellers will be responsible for the maintenance and distribution of benefits accrued through and including the
Closing Date under any Benefit Plan or Benefit Arrangement maintained by any of the Sellers pursuant to the provisions of any Legal Requirement and of such plans and shall be solely responsible for
such Benefit Plans and Benefit Arrangements, including but not limited to, any obligations to current or former employees of the Business who do not become Transferred Employees. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;The
Sellers acknowledge that Buyers may not have Benefit Plans in place on the Closing Date to cover the Transferred Employees. If such Benefit Plans are not in place on
or before the sixty-fifth (65<SUP>th</SUP>) day following the date hereof, Buyers agree to assume the Benefit Plans identified as Item&nbsp;2 on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.20(b)  </I></FONT><FONT SIZE=2>for the Transferred Employees from
the Sellers' Seattle location ("</FONT><FONT SIZE=2><I>Seattle Transferred Employees</I></FONT><FONT SIZE=2>") until such time as the
Seattle Transferred Employees become eligible for coverage under the Benefit Plans to be provided by Buyers. The Sellers acknowledge that Transferred Employees may elect COBRA coverage. If the
Transferred Employees so elect COBRA, Buyers will pay the Sellers (within ten (10)&nbsp;days of the date the Sellers made the payment) an amount equivalent to the employer portion of the medical and
dental premiums that the Sellers paid for the Transferred Employees, but excluding the Seattle Transferred Employees, prior to the Closing Date. Buyers will make that payment with respect to the
period from the date the electing Transferred Employees lose regular coverage through the date that such Transferred Employees become eligible to be covered under the medical and dental plans of
Buyers (or, if earlier, the date such Transferred Employees cease to be employed by Buyers). The Sellers will continue to provide COBRA coverage to employees of the Business who cease to be employees
prior to the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;The
Sellers will fully vest Transferred Employees in the Hathaway Corporation 401(k) Tax Advantaged Investment Plan ("</FONT><FONT SIZE=2><I>Hathaway 401(k)
Plan</I></FONT><FONT SIZE=2>") and any other Qualified Plan in which these employees participated immediately prior to Closing. The Sellers will permit Transferred </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

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Employees to rollover funds from the Qualified Plans in which they participated prior to the Closing into the Danaher Corporation and Subsidiaries Retirement and Savings Plans
("</FONT><FONT SIZE=2><I>Danaher 401(k) Plan</I></FONT><FONT SIZE=2>"), a traditional IRA or other qualified plan as permitted by law. If required, the Sellers shall amend the Hathaway 401(k) Plan to
permit after the Closing Date to the extent permitted under the requirements of the Code applicable to qualified retirement plans, Transferred Employees to elect to receive a distribution of benefits
under such plan and to permit a Transferred Employee to elect to rollover any loan from such plan to the plan maintained by Buyers that covers the Transferred Employee provided such election to
rollover any loan must occur within one hundred and twenty (120)&nbsp;days after the Closing Date. The Sellers shall cooperate with and provide any necessary information to the Danaher 401(k) plan
administrator to facilitate a timely rollover of any plan loans. Buyers shall, to the extent necessary, amend its defined contribution plans that cover employees to permit the rollover of a loan in
accordance with the foregoing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary in this Agreement, Buyers shall (i)&nbsp;give each Transferred Employee credit for his or her past service with the Sellers
for purposes of eligibility to participate, benefit eligibility and vesting (but not benefit accrual) under its employee benefit and other plans; provided that, the Sellers shall provide all records
within its possession as are necessary to determine such service; (ii)&nbsp;not subject any Transferred Employee to any limitations on benefits for pre-existing conditions under any
group health plan; and (iii)&nbsp;credit each Transferred Employee with the amount of vacation accrued by him or her from January&nbsp;1, 2002 through the Transferred Employee's date of
termination unless such accrued vacation was cashed out upon termination of employment pursuant to applicable state law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;The
Sellers shall not terminate, change the duties of or modify the compensation of the manager set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;6.14(g)</I></FONT><FONT SIZE=2>&nbsp;(the "</FONT><FONT SIZE=2><I>Manager</I></FONT><FONT SIZE=2>") until
the date that is six (6)&nbsp;months after the
Closing Date. Buyers shall reimburse the Sellers for all salary payments made by the Sellers to the Manager or benefit costs incurred by the Sellers in connection with the Manager's employment by the
Sellers from the Closing Date until the date that is six (6)&nbsp;months after the Closing Date. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.15</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Meeting.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Promptly
after the date hereof, Parent shall take all necessary action to duly call and give notice of a meeting of the Shareholders (the
"</FONT><FONT SIZE=2><I>Shareholder Meeting</I></FONT><FONT SIZE=2>") and promptly convene the Shareholder Meeting thereafter, for the purpose of considering the approval of this Agreement and at
such meeting call for a vote and cause proxies with respect to the approval and adoption of this Agreement to be voted as directed in such proxies. Except as otherwise required by the fiduciary duties
of its Board of Directors, as determined in good faith by a majority of the members thereof (after the receipt of advice of its outside legal counsel), Parent shall, through its Board of Directors,
recommend to the Shareholders the approval of this Agreement and shall not withdraw or modify such recommendation (unless such modification or withdrawal is in accordance with the proviso in the first
sentence of Section&nbsp;6.5(a)) and shall submit this Agreement to a vote of the Shareholders regardless of whether the Board of Directors of Parent shall have withdrawn or modified such
recommendation. Parent's obligation to call, give notice of, convene and hold the Shareholder Meeting in accordance with this
Section&nbsp;6.15(a) shall not be limited or affected by the commencement, disclosure, announcement or submission to Parent of any Acquisition Proposal or Superior Proposal, or by any withholding,
withdrawal, amendment or modification of the recommendation of the Board of Directors of Parent with respect to this Agreement or the Acquisition. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Within
fifteen (15)&nbsp;business days following the execution of this Agreement, Parent will prepare and file with the Securities and Exchange Commission (the
"</FONT><FONT SIZE=2><I>SEC</I></FONT><FONT SIZE=2>") preliminary proxy materials relating to the approval and adoption of this Agreement by Parent's Shareholders, will </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>41</FONT></P>

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<P><FONT SIZE=2>
use commercially reasonable efforts to respond to any comments thereon by the SEC's staff, and will file with the SEC revised preliminary proxy materials, if appropriate, and definitive proxy
materials in a timely manner as required by the rules and regulations of the SEC. Parent shall supply Buyer with copies of the final draft of the proxy materials (including all amendments or
modifications thereof), and upon Buyer's review and consent, which shall not be unreasonably withheld or delayed, make the necessary filings and mailings. As soon as practicable, but in any event
within seven (7)&nbsp;days, after the SEC has cleared the Proxy Statement for mailing to Shareholders, Parent will mail such Proxy Statement and exhibits thereto to its Shareholders, noticing a
meeting not more than thirty (30)&nbsp;days from the date of the mailing. The Proxy Statement will include the recommendation of Parent's Board of Directors. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.16</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Leases.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Denver.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Parent, Sellers and Buyers acknowledge and agree that Parent's leasehold interest in and to
approximately 13,713 square feet of space located at 8228 East Park Meadows Drive, Lone Tree, Colorado 80124 (the "</FONT><FONT SIZE=2><I>Denver Facility</I></FONT><FONT SIZE=2>"), pursuant to that
certain Commercial Lease Agreement dated October&nbsp;26, 1996 between Parent, as tenant, and First Industrial&nbsp;L.P. (as successor-in-interest to Commerce Square
Associates,&nbsp;LLC), as landlord (the "</FONT><FONT SIZE=2><I>Denver Facility Lease</I></FONT><FONT SIZE=2>"), constitutes a Retained Asset and shall not be conveyed and assigned to Buyer.
Notwithstanding the foregoing, Parent shall provide Buyers for a monthly rent of $12,933.43 (which rental cost reflects all expenses and charges related to the Denver Facility Lease including
utilities, maintenance, security and associated taxes) exclusive use and occupancy of 5,333 square feet of space within the Denver Facility as shown on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.16(a)  </I></FONT><FONT SIZE=2>(the "</FONT><FONT
SIZE=2><I>Occupied Area</I></FONT><FONT SIZE=2>"), together with joint access and use with Parent of shared areas of the Denver Facility (e.g. cafeteria,
bathrooms, lobbies, shared hallways) following Closing through January&nbsp;31, 2003. Buyers' right of use and occupancy shall include use of all existing furniture, fixtures and equipment located
in the Occupied Area and all rights benefiting the tenant under the Lease. The Sellers shall reimburse Buyers pro rata for itemized charges directly related to the Sellers' use of the copier, leased
by Buyers pursuant to the Rental Agreement between Associated Equipment Specialists,&nbsp;Inc. and Parent, dated as of April&nbsp;28, 2000 (which constitutes an Assumed Contract). If Parent
properly terminates Buyers' right of use and occupancy with respect to the Denver Facility, Parent will provide reasonable assistance to Buyers in relocating to other facilities as needed. With
respect to the Denver Facility Lease, Parent shall: (i)&nbsp;continue to satisfy all of its monetary and other obligations as tenant thereunder; (ii)&nbsp;not cause a termination or default
thereof; and (iii)&nbsp;use its commercially reasonable efforts to cause the landlord to discharge and provide all of the services and obligations required of the landlord thereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Belfast.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If, on or prior to the first anniversary of the Closing Date, Buyers request a release (whether by
way of termination, assignment or other means) from their obligations under that certain lease between the Department of Economic Development and Circuits and Systems Design Limited, dated
April&nbsp;7, 1992, as modified by two (2)&nbsp;Supplemental Deeds, dated May&nbsp;30, 1997 and April&nbsp;10, 1999, respectively (the "</FONT><FONT SIZE=2><I>Belfast
Lease</I></FONT><FONT SIZE=2>"), from the lessor of the Belfast Lease (the "</FONT><FONT SIZE=2><I>Landlord</I></FONT><FONT SIZE=2>"), and the Landlord refuses to grant a complete and unconditional
release, effective within thirty (30)&nbsp;days of Buyers' request, at no cost to Buyers (other than payment of applicable rent pursuant to the Belfast Lease for the period prior to the effective
date of such release), the Sellers shall reimburse Buyers for one half (<SUP>1</SUP>/<SMALL>2</SMALL>) of all rent payments made by Buyers pursuant to the Belfast Lease for the period subsequent to the first
anniversary of the Closing Date. The obligation of the Sellers to reimburse Buyers pursuant to this Section&nbsp;6.16(b) shall not exceed $100,000 (such $100,000 limitation meaning the maximum
amount Sellers shall pay to Buyers, which shall equal one half (<SUP>1</SUP>/<SMALL>2</SMALL>) of Buyers' rental payments up through a maximum of $200,000). Buyers shall pay to the Parent for its own account and
the account of each of the other Sellers fifty percent (50%) of any refunds or payments that Buyers receives from the Landlord in </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>42</FONT></P>

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connection with the early termination of the Belfast Lease before the first anniversary of the Closing Date; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, any such payments by Buyers
shall not, in the aggregate, exceed $100,000. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.17</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;"Hathaway" Name.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
Sellers acknowledge that upon the Closing the Hathaway Name and all goodwill associated therewith shall become the exclusive property of Buyers in accordance with
this Section&nbsp;6.17. The "</FONT><FONT SIZE=2><I>Hathaway Name</I></FONT><FONT SIZE=2>" means the business name, brand name, trade name, trademark, service mark and domain name Hathaway and any
business name, brand name, trade name, trademark, service mark and domain name that includes the word "Hathaway" and any and all other derivatives thereof, including without limitation, any
registrations, and/or applications for registration of the foregoing. The Sellers agree to execute any and all assignment documents and perform such acts as reasonably deemed necessary by Buyers to
accomplish the foregoing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Except
as set forth in Section&nbsp;6.17(d), Buyers are not granting Parent or Sellers a license to use, and no Seller shall have any right, title or interest in or to
the Hathaway Name after the Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Prior
to the first anniversary of the Closing Date, each Seller shall, and shall cause each of its respective Affiliates whose corporate name (excluding Parent) contains
the word "Hathaway" to, pass all required resolutions to change its corporate name to a name that does not include the word "Hathaway" or any name intended or likely to be confused or associated with
any Hathaway Name and shall cause the registration of the new name with the appropriate Governmental Authorities. Promptly following receipt of confirmation from the appropriate Governmental
Authorities that each such name change has been effected, Parent shall provide to Buyers written proof that each such name change by the Sellers (excluding Parent) has been effected. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Notwithstanding
anything herein to the contrary except as otherwise set forth in Section&nbsp;6.17(f) with respect to Parent, the Sellers and their Affiliates shall
have a limited, terminable right to use the Hathaway Name for a period of one (1)&nbsp;year following the Closing Date; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, any such use
shall be limited only to the manner in which the applicable Seller or Affiliate of any Seller uses the Hathaway Name as of the
date hereof. Notwithstanding the right granted pursuant to the immediately preceding sentence, the Sellers and their Affiliates shall have no right to use the Hathaway Name in connection with any
products or services currently manufactured or contemplated to be manufactured, marketed, or otherwise sold or transferred to any third party in connection with the Business. In order to preserve
Buyers' proprietary rights in the Hathaway Name, the right granted in this Section&nbsp;6.17(d) shall be subject to a continuing right of termination by Buyers in the event that Buyers determine, in
their reasonable judgment, that any use of the Hathaway Name by the Sellers (other than by Parent solely pursuant to Section&nbsp;6.17(f)), or their Affiliates would or could negatively affect the
proprietary rights associated with the Hathaway Name, to include affecting the goodwill associated therewith. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;The
limited right under the Hathaway Name provided in Section&nbsp;6.17(d) is without any representation or warranty and all liability associated with any use of the
name is and shall be assumed by the user, who is and shall be wholly and solely responsible for any such liability. To the extent permitted by law, Buyers expressly disclaim all warranties, express or
implied, including without limitation, warranties of title, ownership, or noninfringement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Parent
shall use its best efforts to obtain approval from the Shareholders to change the corporate name of Parent to a name that does not include the word "Hathaway" or
any name intended or likely to be confused with any Hathaway Name as soon as practicable but in no event later than the 2002 annual meeting of the Shareholders; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, if the Shareholders do </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>43</FONT></P>

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<P><FONT SIZE=2>
not approve such name change, then, notwithstanding anything to the contrary in Section&nbsp;6.17(d), Parent shall have the limited right to use the name "Hathaway Corporation" solely as its
corporate name and for the purposes of fulfilling applicable legal requirements. This Section&nbsp;6.17(f) does not confer any rights to the Sellers with respect to any use of the name "Hathaway" in
any sale or transfer of goods or services. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;Notwithstanding
any other provision of this Agreement, it is understood and agreed that the remedy of indemnity payments pursuant to SECTION&nbsp;8 and other remedies
at law would be inadequate in the case of any breach of the covenants contained in this Section&nbsp;6.17. Accordingly, Buyers and Parent shall be entitled to seek equitable relief, including the
remedy of specific performance, with respect to any breach or attempted breach of such covenants. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.18</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Holdbacks.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions set forth in
Section&nbsp;2.1, Buyers will hold the Business Holdback and the Name Holdback free and clear of all Liens, and will transfer the Business Holdback and Name Holdback, if so required, to the Parent
for its own account and the account of each of the other Sellers free and clear of all Liens pursuant to the terms and conditions in this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.19</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;[Reserved].</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.20</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Outstanding Checks; Post-Closing Payments.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Notwithstanding
anything to the contrary herein or in the Disclosure Schedules, the Sellers shall ensure that as of the Closing, each checking account relating to the
Business (the "</FONT><FONT SIZE=2><I>Checking Accounts</I></FONT><FONT SIZE=2>") has a balance equal to or in excess of the aggregate amount of all Outstanding Checks. On the Closing Date, Parent on
behalf of itself and the other Sellers shall deliver to Buyer a statement setting forth the amount and the payee for each Outstanding Check (the "</FONT><FONT SIZE=2><I>Outstanding Checks
Statement</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Commencing
on the Closing Date and continuing thereafter, (i)&nbsp;the Sellers shall promptly pay to Buyers all monies received by the Sellers with respect to any
Acquired Asset, including any Accounts Receivable or any claims, rights or benefits arising thereunder constituting an Acquired Asset and (ii)&nbsp;Buyers will promptly pay to Parent for its own
account and the account of each of the other Sellers all monies received by Buyers with respect to any Retained Asset or Excluded Liability or any claims, rights or benefits arising thereunder not
constituting an Acquired Asset. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.21</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Chinese Governmental Consent.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Parent shall use reasonable
best efforts to obtain any consent, waiver or approval from any Chinese Governmental Authority required to transfer any Acquired Asset, including the Interests, from Sellers to Buyers within six
(6)&nbsp;months following the Closing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.22</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Required Consents.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Sellers will use their best efforts
to obtain the Third Party Consents and the Governmental Consents set forth in </FONT><FONT SIZE=2><I>Schedule&nbsp;6.22 </I></FONT><FONT SIZE=2>(the "</FONT><FONT SIZE=2><I>Required
Consents</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.23</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Deferred
Revenue.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;6.23 </I></FONT><FONT SIZE=2>sets forth a list of each job comprising the Sellers' Deferred Revenue Liability with
respect to the Business as of April&nbsp;30, 2002 and the Sellers' estimate of the costs that will be incurred subsequent to April&nbsp;30, 2002 to complete the corresponding jobs (the
"</FONT><FONT SIZE=2><I>Estimated Costs</I></FONT><FONT SIZE=2>"). Buyers agree to perform the jobs set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.23 </I></FONT><FONT SIZE=2>with commercially
reasonable efforts consistent with the Sellers' past performance of such jobs. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Actual Costs</I></FONT><FONT SIZE=2>" shall equal the aggregate costs incurred subsequent to the Closing Date to the complete the
LMC-River MTN project (project no.&nbsp;1998-116) and the Hyre Elec/TARP project (project no.&nbsp;2000-162) (collectively, the "</FONT><FONT SIZE=2><I>Revenue
Projects</I></FONT><FONT SIZE=2>"), both of which are referenced on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.23</I></FONT><FONT SIZE=2>. "</FONT><FONT SIZE=2><I>Expected
Revenue</I></FONT><FONT SIZE=2>" shall equal the Actual Costs divided by 0.707. "</FONT><FONT SIZE=2><I>Actual Revenue</I></FONT><FONT SIZE=2>" shall equal the sum of the aggregate new billings
subsequent to the Closing Date for performance of the Revenue Projects (excluding billings and cash payments associated with deferred </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>44</FONT></P>

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<P><FONT SIZE=2>
maintenance) plus the value of the deferred revenue as of the Closing Date converted into revenue. If the Actual Revenue is less than the Expected Revenue, the Sellers shall pay the amount of such
deficiency to Buyers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Prior
to the Closing, the Sellers shall not perform or agree to perform any job (other than the jobs set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;6.23</I></FONT><FONT SIZE=2>) that would require the recognition of a Deferred Revenue Liability with
respect to the Business (as determined in accordance with
Sellers' historical accounting practices with respect to the Business) without Buyers' prior consent. If Buyers consent to the action contemplated pursuant to the immediately preceding sentence, Buyer
and Parent shall amend </FONT><FONT SIZE=2><I>Schedule&nbsp;6.23 </I></FONT><FONT SIZE=2>to account for any such additional jobs accordingly. The Sellers further agree that: (i)&nbsp;the total
project costs for the Frankfort Plant board (project no.&nbsp;2002-144) referenced on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.23 </I></FONT><FONT SIZE=2>(the
"</FONT><FONT SIZE=2><I>Frankfort Project</I></FONT><FONT SIZE=2>") shall not be reduced from the $885,000 for the purposes of revenue recognition between signing and closing and (ii)&nbsp;any
gross profit on revenue recognized between signing and closing for the Frankfort Project shall not exceed 25.6%. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.24</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Oral
Agreements.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;6.24 </I></FONT><FONT SIZE=2>sets forth certain terms concerning compensation and termination of the oral
agreements that the Sellers have entered into with sales representatives and distributors identified on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.24 </I></FONT><FONT SIZE=2>(the
"</FONT><FONT SIZE=2><I>Oral Agreements</I></FONT><FONT SIZE=2>"). The Oral Agreements shall not constitute Assumed Contracts, however, following the Closing Date, Buyers shall make a good faith
effort to perform the Sellers' obligations under the Oral Agreements in accordance with the terms set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.24</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.25</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Access to Properties.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From the date hereof until the
Closing Date or earlier termination of this Agreement, the Sellers will: (i)&nbsp;provide Buyers and their officers, counsel and other representatives with reasonable access during normal business
hours to the facilities of the Sellers, their principal personnel and representatives and such books and records pertaining to the Sellers as Buyers may reasonably request; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that Buyers agree
that such access will give due regard to minimizing interference with the operations, activities or employees of the Sellers;
and (ii)&nbsp;furnish to Buyers or their representatives such additional financial and operating data and other information relating to the Sellers as may be reasonably requested. Buyers shall
reimburse the Sellers for any out-of-pocket expenses that any of the Sellers' officers or employees incur in connection with any travel to Buyers' (and their Affiliates)
facilities or locations at the request of Buyers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.26</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Schedules.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Sellers and Buyers agree that the schedules
to this Agreement shall not be filed with the SEC unless the parties hereto provide written consent prior to any such filing or if such filing is required by Law. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki1836_section_7_conditions_to_closing"> </A>
<A NAME="toc_ki1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;7<BR>  </B></FONT><FONT SIZE=2><B><I>CONDITIONS TO CLOSING</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>7.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions to Obligations of Each Party to Effect the
Closing.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The respective obligations of each party hereto to effect the Closing and consummate the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing Date of the following conditions, any or all of which may be waived in writing by Parent and Buyer together: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Injunction.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated
or enforced any statute, rule, regulation, executive order, decree, judgment, preliminary or permanent injunction or other order which is in effect and which prohibits, enjoins or otherwise materially
restrains the consummation of the transactions contemplated hereby; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, that the party seeking to terminate shall have used commercially
reasonable efforts to cause any such decree, judgment, injunction or order to be vacated or lifted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Approval.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Approval shall have been obtained. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>45</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_kj1836_1_46"> </A> </FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Transferred Employees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall have Benefit Plans in place to cover the Transferred Employees; </FONT> <FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, if
such Benefit Plans are not in place for the Transferred Employees on or before the sixty-fifth (65<SUP>th</SUP>) day following
the date hereof, Buyers and the Sellers agree to mutually waive this closing condition. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>7.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent to the Obligations of the Sellers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
obligations of Parent and Sellers to effect the Closing and the transactions contemplated hereby are also subject to the satisfaction at or prior to the Closing Date of each of the following
additional conditions, any of which may be waived in writing by Parent and the Sellers: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Accuracy of Representations and Warranties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All representations and warranties made by Buyers herein (or in
any of the other documents or instruments to be delivered in connection herewith), (i)&nbsp;to the extent qualified by any Buyers Material Adverse Effect or other materiality (or equivalent)
qualification contained in any such representation or warranty, shall (except for representations and warranties made as of a specific date) be true and correct as of the Closing as if made as of the
Closing, and (ii)&nbsp;to the extent not qualified by any Buyers Material Adverse Effect or other materiality (or equivalent) qualification contained in such representation or warrant, shall (except
for representations and warranties made as of special date) be true and correct in all material respects as of the Closing as if made as of the Closing; and the Sellers shall have received a
certificate signed by an executive officer of each Buyer, dated as of Closing, to such effect; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Covenants.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall have performed or complied in all material respects with all
obligations, agreements and covenants contained in this Agreement (or in any of the other documents or instruments to be delivered in connection herewith) to be performed or complied with by it prior
to or at the Closing Date, and the Sellers shall have received a certificate signed by an executive officer of each Buyer, dated as of Closing, to such effect; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All other instruments, documents and other deliveries required by any other provision of
this Agreement (including Section&nbsp;3.2(b)) to be delivered or made by Buyers at or prior to the Closing, and any other documents reasonably requested by the Sellers to effect the transactions
contemplated hereby, shall have been made and delivered as required; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Proceedings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No action, suit or proceeding shall be pending or threatened before any Governmental Authority
or other Person wherein an unfavorable order or determination would (i)&nbsp;prevent
consummation of the transactions contemplated by this Agreement, (ii)&nbsp;cause any of the transactions contemplated by this Agreement to be rescinded following consummation or
(iii)&nbsp;adversely affect Parent. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>7.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent to the Obligations of Buyers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The
obligation of Buyers to effect the Closing and the transactions contemplated hereby is also subject to the satisfaction at or prior to the Closing of each of the following additional conditions, each
of which may be waived in writing by Buyers: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Accuracy of Representations and Warranties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All representations and warranties made by the Sellers herein
(or in any of the other documents or instruments to be delivered in connection herewith), (i)&nbsp;to the extent qualified by any Material Adverse Effect or any other materiality (or equivalent)
qualification contained in any such representation or warranty, shall (except for such representations and warranties made as of a specific date) be true and correct as of the Closing as if made as of
the Closing, and (ii)&nbsp;to the extent not qualified by any Material Adverse Effect or other materiality (or equivalent) qualification contained in such representation or warranty, shall (except
for representations and warranties made as of a specific date) be true and correct in all material respects as of the Closing as if made as of the Closing; and Buyers shall have received a certificate
signed by an executive officer of each of the Sellers, dated as of Closing, to such effect; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>46</FONT></P>

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<A NAME="page_kj1836_1_47"> </A>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Covenants.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Sellers shall have performed or complied in all material respects
with all obligations, agreements and covenants contained in this Agreement (or in any of the other documents or instruments to be delivered in connection herewith) to be performed or complied with by
such Seller prior to or on the Closing Date, and Buyers shall have received a certificate signed by an executive officer of each of the Sellers, dated as of Closing, to such effect; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Due Diligence Review.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Sellers shall have made such due diligence deliveries as are called for by this
Agreement, and Buyers shall be fully satisfied in their reasonable discretion with its due diligence investigations with respect to the Business and the Acquired Assets; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Material Adverse Change.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There have been, individually or in the aggregate, no material adverse changes
(i)&nbsp;in the rights of Buyers hereunder, in the Acquired Assets or Assumed Liabilities or in the operations, affairs, prospects (to the Knowledge of any Seller and other than general economic or
industry conditions or eventual technological obsolescence), properties, assets, liabilities, profits or condition (financial or otherwise) of the Business, or (ii)&nbsp;in the ability of any of the
Sellers to consummate the transactions contemplated hereby or to perform their respective obligations hereunder, including without limitation no material adverse changes in the Sellers' customer
relationships; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Related Party Agreements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall have received sufficient evidence that any Contracts (other than
Assumed Contracts) to which any current or former officer, director, stockholder, member,
manager or employee of any Seller or any Affiliate of any of the foregoing is a party, have in fact been terminated at no cost or expense to Buyers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Proceedings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No action, suit or proceeding shall be pending or threatened before any Governmental Authority
or other Person wherein an unfavorable order or determination would (i)&nbsp;prevent consummation of the transactions contemplated by this Agreement, (ii)&nbsp;cause any of the transactions
contemplated by this Agreement to be rescinded following consummation or (iii)&nbsp;adversely affect Parent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Power and Zibo Approval.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Parent shall have obtained consent to the sale and transfer of the Power Interests
and Zibo Interests to Buyers from the respective joint venture partners in Power and Zibo, and Buyers shall have received written evidence of such consents; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Transferred Employees Access.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Sellers shall have provided Buyers satisfactory access to the Transferred
Employees for the purpose described in Section&nbsp;6.14, which determination shall be made in Buyers' sole discretion; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Required Consents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall have received evidence that the Sellers have obtained the Required Consents; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lake Mead Contract.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall have received evidence that the Sellers shall have obtained any necessary
consents required in connection with Buyers performance as a subcontractor under the Lake Mead Contract (in accordance with Section&nbsp;6.13(b)) in a form satisfactory to Buyers in Buyers' sole
discretion; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All other instruments, documents and other deliveries required by any other provision of
this Agreement (including Section&nbsp;3.2(a)) to be delivered or made by any of the Sellers at or prior to the Closing, and any other documents reasonably requested by Buyers to effect the
transactions contemplated hereby, shall have been made and delivered as required. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>47</FONT></P>

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<A NAME="page_kj1836_1_48"> </A>
<UL>
<BR>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj1836_section_8_indemnification"> </A>
<A NAME="toc_kj1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;8<BR>  </B></FONT><FONT SIZE=2><B><I>INDEMNIFICATION    <BR>  </I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;General Indemnification by the Sellers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Sellers jointly
and severally covenant and agree to indemnify, defend, protect and hold harmless Buyers and each of their respective directors, officers, managers, employees, members, assigns, successors and
Affiliates (individually, a "</FONT><FONT SIZE=2><I>Buyers Indemnified Party</I></FONT><FONT SIZE=2>" and collectively, "</FONT><FONT SIZE=2><I>Buyers Indemnified Parties</I></FONT><FONT SIZE=2>")
from, against and in respect of: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all
liabilities, losses, claims, damages, (including punitive, consequential or exemplary damages), causes of action, lawsuits, administrative proceedings (including
informal proceedings), investigations, audits, demands, assessments, adjustments, judgments, settlement payments (including any costs associated with a license agreement), deficiencies, penalties,
fines, interest (including interest from the date of such damages) and costs and expenses (including without limitation reasonable attorneys' fees and disbursements of every kind, nature and
description) (collectively, "</FONT><FONT SIZE=2><I>Damages</I></FONT><FONT SIZE=2>") suffered, sustained, incurred or paid (subject to Section&nbsp;8.5) by any of the Buyers Indemnified Parties in
connection with, resulting from or arising out of: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;any
breach of any representation or warranty of any of the Sellers set forth in this Agreement or any Schedule attached hereto or certificate or other document executed
and delivered by Parent or any of the Sellers at the Closing pursuant to this Agreement including, without limitation, the Shareholder Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;any
breach of any covenant or agreement any of the Sellers in this Agreement or any other certificate or document executed and delivered by any of the Sellers pursuant
to this Agreement including, without limitation, the Shareholder Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
violation, conflict, breach of or default under (or omission or commission of any action, condition or event which, after notice or lapse of time or both, would
result in any such violation, conflict or breach of or default under) any Contract, lease, License, Permit or Law by any of the Sellers prior to the Closing Date; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
matters disclosed in Items&nbsp;1-3 on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2> (intellectual property), subject to
Section&nbsp;8.5(c), </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, Sellers shall have no obligation to indemnify the Buyers Indemnified Parties with respect to Damages resulting
from or arising out of actions of Buyers if Buyers would be required to indemnify Sellers' Indemnified Parties with respect to Damages resulting from or arising out of such actions by Buyers pursuant
to Section&nbsp;8.2(a)(iv). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;the
matter disclosed in Item&nbsp;4 on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2> (intellectual property), subject to
Sections&nbsp;8.5(c) and (d), </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, Sellers shall have no obligation to indemnify the Buyers Indemnified Parties with respect to Damages
resulting from or arising out of actions of Buyers if Buyers would be required to indemnify Sellers' Indemnified Parties with respect to Damages resulting from or arising out of such actions by Buyers
pursuant to Section&nbsp;8.2(a)(iv). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;the
Excluded Liabilities; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;the
Assumed Warranties, to the extent that such Assumed Warranties exceed the warranty reserve set forth in the Closing Statement of Net Equity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;the
termination of any agreement with sales representatives or distributors identified on </FONT><FONT SIZE=2><I>Schedule&nbsp;1.4(a)</I></FONT><FONT SIZE=2> (the
"</FONT><FONT SIZE=2><I>Sales Rep Agreements</I></FONT><FONT SIZE=2>") or any Oral Agreement, or the deemed termination of any Sales Rep Agreement or Oral Agreement resulting from this Agreement or
the transactions contemplated hereunder pursuant to applicable Law; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that, prior to the first anniversary of the Closing Date, Buyers:
(A)&nbsp;terminate the applicable agreement without, in the case of a Sales Rep Agreement, breaching its termination provisions, or, in the case of an Oral Agreement, the termination provisions set
forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.24</I></FONT><FONT SIZE=2> if any; or </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>48</FONT></P>

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<UL>
<UL>
<BR>

<P><FONT SIZE=2>
(B)&nbsp;provide two (2)&nbsp;months (or such shorter period as may be specified in the applicable Sales Rep Agreement or the provisions of the applicable Oral Agreement set forth on
Schedule&nbsp;6.24) written notice to the applicable sales representative or distributor stating the date upon which such Sales Rep Agreement or Oral Agreement will terminate; </FONT> <FONT SIZE=2><I>provided, further</I></FONT><FONT SIZE=2>, in the
case of any deemed termination of any Sales Rep Agreement or Oral Agreement resulting from this Agreement or the transactions
contemplated hereunder pursuant to applicable Law, the Sellers shall indemnify Buyers for all Damages with respect to such termination regardless of Buyers' compliance with clauses&nbsp;(A) and (B)
in the foregoing proviso. Notwithstanding anything to the contrary, the Sellers shall have no obligation to indemnify Buyers with respect to compensation expressly provided for in the applicable Sales
Rep Agreement or the provisions of the applicable Oral Agreement (as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;6.24</I></FONT><FONT SIZE=2>), and earned by the applicable sales
representative or distributor during the period between the Closing Date and the effective date of the termination of the applicable Sales Rep Agreement or Oral Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;except
for Buyers Assumed Taxes, any liability of any of the Sellers for Taxes or any liability for Taxes relating to the Acquired Assets or the Business for any
taxable period (or portion thereof) ending on or before the Closing Date, including, without limitation, Seller Transfer Taxes; and </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;any
and all Damages incident to the enforcement of this Section&nbsp;8.1. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;General Indemnification by Buyers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers covenant and agree
to indemnify, defend, protect and hold harmless the Sellers and their respective officers, directors, employees, stockholders, members, assigns, successors and Affiliates (individually, a
"</FONT><FONT SIZE=2><I>Sellers' Indemnified Party</I></FONT><FONT SIZE=2>" and collectively, "</FONT><FONT SIZE=2><I>Sellers' Indemnified Parties</I></FONT><FONT SIZE=2>") from and against: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;all
Damages suffered, sustained, incurred or paid (subject to Section&nbsp;8.5) by the Sellers' Indemnified Parties in connection with, resulting from or arising out
of: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;any
breach of any representation or warranty of Buyers set forth in this Agreement or any certificate or other document executed and delivered by Buyers at the Closing
pursuant to this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;any
breach of any covenant (except Section&nbsp;6.13(c)) or agreement of Buyers set forth in this Agreement or any certificate executed and delivered by Buyers at the
Closing pursuant to this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
Assumed Liabilities; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;any
infringement following the Closing Date of the Intellectual Property rights of any Person that results from or is caused by a change by Buyers in the design, use or
application of (A)&nbsp;any product that is an Acquired Asset or (B)&nbsp;any of the Sellers' Intellectual Property from the Sellers' design, use or application thereof as of the Closing Date or
any current development effort or current development project in progress as of the Closing Date; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;Buyer
Assumed Taxes; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;any
payments made by Sellers to satisfy their obligations set forth in the Supply Bond dated as of February&nbsp;17, 1999 issued by Automation, Intercargo Insurance
Company and Transatlantic Reinsurance Company in favor of Lake Mead Constructors ("</FONT><FONT SIZE=2><I>Lake Mead</I></FONT><FONT SIZE=2>") in the principal amount of $6,489,222 (the
"</FONT><FONT SIZE=2><I>Supply Bond</I></FONT><FONT SIZE=2>") arising in connection with Buyers' breach of Section&nbsp;6.13(c); </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>,
Buyers' indemnification obligation pursuant to this Section&nbsp;8.2(a)(vi) shall be limited to an amount equal to the product of: (A)&nbsp;the total payments made by Sellers to satisfy their
obligations set forth in the Supply Bond; and (B)&nbsp;the quotient resulting from dividing (1)&nbsp;the amount Lake Mead has paid or would owe to the </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>49</FONT></P>

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<UL>
<UL>
<BR>

<P><FONT SIZE=2>
Sellers or Buyers as compensation for performance following the Closing Date under the Lake Mead Contract (as modified or amended prior to Lake Mead's demand for payment of the Supply Bond), by
(2)&nbsp;the aggregate amount Lake Mead has paid or would owe to the Sellers or Buyers for performance under the Lake Mead Contract during the entire term of the Lake Mead Contract (as modified or
amended prior to Lake Mead's demand for payment of the Supply Bond); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;a
breach of Section&nbsp;6.13(c); </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, Buyer's indemnification obligation pursuant to this
Section&nbsp;8.2(a)(vii) shall be limited to an amount equal to the aggregate payments that Buyers receive
from the Sellers or Lake Mead in connection with Buyers performance of the Lake Mead Contract as a subcontractor to the Sellers; and </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;any
and all Damages incident to the enforcement of this Section&nbsp;8.2. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Limitation and Survival of Indemnification Obligations.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Notwithstanding
anything to the contrary herein, there shall be no liability for indemnification under Section&nbsp;8.1 until the aggregate amount of Damages in
respect of which the Buyers Indemnified Parties would be entitled to indemnification under Section&nbsp;8.1 exceeds two (2)&nbsp;percent of the Purchase Price (the
"</FONT><FONT SIZE=2><I>Sellers' Indemnification Threshold</I></FONT><FONT SIZE=2>"), at which time the Sellers will be obligated to indemnify the Buyers Indemnified Parties only with respect to the
aggregate amount of all Damages in respect of which the Buyers Indemnified Parties would be entitled to indemnification under Section&nbsp;8.1 which are in excess of the Sellers' Indemnification
Threshold; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the Sellers' Indemnification Threshold shall not apply to (i)&nbsp;the Purchase Price Adjustment;
(ii)&nbsp;Damages in connection with, resulting from or arising out of any breaches of the covenants of any of the Sellers set forth in this Agreement or any document, instrument or certificate
delivered by any of the Sellers in connection herewith including, without limitation, the Shareholder Agreement, or out of the breach of representations made by any of the Sellers in any of the
following sections: Sections&nbsp;4.2 (authorization; validity), 4.6 (environmental matters), 4.7 (acquired assets), 4.19 (labor and employment matters), 4.20 (employee benefit plans), 4.21
(conformity with law), 4.22 (litigation) or 4.24 (taxes); or (iii)&nbsp;Damages described in Section&nbsp;8.1(a)(iii)-(ix). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;There
shall be no liability for indemnification under Section&nbsp;8.2 until the aggregate amount of Damages in respect of which the Sellers' Indemnified Parties would
be entitled to indemnification under Section&nbsp;8.2 exceeds two (2)&nbsp;percent of the Purchase Price (the "</FONT><FONT SIZE=2><I>Buyers Indemnification Threshold</I></FONT><FONT SIZE=2>"),
at which time Buyers will be obligated to indemnify the Sellers' Indemnified Parties only with respect to the aggregate amount of all Damages in respect of which the Sellers' Indemnified Parties would
be entitled to indemnification under Section&nbsp;8.2 which are in excess of the Buyers Indemnifications Threshold; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that Buyers
Indemnification Threshold shall not apply to (i)&nbsp;the Purchase Price Adjustment; (ii)&nbsp;Damages in connection with, resulting from or arising out of any breaches of the covenants of Buyers
set forth in this Agreement, or any document, instrument or certificate delivered by Buyers in connection herewith, or out of the breach of representations made by Buyers in Section&nbsp;5.2
(authorization; validity); or (iii)&nbsp;Damages described in Section&nbsp;8.2(a)(iii)-(vii). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;The
indemnification obligations under Sections&nbsp;8.1 and 8.2 shall survive the Closing and, to the extent relating to a representation, warranty or covenant, shall
terminate on the expiration date of the representation, warranty or covenant to which such obligation relates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;The
aggregate indemnification obligations of the Sellers shall be limited to an amount equal to the Purchase Price (the
"</FONT><FONT SIZE=2><I>Cap</I></FONT><FONT SIZE=2>"); </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the Cap shall not apply to (i)&nbsp;the Purchase Price
Adjustment; (ii)&nbsp;Damages in connection with, resulting from or arising out of any breaches of the covenants of any of the Sellers set forth in this Agreement or any document, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>50</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>
instrument or certificate delivered by any of the Sellers in connection herewith including, without limitation, the Shareholder Agreement, or out of the breach of representations made by any of the
Sellers in any of the following sections:Sections&nbsp;4.2 (authorization; validity), 4.6 (environmental matters), 4.7 (acquired assets), 4.19 (labor and employment matters), 4.20 (employee benefit
plans), 4.21 (conformity with law), 4.22 (litigation) or 4.24 (taxes); (iii)&nbsp;Damages described in Section&nbsp;8.1(a)(iii)-(iv); or Damages described in Sections 8.1(a)(vi)-(ix). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;The
aggregate indemnification obligations of Buyers shall be limited to the Cap; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the Cap shall
not apply to (i)&nbsp;Damages in connection with, resulting from or arising out of any breaches of the covenants of Buyers set forth in this Agreement or any document, instrument or certificate
delivered by Buyers in connection herewith, or out of the breach of representations made by Buyers in any of the following sections: Section&nbsp;5.2 (authorization, validity) or (ii)&nbsp;Damages
described in Section&nbsp;8.2(a)(iii)-(v). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Absent
actual fraud or intentional misrepresentation by any Seller, the indemnification provisions set forth in Section&nbsp;8.1, 8.2 and 8.3 shall be the sole and
exclusive remedy any party may have with respect to any Damages. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Survival and Expiration of Representations, Warranties and
Covenants.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;All
representations, warranties and covenants made by any Buyer or any Seller in or pursuant to this Agreement, any of the other documents or agreements to be executed
by a party hereto in connection with this Agreement or in any Schedule or certificate delivered at the Closing (including, without limitation, the Shareholder Agreement) pursuant hereto shall be
deemed to have been made on the date of this Agreement (except as otherwise provided herein) and, if a Closing occurs, as of the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
representations and warranties of Buyers shall survive the Closing and shall expire on the later to occur of (x)&nbsp;the eighteen (18)&nbsp;months following the
Closing Date or (y)&nbsp;the final resolution of Claims pending with respect to such representations and warranties as of the first anniversary of the Closing Date. The representations and
warranties of each of the Sellers shall survive the Closing and shall expire on the later of the applicable dates specified in clause&nbsp;(i) or (ii) of this Section&nbsp;8.4(b): </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;(1)
except as to representations and warranties specified in clause&nbsp;(i)(2), (i)(3) and (i)(4) of this Section&nbsp;8.4(b), the date that is eighteen
(18)&nbsp;months following the Closing Date; or </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;with
respect to Sections&nbsp;4.1 (due organization), 4.2 (authorization, validity) and 4.7(a)&nbsp;(acquired assets), indefinitely; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;with
respect to Sections&nbsp;4.6 (environmental matters), 4.20 (employee benefit plans), 4.24 (taxes) and 4.19 (labor and employment matters), on (A)&nbsp;the date
that is six (6)&nbsp;months after the expiration of the longer of the federal or state statute of limitation (including extensions thereof) applicable thereto, or (B)&nbsp;if there is no
applicable statute of limitation, five (5)&nbsp;years after the Closing Date; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;with
respect to Section&nbsp;4.9 (intellectual property), the date that is four (4)&nbsp;years following the Closing Date. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the
final resolution of Claims pending as of the relevant dates described in clause&nbsp;(i) of this Section&nbsp;8.4(b). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;All
covenants and indemnification obligations of the parties that are to be performed in whole or in part after Closing shall survive the Closing, continue in effect and
expire in accordance with their respective terms. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>51</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Notwithstanding
anything to the contrary herein, the right of any party hereto to indemnification, payment of Damages or other remedies will not be affected in any way
by any investigation conducted or knowledge acquired at any time by such party with respect to the accuracy or inaccuracy of or compliance with or performance of, any representation, warranty,
covenant, agreement or obligation or by the waiver of any condition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;Notwithstanding
anything to the contrary herein, for purposes of the indemnity in Section&nbsp;8.1, each representation, warranty, covenant and agreement made by any
of the Sellers (other than those made in Sections&nbsp;4.15 and 4.31) is made without any qualifications or limitations as to knowledge or materiality (including without limitation any
qualifications or limitations made by reference to a Material Adverse Effect or Knowledge) and the words "knowledge" and "materiality" shall be deemed deleted from any such representation, warranty
covenant or agreement (other than those made in Sections&nbsp;4.15 and 4.31). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification Procedures.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All claims or demands for
indemnification under this Section&nbsp;8 ("</FONT><FONT SIZE=2><I>Claims</I></FONT><FONT SIZE=2>") shall be asserted and resolved as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;In
the event that any Person entitled to indemnification hereunder (the "</FONT><FONT SIZE=2><I>Indemnified Party</I></FONT><FONT SIZE=2>") has a Claim against any
party obligated to provide indemnification pursuant to Section&nbsp;8.1 or 8.2 hereof (the "</FONT><FONT SIZE=2><I>Indemnifying Party</I></FONT><FONT SIZE=2>") which does not involve a Claim being
sought to be collected by a third party, the Indemnified Party shall with reasonable promptness send a Claim Notice with respect to such Claim to each Indemnifying Party. If the Indemnifying Party
does not notify the Indemnified Party within fifteen (15)&nbsp;days from receipt of the Claim Notice (the "</FONT><FONT SIZE=2><I>Notice Period</I></FONT><FONT SIZE=2>") that the Indemnifying Party
disputes such Claim, the amount of such Claim shall be conclusively deemed a liability of the Indemnifying Party hereunder. In case an objection is made in writing in accordance with this
Section&nbsp;8.5(a), the Indemnified Party shall have fifteen (15)&nbsp;days to respond in a written statement to the objection. If after such fifteen (15)&nbsp;day period there remains a
dispute as to any Claims, the parties shall attempt in good faith for fifteen (15)&nbsp;days to agree upon the rights of the respective parties with respect to each of such Claims. If the parties
should so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;In
the event that any Claim for which the Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against an Indemnified Party by a third party,
the Indemnified Party shall with reasonable promptness notify the Indemnifying Party of such Claim, specifying the nature of such claim and the amount or the estimated amount thereof to the extent
then feasible (which estimate shall not be conclusive of the final amount of such Claim) (the "</FONT><FONT SIZE=2><I>Claim Notice</I></FONT><FONT SIZE=2>"). The Indemnifying Party shall, within the
Notice Period, notify the Indemnified Party (i)&nbsp;whether or not such Indemnifying Party disputes the liability to the Indemnified Party hereunder with respect to such Claim and (ii)&nbsp;if
such Indemnifying Party does not dispute such liability, whether or not the Indemnifying Party desires, at the sole cost and expense of the Indemnifying Party, to defend against such Claim, provided
that such Indemnifying Party is hereby authorized (but not obligated) prior to and during the Notice Period to file any motion, answer or other pleading and to take any other action which the
Indemnifying Party shall deem necessary or appropriate to protect the Indemnifying Party's interests. In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period
that the Indemnifying Party does not dispute the Indemnifying Party's obligation to indemnify hereunder and desires to defend the Indemnified Party against such Claim and except as hereinafter
provided, such Indemnifying Party shall have the right to defend by appropriate proceedings, which proceedings shall be promptly settled or prosecuted by such party to a final conclusion, </FONT> <FONT SIZE=2><I>provided </I></FONT><FONT SIZE=2>that,
unless the Indemnified Party otherwise agrees in writing (which agreement shall not be unreasonably withheld) the Indemnifying Party may
not settle any matter (in whole or in part) unless such settlement (A)&nbsp;includes a complete and unconditional release of the Indemnified Party, and (B)&nbsp;excludes any </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>52</FONT></P>

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<UL>
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<P><FONT SIZE=2>
injunctive or non-monetary relief (including any license agreement) applicable to the Indemnified Party or any of its subsidiaries or Affiliates. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement, the Indemnified Party may do so at its sole cost and expense. If the Indemnifying Party elects not to defend the Indemnified Party
against such Claim, whether by failure of such party to give the Indemnified Party timely notice as provided above or otherwise, then the Indemnified Party, without waiving any rights against such
party, may settle or defend against any such Claim in the Indemnified Party's sole discretion and the Indemnified Party shall be entitled to recover from the Indemnifying Party the amount of any
settlement or judgment and, on an ongoing basis, all Damages of the Indemnified Party with respect thereto, including interest from the date such Damages
were incurred. All reasonable costs and expenses incurred by the Indemnified Party in so defending a Claim shall constitute Damages. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;If
at any time any Claim described in Section&nbsp;8.5(b) seeks material prospective relief which is reasonably likely to have a material adverse effect on the assets,
liabilities, financial condition, results of operations or business prospects of any Indemnified Party or any Affiliate thereof or involves any Intellectual Property, the Indemnified Party shall have
the right to control or assume (as the case may be) the defense of any such Claim and the amount of any judgment or settlement and the reasonable costs and expenses of defense shall be included as
part of the indemnification obligations of the Indemnifying Party hereunder. If the Indemnified Party shall elect to exercise such right, the Indemnifying Party shall have the right to participate in,
but not control, or interfere with, the defense of such claim or demand at the sole cost and expense of the Indemnifying Party; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, with
respect to any Claim arising in connection with a matter set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, Parent shall have the right to consent to any settlement
of such Claim negotiated by Buyer, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary (subject to Section&nbsp;8.5(d)), the Sellers shall indemnify the Buyers
Indemnified Parties from and against any cost or expense (including attorneys' fees) incurred in connection with Parent's refusal to consent to any settlement of a Claim arising in connection with a
matter set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2>, regardless of whether Parent's refusal to consent shall be determined to be reasonable. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;If
Buyers elect not to settle a Claim or Claims arising in connection with Item&nbsp;4 on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.9(c)</I></FONT><FONT SIZE=2> (the
"</FONT><FONT SIZE=2><I>Item&nbsp;4 Claim(s)</I></FONT><FONT SIZE=2>") and to defend such Item&nbsp;4 Claim(s), then the Sellers' total indemnification obligation to the Buyers with respect to
the Item&nbsp;4 Claims(s) shall be for: (A)&nbsp;the Buyers Indemnified Parties' costs and expenses, including attorneys fees, incurred in defense of the Item&nbsp;4 Claims; and (B)&nbsp;any
judgment(s) or award(s) to such third party to the extent that such judgment(s) or award(s) exceeds $500,000; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, with respect to any
judgments or awards, the Sellers will be obligated to indemnify the Buyer Indemnified Parties only for a total amount in excess of $500,000 and less than $2,500,000. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;If
Parent refuses to consent to the settlement of an Item&nbsp;4 Claim(s), Parent shall provide a written notice to Buyers of such refusal to consent specifically
stating that Parent refuses to consent because either (but not both) (1)&nbsp;Parent asserts that there is no liability for the Item&nbsp;4 Claim(s) alleged by the third party or (2)&nbsp;Parent
acknowledges and agrees there is liability for the Item&nbsp;4 Claim(s) alleged by the third party, but Parent asserts that the amount Buyers paid to settle the Item&nbsp;4 Claim(s) is
unreasonable under the circumstances. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>53</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;If
Parent refuses to consent under clause&nbsp;(d)(1) above, then notwithstanding anything to the contrary, the Sellers shall indemnify Buyers Indemnified Parties
from, against and in respect of all Damages (including any costs associated with a license agreement whether or not such costs are reasonable) incurred by Buyers Indemnified Parties in connection with
the Item&nbsp;4 Claim(s) unless the Parent can demonstrate that the third party would not have prevailed on the Item&nbsp;4 Claim(s) based upon the allegations asserted by the third party and all
relevant defenses concerning the Item&nbsp;4 Claim(s). If Parent refuses to consent under clause&nbsp;(d)(1), then notwithstanding anything to the contrary, the Sellers hereby stipulate that the
amount Buyers paid to settle the Item&nbsp;4 Claim(s) is reasonable under the circumstances and the Sellers waive any and all claims and/or defenses they may have alleging that the amount Buyers
paid to settle the Item&nbsp;4 Claim(s) is unreasonable under the circumstances. If it is established that such third party would have prevailed on the Item&nbsp;4 Claim(s), then Sellers' total
indemnification obligations to the Buyers shall be for: (A)&nbsp;the Buyers Indemnified Parties' costs and expenses, including attorneys fees, incurred in defense of the Item&nbsp;4 Claim(s) and
(B)&nbsp;any payments made by the Buyers to such third party that exceed $500,000; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
that with respect to clause&nbsp;(B) the Sellers will be obligated to indemnify the Buyer Indemnified Parties only for a total amount in excess of $500,000 and less than $2,500,000. If it is
established that such third party would not have prevailed on the Item&nbsp;4 Claim(s), then (subject to 8.5(d)(iii)) the Sellers' sole indemnification obligation to the Buyers shall be for the
Buyers Indemnified Parties' costs and expenses, including attorneys fees, incurred in defense of the Item&nbsp;4 Claim(s). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;If
Parent refuses to consent under clause&nbsp;(d)(2) above, then notwithstanding anything to the contrary, the Sellers hereby stipulate that there is liability for
the Item&nbsp;4 Claim(s) alleged by the third party, and the Sellers hereby waive any and all claims and/or defenses they may have alleging that there is no liability for the Item&nbsp;4 Claim(s)
alleged by the third party and acknowledge and agree that Damages shall be determined based on the assumption that there is liability for the Item&nbsp;4 Claim(s) alleged by the third party. If it
is established that the amount of the settlement was unreasonable, the Sellers' total liability to Buyers (subject to Section&nbsp;8.5(d)(iii)) shall be limited to an amount determined to be a
reasonable amount, plus the Buyers Indemnified Parties' costs and expenses, including attorneys' fees, incurred in defense of the Item&nbsp;4 Claim(s). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;Notwithstanding
anything to the contrary, the Sellers shall indemnify the Buyers Indemnified Parties from and against any cost or expense, including attorneys' fees,
incurred in connection with Parent's refusal to consent to any settlement of an Item&nbsp;4 Claim(s), regardless of the results under Section&nbsp;8.5(d)(i) or (ii) or whether Parent's refusal to
consent shall be determined to be reasonable. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;Nothing
herein shall be deemed to prevent the Indemnified Party from making a claim, and an Indemnified Party may make a claim hereunder, for potential or contingent
claims or demands provided the Claim Notice sets forth the specific basis for any such potential or contingent claim or
demand to the extent then feasible and to the extent such a claim or demand is reasonably likely to be made. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The
Indemnified Party's failure to give reasonably prompt notice as required by this Section&nbsp;8.5 of any actual, threatened or possible Claim which may give rise
to a right of indemnification hereunder shall not relieve the Indemnifying Party of any liability which the Indemnifying Party may have to the Indemnified Party except to the extent the failure to
give such notice materially and adversely prejudiced the Indemnifying Party. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>54</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;The
parties will make appropriate adjustments for any Tax benefits, Tax detriments or insurance proceeds in determining the amount of any indemnification obligation
under Section&nbsp;8.1 or 8.2. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.6</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;No Right to Set Off.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers shall not have the right to set
off, in whole or in part, against any obligation it owes to any of the Sellers, any amounts owed to Buyers by any of the Sellers under the terms hereof. Without limiting the foregoing, Buyers shall
not have the right to retain from the Business Holdback or Name Holdback any amounts owed to Buyers by Parent or any of the Sellers under the terms hereof. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1836_section_9_noncompetition_and_confidentiality"> </A>
<A NAME="toc_kk1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;9<BR>  </B></FONT><FONT SIZE=2><B><I>NONCOMPETITION AND CONFIDENTIALITY</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Prohibited Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As further consideration for the
purchase and sale of the Acquired Assets and the other transactions contemplated by this Agreement, no Seller will, and each Seller will cause each of their respective Restricted Affiliates not to,
for a period of four (4)&nbsp;years following the Closing Date, for any reason whatsoever, directly or indirectly, for itself or on behalf of or in conjunction with any other Person: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;engage
anywhere in the world (the "</FONT><FONT SIZE=2><I>Territory</I></FONT><FONT SIZE=2>"), as an officer, director, stockholder, owner, partner, member, joint
venturer, investor, employee, independent contractor, consultant, adviser, sales representative or otherwise, in any business, or in selling, manufacturing, distributing or marketing any product or
service, that compete directly or indirectly, or is reasonably likely to compete directly or indirectly, with any service or product of Buyers with respect to the Business; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;call
upon, solicit or hire away any Person who is, at that time, or that has been, within six (6)&nbsp;months prior to that time, within the Territory, an employee,
contractor, subcontractor, independent consultant, sales representative or vendor of Buyers for the purpose or with the intent of enticing such employee, contractor, subcontractor, independent
consultant, sales representative or vendor away from Buyers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;call
upon or solicit any Person who is, at that time, or that has been, within two (2)&nbsp;years prior to that time, a customer of Buyers with respect to the Business
within the Territory for the purpose of soliciting or selling products or services in competition with Buyers with respect to the Business within the Territory; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;call
upon any prospective acquisition candidate with respect to the Business only that was, to the Knowledge of any Seller, previously called upon by Buyers as a
prospective acquisition candidate with respect to the Business only. Each of the Sellers, to the extent lacking the Knowledge described in the preceding sentence, shall immediately cease all contact
with such prospective acquisition candidate with respect to the Business only upon being informed that Buyers have previously called upon such candidate with respect to the Business only. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;For
purposes of this Section&nbsp;9.1, the term "</FONT><FONT SIZE=2><I>Buyers</I></FONT><FONT SIZE=2>" includes all Affiliates of Buyers. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Sellers recognizes that it has
acquired and will acquire Restricted Information, the use or disclosure of which could cause Buyers or their respective Affiliates or subsidiaries substantial loss and damages that could not be
readily calculated and for which no remedy at law would be adequate. Accordingly, each of the Sellers covenants and agrees with Buyers that it will not at any time, except in performance of their
obligations to Buyers, directly or indirectly, use, disclose or publish, or permit Restricted Affiliates not so authorized to use, disclose or publish, any Restricted Information, or use any
Restricted Information in a manner detrimental to the interests of Buyers, unless (i)&nbsp;such Restricted Information becomes known to the public generally through no fault of any of the Sellers or
any of the Restricted Affiliates, (ii)&nbsp;disclosure is required by Law or the order of any Governmental Authority under color of law, or (iii)&nbsp;the disclosing party reasonably believes that
such </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>55</FONT></P>

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<A NAME="page_kk1836_1_56"> </A>

<P><FONT SIZE=2>
disclosure is required in connection with the defense of a lawsuit against the disclosing party; provided, that prior to disclosing any Restricted Information pursuant to clause&nbsp;(i), (ii) or
(iii) above, such Seller shall give prior written notice thereof to Buyers and provide Buyers with the opportunity to contest such disclosure and shall cooperate with efforts to prevent such
disclosure. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Reasonable Restraint.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The parties agree that the covenants
in this SECTION&nbsp;9 impose a reasonable restraint on the Sellers in light of the activities and business of Buyers, the Sellers and their respective Affiliates on the date of the execution of
this Agreement and the current plans of Buyers, the Sellers and their respective Affiliates. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability; Reformation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The covenants in this SECTION 9
are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and the Agreement shall thereby be reformed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Independent Covenant.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All of the covenants in this SECTION 9
shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any claim or cause of action of any of the Sellers against Buyers or any of its respective
Affiliates, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Buyers or their respective Affiliates of such covenants. The parties expressly
acknowledge that the terms and conditions of this SECTION&nbsp;9 are independent of the terms and conditions of any other agreements including, but not limited to, any employment agreements entered
into in connection with this Agreement. It is specifically agreed that the periods set forth in this SECTION&nbsp;9 during which the agreements and covenants of the Sellers made in this
SECTION&nbsp;9 shall be effective, shall be computed by excluding from such computation any time during which any of the Sellers is found by a court of competent jurisdiction to have been in
violation of any provision of this SECTION&nbsp;9. The covenants contained in SECTION&nbsp;9 shall not be affected by any breach of any other provision hereof by any party hereto and shall have no
effect if the transactions contemplated by this Agreement are not consummated. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.6</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Materiality.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the parties hereto hereby agree that
the covenants set forth in this SECTION&nbsp;9 are a material and substantial part of the transactions contemplated by this Agreement, supported by adequate consideration. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1836_section_10_termination,_amendment_and_waiver"> </A>
<A NAME="toc_kk1836_2"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;10<BR>  </B></FONT><FONT SIZE=2><B><I>TERMINATION, AMENDMENT AND WAIVER</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be terminated at any time
prior to the Closing Date, whether before or after approval of this Agreement by the Shareholders: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;by
mutual written consent of Parent and Buyer; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;by
either Parent or Buyer: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;if
any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the
consummation of the Acquisition and such order, decree or ruling or other action shall have become final and nonappealable; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;if,
at the Shareholder Meeting (including any adjournment thereof) this Agreement shall fail to be adopted and approved by the requisite vote of the Shareholders; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;if
the Acquisition shall not have been consummated on or before the date which is [three] months following the date hereof, unless the failure
to consummate the Acquisition is </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>56</FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1836_1_57"> </A>
<UL>
<UL>
<BR>

<P><FONT SIZE=2>
the result of a material breach of this Agreement by the party seeking to terminate this Agreement; </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;by
Buyer if: (i)&nbsp;the Board of Directors of Parent, shall not have recommended, or shall have resolved not to recommend, or shall have qualified, modified or
withdrawn its recommendation of the Acquisition or its declaration that the Acquisition is advisable and fair to and in the best interest of Parent and its Shareholders, or shall have resolved to do
so; (ii)&nbsp;any Seller or any of their Affiliates shall have breached Section&nbsp;6.5; or (iii)&nbsp;the Board of Directors of Parent shall have approved or recommended an Acquisition
Proposal. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;by
Buyer, if any Seller shall have failed to perform in any material respect any of its obligations or to comply in any material respect with any agreement or covenant
of any Seller to be performed or complied with by it under this Agreement, which failure cannot be or has not been cured within twenty (20)&nbsp;business days after the giving of written notice
thereof to Parent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;by
Buyer, if there has been a breach of any of the representations and warranties of any Seller set forth in this Agreement that are qualified as to materiality or there
has been a material breach of any such representation or warranty that is not so qualified, in each case which breach cannot be or has not been cured within twenty (20)&nbsp;business days after the
giving of written notice thereof to Parent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;by
Parent, if Buyers shall have failed to perform in any material respect any of their obligations or to comply in any material respect with any agreement or covenant of
Buyers to be performed or complied with by it or them under this Agreement, which failure cannot be or has not been cured within twenty (20)&nbsp;business days after the giving of written notice
thereof to Buyers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;by
Parent, if there has been a breach of any of the representations and warranties of Buyers set forth in this Agreement that are qualified as to materiality or there
has been a material breach of any such representation or warranty that is not so qualified, in each case which breach cannot be or has not been cured within twenty (20)&nbsp;business days after the
giving of written notice thereof to Buyers; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;by
Buyer or Parent if, prior to the consummation of the Acquisition, Parent's Board of Directors shall have determined to recommend, a Superior Proposal to its
Shareholders and/or to enter into a contract or agreement concerning such Superior Proposal after making the determination required by Section&nbsp;6.5(a); </FONT><FONT SIZE=2><I>provided  </I></FONT><FONT SIZE=2>that Parent may not exercise its
right to terminate under this Section&nbsp;10.1(h) (and may not enter into a contract or agreement with respect to any Superior Proposal)
unless and until (i)&nbsp;Parent shall have provided Buyer written notice at least seven (7)&nbsp;business days prior to such termination that Parent's Board of Directors has authorized and
intends to effect the termination of this Agreement pursuant to this Section&nbsp;10.1(h), including copies of all proposed Contracts, including the forms of any agreements supplied by third
parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto),
(ii)&nbsp;Parent's Board of Directors shall have determined, in good faith and after consultation with its outside legal counsel and its investment banking firm, that, at the time of its
determination to terminate this Agreement and at the end of the 7-business day period referred to in clause&nbsp;(i) above, (1)&nbsp;the foregoing Acquisition Transaction constitutes a
Superior Proposal, and (2)&nbsp;failing to take such action would result in a breach of the fiduciary duties of Parent's Board of Directors under applicable Law, (iii)&nbsp;Parent shall otherwise
be in compliance with its obligations under this Agreement, and (iv)&nbsp;(A)&nbsp;within one (1)&nbsp;business day of termination by Buyer, or (B)&nbsp;prior to such termination in the case
of termination by Parent, Parent shall have paid to Buyers the Termination Fee and the Expense Fee described in Section&nbsp;10.5(a). </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>57</FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1836_1_58"> </A>
<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
right of any party hereto to terminate this Agreement pursuant to this Section&nbsp;10.1 shall remain operative and in full force and effect regardless of any investigation made by
or on behalf of any party hereto, any person controlling any such party or any of their respective officers or directors, whether prior to or after the execution of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Termination.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event of termination of this
Agreement by either Parent or Buyer, as provided in Section&nbsp;10.1, this Agreement shall forthwith become void and there shall be no liability hereunder on the part of Buyers, Sellers or their
respective officers or directors except for Section&nbsp;9.2, Section&nbsp;10.2, Section&nbsp;10.5, Section&nbsp;11.4 (expenses and fees), Section&nbsp;11.7 (governing law) and
Section&nbsp;11.13 (public disclosures), which shall survive the termination; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
nothing contained in this Section&nbsp;10.2 shall relieve any party hereto from any liability for any willful breach of a representation or warranty contained in this Agreement or the willful breach
of any covenant contained in this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendment.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors, at any time before or after approval of the matters presented in connection with the Acquisition by the Shareholders,
but, after any such approval, no amendment shall be made which by law requires further approval by such Shareholders without such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Waiver.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;At any time prior to the Closing Date, the parties
hereto may (i)&nbsp;extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii)&nbsp;waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii)&nbsp;waive compliance with any of the agreements or conditions contained herein which may legally be waived. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination Fee.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;If
this Agreement is terminated pursuant to Sections&nbsp;10.1(b)(ii), 10.1(c) or 10.1(h) then the Parent will, prior to such termination, pay to Buyers a termination
fee equal to $300,000 in cash (the "</FONT><FONT SIZE=2><I>Termination Fee</I></FONT><FONT SIZE=2>") and Buyer's aggregate legal expenses (the "</FONT><FONT SIZE=2><I>Expense
Fee</I></FONT><FONT SIZE=2>") incurred or paid by or on behalf of Buyers in connection with or in contemplation of the Acquisition or the consummation of any of the transactions contemplated by this
Agreement; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, the Expense Fee shall not exceed $150,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;If
this Agreement is terminated pursuant to Section&nbsp;10.1(b)(iii), 10.1(d) or 10.1(e) and within twelve (12)&nbsp;months of the date of termination an
Acquisition Proposal is consummated, Parent shall, prior to or simultaneously with the consummation of such transaction, pay Buyers the Termination Fee and the Expense Fee. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;The
agreement contained in this Section&nbsp;10.5 is an integral part of the Transactions and constitutes liquidated damages in the event of the occurrence of the
circumstances specified in Section&nbsp;10 above and not a penalty. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk1836_section_11_general_provisions"> </A>
<A NAME="toc_kk1836_3"> </A>
<BR></FONT><FONT SIZE=2><B>SECTION&nbsp;11<BR>  </B></FONT><FONT SIZE=2><B><I>GENERAL PROVISIONS</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.1</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Successors and Assigns.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and the rights of
the parties hereunder may not be assigned without the prior written consent of the other parties hereto (except by operation of law) and shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs and legal representatives; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
Buyers may assign any or all of their rights, obligations or liabilities hereunder to any of its wholly-owned Affiliates; </FONT><FONT SIZE=2><I>provided further </I></FONT><FONT SIZE=2>that Buyers
may assign any or all of their rights and obligations under this Agreement to any party that </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>58</FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1836_1_59"> </A>

<P><FONT SIZE=2>
merges with or acquires all or substantially all of the stock or assets of Buyers so long as, in the case of any assignment by Buyers, Buyers remain fully liable for the obligations or liabilities so
assigned. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.2</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement (which includes the
Schedules hereto) sets forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby. It shall not be amended or modified except by a written instrument
duly executed by each of the parties hereto. Any and all previous agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement. Each of the Schedules to this Agreement is incorporated herein by this reference and expressly made a part hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.3</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in multiple
counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.4</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Expenses and Fees.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Buyers will pay and be solely
responsible for all of the fees, expenses and disbursements of Buyers and its agents, representatives, financial advisors, accountants and counsel incurred in connection with this Agreement and the
transactions contemplated hereby, including without limitation negotiation, legal, travel and due diligence expenses. The Sellers will pay and be solely responsible for all of the fees, expenses and
disbursements of the Sellers and their agents, representatives, financial advisers, accountants and counsel incurred in connection with this Agreement and the transactions contemplated hereby,
including without limitation negotiation, legal, travel and due diligence expenses and all fees and expenses associated with Blitzer, Ricketson&nbsp;&amp; Co. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.5</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Specific Performance; Remedies.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party hereto
acknowledges that the other parties will be irreparably harmed and that there will be no adequate remedy at law for any violation by any of them of any of the covenants or agreements contained in this
Agreement, including without limitation, the noncompetition and confidentiality obligations set forth in SECTION&nbsp;9. It is accordingly agreed that, in addition to any other remedies which may be
available upon the breach of any such covenants or agreements, each party hereto shall have the right to obtain injunctive relief to restrain a breach or threatened breach of, or otherwise to obtain
specific performance of, the covenants and agreements contained in this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.6</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any notice, request, claim, demand, waiver,
consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given if delivered personally or sent by telefax (with confirmation of
receipt), by registered or certified mail, postage prepaid, or by recognized courier service, as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
to either Buyer to: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Qualitrol
Power Products,&nbsp;LLC<BR>
c/o Danaher Corporation<BR>
2099 Pennsylvania Avenue, N.W.<BR>
12th Floor<BR>
Washington, D.C. 20006<BR>
Attn: Alex Joseph, Director of Corporate Development<BR>
(202)&nbsp;828-0850 (phone)<BR>
(202)&nbsp;828-0860 (telefax) </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>59</FONT></P>

<HR NOSHADE>
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<A NAME="page_kk1836_1_60"> </A>
<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
a required copy to: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Wilmer,
Cutler&nbsp;&amp; Pickering<BR>
2445 M Street, N.W.<BR>
Washington D.C. 20037<BR>
Attn: Mark A. Dewire, Esquire<BR>
(202)&nbsp;663-6658 (phone)<BR>
(202)&nbsp;663-6363 (telefax) </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
to any Seller to: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Hathaway
Corporation<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124<BR>
Attn: Richard Smith, President<BR>
(303)&nbsp;799-8200 (phone)<BR>
(303)&nbsp;799-8880 (telefax) </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
a required copy to: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Sherman&nbsp;&amp;
Howard&nbsp;L.L.C.<BR>
633 Seventeenth Street, Suite&nbsp;3000<BR>
Denver, Colorado 80202<BR>
Attn: Scott Pullara<BR>
(303)&nbsp;297-2900 (phone)<BR>
(303)&nbsp;298-0940 (telefax) </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>or
to such other address as the Person to whom notice is to be given may have specified in a notice duly given to the sender as provided herein. Such notice, request, claim, demand, waiver, consent,
approval or other communication shall be deemed to have been given as of the date so delivered, telefaxed, mailed or dispatched and, if given by any other means, shall be deemed given only when
actually received by the addressees. All notices and communications required to be directed to any Seller under this Agreement shall be directed to Parent in accordance with this Section&nbsp;11.6
in lieu of directing them to each Seller. All notices and communication required to be directed to Buyers under this Agreement shall be delivered by Parent in lieu of delivery by each Seller. Buyers
shall be entitled to rely upon any communication or writings given or executed by Parent. All notices sent to Parent shall be deemed notice to each Seller hereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.7</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of Delaware without giving effect to the choice of law provisions thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.8</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Selection of a Forum.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;EACH PARTY HERETO AGREES THAT IT
SHALL BRING ANY ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR CONTRACT
OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (THE "CHOSEN COURT") AND (A)&nbsp;IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
CHOSEN COURT, (B)&nbsp;WAIVES ANY OBJECTION TO LAYING OF VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURT, (C)&nbsp;WAIVES ANY OBJECTION THAT THE CHOSEN COURT ARE AN INCONVENIENT FORUM
OR DO NOT HAVE JURISDICTION OVER ANY PARTY HERETO, AND (D)&nbsp;AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE
WITH THIS AGREEMENT. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>60</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.9</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If any provision of this Agreement or the
application thereof to any Person or circumstances is held invalid or unenforceable in any jurisdiction, the remainder hereof, and the application of such provision to such Person or circumstances in
any other jurisdiction, shall not be affected thereby, and to this end the provisions of this Agreement shall be severable. The preceding sentence is in addition to and not in place of the
severability provisions in SECTION&nbsp;9. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.10</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Absence of Third Party Beneficiary Rights.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No provision of
this Agreement is intended, nor will be interpreted, to provide or to create any third party beneficiary rights or any other rights of any kind in any client, customer, Affiliate, stockholder,
officer, director, employee, partner of any party hereto or any other Person, other than the parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.11</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Further Representations.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party to this Agreement
acknowledges and represents that it has been represented by its own legal counsel in connection with the transactions contemplated by this Agreement, with the opportunity to seek advice as to its
legal rights from such counsel. Each party further represents that it is being independently advised as to the tax consequences of the transactions contemplated by this Agreement and is not relying on
any representation or statements made by the other party as to such tax consequences. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.12</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Schedules.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The disclosure of any item in any of the
schedules attached hereto shall not be deemed a disclosure with respect to any schedules in which such item is not expressly disclosed. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.13</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Public Disclosure; Press Announcements.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each of
the Sellers shall not, and shall cause each Affiliate thereof not to, at any time after the Closing Date, divulge, disclose or communicate to others in any manner whatsoever, information or statements
which disparage or are intended to disparage Buyers or any of their Affiliates and their respective business reputations. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;No
party to this Agreement shall make any public announcement or press release concerning the transactions contemplated by this Agreement without the prior written
approval of the other party (which consent shall not be unreasonably withheld), except as may be required by law or by obligations pursuant to any listing agreement with any national securities
exchange. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.14</B></FONT><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Interpretation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The defined terms used herein shall apply
equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references
herein to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. All Disclosures
Schedules and Exhibits attached hereto shall be deemed incorporated herein as if set forth in full herein and, unless otherwise defined therein, all terms used in any Exhibit or Disclosure Schedule
shall have the meaning ascribed to such term in this Agreement. The words "</FONT><FONT SIZE=2><I>include</I></FONT><FONT SIZE=2>," "</FONT><FONT SIZE=2><I>includes</I></FONT><FONT SIZE=2>" and
"</FONT><FONT SIZE=2><I>including</I></FONT><FONT SIZE=2>" shall be deemed to be followed by the phrase "without limitation." All accounting terms not defined in this Agreement shall have the
meanings determined by GAAP. Whenever any payment hereunder is to be paid in "</FONT><FONT SIZE=2><I>cash</I></FONT><FONT SIZE=2>," payment shall be made in the legal tender of the United States and
the method for payment shall be by wire transfer of immediately available funds. The words "</FONT><FONT SIZE=2><I>hereof</I></FONT><FONT SIZE=2>,"
"</FONT><FONT SIZE=2><I>herein</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>hereunder</I></FONT><FONT SIZE=2>" and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise expressly provided herein, any Contract, instrument or statute defined or referred to herein or in any
Contract or instrument that is referred to herein means such Contract, instrument or statute as from time to time amended, modified or supplemented, including (in the case of Contracts or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. This Agreement shall
be deemed to have been drafted by each party hereto and this Agreement shall not be construed against any party as a principal draftsperson. Unless otherwise expressly provided, wherever the consent
of any Person is required or permitted herein, such consent may withheld in such person's sole discretion. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>61</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>62</FONT></P>

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NAME="page_km1836_1_63"> </A> </FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the day and year first above written. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>QUALITROL POWER PRODUCTS,&nbsp;LLC</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES A. SCHWERTNER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Charles A. Schwertner</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Ass't Secretary/Treasurer</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>DANAHER UK INDUSTRIES LIMITED</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JAMES H. DITKOFF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>James H. Ditkoff</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Director</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>HATHAWAY SYSTEMS CORPORATION</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RICHARD D. SMITH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Richard D. Smith</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>President</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>HATHAWAY INDUSTRIAL AUTOMATION,&nbsp;INC.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RICHARD D. SMITH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Richard D. Smith</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Vice President</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>HATHAWAY SYSTEMS,&nbsp;LTD.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RICHARD D. SMITH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Richard D. Smith</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Vice President &amp; Director</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>63</FONT></P>

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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>HATHAWAY PROCESS INSTRUMENTATION CORPORATION</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RICHARD D. SMITH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Richard D. Smith</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>President</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>HATHAWAY CORPORATION</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RICHARD D. SMITH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>Richard D. Smith</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="42%"><FONT SIZE=2>CEO</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>64</FONT></P>

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<A NAME="page_km1836_1_65"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="km1836_exhibit_index"> </A>
<A NAME="toc_km1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit Index    <BR>  </B></FONT></P>

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<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Exhibit</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="89%" ALIGN="LEFT"><FONT SIZE=1><B>Title<BR> </B></FONT><HR NOSHADE></TH>
</TR>
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<TD WIDTH="8%"><FONT SIZE=2>A</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2>Shareholder Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
B</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2><BR>
Assignment and Assumption Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
C</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="89%"><FONT SIZE=2><BR>
Bill of Sale</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>65</FONT></P>

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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="la1836_appendix_b"> </A>
<A NAME="toc_la1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>APPENDIX&nbsp;B    <BR>  </B></FONT></P>

<P><FONT SIZE=2>May&nbsp;28,
2002 </FONT></P>

<P><FONT SIZE=2>The
Board of Directors<BR>
Hathaway Corporation<BR>
8228 Park Meadows Drive<BR>
Littleton, CO 80124 </FONT></P>

<P><FONT SIZE=2>Gentlemen:
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference
is made to the proposed power and process transaction (the "Transaction"), whereby Hathaway Corporation (the "Company" or "Hathaway") agreed to sell its power and process
segment (the "Segment") to Danaher Corporation ("Danaher"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
have asked us to opine on whether the financial aspects of the Transaction, considered in their entirety, are fair to the shareholders of the Company from a financial point of view.
In referring to the shareholders of the Company in this letter we refer to the shareholders as a whole and not to any individual shareholder. The term shareholder, as used herein, does not include a
shareholder that is affiliated with Danaher. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with rendering our opinion, we have reviewed the Asset Purchase Agreement executed May&nbsp;17, 2002 (the "Agreement") and the financial terms of the Transaction proposed
therein. We have also reviewed and analyzed certain financial information relating to the Segment for recent years and interim periods to date provided to us by the Company, which included documents
and discussions relating to certain forward looking financial information. We have met with the Chief Executive Officer and Chief Financial Officer of the Company to review and discuss such financial
information, which discussions included, among other matters, the Company's business, financial condition and results of operations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to certain financial data of the Segment reviewed by us, we have compared that data with similar or comparable data for certain other companies, the securities of which are
publicly traded, that we believe may be relevant or comparable in certain respects to the Segment. We have also reviewed and considered the financial terms of certain acquisitions and business
combination transactions in the Power, Process and Systems Automation industries, which we believe to be reasonably comparable to the Transaction or otherwise relevant to our analysis. We have, based
on the information provided to us by the Company, also conducted an unleveraged post-tax discounted cash flow analysis of projected five-year financial performance of the
Segment. We have also performed such other studies, analyses and investigations and reviewed such other information as we considered appropriate for purposes of our opinion. In arriving at our
opinion, we made qualitative judgments as to the significance and relevance of each analysis and factor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has advised us that other than the Agreement, the Company has not received meaningful proposals or offers for a sale of the Segment or proposals or offers relating to other
strategic combinations from other interested parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our review and analysis, and in formulating the opinion set forth below, we have assumed and relied upon the accuracy and completeness of all the financial and other information
provided to us, discussed with us or made available to us, and we have not assumed any responsibility for independent verification of, and express no opinion as to the accuracy of, any of such
information. With respect to the Segment's forward looking financial and other information made available to us, we have relied upon the accuracy and completeness of that information, and have assumed
that such information was reasonable, prepared in good faith in accordance with industry practice, and on a basis reflecting the best currently available judgments and estimates of the Company's
management as of the date thereof. We have also assumed that management of the Company is unaware of any facts not disclosed to us that would make any of the information provided to us materially
incomplete or misleading. We have not reviewed any of the books and records of the Segment or conducted, or assumed any responsibility for conducting, a physical inspection of the properties or
facilities of the Segment or for making or </FONT></P>

<HR NOSHADE>
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<A NAME="page_la1836_1_2"> </A>
<BR>

<P><FONT SIZE=2>
obtaining an independent valuation or appraisal of the assets or liabilities of the Segment, and no such independent valuation or appraisal was provided to us. Our opinion is necessarily based on
economic and market conditions and other circumstances as they currently exist. Material changes in such conditions and circumstances or any material amendment to the Agreement could cause us to alter
our opinion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have assumed for purposes of this opinion that Danaher will have adequate financing at closing to consummate the Transaction and that the Transaction complies in all respects with
applicable laws and regulations. In addition, we have made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of pending or
threatened litigation,
possible unasserted claims or other contingent liabilities to which either the Company, any of its affiliates, or any party may be subject. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
note that the Hathaway name and all goodwill associated therewith shall become the exclusive property of Danaher upon consummation of the Transaction. We have not valued the Hathaway
name separately from the Segment's underlying business, and have assumed that the value of the Hathaway name does not exceed the inherent value of its association with the assets being sold.
Furthermore, our opinion assumes that the sale of the Hathaway name will have no detrimental effect on the Company's remaining business lines. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
opinion addresses only the financial aspects of the Transaction considered in their entirety, and does not address the underlying business decision to accept or reject the
Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
letter is for the benefit and use of the Board of Directors of the Company in its consideration of the Transaction and, except for the statement in the following sentence, may not
be used for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose without our prior written consent. A copy of this letter may be furnished
by the Company to the Company's shareholders, provided that it is accompanied by other material that the Company is advised by its legal counsel may be necessary or appropriate to the use for which
this letter is furnished to the shareholders. We have been engaged and are acting solely as an advisor to the Company and not as an advisor to or agent of any shareholder in their capacity as such or
any other person. This letter does not constitute a recommendation to any shareholder with respect to whether or not to accept the Transaction and should not be relied upon by any shareholder for that
purpose. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have acted as adviser to the Company with respect to this opinion and will receive a fee from the Company for services rendered. In addition, the Company has agreed to indemnify us
for certain liabilities that may arise in connection with our engagement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
upon and subject to the foregoing, including the various assumptions and limitations set forth herein, it is our opinion that, as of the date hereof, the financial aspects of the
Transaction, considered in their entirety, are fair to the Company from a financial point of view. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>Very truly yours,</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>GREEN MANNING&nbsp;&amp; BUNCH,&nbsp;LTD.</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>CoBiz GMB,&nbsp;Inc.<BR>
its General Partner</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JOHN R. GREEN</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> John R. Green, </FONT><FONT SIZE=2><I>Co-President</I></FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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NAME="page_lg1836_1_1"> </A> </FONT></P>

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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="lg1836_appendix_c"> </A>
<A NAME="toc_lg1836_1"> </A>
<BR></FONT><FONT SIZE=2><B>APPENDIX C    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>ARTICLE 113<BR>
OF THE COLORADO BUSINESS CORPORATION ACT<BR>
DISSENTERS' RIGHTS<BR>
PART 1<BR>
RIGHT OF DISSENT&#151;<BR>
PAYMENT FOR SHARES  </B></FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-101. Definitions  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this article: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;"Beneficial
shareholder" means the beneficial owner of shares held in a voting trust or by a nominee as the record shareholder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;"Corporation"
means the issuer of the shares held by a dissenter before the corporate action, or the surviving or acquiring domestic or foreign corporation, by merger or
share exchange of that issuer. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;"Dissenter"
means a shareholder who is entitled to dissent from corporate action under section&nbsp;7-113-102 and who exercises that right at
the time and in the manner required by part&nbsp;2 of this article. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;"Fair
value," with respect to a dissenter's shares, means the value of the shares immediately before the effective date of the corporate action to which the dissenter
objects, excluding any appreciation or depreciation in anticipation of the corporate action except to the extent that exclusion would be inequitable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;"Interest"
means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its
principal bank loans or, if none, at the legal rate as specified in section&nbsp;5-12-101, C.R.S. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;"Record
shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares that are registered in the
name of a nominee to the extent such owner is recognized by the corporation as the shareholder as provided in section&nbsp;7-107-204. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)&nbsp;&nbsp;"Shareholder"
means either a record shareholder or a beneficial shareholder. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&sect; 7-113-102. Right to dissent  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;A
shareholder, whether or not entitled to vote, is entitled to dissent and obtain payment of the fair value of the shareholder's shares in the event of any of the
following corporate actions: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Consummation
of a plan of merger to which the corporation is a party if: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)&nbsp;&nbsp;Approval
by the shareholders of that corporation is required for the merger by section&nbsp;7-111-103 or 7-111-104 or
by the articles of incorporation; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(II)&nbsp;&nbsp;The
corporation is a subsidiary that is merged with its parent corporation under section&nbsp;7-111-104; </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Consummation
of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>C-1</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Consummation
of a sale, lease, exchange, or other disposition of all, or substantially all, of the property of the corporation for which a shareholder vote is required
under section&nbsp;7-112-102(1); and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Consummation
of a sale, lease, exchange, or other disposition of all, or substantially all, of the property of an entity controlled by the corporation if the
shareholders of the corporation were entitled to vote upon the consent of the corporation to the disposition pursuant to section&nbsp;7-112-102(2). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1.3)&nbsp;&nbsp;A
shareholder is not entitled to dissent and obtain payment, under subsection (1)&nbsp;of this section, of the fair value of the shares of any class or
series of shares which either were listed on a national securities exchange registered under the federal "Securities Exchange Act of 1934," as amended, or on the national market system of the national
association of securities dealers automated quotation system, or were held of record by more than two thousand shareholders, at the time of: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
record date fixed under section&nbsp;7-107-107 to determine the shareholders entitled to receive notice of the shareholders' meeting at
which the corporate action is submitted to a vote; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
record date fixed under section&nbsp;7-107-104 to determine shareholders entitled to sign writings consenting to the corporate action; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;The
effective date of the corporate action if the corporate action is authorized other than by a vote of shareholders. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1.8)&nbsp;&nbsp;The
limitation set forth in subsection&nbsp;(1.3) of this section&nbsp;shall not apply if the shareholder will receive for the shareholder's shares,
pursuant to the corporate action, anything except: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Shares
of the corporation surviving the consummation of the plan of merger or share exchange; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Shares
of any other corporation which at the effective date of the plan of merger or share exchange either will be listed on a national securities exchange registered
under the federal "Securities Exchange Act of 1934," as amended, or on the national market system of the national association of securities dealers automated quotation system, or will be held of
record by more than two thousand shareholders; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Cash
in lieu of fractional shares; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Any
combination of the foregoing described shares or cash in lieu of fractional shares. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;Deleted
by Laws 1996, H.B.96-1285, &sect; 30, eff. June&nbsp;1, 1996. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.5)&nbsp;&nbsp;A
shareholder, whether or not entitled to vote, is entitled to dissent and obtain payment of the fair value of the shareholder's shares in the event of a
reverse split that reduces the number of shares owned by the shareholder to a fraction of a share or to scrip if the fractional share or scrip so created is to be acquired for cash or the scrip is to
be voided under section&nbsp;7-106-104. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;A
shareholder is entitled to dissent and obtain payment of the fair value of the shareholder's shares in the event of any corporate action to the extent provided by the
bylaws or a resolution of the board of directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;A
shareholder entitled to dissent and obtain payment for the shareholder's shares under this article may not challenge the corporate action creating such entitlement
unless the action is unlawful or fraudulent with respect to the shareholder or the corporation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>C-2</FONT></P>

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<A NAME="page_lg1836_1_3"> </A>
<BR>

<P><FONT SIZE=2><B>&sect; 7-113-103. Dissent by nominees and beneficial owners  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;A
record shareholder may assert dissenters' rights as to fewer than all the shares registered in the record shareholder's name only if the record shareholder dissents
with respect to all shares beneficially owned by any one person and causes the corporation to receive written notice which states such dissent and the name, address, and federal taxpayer
identification number, if any, of each person on whose behalf the record shareholder asserts dissenters' rights. The rights of a record shareholder under this subsection&nbsp;(1)&nbsp;are
determined as if the shares as to which the record shareholder dissents and the other shares of the record shareholder were registered in the names of different shareholders. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;A
beneficial shareholder may assert dissenters' rights as to the shares held on the beneficial shareholder's behalf only if, </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
beneficial shareholder causes the corporation to receive the record shareholder's written consent to the dissent not later than the time the beneficial shareholder
asserts dissenters' rights; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
beneficial shareholder dissents with respect to all shares beneficially owned by the beneficial shareholder. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;The
corporation may require that, when a record shareholder dissents with respect to the shares held by any one or more beneficial shareholders, each such beneficial
shareholder must certify to the corporation that the beneficial shareholder and the record shareholder or record shareholders of all shares owned beneficially by the beneficial shareholder have
asserted, or will timely assert, dissenters' rights as to all such shares as to which there is no limitation on the ability to exercise dissenters' rights. Any such requirement shall be stated in the
dissenters' notice given pursuant to section&nbsp;7-113-203. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>PART 2<BR>
PROCEDURE FOR EXERCISE<BR>
OF DISSENTERS' RIGHTS  </B></FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-201. Notice of dissenters' rights  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;If
a proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 is submitted to a vote at a shareholders' meeting, the
notice of the meeting shall be given to all shareholders, whether or not entitled to vote. The notice shall state that shareholders are or may be entitled to assert dissenters' rights under this
article and shall be accompanied by a copy of this article and the materials, if any, that, under articles 101 to 117 of this title, are required to be given to shareholders entitled to vote on the
proposed action at the meeting. Failure to give notice as provided by this subsection&nbsp;(1)&nbsp;shall not affect any action taken at the shareholders' meeting for which the notice was to have
been given, but any shareholder who was entitled to dissent but who was not given such notice shall not be precluded from demanding payment for the shareholder's shares under this article by reason of
the shareholder's failure to comply with the provisions of section&nbsp;7-113-202(1). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;If
a proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 is authorized without a meeting of shareholders
pursuant to section&nbsp;7-107-104, any written or oral solicitation of a shareholder to execute a writing consenting to such action contemplated in
section&nbsp;7-107-104 shall be accompanied or preceded by a written notice stating that shareholders are or may be entitled to assert dissenters' rights under this article,
by a copy of this article, and by the materials, if any, that, under articles 101 to 117 of this title, would have been required to be given to shareholders entitled to vote on the proposed action if
the proposed action were submitted to a vote at a shareholders' meeting. Failure to give notice as provided by this subsection&nbsp;(2)&nbsp;shall not affect any action taken pursuant to
section&nbsp;7-107-104 for which the notice was to have been given, but any shareholder who was entitled to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>C-3</FONT></P>

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<BR>

<P><FONT SIZE=2>
dissent but who was not given such notice shall not be precluded from demanding payment for the shareholder's shares under this article by reason of the shareholder's failure to comply with the
provisions of section&nbsp;7-113-202(2). </FONT></P>


<P><FONT SIZE=2><B>&sect; 7-113-202. Notice of intent to demand payment  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;If
a proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 is submitted to a vote at a shareholders' meeting and
if notice of dissenters' rights has been given to such shareholder in connection with the action pursuant to section&nbsp;7-113-201(1), a shareholder who wishes to assert
dissenters' rights shall: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Cause
the corporation to receive, before the vote is taken, written notice of the shareholder's intention to demand payment for the shareholder's shares if the proposed
corporate action is effectuated; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Not
vote the shares in favor of the proposed corporate action. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;If
a proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 is authorized without a meeting of shareholders
pursuant to section&nbsp;7-107-104 and if notice of dissenters' rights has been given to such shareholder in connection with the action pursuant to
section&nbsp;7-113-201(2)&nbsp;a shareholder who wishes to assert dissenters' rights shall not execute a writing consenting to the proposed corporate action. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;A
shareholder who does not satisfy the requirements of subsection&nbsp;(1)&nbsp;or (2)&nbsp;of this section&nbsp;is not entitled to demand payment for the
shareholder's shares under this article. </FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-203. Dissenters' notice  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;If
a proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 is authorized, the corporation shall give a written
dissenters' notice to all shareholders who are entitled to demand payment for their shares under this article. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;The
dissenters' notice required by subsection&nbsp;(1)&nbsp;of this section&nbsp;shall be given no later than ten&nbsp;days after the effective date of the
corporate action creating dissenters' rights under section&nbsp;7-113-102 and shall: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;State
that the corporate action was authorized and state the effective date or proposed effective date of the corporate action; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;State
an address at which the corporation will receive payment demands and the address of a place where certificates for certificated shares must be deposited; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;Inform
holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;Supply
a form for demanding payment, which form shall request a dissenter to state an address to which payment is to be made; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;Set
the date by which the corporation must receive the payment demand and certificates for certificated shares, which date shall not be less than thirty&nbsp;days
after the date the notice required by subsection&nbsp;(1)&nbsp;of this section is given; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;State
the requirement contemplated in section&nbsp;7-113-103(3), if such requirement is imposed; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;Be
accompanied by a copy of this article. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>C-4</FONT></P>

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<UL>
<BR>
</UL>

<P><FONT SIZE=2><B>&sect; 7-113-204. Procedure to demand payment  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;A
shareholder who is given a dissenters' notice pursuant to section&nbsp;7-113-203 and who wishes to assert dissenters' rights shall, in
accordance with the terms of the dissenters' notice: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Cause
the corporation to receive a payment demand, which may be the payment demand form contemplated in section&nbsp;7-113-203(2)(d), duly
completed, or may be stated in another writing; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Deposit
the shareholder's certificates for certificated shares. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;A
shareholder who demands payment in accordance with subsection&nbsp;(1)&nbsp;of this section&nbsp;retains all rights of a shareholder, except the right to
transfer the shares, until the effective date of the proposed corporate action giving rise to the shareholder's exercise of dissenters' rights and has only the right to receive payment for the shares
after the effective date of such corporate action. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;Except
as provided in section&nbsp;7-113-207 or 7-113-209(1)(b), the demand for payment and deposit of certificates are
irrevocable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;A
shareholder who does not demand payment and deposit the shareholder's share certificates as required by the date or dates set in the dissenters' notice is not entitled
to payment for the shares under this article. </FONT></P>


<P><FONT SIZE=2><B>&sect; 7-113-205. Uncertificated shares  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;Upon
receipt of a demand for payment under section&nbsp;7-113-204 from a shareholder holding uncertificated shares, and in lieu of the deposit
of certificates representing the shares, the corporation may restrict the transfer thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;In
all other respects, the provisions of section&nbsp;7-113-204 shall be applicable to shareholders who own uncertificated shares. </FONT></P>


<P><FONT SIZE=2><B>&sect; 7-113-206. Payment  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;Except
as provided in section&nbsp;7-113-208, upon the effective date of the corporate action creating dissenters' rights under
section&nbsp;7-113-102 or upon receipt of a payment demand pursuant to section&nbsp;7-113-204, whichever is later, the corporation shall pay each
dissenter who complied with section&nbsp;7-113-204, at the address stated in the payment demand, or if no such address is stated in the payment demand, at the address shown
on the corporation's current record of shareholders for the record shareholder holding the dissenter's shares, the amount the corporation estimates to be the fair value of the dissenter's shares, plus
accrued interest. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;The
payment made pursuant to subsection&nbsp;(1)&nbsp;of this section&nbsp;shall be accompanied by: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
corporation's balance sheet as of the end of its most recent fiscal year or, if that is not available, the corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen&nbsp;months before the date of payment, an income statement for that year, and, if the corporation customarily provides such statements to shareholders, a statement of
changes in shareholders' equity for that year and a statement of cash flow for that year, which balance sheet and statements shall have been audited if the corporation customarily provides audited
financial statements to shareholders, as well as the latest available financial statements, if any, for the interim or full-year period, which financial statements need not be audited; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;A
statement of the corporation's estimate of the fair value of the shares; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;An
explanation of how the interest was calculated; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;A
statement of the dissenter's right to demand payment under section&nbsp;7-113-209; and </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>C-5</FONT></P>

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<A NAME="page_lg1836_1_6"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;A
copy of this article. </FONT></P>

</UL>

<P><FONT SIZE=2><B>&sect; 7-113-207. Failure to take action  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;If
the effective date of the corporate action creating dissenters' rights under section&nbsp;7-113-102 does not occur within sixty days after
the date set by the corporation by which the corporation must receive the payment demand as provided in section&nbsp;7-113-203, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;If
the effective date of the corporate action creating dissenters' rights under section&nbsp;7-113-102 occurs more than sixty&nbsp;days after
the date set by the corporation by which the corporation must receive the payment demand as provided in section&nbsp;7-113-203, then the corporation shall send a new
dissenters' notice, as provided in section&nbsp;7-113-203, and the provisions of sections&nbsp;7-113-204 to 7-113-209 shall
again be applicable. </FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-208. Special provisions relating to shares acquired after announcement of proposed corporate action  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;The
corporation may, in or with the dissenters' notice given pursuant to section&nbsp;7-113-203, state the date of the first announcement to
news media or to shareholders of the terms of the proposed corporate action creating dissenters' rights under section&nbsp;7-113-102 and state that the dissenter shall
certify in writing, in or with the dissenter's payment demand under section&nbsp;7-113-204, whether or not the dissenter (or the person on whose behalf dissenters' rights are
asserted) acquired beneficial ownership of the shares before that date. With respect to any dissenter who does not so certify in writing, in or with the payment demand, that the dissenter or the
person on whose behalf the dissenter asserts dissenters' rights acquired beneficial ownership of the shares before such date, the corporation may, in lieu of making the payment provided in
section&nbsp;7-113-206, offer to make such payment if the dissenter agrees to accept it in full satisfaction of the demand. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;An
offer to make payment under subsection&nbsp;(1)&nbsp;of this section&nbsp;shall include or be accompanied by the information required by
section&nbsp;7-113-206(2). </FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-209. Procedure if dissenter is dissatisfied with payment or offer  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;A
dissenter may give notice to the corporation in writing of the dissenter's estimate of the fair value of the dissenter's shares and of the amount of interest due and
may demand payment of such estimate, less any payment made under section&nbsp;7-113-206, or reject the corporation's offer under
section&nbsp;7-113-208 and demand payment of the fair value of the shares and interest due, if: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;The
dissenter believes that the amount paid under section&nbsp;7-113-206 or offered under section&nbsp;7-113-208 is
less than the fair value of the shares or that the interest due was incorrectly calculated; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;The
corporation fails to make payment under section&nbsp;7-113-206 within sixty&nbsp;days after the date set by the corporation by which the
corporation must receive the payment demand; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;The
corporation does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares as required by
section&nbsp;7-113-207(1). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;A
dissenter waives the right to demand payment under this section&nbsp;unless the dissenter causes the corporation to receive the notice required by
subsection&nbsp;(1)&nbsp;of this section&nbsp;within thirty&nbsp;days after the corporation made or offered payment for the dissenter's shares. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>C-6</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>PART 3<BR>
JUDICIAL APPRAISAL OF SHARES  </B></FONT></P>

<P><FONT SIZE=2><B>&sect; 7-113-301. Court action  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;If
a demand for payment under section&nbsp;7-113-209 remains unresolved, the corporation may, within sixty&nbsp;days after receiving the
payment demand, commence a proceeding and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the
sixty-day period, it shall pay to each dissenter whose demand remains unresolved the amount demanded. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;The
corporation shall commence the proceeding described in subsection (1)&nbsp;of this section&nbsp;in the district court of the county in this state where the
corporation's principal office is located or, if the corporation has no principal office in this state, in the district court of the county in which its registered office is located. If the
corporation is a foreign corporation without a registered office, it shall commence the proceeding in the county where the registered office of the domestic corporation merged into, or whose shares
were acquired by, the foreign corporation was located. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;The
corporation shall make all dissenters, whether or not residents of this state, whose demands remain unresolved parties to the proceeding commenced under
subsection&nbsp;(2)&nbsp;of this section&nbsp;as in an action against their shares, and all parties shall be served with a copy of the petition. Service on each dissenter shall be by registered
or certified mail, to the address stated in such dissenter's payment demand, or if no such address is stated in the payment demand, at the address shown on the corporation's current record of
shareholders for the record shareholder holding the dissenter's shares, or as provided by law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;The
jurisdiction of the court in which the proceeding is commenced under subsection&nbsp;(2)&nbsp;of this section&nbsp;is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers have the powers described in the order appointing them, or in any
amendment to such order. The parties to the proceeding are entitled to the same discovery rights as parties in other civil proceedings. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;Each
dissenter made a party to the proceeding commenced under subsection (2)&nbsp;of this section&nbsp;is entitled to judgment for the amount, if any, by which the
court finds the fair value of the dissenter's shares, plus interest, exceeds the amount paid by the corporation, or for the fair value, plus interest, of the dissenter's shares for which the
corporation elected to withhold payment under section&nbsp;7-113-208. </FONT></P>


<P><FONT SIZE=2><B>&sect; 7-113-302. Court costs and counsel fees  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;The
court in an appraisal proceeding commenced under section&nbsp;7-113-301 shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation; except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under section&nbsp;7-113-209. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;The
court may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;Against
the corporation and in favor of any dissenters if the court finds the corporation did not substantially comply with the requirements of part&nbsp;2 of this
article; or </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>C-7</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Against
either the corporation or one or more dissenters, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed
acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this article. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;If
the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those
services should not be assessed against the corporation, the court may award to said counsel reasonable fees to be paid out of the amounts awarded to the dissenters who were benefitted. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>C-8</FONT></P>

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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="ma1848_appendix_d"> </A>
<A NAME="toc_ma1848_1"> </A>
<BR></FONT><FONT SIZE=2><B>APPENDIX D    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>HATHAWAY CORPORATION<BR>
8228 Park Meadows Drive<BR>
Littleton, Colorado 80124  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby appoints Eugene E. Prince and Richard D. Smith, or either of them, each with full power of substitution as proxies of the undersigned and
hereby authorizes them to vote, as designated below, all shares of common stock, no par value, of the undersigned at the Special Meeting of shareholders of Hathaway Corporation (the "Company") to be
held on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2002, and all adjournments thereof, with respect to the following: </FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 1.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;to consider and vote on the sale of substantially all of Hathaway's power and process segment, including our consent
to the sale of substantially all the property of our directly and indirectly wholly owned subsidiaries: Hathaway Systems Corporation, Hathaway Industrial Automation,&nbsp;Inc., Hathaway
Systems,&nbsp;Ltd., and Hathaway Process Instrumentation Corporation (except its calibration business), together with our investment in two China joint ventures pursuant to an Asset Purchase
Agreement dated May&nbsp;17, 2002, among Qualitrol Power Products, LLC and Danaher UK Industries,&nbsp;Ltd., as Buyers, and Hathaway Systems Corporation, Hathaway Industrial
Automation,&nbsp;Inc., Hathaway Process Instrumentation Corporation and Hathaway Corporation for a cash consideration to us and the assumption of certain related liabilities. </FONT></P>

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<TD WIDTH="3%"><FONT SIZE=2>/&nbsp;/</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>(FOR)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>/&nbsp;/</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>(AGAINST)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>/&nbsp;/</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>(ABSTAIN)</FONT></TD>
</TR>
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<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 2.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the proxy's discretion, on such other business as may properly be presented for action at the Special Meeting. </FONT></P>

<P><FONT SIZE=2><B>This proxy is solicited on behalf of the Board of Directors of the Company and may be revoked prior to its exercise. This proxy when properly executed, will be voted as
directed above by the undersigned shareholder. If no direction is made, it will be voted FOR approval of the proposed disposition of substantially all, the property of Hathaway's power and process
segment in Item 1, and in the proxy's discretion, on such other business as may properly come before the Special Meeting in Item 2.</B></FONT></P>

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</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
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<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=5><FONT SIZE=2><BR>
Your signature should appear exactly as your name appears in the space at the left. For joint accounts, all owners should sign. When signing in a fiduciary or representative capacity, please give your full title as such.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
Date:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
, 2002</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%"><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
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<P><FONT SIZE=2><B>PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE.</B></FONT></P>

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<BR>
<P><br><A NAME="02DEN1836_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_bf1836_1">NOTICE OF SPECIAL MEETING OF SHAREHOLDERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_bg1836_1">TABLE OF CONTENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ca1836_1">PROXY STATEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ca1836_2">QUORUM AND VOTING RIGHTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ca1836_3">CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cc1836_1">PROPOSAL TO SELL SUBSTANTIALLY ALL OUR POWER AND PROCESS SEGMENT (ITEM 1)</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_cc1836_2">SUMMARY TERM SHEET</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ce1836_1">QUESTIONS AND ANSWERS ABOUT THE POWER AND PROCESS TRANSACTION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ce1836_2">THE BUYERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cg1836_1">RISK FACTORS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ck1836_1">INFORMATION ABOUT HATHAWAY'S BUSINESS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cq1836_1">HATHAWAY CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2002 (In thousands, except per share data)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cx1836_1">HATHAWAY CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2002 (In thousands, except per share data)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cz1836_1">HATHAWAY CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2001 (In thousands, except per share data)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_da1836_1">HATHAWAY CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2000 (In thousands, except per share data)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dc1836_1">HATHAWAY CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1999 (In thousands, except per share data)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_de1836_1">NOTES&#160;TO&#160;UNAUDITED&#160;PRO&#160;FORMA&#160;CONSOLIDATED&#160;FINANCIAL&#160;STATEMENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dg1836_1">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dk1836_1">MARKET PRICE OF HATHAWAY'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dk1836_2">THE POWER AND PROCESS TRANSACTION PROPOSAL</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dt1836_1">REGULATORY APPROVAL</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dt1836_2">STOCKHOLDERS AGREEMENT</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ea1836_1">HISTORICAL INFORMATION ABOUT THE COMBINED POWER AND PROCESS SEGMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ea1836_2">HATHAWAY CORPORATION POWER AND PROCESS BUSINESS COMBINED STATEMENTS OF NET ASSETS TO BE DISPOSED OF (In Thousands) (Unaudited)</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ec1836_1">HATHAWAY CORPORATION POWER AND PROCESS BUSINESS COMBINED STATEMENTS OF OPERATIONS (In thousands) (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ee1836_1">HATHAWAY CORPORATION POWER AND PROCESS BUSINESS COMBINED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_eg1836_1">HATHAWAY CORPORATION POWER AND PROCESS BUSINESS COMBINED STATEMENTS OF NET ASSETS TO BE DISPOSED OF (In thousands) (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ek1836_1">HATHAWAY CORPORATION POWER AND PROCESS BUSINESS NOTES TO COMBINED FINANCIAL STATEMENTS (Unaudited)</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_eq1836_1">OTHER MATTERS (ITEM 2)</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_eq1836_2">INDEPENDENT PUBLIC ACCOUNTANTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_eq1836_3">SHAREHOLDERS' PROPOSALS FOR 2002 ANNUAL MEETING</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ja1836_1">GLOSSARY OF TERMS</A></FONT><BR>
<!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2><A HREF="#toc_kc1836_1">APPENDIX A</A></FONT><BR>
</UL>
<FONT SIZE=2><A HREF="#toc_kc1836_2">TABLE OF CONTENTS</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kd1836_1">ASSET PURCHASE AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kd1836_2">SECTION 1 ASSET PURCHASE AND CLOSING</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ke1836_1">SECTION 2 PURCHASE PRICE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke1836_2">SECTION 3 CLOSING</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kf1836_1">SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE SELLERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kh1836_1">SECTION 5 REPRESENTATIONS AND WARRANTIES OF BUYERS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kh1836_2">SECTION 6 COVENANTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ki1836_1">SECTION 7 CONDITIONS TO CLOSING</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kj1836_1">SECTION 8 INDEMNIFICATION</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kk1836_1">SECTION 9 NONCOMPETITION AND CONFIDENTIALITY</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1836_2">SECTION 10 TERMINATION, AMENDMENT AND WAIVER</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk1836_3">SECTION 11 GENERAL PROVISIONS</A></FONT><BR>
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<FONT SIZE=2><A HREF="#toc_km1836_1">Exhibit Index</A></FONT><BR>
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<UL>
<FONT SIZE=2><A HREF="#toc_la1836_1">APPENDIX B</A></FONT><BR>
</UL>
<!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2><A HREF="#toc_lg1836_1">APPENDIX C</A></FONT><BR>
</UL>
<!-- TOC_BEGIN -->
<UL>
<FONT SIZE=2><A HREF="#toc_ma1848_1">APPENDIX D</A></FONT><BR>
</UL>
<!-- SEQ=,FILE='QUICKLINK',USER=MBRADT,SEQ=,EFW="2081689",CP="HATHAWAY CORPORATION",DN="1" -->
<!-- TOCEXISTFLAG -->
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</TEXT>
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