NORDIC EQUITY PARTNERS CORP, S-1/A, 1997-01-15

NORDIC EQUITY PARTNERS CORP
S-1/A, 1997-01-15
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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1997

FILE NO. 333-12841

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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NORDIC EQUITY PARTNERS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 5090 13-3853305
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

120 WALL STREET
NEW YORK, NEW YORK 10005
(212) 269-1400

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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BJORN NYSTED
PRESIDENT
NORDIC EQUITY PARTNERS CORP.
120 WALL STREET
NEW YORK, NEW YORK 10005
(212) 269-1400

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

<TABLE>
<S> <C>
LAWRENCE G. NUSBAUM, ESQ. JAY M. KAPLOWITZ, ESQ.
GUSRAE KAPLAN & BRUNO GERSTEN, SAVAGE, KAPLOWITZ,
120 WALL STREET FREDERICKS & CURTIN, LLP
NEW YORK, NEW YORK 10005 101 E. 52ND STREET
(212) 269-1400 NEW YORK, NEW YORK 10022-6102
FAX: (212) 809-5449 (212) 752-9700
FAX: (212) 980-5192
</TABLE>

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS SECURITIES AMOUNT BEING MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
BEING REGISTERED REGISTERED PRICE PER SECURITY(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
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Common Stock, $.0001 par value(2)......... 906,250 $7.00 $ 6,343,750 $1,922.35
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Common Stock Purchase Warrants(3)......... 2,012,500 $ .15 301,875 91.48
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Common Stock $.0001 par value(4).......... 2,012,500 $8.40 16,905,000 5,122.73
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Common Stock $.0001 par value(5).......... 100,000 $7.00 700,000 212.12
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Underwriter's Warrants(6)................. 87,500 -- 5 (7)
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Underwriter's Warrants(6)................. 175,000 -- 5 (7)
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Common Stock Purchase Warrants(8)......... 175,000 $ .18 31,500 9.55
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Common Stock, $.0001 par value(9)......... 87,500 $8.40 735,000 222.73
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Common Stock, $.0001 par value(10)........ 175,000 $8.40 1,470,000 445.45
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Totals.................................... 26,487,135 8,026.41
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</TABLE>

(1) Total estimated solely for the purpose of determining the registration fee.

(2) Includes 131,250 shares of Common Stock subject to sale upon exercise of
the Underwriters' Over-allotment Option granted to the Underwriters by the
Company.

(3) Includes 262,500 Redeemable Common Stock purchase warrants (the "Warrants")
subject to sale upon exercise of the Underwriters' Over-allotment Option
granted to the Underwriters.

(4) Issuable upon exercise of the Warrants, together with such indeterminate
number of securities as may be issuable by reason of anti-dilution
provisions contained therein.

(5) Includes 100,000 shares of Common Stock being sold by certain selling
stockholders (the "Selling Stockholders").

(6) Represent warrants to be issued to the Underwriters to purchase 87,500
shares of Common Stock and 175,000 Warrants (the "Underwriters' Warrants").
See "Underwriting."

(7) No fee due pursuant to Rule 457(g).

(8) Represents Warrants issuable upon exercise of the Underwriters' Warrants.

(9) Represents shares of Common Stock issuable upon the exercise of the
Underwriters' Warrants, together with such indeterminate number of
securities as may be issuable by reason of anti-dilution provisions
contained therein.

(10) Represents shares of Common Stock issuable upon the exercise of Warrants
issuable upon exercise of the Underwriters' Warrants, together with such
indeterminate number of securities as may be issuable by reason of
anti-dilution provisions contained therein.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2

NORDIC EQUITY PARTNERS CORP.
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CROSS-REFERENCE SHEET
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PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
ITEM OF FORM S-1 LOCATION IN PROSPECTUS
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<S> <C>
PART I -- INFORMATION REQUIRED IN PROSPECTUS
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus.................... Forepart of Registration Statement
and Outside Front Cover Page
2. Insider Front and Outside Back Cover Pages of
Prospectus........................................ Inside Front and Outside Back Cover
Pages of Prospectus
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges......................... Prospectus Summary; Risk Factors
4. Use of Proceeds................................... Use of Proceeds
5. Determination of Offering Price................... Outside Front Cover Page; Risk
Factors; Underwriting
6. Dilution.......................................... Dilution; Risk Factors
7. Selling Security Holders.......................... Selling Securityholders
8. Plan of Distribution.............................. Underwriting
9. Description of Securities to be Registered........ Prospectus Summary; Description of
Securities
10. Interest of Named Experts and Counsel............. Legal Matters; Experts
11. Information with Respect to the Registrant........ Prospectus Summary; Risk Factors; Use
of Proceeds; Capitalization; Dividend
Policy; Selected Consolidated
Financial Data; Shares Eligible for
Future Sale; Management's Discussion
and Analysis of Financial Condition
and Results of Operations;
Management; Business; Principal and
Selling Stockholders; Certain
Transactions; Description of
Securities; Underwriting;
Consolidated Financial Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.... Not Applicable

PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
13. Other Expenses of Issuance and Distribution....... Other Expenses of Issuance and
Distribution
14. Indemnification of Directors and Officers......... Indemnification of Directors and
Officers
15. Recent Sales of Unregistered Securities........... Recent Sales of Unregistered
Securities
16. Exhibits and Financial Statement Schedules........ Exhibits
17. Undertakings...................................... Undertakings
</TABLE>
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JANUARY 15, 1997

NORDIC EQUITY PARTNERS CORP.

875,000 SHARES OF COMMON STOCK AND

1,750,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

Nordic Equity Partners Corp., a Delaware corporation (the "Company") hereby
offers (the "Offering") 775,000 shares of common stock, $.0001 par value (the
"Common Stock") of the Company and 1,750,000 Redeemable Common Stock Purchase
Warrants (the "Warrants"). The initial public offering prices of the Common
Stock and Warrants are $7.00 and $.15, respectively. This Prospectus also
relates to the offering (the "Selling Securityholders Offering") of 100,000
shares of Common Stock by certain individuals (the "Selling Stockholders"). Both
the offering and the Selling Securityholders Offering are being sold through
Mason Hill & Co., Inc. See "Underwriting". The Common Stock and the Warrants
offered hereby (sometimes hereinafter collectively referred to as the
"Securities") will be separately tradeable immediately upon issuance and may be
purchased separately. Investors will not be required to purchase shares of
Common Stock and Warrants together or in any particular ratio. Each Warrant
entitles the holder to purchase one share of Common Stock at an exercise price
of $8.40 (the "Exercise Price"), subject to adjustment, commencing one year
after the date of this Prospectus (the "Effective Date") until the close of
business on January , 2003 [the sixth year after the Effective Date].

For at least five years prior to this Offering, there has been no public
market for the Company's Common Stock and there has never been a market for the
Company's Warrants. There can be no assurance that a public market will develop
or be sustained for the Common Stock or the Warrants after the completion of the
Offering. The Offering prices of the Common Stock and Warrants, exercise price
and other terms of the Warrants were established by negotiations between the
Company and Mason Hill & Co., Inc. (the "Representative") and J.W. Barclay &
Co., Inc. ("J.W. Barclay"; the Representative and J.W. Barclay are hereinafter
collectively referred to as the "Underwriters") and do not bear any direct
relationship to the Company's assets, book value, results of operations or any
other criteria of value. The Company has applied for the listing of the Common
Stock and Warrants on the NASDAQ National Market System ("NASDAQ-NMS") under the
symbols "NEPC" and "NEPCW", respectively. See "Risk Factors" and "Underwriting."

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

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK
AND IMMEDIATE AND SUBSTANTIAL DILUTION. SEE "RISK FACTORS" COMMENCING ON PAGE 9
AND "DILUTION".
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<TABLE>
<S> <C> <C> <C> <C>
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING PROCEEDS TO
PUBLIC COMMISSIONS(1) STOCKHOLDERS(3) COMPANY(2)
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Per Share......................... $7.00 $.70 $6.30 $6.30
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Per Warrant....................... $.15 $.015 $.135 --
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Total(4).......................... $6,387,500 $638,750 $5,118,750 $630,000
</TABLE>

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See footnotes on following page of this Prospectus.

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MASON HILL & CO., INC. J.W. BARCLAY & CO., INC.

THE DATE OF THIS PROSPECTUS IS , 1997.

<PAGE> 4

Footnotes to Table

(1) Does not include additional compensation to the Underwriters consisting of
(i) a non-accountable expense allowance equal to 3% of the aggregate
purchase price of the Securities, or $170,625 ($199,368.75 if the
Underwriters' over-allotment option is exercised in full) none of which has
been paid to date; (ii) warrants to purchase 87,500 shares of Common Stock
at $8.40 per share and 175,000 Common Stock Purchase Warrants at $.18 per
Warrant; and (iii) a three year consulting agreement providing for fees
totalling $100,000, which is payable to the Representative in full on the
closing of this Offering. For additional information concerning further
agreements between the Company and the Underwriters, including an agreement
to indemnify the Underwriters against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities
Act") See "Underwriting".

(2) After deducting Underwriting discounts and commissions, but before the
payment of the Underwriters' nonaccountable expense allowance in the amount
of $170,625 ($199,368.75 if the Underwriters' over-allotment option is
exercised in full) and other expenses of the Offering payable by the Company
(estimated at $430,000).

(3) Before deducting a 3% non-accountable expense allowance being paid by the
Selling Stockholders to the Underwriters of $21,000.

(4) The Company and the Selling Stockholders have granted the Underwriters an
option, exercisable within forty-five (45) days from the date of this
Prospectus, to purchase up to 131,250 additional shares of Common Stock and
262,500 additional Warrants, upon the same terms and conditions set forth
above, solely to cover overallotments, if any (the "Over-allotment Option").
If the Over-allotment Option is exercised in full, the Total Price to
Public, Underwriting Discounts and Commissions, Proceeds to Company, and
Proceeds to the Selling Stockholders will be increased to $7,345,625,
$734,562.50, $5,981,062.50 and $630,000, respectively.

The Common Stock and Warrants are being offered on a "firm commitment"
basis, subject to prior sale, when, as, and if delivered to and accepted by the
Underwriters, and subject to certain other conditions and legal matters. The
Underwriters reserve the right to withdraw, cancel or modify the Offering and to
reject orders in whole or in part. It is expected that delivery of the
certificates representing the shares of Common Stock and Warrants will be made
at the offices of the Representative, in New York City, on or about ,
1997.

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

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND THE WARRANTS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
<PAGE> 5

AVAILABLE INFORMATION

The Company has filed with the Washington, D.C. office of the Securities
and Exchange Commission a Registration Statement (the "Registration Statement")
under the Securities Act with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and this Offering, reference is made to the Registration
Statement, including the exhibits filed therewith. Statements contained in the
Prospectus as to the contents of any contract or other document are not
necessarily complete and reference is made to each such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Reports and other
information filed by the Company can be inspected, without charge, at prescribed
rates from the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, or
at the following Regional Offices of the Commission, at Citicorp, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 or at Northeast Regional
Office, 7 World Trade Center, New York, New York 10048. The Commission maintains
a World Wide Website that contains reports, proxies and information statements
and other information regarding issuers that file electronically with the
Commission. The Commission's World Wide Website is located at
http://www.sec.gov.

The Company intends to distribute to its stockholders annual reports
containing financial statements audited and reported upon by its independent
public accountants after the close of each fiscal year, and will make such other
periodic reports as the Company may determine to be appropriate or as may be
required by law. The Company's fiscal year ends December 31st of each year.

In addition to the 775,000 shares of Common Stock and 1,750,000 Warrants
being offered by the Company, the Registration Statement of which this
Prospectus forms a part also covers 100,000 shares of Common Stock by certain
Selling Stockholders. The Company consummated a private placement in August
1996, whereby the Company sold ten (10) units, each unit was comprised of a
$950,000 principal amount 10% promissory note and 10,000 shares of Common Stock
at a purchase price of $100,000 per unit. The Representative acted as placement
agent for the Company in the August 1996 private placement. The shares of Common
Stock purchased in the Private Placement are being sold through the Underwriters
or a firm commitment basis in this Offering. The proceeds of the Private
Placement were used by the Company for working capital purposes, including
proposed acquisitions. See "Risk Factors," "Selling Stockholders" and
"Underwriting".

ENFORCEMENT OF CIVIL LIABILITIES

The Company was incorporated in the State of Delaware. However, all of the
Company's directors and officers reside outside the United States (in Sweden and
Norway) and substantially all of the assets of the Company and of such persons
are located outside the United States. The Company has been advised by its
Swedish counsel (Falks Advokatbyra) and its Norwegian counsel (Meltvedt, Komnaes
& Co.), that (1)(a) Swedish courts would not enforce judgments of United States
courts obtained in actions against the Company and/or its officers and directors
predicated upon the civil liabilities provisions of the Federal securities laws,
and (b) Swedish and Norwegian courts would not enforce, in original actions,
liabilities against such persons predicated solely upon the Federal securities
laws, and (2)(a) there is no treaty between Sweden and the United States or
between Norway and the United States, and, accordingly, Swedish and Norwegian
courts would have no obligations to enforce judgments of the United States
obtained in actions against the Company and/or its officers and directors
predicated upon the civil liabilities provisions of the Federal securities laws,
and (b) Swedish and Norwegian courts, in original actions to enforce liabilities
against such persons predicated solely upon the Federal securities laws would
apply the "Lex loci delicti-principle" pursuant to which the law of the country
in which damage has been done will be applied by Swedish and Norwegian courts.
This principle is complemented by the "Irma Mignon-formula" pursuant to which
the court shall apply the law of the country to which the issue in question has
the closest connection. Both the "Lex loci delicti-principle" and the "Irma
Mignon-formula" will most likely lead to the use of United States laws by
Swedish and Norwegian Courts in a situation where a Swedish and Norwegian
officer/director of a company located in the United States has caused damage to
this company.

3
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including financial statements and notes thereto appearing
elsewhere in this Prospectus. Each prospective investor is urged to read this
Prospectus in its entirety. Unless otherwise indicated, all share and per share
amounts reflect a fifty-for-one and a 1,000-for-one reverse stock split of the
Company's issued and outstanding Common Stock effective as of May 1994 and
September 1995, respectively. All references to "$" herein are to United States
dollars and all references to "Norwegian NOK" and "Swedish SEK" are to
"Norwegian Krones" and "Swedish Krones", respectively. Except for $ figures
relating to the Company's profits and losses which have been converted from
either Norwegian NOKS or Swedish SEKS based upon the average exchange in effect
during the period stated, the $ figures have been converted from either
Norwegian NOKs or Swedish SEKs based upon the applicable conversion rate at the
time a particular transaction or reporting event occurred. See Note 1(c) to the
Financial Statements.

THE COMPANY

Nordic Equity Partners Corp.("the "Company"), through its two wholly-owned
subsidiaries, Nortelco AS, a Norwegian corporation ("Nortelco"), and Storebro
Machine AB, a Swedish corporation ("Storebro"), (i) imports and distributes
products for use in the electronic, electrical and audio visual industries and
(ii) designs, assembles and distributes lathes, sells lathe spare parts to
existing lathe owners and services, and repairs and overhauls lathes owned by
third parties. All of the Company's business and sales are conducted in Sweden,
Norway and Germany. However, the Company is the exclusive representative for
certain companies in the United States and Japan, and, accordingly, the Company
purchases products from such companies for resale in Sweden, Norway and Germany.

Nortelco. Nortelco imports and distributes over 10,000 products for use in
the electronic, electrical and audio visual industries to over 1,000 customers
throughout Norway and Sweden. Nortelco's Electronics industry products include
components, telecommunication and datacommunication equipment and studio and
communication equipment. Nortelco's Electrical Division's products generally are
divided into three main areas: explosion proof equipment and lighting, passive
fire protection equipment and installation materials. The products sold in the
Audio Visual Division include audio equipment (AV cassette recorders,
microphones, sound systems and cassettes) overhead projectors and accessories
and related equipment such as projection screens, portable and fixed video
projectors, data interface equipment, conference room and auditorium furniture
and related equipment and light-dimming systems. The prices of its products
range from $1.00 to $100,000. Nortelco's product strategy is to have its product
line consist substantially of "niche" products.

Nortelco does not manufacture any products that it distributes. Nortelco
purchases its products from over thirty (30) non-affiliated third party
manufacturers worldwide including Germany and the United States. Nortelco's
gross profits result primarily from the difference between the price it
purchases its products from non-affiliated third party manufacturers and the
price it sells such products to its customers. Nortelco also designs, installs
and sells complete, customized conference rooms and auditoriums and provides
after sale service and maintenance support to its customers.

Substantially all of Nortelco's products are sold by its internal sales
force which consists of approximately fifty (50) full time salespersons in
Norway and Sweden. Nortelco believes that because its salespersons are
experienced and have technical backgrounds, it is able to service the continuing
needs of its customers and attract additional customers.

Nortelco believes that many foreign product manufacturers avoid
establishing and maintaining new operations in Sweden and Norway because of the
start-up costs associated with new operations and the local competition which
already exists. As a result, many of such companies enter into agreements with
Nortelco for Nortelco to act as their distributor in both or one of such
countries. Because Nortelco already has established operations in both
countries, Nortelco believes it can distribute products for manufacturers more
efficiently and inexpensively.

4
<PAGE> 7

Storebro. Storebro designs, assembles and distributes lathes. Storebro also
sells lathe spare parts to existing lathe owners and services, repairs and
overhauls lathes owned by third parties.

Storebro sells over six different types of its lathes which include both
computer numerically controlled ("CNC") lathes and traditional manually-operated
lathes. Storebro distributes its lathes mainly to customers in Germany and
Sweden, both through its own and independent sales representatives. The prices
of its products range from $18,000-$360,000.

In 1996, Storebro introduced the ALERT, which is a new model of lathe. The
ALERT lathe is a combination of a conventional and a CNC lathe and was shown
officially for the first time in May 1996 at the Gothenburger Machine Tool Show,
one of the largest machine tool shows held in Sweden. The ALERT lathe can either
be used as a conventional lathe or with a control system as a CNC machine.
Although sales of the ALERT lathes have been minimal, the Company anticipates,
although there can be no assurance, that sales of such lathes will increase in
the future.

The Company consummated two private placement offerings in July and August
1996. Pursuant to the July 1996 private placement, the Company sold 500,000
shares of Common stock at a purchase price of $.30 per share. In addition,
pursuant to the August 1996 private placement, the Company sold 10 units, each
unit consisting of $95,000 principal amount 10% promissory note and 10,000
shares of Common Stock, at a purchase price of $100,000 per unit. The
Representative acted as placement agent for the Company in the July 1996 and
August 1996 private placement offerings. The 100,000 shares of Common Stock sold
by the Company in the August 1996 private placement are being sold by the
Selling Stockholders through the Underwriters on a firm commitment basis. See
"Underwriting". The proceeds of the private placements were used by the Company
to finance, in part, the costs of the public offering, and for corporate and
general working capital purposes, including proposed acquisitions.

The Company was organized under the laws of Delaware in May 1994. From the
date of its inception until May 1995, the Company was dormant, having conducted
no business or activities. In May 1995, the Company entered into an agreement
and plan of merger with Sherman, Goelz & Associates ("SGA"), pursuant to which
SGA was merged with and into the Company. Prior to the merger, SGA had acquired
Nortelco and Storebro from corporations controlled by, among others, the
Company's current principal stockholders in exchange for cash and shares of
Common Stock. See "Certain Transactions."

The Company's executive office is located at 120 Wall Street, New York, New
York 10005 and its telephone number at that address is (212) 269-1400.

Unless the context requires differently, all references herein to the
"Company" include Nortelco and Storebro, the Company's wholly-owned
subsidiaries, as well as three wholly-owned subsidiaries of Nortelco, Nortelco
System Teknikk AS, a Norwegian corporation ("Nortelco System Teknikk"),
Brannteknikk AS, a Norwegian corporation ("Brannteknikk"), and Nortelco Audiatur
AB, a Swedish corporation ("Nortelco Audiatur").

5
<PAGE> 8

THE OFFERING

<TABLE>
<S> <C>
Securities Offered By
The Company..................... 775,000 shares of Common Stock and 1,750,000 Warrants.
The Selling Stockholders........ 100,000 shares of Common Stock.
Common Stock Outstanding Before
Offering............................. 2,400,000 shares.
Common Stock Outstanding After
Offering(1)(2)....................... 3,175,000 shares.
Warrants Outstanding Before
Offering............................. -0 -
Warrants Outstanding After
Offering............................. 1,750,000 Warrants.
Exercise Terms.................. Each Warrant entitles the holder thereof to purchase
one share of Common Stock for $8.40, during the four
(4) year period commencing one year after the
Effective Date, subject to adjustment in certain
circumstances. See "Description of Secu-
rities -- Warrants".
Expiration Date................. , 2003 (six years after the Effective Date).
Redemption...................... Redeemable by the Company, in whole or in part, at a
price of $.05 per Warrant, commencing one year after
the Effective Date upon not less than thirty (30) days
prior written notice to the holders of such Warrants,
provided that the closing bid price (as defined) of
the Company's Common Stock for the twenty (20)
consecutive trading days immediately prior to the date
on which the notice of redemption is given, shall have
exceeded $13.00 per share.
Use of Proceeds...................... Repayment of indebtedness, acquisition of businesses
and working capital. See "Use of Proceeds".
Risk Factors......................... Investment in the securities offered hereby involves a
high degree of risk and immediate substantial
dilution. See "Risk Factors" and "Dilution".
Proposed NASDAQ Symbols:(3)
Common Stock......................... NEPC
Warrants............................. NEPCW
</TABLE>

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

(1) Does not include (i) 131,250 shares of Common Stock subject to the
Underwriters' Over-allotment Option; (ii) 87,500 shares of Common Stock and
175,000 Warrants issuable upon the exercise of the Underwriters' Warrants;
or (iii) 250,000 shares of Common Stock reserved for issuance pursuant to
the Company's stock option plan. See "Management", "Underwriting" and
"Description of Securities".

(2) Does not include 262,500 Warrants subject to the Underwriters'
Over-allotment option.

(3) The proposed trading symbols do not imply that a liquid and active market
will be developed or sustained for the securities upon completion of the
Offering.

6
<PAGE> 9

SUMMARY FINANCIAL DATA

The summary financial information set forth below is derived from and
should be read in conjunction with the consolidated financial statements of the
Company, including the notes thereto, appearing elsewhere in this Prospectus.

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993(1) 1992(1) 1991(1)
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Sales.................................................. 25,531,000 21,081,000 11,527,000 13,237,000 10,732,000
Cost of Goods Sold......................................... 15,318,000 12,296,000 6,445,000 7,524,000 6,027,000
Gross Profit............................................... 10,213,000 8,785,000 5,082,000 5,713,000 4,705,000
Operating Expenses Selling, General and Administrative..... 8,707,000 7,408,000 3,910,000 4,419,000 3,812,000
Interest................................................... 536,000 511,000 830,000 1,043,000 943,000
Depreciation and Amortization.............................. 503,000 376,000 300,000 453,000 289,000
Earnings (Loss) Before Other Income Taxes, Extraordinary
Income and Minority Interest............................. 467,000 490,000 42,000 (202,000) (339,000)
Other Income
Interest Earned............................................ 84,000 30,000 18,000 29,000 -0-
Other Earnings (Loss)...................................... 210,000 62,000 (114,000) 46,000 970,000
Earnings (Loss) Before Taxes and Minority Interest......... 761,000 582,000 (54,000) (127,000) 631,000
Provision for Taxes........................................ 254,000 136,000 35,000 36,000 177,000
Earnings (Loss) Before Minority Interest................... 507,000 446,000 (89,000) (163,000) 454,000
Minority Interest.......................................... -0- 54,000 (31,000) 51,000 91,000
Net Earnings (Loss)........................................ 507,000 392,000 (58,000) (112,000) 363,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss) Before Extraordinary Income............ 0.28 0.22 0.05 0.06 (0.32)
Net Earnings/(Loss)........................................ 0.28 0.22 (0.03) 0.06 0.20
Weighted Average Number of Common Stock Outstanding........ 1,800,000 1,799,705 1,799,690 1,799,690 1,799,690
</TABLE>

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

(1) Pooling of interests accounting results in all the historical financial
information being retroactively adjusted to reflect the business
combination.

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED
SEPTEMBER 30,
-----------------------
1996 1995
---------- ----------
(UNAUDITED)
<S> <C> <C>
Net Sales................................................................................... 19,234,000 18,861,000
Cost of Goods Sold.......................................................................... 11,382,000 11,201,000
Gross Profits............................................................................... 7,852,000 7,660,000
Operating Expenses Selling, General and Administrative...................................... 6,715,000 6,312,000
Interest.................................................................................... 387,000 382,000
Depreciation and Amortization............................................................... 350,000 416,000
Earnings Before Other Income, Taxes, Extraordinary Income and Minority Interest............. 400,000 550,000
Other Income Interest Earned................................................................ 160,000 162,000
Other Earnings (Loss)....................................................................... (36,000) 5,000
Earnings (Loss) Before Taxes and Minority Interest.......................................... 524,000 717,000
Provision for Taxes......................................................................... 161,000 205,000
Earnings (Loss) Before Minority Interest.................................................... 363,000 512,000
Minority Interest........................................................................... -0- 78,000
Net Earnings (Loss)......................................................................... 363,000 434,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss) Before Extraordinary Income............................................. 0.19 0.24
Net Earnings (Loss)......................................................................... 0.19 0.24
Weighted Average Number of Common Stock Outstanding......................................... 1,937,500 1,800,000
</TABLE>

7
<PAGE> 10

CONSOLIDATED BALANCE SHEET DATA:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------
1995 1994 1993 1992 1991
---------- --------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Working Capital............................................... 1,648,000 1,007,000 21,000 (292,000) (591,000)
Total Assets.................................................. 11,240,000 9,169,000 10,440,000 9,551,000 8,619,000
Current Liabilities........................................... 7,674,000 6,458,000 4,387,000 3,517,000 3,218,000
Long-Term Debt................................................ 1,276,000 1,340,000 5,559,000 5,894,000 5,442,000
Stockholder's Equity.......................................... 2,290,000 1,371,000 494,000 141,000 (41,000)
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-----------------------
ACTUAL ADJUSTED(1)
---------- ----------
(UNAUDITED)
<S> <C> <C>
Working Capital............................................................................. 3,972,000 8,390,125
Total Assets................................................................................ 12,563,000 15,531,125
Current Liabilities......................................................................... 8,591,000 7,141,000
Long-Term Debt.............................................................................. 1,174,000 1,174,000
Stockholder's Equity........................................................................ 2,798,400 7,216,525
</TABLE>

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

(1) The adjusted column reflects the changes that will occur upon completion of
this offering.

8
<PAGE> 11

RISK FACTORS

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE,
INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY ANY INVESTOR WHO CANNOT
AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. EACH PROSPECTIVE PURCHASER SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE FACTORS ASSOCIATED WITH
THIS OFFERING, AS WELL AS OTHERS DESCRIBED ELSEWHERE IN THIS PROSPECTUS, BEFORE
MAKING ANY INVESTMENTS.

1. Dependence by Nortelco on Third Party Manufacturers and
Suppliers. Nortelco does not own or operate any manufacturing or production
facilities. Nortelco distributes products which are manufactured and supplied by
third party companies. While Nortelco has exclusive agreements with such
manufacturers and suppliers, these companies could terminate their relationships
with Nortelco at any time. Although no products from any of Nortelco's suppliers
accounted for more than 5% of the gross sales of the Company for the year ended
December 31, 1995 or the nine months ended September 30, 1996, the loss of
business from a number of manufacturers and suppliers as a result of change in
sales or distribution practices or otherwise, would have a material adverse
affect on Nortelco's operations. Although the Company believes it has good
relationships with its manufacturers and suppliers, and that it could readily
obtain other suppliers of similar products, there can be no assurances that
Nortelco would not experience delays in locating alternative sources for such
products. See "Management's Discussion and Analysis of Financial Conditions and
Results of Operations" and "Business."

2. Storebro's Dependence on a Single Product Line. Sales of lathes and
lathe parts and the servicing and repairing of lathes by Storebro for the year
ended December 31, 1995 and the nine months ended September 30, 1996 accounted
for approximately $4,109,000 and $2,597,000 of the Company's revenues,
respectively, or 16.1% and 13.5% of the Company's revenues, respectively.
Although Storebro offers for sale a variety of different lathes, Storebro's
business is dependent on sales of lathes. A substantial reduction in lathe sales
could have a material adverse effect on the Company's results of operations. See
"Business."

3. Need for Additional Financing. The Company believes that the net
proceeds from the sale of the Securities offered hereby will be sufficient to
fund the Company's operations for a period of approximately one year following
the completion of this Offering. In addition, the Company's strategy is to
acquire companies with related and complimentary businesses, although the
Company has not presently identified any specific acquisitions. The continued
expansion and operation of the Company's business beyond such one year period
and its ability to make acquisitions may be dependent upon its ability to obtain
additional financing. There can be no assurances that the Company will be able
to obtain such additional financing on acceptable terms or at all. In the event
that the Company is unable to obtain additional financing, the Company will not
be able to achieve all of its growth and expansion plans. See Managements's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Use of Proceeds."

4. Foreign Manufacturing. A substantial portion of the Company's business
consists of sales of products manufactured outside of Sweden and Norway. Foreign
manufacturing is subject to a number of risks, including transportation delays
and interruptions, political and economic disruptions, the impositions of
tariffs and import and export controls and changes in governmental policies.
While the Company has not, to date, experienced any material adverse effects due
to such risks, there can be no assurance that such events will not occur in the
future with the result of possible increases in costs and delays of, or
interferences with, product deliveries resulting in losses of revenues and
goodwill. See "Business."

5. Sensitivity to Economic and Other Conditions. The Company's businesses
may be affected by changes in economic conditions. A downturn in the economy in
one or more markets served by the Company, particularly Norway, Sweden or
certain other European countries, could have a material adverse effect on the
Company's operations. See "Management's Discussion and Analysis of Financial
Conditions and Results of Operations."

6. Acquisition Strategy. The Company's growth strategy includes the
acquisition of entities with businesses and/or assets similar to the Company's.
The Company continually seeks acquisition candidates in

9
<PAGE> 12

selected markets and from time to time engages in exploratory discussions with
suitable candidates. There can be no assurance, however, that the Company will
be able to identify and acquire appropriate businesses or obtain financing for
such acquisitions on satisfactory terms. The process of integrating acquired
businesses into the Company's operations may result in unforeseen difficulties
and may require a disproportionate amount of resources and management's
attention. Future acquisitions may be financed through the issuance of Common
Stock, which may dilute the Company's shareholders, or through the incurrence of
additional indebtedness. Furthermore, there can be no assurance that competition
for acquisition candidates will not escalate, thereby increasing the costs of
making acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

7. Competition. Nortelco and Storebro both compete in markets that are
extremely competitive and sensitive to changing consumer preferences and
demands. Each such corporation competes against many companies that are better
known with better known brand products, substantially larger and more
diversified, and have substantially greater financial, employee and marketing
resources than either of such corporations, as well as greater name recognition
and the ability to develop and market products similar to and more competitively
priced than those distributed by such corporations. Nortelco's competitors
include Hawke, Ltd. (England), Group Schneider, Ltd. (France), Wandel & Guterman
GmbH (Germany), Asea Brown Bowery AS (Norway) and Audio Grafiska (Norway), and
Storebro's competitors include Emco Maier GmbH (Austria), Gildemeister
N.E.F.-Drehmaschinen GmbH (Germany), A. Monforts GmbH & Co. Maschinenfabrik
(Germany), Traub AG (Germany), Yamazaki Mazak Corporation (Japan), Okuma
Machinery Works Ltd. (Japan), Mori Seiki Co., Ltd. (Japan). No assurances can be
given that either of such companies will be able to compete in their respective
markets. See "Business."

8. Foreign Currency and Foreign Exchange Regulation. The Company's sales
are invoiced primarily in the Swedish Krone and the Norwegian Krone. An
increasing value of the Swedish Krone and the Norwegian Krone would make the
Company's products more expensive to its buyers. Fluctuations in exchange rates
of the Swedish Krone and the Norwegian Krone against foreign currencies and the
translation of such currencies into U.S. dollars for determining the Company's
financial statements could adversely affect the Company's results and
operations. Furthermore, there can be no assurances that the Company will be
able to forecast and adjust to a rapid fluctuation in the international currency
market.

9. Lack of Experience of the Representative. The Representative was
organized in March 1995, was first registered as a broker dealer in December
1995, and became a member firm of the NASD in December 1995. The Representative
is principally engaged in retail brokerage and market making activities and
various corporate finance projects. Although the Representative has acted as a
placement agent in private offerings and has participated as a member of the
underwriting syndicate or as a selected dealer in four prior public offerings,
it only has acted as the lead managing underwriter in one prior public offering
and has co-managed one other public offering. No assurance can be given that the
Representative's lack of experience as a lead managing underwriter of public
offerings will not adversely affect the Offering and the subsequent development
of a liquid public trading market in the Company's securities.

10. Broad Discretion in Application of Proceeds. Approximately 4.5% of the
net proceeds of this Offering will be applied to working capital and general
corporate purposes. Accordingly, management will have a broad discretion over
the use of proceeds. See "Use of Proceeds."

11. Dependence Upon Management; No "Key Man Life Insurance"; Attraction and
Retention of Key Personnel. The success of the Company will be dependent on the
efforts of Bjorn Nysted, the Company's President, Goran Haggqvist, the Company's
Chairman of the Board, and Kjell Sjostrand, the Company's Chief Financial
Officer, Treasurer and Secretary, all of whom are employed for three year terms
commencing on the completion of this Offering. Following completion of this
Offering, Messrs. Nysted, Haggqvist and Sjostrand intend to fully devote their
time to the business and operations of the Company. Although the Company intends
in the future to obtain "key man life insurance," the Company currently has no
such insurance on the life of any of its employees. The loss of the services of
Mr. Nysted, Mr. Haggqvist or Mr. Sjostrand may adversely affect the Company's
business and prospects. The success of the Company's business will also be
dependent upon its ability to attract and retain other qualified personnel.
There can be no assurances that the Company will be successful in attracting or
retaining such personnel. See "Management."

10
<PAGE> 13

12. Product Liability. Nortelco has approximately $500,000 in product
liability insurance. Nortelco believes that, generally, the manufacturers of its
products also have product liability insurance for their respective products.
Storebro has approximately $2,000,000 of product liability insurance. To date,
neither Nortelco or Storebro has been a party to any material product liability
claims asserted against them, and believe their respective product liability
insurance policies are sufficient. However, no assurance can be given that in
the future a claim will not be made against the Company and such insurance will
not be sufficient.

13. Control by Management. The Company's officers and directors currently
own and have the power to vote 68.5% of the shares of Common Stock. In addition,
upon the completion of this Offering, management of the Company will continue to
beneficially own shares of Common Stock representing 51.9% of all votes entitled
to be cast. Accordingly, management of the Company will, as a practical matter,
be in a position to elect a majority of the directors of the Company and to
control the Company's day-to-day affairs. See "Principal Stockholders" and
"Description of Securities."

14. Anti-Takeover Provisions. The Company's Certificate of Incorporation
permits its Board of Directors to designate the terms of and issue shares of
Preferred Stock (subject to the prohibition of the Company issuing such shares
for two years from the Effective Date, without the consent of the Underwriter).
These provisions, might render it more difficult, and therefore discourage, an
unsolicited takeover proposal such as a proxy contest or the removal of
incumbent management, even if such actions would be in the best interest of the
Company's stockholders. See "Description of Securities -- Preferred Stock."

15. Shares Eligible for Future Sale. The Company currently has 2,400,000
shares of Common Stock outstanding that are "restricted securities", as that
term is defined under Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). In general, under Rule 144, a person who has
satisfied a two-year holding period may, under certain circumstances, sell
within any three month period a number of shares of Common Stock that does not
exceed the greater of 1% of the then outstanding shares of Common Stock or the
average weekly trading volume in such shares during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain circumstances, the sale
of shares without any quantity or other limitation by a person who is not an
affiliate of the Company and who has satisfied a three-year holding period. Any
substantial sale of restricted securities under Rule 144 could have a
significant adverse effect on the market price of the Company's securities.

Giving effect to the sale of 775,000 by the Company and 100,000 shares by
the Selling Stockholders, the Company will have issued and outstanding 3,175,000
shares of its Common Stock, of which 2,300,000 will be "restricted securities".
See "Shares Eligible for Future Sale."

All Company's securityholders, on the date hereof, have agreed not to
publicly sell, for a period of two (2) years from the date of this Prospectus,
any shares of the Company's Common Stock without the prior written consent of
the Representative. The Underwriter's decision whether to release such
individuals from their lock-ups will be dependent upon market conditions,
including the need to maintain orderly market conditions.

16. Immediate and Substantial Dilution. As of September 30, 1996, the net
tangible book value of the Company was $2,027,000 or approximately $.84 per
share of Common Stock, based on 2,400,000 shares outstanding on such date.
Investors participating in this Offering will incur immediate dilution in net
tangible book value of $4.97 per share of Common Stock, which is approximately
71%, based upon the Offering Price of $7.00 per share for the Common Stock. All
of the Company's present stockholders purchased their shares at a price
substantially less than Offering Price herein. See "Dilution."

17. No Dividends and None Anticipated. The holders of Common Stock are
entitled to receive dividends when, as and if declared by the Board of
Directors, out of funds legally available therefor. To date, no dividends have
been declared or paid on the Common Stock, and the Company does not intend to
declare any dividends in the foreseeable future. It is currently anticipated
that earnings, if any, will be used to develop and finance the Company's
proposed business operations. See "Dividend Policy."

18. No Assurance of Public Market; Determination of Offering Price;
Volatility of Stock Price. Prior to this Offering, there has been no sustained
public market for the Company's Common Stock and no public

11
<PAGE> 14

market for the Company's Warrants. There can be no assurance that a trading
market will develop or be sustained after this Offering. The initial public
offering prices of the Securities and the exercise price and other terms of the
Warrants were established by negotiations between the Company and the
Underwriters and do not bear any direct relationship to the Company's assets,
book value, results of operations or any other criteria of value. In addition,
factors such as quarterly variations in the Company's actual or anticipated
results of operations may cause the market price of the Common Stock and
Warrants to fluctuate significantly. Furthermore, the stock market may
experience extreme price and volume fluctuations. These broad market
fluctuations may adversely affect the market price of the Company's Common Stock
and Warrants. See "Underwriting".

19. NASDAQ Eligibility and Maintenance Requirements; Possible Delisting of
Securities from NASDAQ Market; Risks of Low-Priced Stocks. Prior to this
Offering, there has been no sustained public trading market for the Company's
securities and there is no assurance that a sustained public trading market for
the Company's securities will develop after the completion of this Offering. If
a trading market does in fact develop for the securities offered hereby, there
can be no assurance that it will be sustained.

The Company has applied for listing of the Common Stock and Warrants on
NASDAQ-NMS upon the Effective Date. The Commission has approved rules for
imposing criteria for listing of securities on NASDAQ-NMS, including standards
for maintenance of such listing. In order to qualify for initial quotation of
securities on NASDAQ-NMS, a company, among other things, must have at least
$4,000,000 in net tangible assets, $3,000,000 in market value of the public
float and a minimum bid price of $5.00 per share. For continued listing, a
company, among other things, must have at least $1,000,000 in net tangible
assets, $1,000,000 in market value of the public float and a minimum bid price
of $1.00 per share. If the Company is unable to satisfy NASDAQ-NMS maintenance
criteria for listing in the future, its securities may be delisted from
NASDAQ-NMS. In such event, the Company would seek to list its securities on the
NASDAQ SmallCap Market, however, if it is unsuccessful, trading, if any, in the
Company's securities would thereafter be conducted in the over-the-counter
market in the so-called "pink sheets" or the NASD's "Electronic Bulletin Board."
As a consequence of such delisting, an investor would likely find it more
difficult to dispose of, or to obtain quotations as to, the price of the
Company's securities.

20. Penny Stock Regulation. In the event that the Company is unable to
satisfy the maintenance criteria requirements for the NASDAQ-NMS and its Common
Stock falls below the minimum bid price of $5.00 per share for the initial
quotation, the Company would seek to list its securities on the NASDAQ SmallCap
Market. If it was unsuccessful, trading would be conducted in the "Pink Sheets"
or the NASD's Electronic Bulletin Board. In the absence of the Common Stock
being quoted on NASDAQ, or the Company's having $2,000,000 in stockholders'
equity, trading in the Common Stock would be covered by Rule 15g-9 promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act"), for non-NASDAQ
and non-exchange listed securities. Under such rule, broker-dealers who
recommend such securities to persons other than established customers and
accredited investors must make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to a transaction
prior to sale. Securities are exempt from this rule if the market price is at
least $5.00 per share.

The Commission has adopted regulations that generally define a "penny
stock" to be any equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Such exceptions include an equity security listed on NASDAQ, and an
equity security issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for three years,
(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average revenue of at
least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a risk disclosure schedule explaining the penny
stock market and the risks associated therewith.

If the Company's securities were to become subject to the regulations
applicable to penny stocks, the market liquidity for the securities would be
severely affected, limiting the ability of broker-dealers to sell the securities
and the ability of purchasers in this Offering to sell their securities in the
secondary market. There is

12
<PAGE> 15

no assurance that trading in the Company's securities will not be subject to
these or other regulations that would adversely affect the market for such
securities.

21. Potential Adverse Effect of Redemption of Warrants. The Warrants
offered hereby are redeemable, in whole or in part, at a price of $.05 per
Warrant, commencing one year after the Effective Date and prior to their
expiration; provided that (i) prior notice of not less than 30 days is given to
the Warrantholders; (ii) the closing bid price of the Company's Common Stock for
the twenty (20) consecutive trading days immediately prior to the date on which
the notice of redemption is given, shall have exceeded $13.00 per share; and
(iii) Warrantholders shall have exercise rights until the close of the business
day preceding the date fixed for redemption. Notice of redemption of the
Warrants could force the holders to exercise the Warrants and pay the Exercise
Price at a time when it may be disadvantageous for them to do so, or to sell the
Warrants at the current market price when they might otherwise wish to hold
them, or to accept the redemption price, which may be substantially less than
the market value of the Warrants at the time of redemption. The Company has
agreed to use its best efforts to keep the registration statement current in
connection with any proposed exercise of the Warrants. Further, the Warrants may
not be exercised unless the registration statement pursuant to the Securities
Act covering the underlying shares of Common Stock is current and such shares
have been qualified for sale, or there is an exemption from applicable
qualification requirements, under the securities laws of the state of residence
of the holder of the Warrants. Although the Company does not presently intend to
do so, the Company reserves the right to call the Warrants for redemption
whether or not a current prospectus is in effect or such underlying shares are
not, or cannot be, registered in the applicable states. Such restrictions could
have the effect of preventing certain Warrantholders from liquidating their
Warrants. Further, in the event the Company does not have a current registration
statement in effect, the Company would be unable to call the Warrants for
redemption. See "Description of Securities -- Warrants."

22. Current Prospectus and State Blue Sky Registration Required to Exercise
Warrants. Holders of the Warrants will have the right to exercise the Warrants
for the purchase of shares of Common Stock only if a current prospectus relating
to such shares is then in effect and only if the shares are qualified for sale
under the securities laws of the applicable state or states. The Company has
undertaken and intends to file and keep current a prospectus which will permit
the purchase and sale of the Common Stock underlying the Warrants, but there can
be no assurance that the Company will be able to do so. Although the Company
intends to seek to qualify for sale the shares of Common Stock underlying the
Warrants in those states in which the securities are to be offered, no assurance
can be given that such qualification will occur. In addition, purchasers may buy
Warrants in the aftermarket or may move to jurisdictions in which the shares of
Common Stock issuable upon exercise of the Warrants are not so registered or
qualified during the period that the Warrants are exercisable. In such event,
the Company would be unable to issue shares to those persons desiring to
exercise their Warrants unless and until the shares could be registered or
qualified for sale in the jurisdiction in which such purchasers reside, or an
exemption to such qualification exists or is granted in such jurisdiction. The
Warrants may lose or be of no value if a prospectus covering the shares issuable
upon the exercise thereof is not kept current or if such underlying shares are
not, or cannot be, registered in the applicable states. See "Description of
Securities-Warrants."

23. Relationship of Underwriters to Trading. The Underwriters may act as
brokers or dealers with respect to the purchase or sale of the Common Stock and
the Warrants in the over-the-counter market where each is expected to trade. The
Representative also has the right to act as the Company's exclusive agent in
connection with any future solicitation of warrantholders to exercise their
Warrants. Unless granted an exemption by the Commission from Rule 10b-6 under
the Exchange Act, the Representative will be prohibited from engaging in any
market-making activities or solicited brokerage activities with regard to the
Company's securities during a period beginning nine business days prior to the
commencement of any such solicitation and ending on the later of the termination
of such solicitation activity or the termination (by waiver or otherwise) of any
right the Representative may have to receive a fee for the exercise of the
Warrants following such solicitation. As a result, the Representative and
soliciting broker/dealers may be unable to continue to make a market in the
Company's securities during certain periods while the exercise of Warrants is
being solicited. Such a limitation, while in effect, could impair the liquidity
and market price of the Company's securities.

13
<PAGE> 16

24. Underwriter's Warrants and Registration Rights. In connection with this
Offering, the Company has agreed to sell to the Underwriters, for $10, the
Underwriters' Warrants which entitle the Underwriters to purchase up to 87,500
shares of Common Stock and/or 175,000 Warrants, respectively. The securities
issuable upon exercise of the Underwriters' Warrants are identical to those
offered pursuant to this prospectus. The Underwriters' Warrants are exercisable
at $8.40 and $.18, respectively, for a period of four years commencing one year
from the Effective Date. The exercise of the Underwriters' Warrants and the
Warrants contained in the Underwriters' Warrants may dilute the value of the
shares of Common Stock to be acquired by holders of the Warrants, may adversely
affect the Company's ability to obtain equity capital, and, if the Common Stock
issuable upon the exercise of the Underwriters' Warrants and the Warrants
contained in the Underwriters' Warrants are sold in the public market, may
adversely affect the market price of the Common Stock. The Underwriters have
been granted certain "piggyback" and demand registration rights for a period of
five years from the Effective Date with respect to the registration under the
Securities Act of the securities directly or indirectly issuable upon exercise
of the Underwriters' Warrants. The exercise of such rights could result in
substantial expense to the Company. See "Underwriting."

14
<PAGE> 17

USE OF PROCEEDS

The net proceeds to the Company from the sale the Securities offered hereby
are estimated to be approximately $4,418,125 ($5,251,693.80 if the Underwriters'
Over-allotment Option is exercised in full) after deducting underwriting
commissions and discounts and other expenses of the Offering. The Company
expects to use the net proceeds approximately as follows:

<TABLE>
<CAPTION>
APPROXIMATE
APPLICATION OF APPROXIMATE PERCENTAGE OF
NET PROCEEDS DOLLAR AMOUNT NET PROCEEDS
-------------------------------------------------- ------------- -------------
<S> <C> <C>
Repayment of Bridge Loans(1)...................... $ 950,000 21.5%
Acquisitions(2)................................... 2,468,125 55.9%
Repayment of Indebtedness(3)...................... 500,000 11.3%
Research and Development(4)....................... 300,000 6.8%
Working Capital................................... 200,000 4.5%
---------- -----
Total................................... $ 4,418,125 100.0%
========== =====
</TABLE>

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

(1) The Bridge Loans which were made by unaffiliated third parties are payable
on the earlier of the closing of this Offering or February 15, 1998. The
principal amount of the Bridge Loans of $950,000 bears interest at the rate
of 10% per annum. In the event the Bridge Loans are repaid on February 15,
1997, the total amount of interest to be paid to the holders of the Bridge
Notes shall be $47,500. The proceeds of the Bridge Loans were used to
finance, in part, the cost of the public offering and for corporate and
general working capital purposes, including proposed acquisitions.

(2) The Company intends to use a portion of the proceeds from this offering to
pursue acquisition of entities with businesses and/or assets similar to the
Company's. See "Risk Factors -- Acquisition Strategy."

(3) The Company intends to use a portion of the proceeds from this offering to
reduce Nortelco's bank indebtedness.

(4) The Company intends to use a portion of the proceeds from this offering to
continue the development of Storebro's lathes.

The foregoing represents the Company's current estimate of the allocation
of the net proceeds of the Offering based upon certain assumptions relating to
the Company's business. Future events, including changes in economic conditions,
regulatory or competitive conditions, and the success or lack thereof of the
Company's businesses, may make shifts in the allocation of funds necessary or
desirable. There can be no assurance that the Company's estimates will prove to
be accurate or that unforeseen expenses will not be incurred.

The Company anticipates, based on its currently proposed plans and
assumptions relating to its operations, that the proceeds of this Offering,
together with projected cash flow from operations and available cash resources,
will be sufficient to satisfy the Company's contemplated cash requirements for
at least twelve (12) months following the consummation of this Offering. In the
event that the Company's plans change, its assumptions change or prove to be
inaccurate, or if the proceeds of this Offering or cash flow otherwise prove to
be insufficient to fund operations (due to unanticipated expenses, problems,
difficulties or otherwise), the Company may find it necessary or advisable to
reallocate some of the proceeds within the above-described categories or may be
required to seek additional financing sooner than currently anticipated or
curtail its expansion activities. There can be no assurance that additional
financing will be available to the Company on commercially reasonable terms, or
at all.

Proceeds not immediately required for the purposes described above will be
invested principally in short-term bank certificates of deposit, short-term
securities, United States Government obligations, money market instruments or
other interest-bearing investments.

15
<PAGE> 18

DILUTION

The difference between the initial public offering price per share of
Common Stock and the pro forma net tangible book value per share of Common Stock
after this Offering constitutes the dilution to investors in this Offering. Net
tangible book value per share is determined by dividing the net tangible book
value of the Company (total tangible assets less total liabilities) by the
number of outstanding shares of Common stock. The following discussions allocate
no value to the Warrants.

At September 30, 1996, the Company's tangible assets exceeded its
liabilities by $2,027,000 (giving effect to expenses of the Offering paid at
such date) and accordingly the Company's Common Stock had a net tangible book
value of $.84 per share. After giving effect to the receipt of the net proceeds
from the sale of the Common Stock offered hereby at an initial public offering
price of $7.00 per share of Common Stock (less underwriting discount and
offering expenses) the pro forma net tangible book value of the Company at
September 30, 1996 would have been $6,445,125 or $2.03 per share, representing
an immediate increase in net tangible book value of $1.19 per share to the
existing stockholders and an immediate dilution of $4.97 per share (71%) to new
investors. The following table illustrates dilution to new investors on a per
share basis:

<TABLE>
<S> <C> <C>
Initial public offering price................................ $7.00
Net tangible book value per share before this
offering(1)............................................. $ .84
Increase per share attributable to new investors........... 1.19
-----
Pro forma net tangible book value per share after this
offering................................................... 2.03
-----
Dilution per share to new investors(2)....................... $4.97
=====
</TABLE>

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

(1) Net tangible book value per share is determined by dividing the Company's
net tangible book value (total assets less intangible assets and total
liabilities) at September 30, 1996 by the number of shares of Common Stock
then outstanding.

(2) Dilution per share is determined by subtracting pro forma net tangible book
value per share after the Underwritten Offering from the initial public
offering price per share. The foregoing table also assumes no exercise of
the Underwriter's Warrant or options to purchase 250,000 shares of Common
Stock to be granted pursuant to the Company's Stock Option Plan.

In the event the Underwriters exercise the Over-allotment Option in full,
the pro forma net tangible book value per share would be $7,278,694 which would
result in dilution to new investors of $4.71 per share.

The following table sets forth on a pro forma basis as of September 30,
1996 the respective positions of the Company's existing stockholders and new
investors with respect to the number of shares of Common Stock purchased from
the Company, the total cash consideration paid and the average price per share
paid by the existing stockholders and by the new investors with respect to the
775,000 shares of Common Stock to be issued by the Company at an initial public
offering price of $7.00 per share.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- ------------------------- AVERAGE
APPROXIMATE APPROXIMATE PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
--------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Existing Stockholders............. 2,400,000 75.6% 1,242,000 20.8% $0.59
New Investors..................... 775,000 24.4% 5,425,000 79.2% $7.00
--------- ----- --------- ----- -----
Total........................ 3,175,000 100.0% 6,847,000 100.0%
</TABLE>

The foregoing table assumes no exercise of any Warrants or options to
purchase 250,000 shares of Common Stock to be granted pursuant to the Company's
1995 Stock Option Plan.

16
<PAGE> 19

DIVIDEND POLICY

To date, the Company has paid no dividends on any shares of its Common
Stock and the Company's Board of Directors has no present intention of paying
any dividends on its Common Stock in the foreseeable future, as it intends to
use its earnings, if any, to generate increased growth. The payment by the
Company of dividends in the future, if any, rests solely within the discretion
of the Board of Directors and will depend upon, among other things, the
Company's earnings, capital requirements and financial condition, as well as
other factors deemed relevant by the Company's Board of Directors. Although
dividends are not limited currently by any agreements, it is anticipated that
future agreements, if any, with institutional lenders or others may also limit
the Company's ability to pay dividends.

17
<PAGE> 20

CAPITALIZATION

The following table sets forth (i) the capitalization of the Company as of
September 30, 1996, and (ii) such capitalization as adjusted to give effect to
the sale of 775,000 shares of Common Stock and 1,750,000 Warrants at initial
public offering prices of $7.00 per share and $.15 per Warrant and the
application of the net proceeds therefrom. This table should be read in
conjunction with the Financial Statements and the notes thereto appearing
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-----------------------------
ACTUAL AS ADJUSTED(1)
---------- --------------
<S> <C> <C>
Current Liabilities............................... $8,591,000 $7,141,000
Long-Term Debt.................................... $1,174,000 $1,174,000
Common Stock, $.0001 par value; 19,000,000 shares
authorized; 2,400,000 shares issued and
outstanding as of September 30, 1996 (actual);
3,175,000 shares issued and outstanding as
adjusted........................................ $ 2,400 $ 3,175
Additional Paid-In Capital........................ $1,290,000 $5,657,350
Retained Earnings................................. $1,595,000 $1,595,000
Cumulative Currency Translation Adjustment........ $ (39,000) $ (39,000)
Total Stockholders' Equity...................... $2,798,400 $7,216,525
---------- ---------
Total Capitalization............................ $3,972,400 $8,390,525
========== =========
</TABLE>

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

(1) The adjusted column reflects the changes that will occur upon completion of
this offering.

MARKET FOR SECURITIES

There is presently no established public trading market for the Company's
Common Stock. Present management is unaware of any active trading in the
Company's Common Stock within the last three (3) years.

The approximate number of record holders of the Company's Common Stock as
of September 1, 1996 was approximately 630.

18
<PAGE> 21

SELECTED FINANCIAL INFORMATION

The following is a summary of the Company's financial information extracted
from the indicated year end Consolidated Financial Statements of the Company,
and is qualified in its entirety by the detailed financial information appearing
in the Consolidated Financial Statements and the Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
unaudited Consolidated Financial Statements of the Company for the interim
periods ended September 30, 1996 and 1995, have been prepared by management from
the books and records of the Company and reflect, in the opinion of management,
all adjustments (consisting of normally occurring accruals), necessary for a
fair presentation of the financial position, results of operations, and changes
in the financial position of the Company, as at the periods indicated therein.
Results for interim periods are not necessarily indicative of results which can
be expected for the entire year.

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
UNAUDITED
------------------------
1995 1994 1993(1) 1992(1) 1991(1)
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Sales........................ 25,531,000 21,081,000 11,527,000 13,237,000 10,732,000
Cost of Goods Sold............... 15,318,000 12,296,000 6,445,000 7,524,000 6,027,000
Gross Profit..................... 10,213,000 8,785,000 5,082,000 5,713,000 4,705,000
Operating Expenses Selling,
General and Administrative..... 8,707,000 7,408,000 3,910,000 4,419,000 3,812,000
Interest......................... 536,000 511,000 830,000 1,043,000 943,000
Depreciation and Amortization.... 503,000 376,000 300,000 453,000 289,000
Earnings (Loss) Before Other
Income Taxes, Extraordinary
Income and Minority Interest... 467,000 490,000 42,000 (202,000) (339,000)
Other Income Interest Earned..... 84,000 30,000 18,000 29,000 -0-
Other Earnings (Loss)............ 210,000 62,000 (114,000) 46,000 930,000
Earnings (Loss) Before Taxes and
Minority Interest.............. 761,000 582,000 (54,000) (127,000) 631,000
Provision for Taxes.............. 254,000 136,000 35,000 36,000 177,000
Earnings (Loss) Before Minority
Interest....................... 507,000 446,000 (89,000) (163,000) 454,000
Minority Interest................ -0- 54,000 (31,000) 51,000 91,000
Net Earnings (Loss).............. 507,000 392,000 (58,000) (112,000) 363,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss) Before
Extraordinary Income........... 0.28 0.22 0.05 0.06 (0.32)
Net Earnings/(Loss).............. 0.28 0.22 (0.03) 0.06 0.20
Weighted Average Number of Common
Stock Outstanding.............. 1,800,000 1,799,705 1,799,690 1,799,690 1,799,690
</TABLE>

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

(1) Pooling of interests accounting results in all the historical financial
information being retroactively adjusted to reflect the business
combination.

19
<PAGE> 22

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED
SEPTEMBER 30,
--------------------------
1996 1995
---------- -----------
(UNAUDITED)
<S> <C> <C>
Net Sales........................................................... 19,234,000 18,861,000
Cost of Goods Sold.................................................. 11,382,000 11,201,000
Gross Profits....................................................... 7,852,000 7,660,000
Operating Expenses Selling, General and Administrative.............. 6,715,000 6,312,000
Interest............................................................ 387,000 382,000
Depreciation and Amortization....................................... 350,000 416,000
Earnings Before Other Income, Taxes, Extraordinary Income and
Minority Interest................................................. 400,000 550,000
Other Income Interest Earned........................................ 160,000 162,000
Other Earnings (Loss)............................................... (36,000) 5,000
Earnings (Loss) Before Taxes and Minority Interest.................. 524,000 717,000
Provision for Taxes................................................. 161,000 205,000
Earnings (Loss) Before Minority Interest............................ 363,000 512,000
Minority Interest................................................... -0- 78,000
Net Earnings (Loss)................................................. 363,000 434,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss) Before Extraordinary Income..................... 0.19 0.24
Net Earnings (Loss)................................................. 0.19 0.24
Weighted Average Number of Common Stock Outstanding................. 1,937,500 1,800,000
</TABLE>

CONSOLIDATED BALANCE SHEET DATA:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- --------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Working Capital................. 1,648,000 1,007,000 21,000 (292,000) (591,000)
Total Assets.................... 11,240,000 9,169,000 10,440,000 9,551,000 8,619,000
Current Liabilities............. 7,674,000 6,458,000 4,387,000 3,517,000 3,218,000
Long-Term Debt.................. 1,276,000 1,340,000 5,559,000 5,894,000 5,442,000
Stockholder's Equity............ 2,290,000 1,371,000 494,000 141,000 (41,000)
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------
ACTUAL ADJUSTED(1)
----------- -----------
(UNAUDITED)
<S> <C> <C>
Working Capital..................................................... 3,972,000 8,390,125
Total Assets........................................................ 12,563,000 15,531,125
Current Liabilities................................................. 8,591,000 7,141,000
Long-Term Debt...................................................... 1,174,000 1,174,000
Stockholder's Equity................................................ 2,798,400 7,216,525
</TABLE>

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

(1) The adjusted column reflects the changes that will occur upon completion of
this offering.

20
<PAGE> 23

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the Financial Statements and notes thereto appearing elsewhere in this
Prospectus.

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR TWELVE MONTHS
ENDED DECEMBER 31,
-----------------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Net Sales....................................................... 100.0% 100.0% 100.0%
Cost of Goods Sold.............................................. 60.0% 58.3% 55.9%
----- ----- -----
Gross Profit.................................................... 40.0% 41.7% 44.1%
Operating Expenses:
Selling, General and Administrative........................... 34.1% 35.1% 33.9%
Depreciation and Amortization................................. 2.0% 1.8% 2.6%
Interest...................................................... 2.1% 2.4% 7.2%
Earnings before other income, taxes, extraordinary income, and
minority interest............................................. 1.8% 0.2% 0.4%
Earnings before taxes, extraordinary income and minority
interest...................................................... 3.0% 0.6% 0.9%
Earnings/(Loss) before taxes and minority interest.............. 3.0% 2.8% (0.5)%
Earnings/(Loss) before minority interest........................ 2.0% 2.2% (0.8)%
Net Earnings/(Loss)............................................. 2.0% 1.9% (0.5)%
</TABLE>

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1996 TO THE NINE MONTHS
ENDED SEPTEMBER 30, 1995

Net Earnings

The Company's net earnings for the nine month period ended September 30,
1996 were $363,000, a decrease of $71,000 from 1995, when the Company had a net
earning of $434,000. Net earnings for Nortelco's Audio Visual Division increased
by approximately 668.8%, from $32,000 to $246,000, as a result of the Company
increasing its sales and obtaining a higher percentage of the market. Net
earnings for Nortelco's Electrical Division decreased by approximately 32.2%,
from $298,000 to $202,000, as a result of a decrease in its sales resulting from
one of its customers experiencing a strike. Net earnings (loss) for Storebro
decreased by approximately 101.4%, from $146,000 to ($2,000), as a result of the
delay in completing and delivering lathe orders. Net earnings (loss) for
Nortelco's Electronics division decreased by approximately 528.6%, from ($7,000)
to ($44,000), as a result of an increase in its expenses. The net earnings
(loss) for the Company's divisions were offset by net losses incurred by the
Company in the amount of $39,000 and $35,000 for the nine months ended September
30, 1996 and 1995, respectively.

Net Sales

Net sales for the Company increased by $373,000 for the nine months ended
September 30, 1996, from $18,861,000 to $19,234,000, or approximately 2%, from
the previous year as a result of normal growth. The increase in net sales was
partially attributable to an increase in net sales of Nortelco System-Teknikk,
which experienced a 53% increase due to the synergistic effects from the merger
of Bror Mauritz-Hansen ("Bror") with and into Nortelco System-Teknikk, as well
as an improved economy in Norway. Based upon these circumstances, the Company
considers a growth of 2% as normal. Net sales for Nortelco's Audio Visual
Division increased by approximately 5.3%, from $8,945,000 to $9,416,000, and net
sales for Storebro increased by approximately 8.8%, from $2,388,000 to
$2,597,000, while net sales for Nortelco's Electrical Division decreased by
approximately 6.5%, from $4,299,000 to $4,020,000, and net sales for Nortelco's
Electronics division decreased by approximately 0.9%, from $3,299,000 to
$3,201,000.

21
<PAGE> 24

Gross Profit

Gross Profit increased for the nine months ended September 30, 1996 by
$202,000, from $7,660,000 to $7,862,000, or approximately 2.6%, as a result of
the increased net sales and higher profit margin on goods sold. The higher
profit margin is due to the increased sales of Nortelco System-Teknikk, which
sold audio visual products having a higher average profit margin. Gross profit
for Nortelco's Audio Visual Division increased by approximately 11.2%, from
$3,526,000 to $3,922,000, gross profit for Storebro increased by approximately
3.5%, from $1,118,000 to $1,157,000, and gross profit for Nortelco's Electronics
Division increased by approximately 0.4%, from $1,230,000 to $1,235,000 while
gross profit for Nortelco's Electrical Division decreased by approximately
13.3%, from $1,786,000 to $1,548,000.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") increased for the
nine months ended September 30, 1996 by $640,000, from $6,326,000 to $6,966,000
and as a percentage of net sales to 36.2% from 33.5%. The increase in SG&A and
SG&A as a percentage of net sales resulted from an increased number of employees
as well as increased advertising costs. SG&A for Nortelco's Audio Visual
Division increased by approximately 16.2%, from $2,920,000 to $3,394,000, SG&A
for Storebro increased by approximately 30.5%, from $918,000 to $1,198,000, and
SG&A for Nortelco's Electronics division increased by approximately 18.4%, from
$1,028,000 to $1,217,000, while SG&A for Nortelco's Electrical Division
decreased by approximately 20.8%, from $1,460,000 to $1,157,000.

COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1995 TO THE TWELVE MONTHS
ENDED
DECEMBER 31, 1994

Net Earnings

The Company's net earnings in 1995 were $507,000, an increase of $115,000
from 1994, when the Company had net earnings of $392,000. Such increase resulted
from an increased level of sales. Net earnings (loss) for Nortelco's Audio
Visual Division increased by approximately 116.8%, from ($223,000) to $37,000,
as a result of increased net sales, increased gross profits and the allocation
of certain administrative costs to other divisions of the Company. Net earnings
for Storebro increased by approximately 16.0%, from $231,000 to $268,000, as a
result of increased net sales and increased gross profit. Net earnings for
Nortelco's Electrical Division decreased by approximately 1.3%, from $348,000 to
$343,000, as a result of a slightly greater increase in costs as compared to
increased sales. Net earnings (loss) for Nortelco's Electronics division
decreased by approximately 192.8%, from $92,000 to ($85,000), as a result of the
allocation of certain administrative costs to other divisions of the Company.
The net earnings (loss) for the Company's divisions were offset by net losses
incurred by the Company in the amount of $56,000 for each of the years ended
December 31, 1995 and 1994.

Net Sales

Net sales increased by $4,899,000 for the twelve months ended December 31,
1995, from $21,081,000 to $25,531,000, or approximately 21.1%, from the previous
year as a result of the larger business base due to Nortelco's 1994 acquisitions
of Nortelco Audiatur and Bror. Net sales for Nortelco's Audio Visual Division
increased by approximately 5.4%, from $10,558,000 to $11,124,000, as a result of
increases in prices of products sold. Net sales for Storebro increased by
approximately 91.7%, from $2,144,000 to $4,109,000, as a result of an increase
in customer base. Net sales for Nortelco's Electrical Division increased by
approximately 11.3%, from $4,918,000 to $5,474,000, as a result of increases in
prices of products sold, as well as an expanded customer base. Net sales for
Nortelco's Electronics division increased by approximately 39.4%, from
$3,460,000 to $4,825,000, as a result of the purchase of the remaining 20% of
the outstanding shares of Nortelco Audiatur which resulted in the Company's
owning 100% of Nortelco Audiatur.

22
<PAGE> 25

Gross Profit

Gross Profit increased in 1995 by $1,428,000, from $8,785,000 to
$10,213,000 as a result of increased net sales in 1995 from the Nortelco
acquisition. However, profit remained the same due to the administrative and
relocation costs incurred from the acquisition. Gross profit for Nortelco's
Audio Visual Division increased by approximately 2.9%, from $4,394,000 to
$4,522,000, as a result of increases in prices of products sold, as well as a
change in the mix of products sold resulting in the sale of products with a
higher gross profit margin. Gross profit for Storebro increased by approximately
21.7%, from $1,412,000 to $1,719,000, as a result of increased sales. Gross
profit for Nortelco's Electrical Division increased by approximately 23.9%, from
$1,764,000 to $2,186,000, as a result of increased sales, as well as a change in
the mix of products sold resulting in the sale of products with a higher gross
profit margin. Gross profit for Nortelco's Electronics Division increased by
approximately 47.1%, from $1,215,000 to $1,786,000, as a result of a change in
the mix of products sold resulting in the sale of products with a higher gross
profit margin.

Selling, General and Administrative Expenses

SG&A increased in 1995 by $1,299,000, from $7,408,000 to $8,707,000 and
decreased as a percentage of net sales to 34.1% from 35.1%. The increase in SG&A
resulted from increased salaries due to Nortelco's 1994 acquisitions discussed
above. SG&A for Storebro increased by approximately 28.4%, from $1,091,000 to
$1,401,000, as a result of increased sales. SG&A for Nortelco's Electrical
Division increased by approximately 53.9%, from $1,051,000 to $1,618,000,as a
result of the acquisition of Brannteknikk and the allocation of certain
administrative costs. SG&A for Nortelco's Electronics division increased by
approximately 80.6%, from $924,000 to $1,668,000, as a result of an increased
number of employees and a change in the allocation of certain administrative
costs. SG&A for Nortelco's Audio Visual Division decreased by approximately
7.4%, from $4,343,000 to $4,020,000, as a result of the reduction in the number
of employees.

COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1994 TO THE TWELVE MONTHS
ENDED
DECEMBER 31, 1993

Net Earnings

The Company's net earnings in 1994 were $392,000, an increase of $450,000
from 1993, when the Company had net losses of ($58,000). Net earnings for
Storebro increased by approximately 10.8%, from $47,000 to $231,000, as a result
of an increase in sales which exceeded and offset a slight decrease in gross
profit percentage and a slight increase in SG&A. Net earnings (loss) for
Nortelco's Electronics division increased by approximately 138.7%, from
($237,000) to $92,000, as a result of the fact that this division was in
start-up phase in 1993 with low sales and high SG&A, as well as the purchase of
the assets of Dynatech, Inc. Net earnings for Nortelco's Electrical Division
increased by approximately 200%, from $116,000 to $348,000, as a result of the
allocation of certain administrative costs to other divisions of the Company.
Net earnings (loss) for Nortelco's Audio Visual Division decreased by
approximately 242.0%, from $157,000 to ($223,000), as a result of costs incurred
from the write-off of certain accounts receivable and obsolete inventory. The
Company's Real Estate Division, which was sold in January 1994, had net losses
of $141,000 for the year ended December 31, 1993. The net earnings (loss) for
the Company's divisions were offset by net losses incurred by the Company in the
amount of $56,000 for the year ended December 31, 1994.

Net Sales

Net sales increased by $9,554,000 for the twelve months ended December 31,
1994, from $11,527,000 to $21,081,000, or approximately 82.9%, from the previous
year as a result of the purchase of Audiator AB and Bror. Net sales for
Nortelco's Audio Visual Division increased by approximately 172.0%, from
$3,882,000 to $10,558,000, due to the purchase of Nortelco Audiatur and Bror,
which accounted for approximately $7,200,000 and $650,000 of the Company's total
net sales, respectively. Net sales for Storebro increased by approximately
51.0%, from $1,420,000 to $2,144,000, as a result of increased customer base.
Net sales for Nortelco's Electrical Division increased by approximately 32.4%,
from $3,715,000 to $4,918,000, as a result of

23
<PAGE> 26

increased sales of fire protection equipment related to off-shore oil rig
projects. Net sales for Nortelco's Electronics division increased by
approximately 75.2%, from $1,975,000 to $3,460,000, as a result of the purchase
of the assets of Dynatech, Inc.

Gross Profit

Gross Profit increased in 1994 by $3,703,000, from $5,082,000 to $8,785,000
as a result of increased net sales in 1994 resulting from the acquisitions of
Audiator AB and Bror. Gross profit for Nortelco's Audio Visual Division
increased by approximately 180.0%, from $1,570,000 to $4,394,000, due to
increased sales. Gross profit for Storebro increased by approximately 39.7%,
from $1,011,000 to $1,412,000, as a result of increased sales. Gross profit for
Nortelco's Electrical Division increased by approximately 25.6%, from $1,404,000
to $1,764,000, as a result of increased sales. Gross profit for Nortelco's
Electronics Division increased by approximately 115.9%, from $563,000 to
$1,215,000, as a result of a change in the mix of products sold resulting in the
sale of products with a higher gross margin.

Selling, General and Administrative Expenses

SG&A increased in 1994 by $3,498,000, from $3,910,000 to $7,408,000 and
increased as a percentage of net sales to 35.1% from 33.9%. The increase in
selling, general and administrative expenses resulted from an increased number
of employees. SG&A for Nortelco's Audio Visual Division increased by
approximately 278.1%, from $1,148,000 to $4,343,000, as a result of the purchase
of Nortelco Audiatur and the costs of relocating Nortelco Audiatur to offices in
Oslo, Norway. SG&A for Storebro increased by approximately 5.2%, from $932,000
to $1,091,000, as a result of an increased number of employees. SG&A for
Nortelco's Electrical Division increased by approximately 4.3%, from $1,008,000
to $1,051,000, as a result of the allocation of certain administrative cost from
other divisions of the Company. SG&A for Nortelco's Electronics Division
increased by approximately 39.2%, from $663,000 to $924,000, as a result of an
increased number of employees and a change in the allocation of certain
administrative costs.

Effects of Foreign Currency

The functional currency used by each of the Company's subsidiaries are
either Swedish SEK or Norwegian NOK. The Company's sales are invoiced in Swedish
SEK and Norwegian NOK. All foreign invoices received by the Company are booked
at the exchange rate as of the date of such invoices. Thereafter, upon payment
of such invoices by the Company, the gain or loss resulting from the change in
exchange rate between the invoice date and the payment date will be credited or
debited to the Company's financial costs or income. Accordingly, the Company is
subject to foreign currency fluctuations. The Company does not engage in any
hedging activities with respect to foreign currencies. However, the Company does
maintain a foreign currency account with respect to sales to and purchases from
customers and supplies in Germany.

Liquidity and Capital Resources

Historically, Nortelco has financed its operations and acquisitions through
borrowings from certain officers and/or directors of the Company, loans under
its bank credit agreements and cash flow from operations. Storebro has financed
its operations from cash flow from operations.

The primary uses of Nortelco's cash are product acquisitions from
suppliers, and, in 1994, to fund, in part, growth through acquisitions of
corporations with compatible product lines. The primary uses of Storebro's cash
are to purchase materials and inventory used in the assembly of its lathe
product line.

In 1994, Haggqvinvest AB, a corporation owned by Mr. Haggqvist, and certain
family members contributed $1,000,000 to the Company and subsequently received
1,793,939 shares of Common Stock of the Company in September 1995. Such funds
were used in connection with the Company's acquisition of Storebro and Nortelco.

In March 1994, Nortelco sold its corporate headquarters for approximately
$6,700,000. Nortelco then entered into a ten year lease for such property. The
funds from such sale were used to repay loans on the

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premises which reduced the Company's interest payments to its bank, paid certain
obligations to product suppliers and the remaining funds were used for working
capital purposes.

Net cash used by operating activities was ($119,000) and ($267,000) for the
year ended December 31, 1995 and the nine months ended September 30, 1996,
respectively. Bank indebtedness at December 31, 1995 and September 30, 1996 was
$484,087 and $397,632, respectively.

The Company's working capital at December 31, 1995 and September 30, 1996
was $1,648,000 and $2,149,000, respectively. The Company's accounts receivable
at December 31, 1995 and September 30, 1996 were $3,934,000 and $4,477,000,
respectively. The Company's inventory at December 31, 1995 and September 30,
1996 was $4,516,000 and $5,147,000, respectively.

Nortelco has a revolving working capital credit facility of approximately
$722,300 with Den Norske Bank, a Norwegian bank ("DNB"), and Nortelco System
Teknikk has a revolving working capital credit facility of approximately
$136,435 also with DNB. Such credit lines bear interest at thee rate of 8.75%
per annum, payable quarterly, for the first 60% of the aggregate amount
available under each such credit facility and 10.75% per annum, payable
quarterly, for all funds borrowed in excess of such 60% amount. DNB also
receives a fee of .25% each quarter for all funds outstanding at such time under
each such credit facility. As of September 30, 1996, Nortelco and Nortelco
System Teknikk had approximately $700,000 and approximately $45,000 outstanding,
respectively under such facilities.

In April 1994, Nortelco and Nortelco System Teknikk entered into four-year
working capital loans expiring in April 1998 with DNB in the amounts of $615,000
and $308,000, respectively. Such loans each bear interest at the rate of 9.5%
per annum, payable quarterly, and have an annual repayment schedule of $158,000
for Nortelco and $79,000 for Nortelco System Teknikk with the balance due upon
expiration of the credit facilities in April 1998. As of September 30, 1996,
Nortelco and Nortelco System Teknikk had approximately $269,000 and $134,460
outstanding, respectively, under such loans. In addition, Nortelco has a working
capital loan with DNB in the amount of $146,000.

In order for Nortelco to enter into its lease on its corporate headquarters
in Oslo, Norway, DNB posted a one year letter of credit in favor of the property
owner in the amount of $385,000. Under such facility, Nortelco pays to DNB an
annual fee of 1.75% on such amount payable quarterly in advance. As of the date
hereof, such letter of credit has not been drawn down upon. Such Letter of
Credit is renewable annually at the option of Nortelco.

DNB also has provided a letter of credit facility to Nortelco in the
aggregate principal amount of $154,000 to guarantee payments by Nortelco to its
suppliers for products purchased. Under such facility, DNB charge an annual fee
of 1.75% per annum, but in no event can the annual fee be less than $77 payable
quarterly in advance. Such facility is renewable annually at the option of
Nortelco. As of December 31, 1994, no funds had been drawn down upon such
facility.

Under the credit facilities between Nortelco, Nortelco System Teknikk and
DNB discussed above, Nortelco and Nortelco System Teknikk have each secured such
loans by providing cross security interests in $2,615,000 in the inventories of
each corporation and $2,615,000 in the accounts receivable of each such
corporation. Additionally, Mr. Nysted, the President of Nortelco and a Director,
President and principal shareholder of the Company has guaranteed up to $77,000
under such credit facilities.

Nortelco Audiatur has a revolving credit facility of $530,000 with
Handelsbanken, a Swedish Bank, secured by all of such entities' inventory and
account receivables. At September 30, 1996, $519,000 was outstanding under such
facility. Nortelco Audiatur also has a term working capital credit facility with
Handelsbanken bearing annual interest of 12.5% per annum of $384,000 of which
$169,000 was outstanding at September 30, 1996. The outstanding principal under
such credit facility is repayable at the rate of $21,000 each quarter and is
secured by such entity's inventory and accounts receivable. In addition,
Nortelco Audiatur has a foreign currency loan in the amount of $65,000 with
Handelsbanken bearing interest at the rate of 12.5% per annum.

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<PAGE> 28

Storebro currently has a revolving credit facility with Handelsbanken, a
Swedish bank, of $250,000 (the "Storebro Credit Facility"). Under the terms of
the Swedish Credit Facility, the Company may draw down working capital loans for
$250,000. Storebro also has a letter of credit facility with such bank to allow
Storebro to guarantee payment of supplies. The interest rate on the Storebro
credit facility is 12% and a 1.5%-2.0% fee on the amount of any letter of credit
posted. As of September 30, 1996, Storebro had approximately $170,000
outstanding under the Storebro Credit Facility and no outstanding letters of
credit.

In April 1994, Nortelco and Nortelco Audiatur acquired certain assets,
including inventory, fixed assets, customer lists and exclusive rights to sell
products, of the Swedish and Norwegian operations of Dynatech Corporation, a
Massachusetts corporation, for an aggregate of approximately $383,809, of which
approximately $25,759 (NOK 162,800) and approximately $109,000 (SEK 797,900)
were paid by the delivery of promissory notes, bearing no interest, due in April
1997. Certain of the acquired assets, such as office equipment, customer lists
and exclusive rights to sell are still owned or held by the Company, while other
assets, such as inventory, have been sold in the normal course of the Company's
business. To fund such acquisition, Nortelco borrowed $240,350 from Bjorn
Nysted, the President of Nortelco. In exchange for such funds, Nortelco issued
to Mr. Nysted a 12% $240,350 principal amount promissory note, payable upon
demand.

In December 1994, in exchange for a cancellation of a $77,000 invoice from
the Company to Nortelco for certain accounting, bookkeeping and other
administrative services performed by certain officers of the Company on behalf
of Nortelco, Nortelco issued to the Company 500 shares of its common stock, par
value $153. Nordic Business Development AS, a Norwegian corporation controlled
by Mr. Nysted ("NBD"), then purchased from the Company 100 shares of such stock
for $15,000. Such purchase price was paid by a 10% promissory note from NBD due
December 31, 1995.

In January 1995, the Company sold 126,271 shares of its Common Stock to
Mayfair Capital Limited at a purchase price of $1.75 per share, $220,974.25 in
the aggregate. The Company subsequently loaned such $220,974.25 to Nortelco
through a 10% subordinated note due December 31, 1996, which funds were used by
Nortelco to purchase 75% of the issued and outstanding stock of Brannteknikk.

Management believes that the credit facilities of Nortelco and Storebro,
together with internally generated funds and the proceeds of this offering will
be adequate to meet the Company's working capital requirements for approximately
twelve months following the date hereof.

The Company does not believe that its operations have been materially
affected by inflation or seasonality.

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BUSINESS

GENERAL

Nordic Equity Partners Corp.(the "Company"), through its two wholly-owned
subsidiaries, Nortelco AS, a Norwegian corporation ("Nortelco"), and Storebro
Machine AB, a Swedish corporation ("Storebro"), (i) imports and distributes
products for use in the electronic, electrical and audio visual industries and
(ii) designs, assembles and distributes lathes, sells lathe spare parts to
existing lathe owners and services, and repairs and overhauls lathes owned by
third parties. All of the Company's business and sales are conducted in Sweden,
Norway and Germany.

In May 1995, the Company entered into an Agreement and Plan of Merger with
SGA, pursuant to which SGA was merged with and into the Company, with each share
of SGA being exchanged for one share of the Company. Prior to the merger, SGA
acquired Nortelco and Storebro from corporations controlled by, among others,
the Company's current principal stockholders, in exchange for cash and shares of
Common Stock. See "Certain Transactions".

The consolidated revenues of the Company were approximately $25,531,000,
$21,081,000 and $11,527,000 in 1995, 1994 and 1993, respectively. In addition,
the net earnings (loss) of the Company were approximately $507,000, $392,000 and
($58,000) in 1995, 1994 and 1993, respectively. See "Management's Discussion and
analysis of Financial Condition and Results of Operations."

Nortelco. Nortelco imports and distributes throughout Norway and Sweden
over 10,000 products for use in the electronic, electrical and audio visual
industries to over 1,000 customers. The prices of its products range from $1.00
to $100,000. Nortelco's product strategy is to have its product line consist
substantially of products which are supplemental, or add-on, products to other
high volume products. Such products are generally highly specific products which
are marketed and sold to a very narrow part of the market. Accordingly, the
Company believes that its product line consists of "niche" products.

Nortelco does not manufacture any products that it distributes. Nortelco
purchases its products from over 50 nonaffiliated third party manufacturers
worldwide including Germany and the United States. Sales of products
manufactured by Lycab AB, Sennheisser GmbH and TOA Ltd., constituted 9%, 8% and
7%, respectively of Nortelco's revenues in 1995, and 10%, 9% and 7%,
respectively of Nortelco's revenues in 1994. No other manufacturer's products
accounted for more than 5% of Nortelco's sales in 1995 and 1994.

Nortelco's gross profit results primarily from the difference between the
price it purchases its products from non-affiliated third party manufacturers
and the price it sells such products to its customers. Nortelco also designs,
installs and sells complete, customized conference rooms and auditoriums and
provides after sale service and maintenance support to its customers.

Substantially all of Nortelco's products are sold by its internal sales
force which consists of approximately 50 full time salespersons in Norway and
Sweden. Nortelco believes that because its salespersons are experienced and have
technical backgrounds, it is able to service the continuing needs of its
customers and attract additional customers.

Nortelco believes that because of the high cost of establishing and
maintaining operations in Sweden and Norway, many foreign product manufacturers
avoid doing so. As a result, many of such companies enter into agreements with
Nortelco for Nortelco to act as their distributor in both or one of such
countries. Because Nortelco already has established operations in both
countries, Nortelco believes it can distribute for manufacturers their products
more efficiently and inexpensively.

Storebro. Storebro designs, assembles and distributes lathes. Storebro also
sells lathe spare parts to existing lathe owners and services, repairs and
overhauls lathes owned by third parties.

Storebro sells over six different types of its lathes which include both
computer numerically controlled ("CNC") lathes and traditional manually-operated
lathes. Storebro recently introduced a new lathe which can function as either a
manually operated or CNC lathe. Storebro distributes its lathes mainly to
customers

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<PAGE> 30

in Germany and Sweden, both through its own and independent sales
representatives. The prices of its products range from $18,000 to $360,000.

Revenues for Storebro for the years ended December 31, 1995 and 1994 were
$4,250,000 and $2,288,333, respectively. Net income for Storebro for the years
ended December 31, 1995 and 1994 were $260,000 and $240,041, respectively.

PRODUCTS

NORTELCO. Nortelco, through itself and its three wholly-owned subsidiaries,
Nortelco Audiatur, Nortelco System Teknikk, and Brannteknikk, imports and sells
approximately 10,000 select technical products to its customers throughout
Sweden and Norway. Products included in the Company's product line are generally
the same products that such manufacturers market and sell in other countries. In
determining which products to include in its product line, the Company examines
factors such as demand for the product in other countries, as well as
competition and customer demand within Norway and Sweden. The price range that
Nortelco sells its products ranges from $1 to $100,000.

Nortelco has three divisions, the Electronics Division, the Electrical
Division and the Audio Visual Division.

Electronics Division. Nortelco purchases and resells approximately 5,000
different products in the electronics industry including components,
telecommunication and datacommunication equipment and studio and communication
equipment. Sales of these products accounted for approximately 30.3% and 29.9%
of the Company's consolidated revenues for the nine months ended September 30,
1996 and for the year ended December 31, 1995, respectively. Notwithstanding the
foregoing, none of the products sold by the Company's electronics division which
are described below provide 15% or more of the Company's consolidated revenues
for its last three fiscal years.

Components. The Company's electronic components product line consists of
power conditioning components that protect, stabilize and monitor a proper and
continuous flow of power to electronic and electrical appliances and equipment,
such as computers. These components are designed to protect such equipment from
disturbances and memory loss that can result from blackouts, voltage
fluctuations and transients. They include electronic voltage regulators that
protect computers by compensating for rapid and slow variations in voltage,
electronic line conditioners to protect computers and electronics systems from
voltage variations, line noises and voltage spikes; power supply systems that
guarantee power to computers without significant interruptions; powerline
diagnostic analyzers that detect powerline disturbances such as voltage
fluctuations, voltage spikes or blackouts; and high energy transient protection
components such as zener diode regulators, bridge rectifiers, gas discharge
tubes and filters. Also included in this product line are semiconductors,
precision potentiometers, resistors/capacitators, ferrites and interconnecting
components that hook up public telephone networks, data networks and optical
fiber networks.

Telecommunication and Datacommunication Products. Tele-communication
products sold by the Company generally are innovative test and measurement
instruments used in the development, installation and maintenance of
sophisticated telecommunications networks. Products included in this category
sold by the Company include a wide array of portable instruments and permanently
located system testers, multi-function communicators, analyzers that typically
test at the physical and logical levels of network organization which measure
performance and error on a wide range of network transmission media equipment,
modular, portable fiber optic test instruments which allow both central office
and field technicians to isolate fiber optic cable breaks and measure
degradation caused by aging connectors and related components.

Datacommunications products sold by the Company provide users of
information networks with the management tools to ensure reliable network
operations and products to condition the data operations for transmission via
private or public networks. These products are designed primarily to manage data
transmission and communication networks in a computer environment. Among the
products included in this product category and sold by the Company include
patches used for monitoring, testing and rearranging datacommunications lines
and equipment and high performance packet switching equipment which breaks up
data into

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"packets" for efficient transmission over private and public data networks,
which generally is a cost effective means for companies to transmit data over
long distances.

Studio and Communication Products. Included in this product line is a wide
array of speakers, amplifiers, microphones, microphone systems and headphones
with related accessories and components, and a wide array of multifamily
(apartments) and business (office) video entry security systems, residential
audio and audio/video intercoms, conference and simultaneous interpretation
systems.

Electrical Division. Nortelco's Electrical Division imports and distributes
approximately 7,000 products for use in the electrical field. The price range
that Nortelco sells products to its customers in this division is from $1 to
$1,000.

Nortelco's Electrical Division's products generally are divided into three
main areas: explosion proof equipment and lighting, passive fire protection
equipment and installation materials. Sales of these products accounted for
approximately 22.5% and 21.3% of the Company's consolidated revenues for the
nine months ended September 30, 1996 and for the year ended December 31, 1995,
respectively.

Explosion Proof Equipment. Products in this product line include a wide
array of "explosion proof" equipment designed to be used in hazardous areas,
such as offshore drilling areas. Products include explosion protected
selfhoused, high performance switches, transformers, terminals, terminal blocks,
cables, junction and distribution boxes and a wide variety of explosion
protected, high quality line bushings and cable entries.

Lighting. Nortelco sells approximately 200 lighting products. Generally,
products in this product line are used in highly hazardous areas such as utility
plants and offshore drilling rigs, including a wide variety of special purpose
lighting systems for, among other users, ships and offshore drilling platforms
including floodlights, hazardous arc lighting equipment, lanterns and
searchlights fluorescent luminaries and search lights used by shipyards, ship
chandlers and electrical installers.

Fire Protection Equipment. The products in this area consist of modulbuilt
fire protection, pressure-tight systems and components for both cables and
pipes. Generally, this equipment is used to prevent the spread of fire and gas
in hazardous areas such as on ships and oil rigs and other potentially hazardous
areas. The equipment is used to seal off construction into watertight and
fireproof sections so that if a fire or gas leak occurs, the spread of fire or
gas between sections of cables or pipes would be prevented.

Installation Materials. Included in such product line are heat-shrinkable
products that protect energy and signal conductors, connectors and cable systems
from corrosion, chemicals and environmental hazards, miniature circuit breakers,
switch gear, time switches, accessories for cabinets, and a wide variety of
electrical insulation tapes for high and low voltage, infrared heating systems
and anaconda circuits.

Audio Visual Division. Nortelco's Audio Visual Division sells approximately
1,000 products in the audio visual industry. Generally, the price range for such
products ranges from $100 to $80,000.

The products sold in the Audio Visual Division include audio equipment (AV
cassette recorders, microphones, sound systems and cassettes) overhead
projectors and accessories and related equipment such as projection screens,
portable and fixed video projectors, data interface equipment, conference room
and auditorium furniture and related equipment and light-dimming systems.

The Audio Visual Division also offers a wide variety of additional related
and compatible services and "add-ons" such as designing, equipping and
installing "turn-key", fully equipped conference rooms and auditoriums.
Furthermore, such division provides consulting services with clients regarding
previously-built conference rooms and auditoriums. The Audio Visual Division
also leases equipment such as overhead slide or film projectors, service and
maintenance programs for systems either designed or installed by Nortelco or
others and provides installation assistance for equipment purchased.

The products and services offered and sold by the Nortelco's Audio Visual
Division accounted for approximately 29.2% and 31.1% of the Company's
consolidated revenues for the nine months ended September 30, 1996 and for the
year ended December 31, 1995, respectively. Of such amount, approximately 18.6%
and 17.5% were derived from products sold and 10.6% and 13.6% were derived from
the installation

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and sale of customized conference rooms and auditoriums, for the nine months
ended September 30, 1996 and for the year ended December 31, 1995, respectively.

STOREBRO. The lathes which Storebro designs, assembles, and distributes are
principally used as metal cutting machine tools, however, in certain instances,
the lathes may be specially designed to work with plastic or other materials.
Metal cutting machine tools utilize a process in which a part or finished
product is generated or shaped by rotating the workpiece. Lathing is a machining
process whereby a surface is shaped with a tool contained in the lathe which is
applied to the rotating workpiece which is chucked in the lathe.

Typically, early metal working machines, including lathes, were either
manually operated or specifically engineered for production applications. In the
early 1950's, numerical controls were introduced which automated the operations
of a machine tool and increased its efficiency. In the mid 1970's,
microprocessors were integrated with numerical controls, which allowed personnel
on the shop floor to program and perform sophisticated metal working tasks
without central office support. Machine tools with computer numerical controls
are referred to as "CNC" machines. All other machine tools are referred to as
"conventional" machines.

Storebro's product line includes both manual lathes and CNC lathes. In the
year ended December 31, 1995, Storebro sold 24 lathes, of which 7 were manual
lathes and 17 were CNC lathes. The Company also sells lathe parts to existing
lathe owners and also services, repairs and overhauls existing lathes. Sales of
these products accounted for approximately 18.0% and 17.7% of the Company's
revenues for the nine months ended September 30, 1996 and for the year ended
December 31, 1995, respectively.

Manual Lathes. Storebro's manual lathes are used in small workshops,
vocational schools and tool rooms of large manufacturing companies. The Company
sells two lines of its manual lathes, the GK-195 and the SB-N.

The GK-195 manual lathe is used for smaller jobs such as in repair shops
and vocational schools. Generally, these lathes are designed to be used for
small single jobs and single small pieces such as making spare parts for, among
other things, automobiles and boats. The GK-195 lathe may also be designed by
the Company in varying lengths and with various options, depending upon the
needs and specifications, if any, of a particular customer.

The SB-N lathe is used for substantially larger, heavy production jobs such
as the manufacture of heavy metal cylinders and axles. The SB-N model, depending
on customer needs and specifications can be designed in a variety of lengths and
with a variety of options.

Depending on the number of "add-ons," if any, a particular client may
request to be built into a particular lathe, the price range for the GK-195
lathes ranges from approximately $18,000 to $28,000 and approximately $60,000 to
$160,000 for the SB-N lathe.

CNC Lathes. Storebro's CNC lathe machine product line consists of four
basic models: the STM 2000, the STM 2500, the STM 4000 and the STM 6000.
Generally, the difference in the models is the size of the "chuck" within the
lathe and the general size of the lathe. The "chuck" is the component of the
lathe which holds the workpiece. Within the four basic CNC lathes sold by
Storebro, an unlimited variety of any of each such lathes can be designed and
assembled by the Company, depending upon a particular customer's specifications
and requirements. All of the Company's CNC lathes incorporate CNC control
systems produced by Siemens AG.

In the second quarter of 1996, Storebro introduced a new model of lathe,
the ALERT, which is a combination of a conventional and a CNC lathe. The ALERT
Model was shown officially for the first time in May 1996 at the Gothenburger
Machine Tool Show, one of the largest machine tool shows held in Sweden. The
Company believes that this lathe can either be used as a conventional lathe with
a control system recording the various manual operations made by the operator
making a first part in order to automatically turn the next workpiece in
accordance with the originally turned piece (teach-in), or in the alternative,
it can be programmed in a very easy and user-friendly way as an ordinary CNC
machine. As of the date of this Prospectus, the Company has sold 5 ALERT lathes,
representing approximately $400,000 of revenues. The

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Company anticipates, although there can be no assurance, that sales of such
lathes will increase to approximately 30 ALERT lathes (approximately $1,200,000
in revenues) per year in the future.

The Company believes that all of its CNC lathes are equipped with
state-of-the-art interactive programming capabilities with operator guidance,
blueprint programming and graphics. All controls are located in a sliding
console which the Company believes allows the operator easy access. The software
can be manually input into the machine or fed into memory. Because data entry
and display for such lathes are simplified, each of Storebro's CNC lathes are
shop-floor programmable.

Depending on the number of "add-ons", a particular client may request to be
built into a particular CNC lathe, the price range of the STM 2000 ranges from
approximately $110,000 to $150,000. The STM 2500 ranges from approximately
$130,000 to $180,000, the STM 4000 ranges from approximately $160,000 to
$270,000 and the STM 6000 ranges from approximately $175,000 to $360,000.

Storebro also generates revenues from providing maintenance and support
services to lathe owners and from the sale of spare parts for lathes.

The products sold and services rendered by Storebro accounted for
approximately 13.5% and 16.1% of the Company's consolidated revenues for the
nine months ended September 30, 1996 and for the year ended December 31, 1995,
respectively. Of such amount, approximately 11.0% and 13.1% were derived from
the sale of products and 2.5% and 3.0% were derived from maintenance and support
services rendered, for the nine months ended September 30, 1996 and for the year
ended December 31, 1995, respectively.

SOURCES OF MANUFACTURING

NORTELCO. Nortelco does not manufacture any of the products its
distributes. The products Nortelco distributes are purchased from various
manufacturers as finished products and are stored at Nortelco's corporate
headquarters and subsequently sold by Nortelco to its customers. Nortelco has
not entered into any written, material contracts with any of its product
manufacturers for the manufacture of products for Nortelco.

Although no products from any of Nortelco's suppliers accounted for more
than 5% of the Company's revenues in the year ended December 31, 1995 or the
nine months ended September 30, 1996, the loss of business from major suppliers
could have a material adverse effect on Nortelco's operations. See "Risk
Factors."

Nortelco's products are imported from non-affiliated, third-party
manufacturers throughout the world including Germany (approximately 40%), United
States (approximately 10%), England (approximately 10%), and certain countries
in the Far East, aggregating approximately 10%. No other country accounted for
more than 5%. Nortelco avoids incurring fixed manufacturing costs. Delays in
shipments or defects in products could result in a loss of sales or customers,
which could have a material adverse affect on Nortelco.

Products purchased by Nortelco are paid for by either letter of credit or
wire transfer. Payment is made by Nortelco only upon the proper fulfillment of
terms established between Nortelco and the manufacturer. Most product purchases
are made and paid for in foreign currency. To date, Nortelco has not experienced
any material delays or defects in its products. Because Nortelco purchases
substantially all of its products from third-party manufacturers in foreign
countries, timely delivery of such products is subject to and could be affected
by political or economic disruptions, including labor strikes and disruptions in
the shipping industries. To date, Nortelco has not experienced any problems as a
result of any political or economic disruptions. See "Risk Factors-Foreign
Manufacturing."

Nortelco purchases products from approximately 50 manufacturers. Nortelco's
corporate headquarters and executive offices are located in Oslo, Norway. In
addition, Nortelco's Norwegian subsidiaries, Nortelco Teknikk and Brannteknikk,
also maintain their offices at such location. Nortelco also maintains offices,
warehouse and showroom space for itself and its Swedish subsidiary, Nortelco
Audiatur, in Solna, Sweden. Nortelco maintains an inventory of certain of its
products at its facilities, enabling it to respond quickly to customer orders.

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STOREBRO. Although Storebro orders the components included in its lathes,
generally, Storebro manufactures and assembles all of its lathes on a customized
basis. Based upon discussions with a particular customer, Storebro's in-house
engineers produce drawings of the type of lathe desired by the customers. In
instances where customers request specialized add-on features, as automated
loading of unloading, Storebro contracts with a local design consulting firm,
such as Solve Ekholm, which produces drawings of the specialized features, which
drawings are finalized by Storebro's engineers. Based upon such drawings,
Storebro has molds of the particular lathe parts manufactured by various local
subcontractors and the steel molds are sent to Storebro Gjutereri, a local
foundry, which produces iron castings to be used for the major body and various
other parts of the lathe. The iron castings are sent back to Storebro and the
lathe body and the mechanical features are machined to correct specifications
and assembled into a customized lathe in Storebro's workshop. All of the
components used in assembling the lathes are purchased from independent third
parties. Many of such components are standard components and can be ordered and
delivered to Storebro in one to sixteen weeks. Storebro keeps an internal supply
of the standard components. Storebro is dependent on the manufacture of its
components used in its lathes. To date, although Storebro has experienced delays
in delivery of certain non-standard parts of its lathes, such delays have not
had a material adverse affect on Storebro. In the future, however, such delays
could have a material adverse affect on the Company. See "Risk Factors".

MARKETING, SALES AND DISTRIBUTION

NORTELCO. Nortelco distributes its products throughout Norway and Sweden
through its own sales representatives. Nortelco currently has fifty (50)
in-house full-time sales representatives. The Company believes that each such
sales representative is a highly trained, technical person which management
believes enables the representative to explain and install the products and
assist the customer in problem solving and after-sale maintenance. Nortelco also
employs one independent sales representative. Purchasers of Nortelco's products
include retailers, end users and wholesalers. Other than purchase orders
completed by customers, Nortelco does not have written agreements with its
customers but sells products to customers on open accounts with payment terms
typically varying from thirty (30) to ninety (90) days.

Nortelco also markets products at international and regional trade shows in
Norway and Sweden. In addition, Nortelco maintains showrooms in its Oslo and
Stockholm facilities where it exhibits its products to customers.

Nortelco directly, or through its independent salespersons takes written
orders for its products from its customers. If Nortelco has the particular item
in inventory, it generally ships it or makes it available for pick-up by the
customer within one day. If the particular product is not in inventory, Nortelco
orders such product from the manufacturer. Delivery of such products to its
customers can take, depending on how quickly Nortelco is able to obtain the
product from the manufacturer, up to six months. Cancellations are generally
made in writing and Nortelco takes appropriate steps to notify its manufacturers
of such cancellations.

Nortelco generally does not accept returns, although consistent with
industry practices, it makes exceptions to this policy on a case-by-case
negotiated basis. Generally, Nortelco provides a one to three year warranty on
its products pursuant to which it replaces defective products. To date
replacement of products under warranty by Nortelco have not been material.

Nortelco considers backlog to be written customer orders received but not
yet shipped by Nortelco. Nortelco's backlog at September 30, 1996 was
approximately $2,843,000. Backlog generally represents orders that will be
shipped within six months. Because customer orders may be canceled at any time
without penalty, Nortelco believes that backlog may not accurately indicate
sales for any future period.

Nortelco has expended approximately $160,000 on a computer system and
custom-made software which enable it to have a fully integrated state-of-the-art
distribution system. The Company believes that this system will not only result
in a substantial saving of time and manpower in Nortelco's distribution process,
but also allows Nortelco to order and distribute its products in a more timely
and efficient manner. Nortelco's computer distribution system encompasses its
entire distribution network from purchase orders to the actual receipt of
inventory in its warehouse and from sales orders to customer invoice and
collection. This system

32
<PAGE> 35

enables Nortelco to track a product order from initiation through the ultimate
cash receipt from the customer. The system also has a built-in management
information system, which enables Nortelco to analyze its total profitability as
well as profitability by a particular product or customer. The Company is
currently inputting all of Nortelco's products and information and Nortelco
believes that by the year ending December 31, 1996 all of Nortelco's production
information will be "on" such system.

STOREBRO. Storebro distributes its lathes primarily in Sweden and Germany.
Sales of lathes to Swedish customers accounted for approximately 60% and 50% of
all of its lathes sold in the year ended December 31, 1995 and the nine months
ended September 30, 1996, respectively. In addition, sales of lathes to German
customers accounted for approximately 40% and 50% of all of its lathes sold in
the year ended December 31, 1995 and the nine months ended September 30, 1996.
In Sweden, Storebro sells lathes through its two full-time, in house sales
representatives. In Germany, Storebro sells lathes through MWD-Vertriebs GmbH,
an independent sales representative, pursuant to an agency agreement which
terminates in October 1997. The Company also distributes its lathes to customers
in Norway, Denmark, and Switzerland through independent sales representatives
located in such countries. Such representatives purchase the lathes and then
sell them to their customers.

Generally, all sales of lathes require customers to pay an initial down
payment of approximately 30% of the purchase price, and the balance on delivery.
Delivery of a lathe from the date of order generally is approximately four
months.

Storebro advertises through trade shows and trade magazines in Sweden and
uses its corporate headquarters to exhibit lathes to customers. Outside of
Sweden, all advertising and promotion is done by Storebro's independent sales
representatives at their own costs.

For all lathes sold, Storebro provides a twelve (12) month full warranty
and provides on-site services to customers including delivery of replacement
parts during the warranty period.

Storebro considers backlog to be written customer orders received but not
yet shipped. At September 30, 1996, Storebro's backlog was $2,907,000. Backlog
generally represents orders that will be shipped and invoiced within eight
months. Because Storebro has not experienced any cancellations of customer
orders, Storebro believes that backlog accurately indicates sales for future
periods.

As stated above, Storebro has not experienced any cancellations of customer
orders. However, in the event that a cancellation of an order for a lathe
occurs, Storebro will retain the customer's 30% down payment. In the case of
cancellation of an order for spare parts, the customer will be charged a 20%
cancellation charge on items which Storebro has in its inventory, and a 40%
cancellation charge on externally purchased spare parts. In all cases, Storebro
will be responsible for its commitments to third party manufacturers from whom
it may order parts.

PRODUCT LIABILITY

Nortelco has approximately $500,000 in product liability insurance.
Nortelco believes that, generally, the manufacturers of its products also have
product liability insurance for their respective products. Storebro has
approximately $2,000,000 of product liability insurance. To date, neither
Nortelco or Storebro has been a party to any material product liability claims
asserted against them, and believe their respective product liability insurance
policies are sufficient. See "Risk Factors-Product Liability."

COMPETITION

Nortelco and Storebro both compete in markets that are extremely
competitive and sensitive to changing consumer preferences and demands. Each
such corporation competes against many companies that are better known,
substantially larger and more diversified, and have substantially greater
financial, employee and marketing resources than either of such corporations, as
well as greater name recognition and the ability to develop and market products
similar to and more competitively priced than those distributed by such
corporations. Nortelco's competitors include Hauke, Ltd. (England), Group
Schneider, Ltd. (France), Wandel & Guterman GmbH (Germany), Asea Brown Bowery AS
(Norway) and Audio Grafiska (Norway),

33
<PAGE> 36

and Storebro's competitors include Emco Maier Gessellschaft m.b.H. (Austria),
Gildemeister N.E.F.-Drehmaschinen GmbH (Germany), A. Monforts GmbH & Co.
Maschinenfabrik (Germany), Traub AG (Germany), Yamazaki Mazak Corportion
(Japan), Okuma Machinery Works Ltd. (Japan), Mori Seiki Co., Ltd. (Japan). No
assurances can be given that either of such companies will be able to compete in
their respective markets.

EMPLOYEES

At September 30, 1996, the Company, through Nortelco and Storebro, employed
approximately 92 persons. Of such 92 persons, Nortelco employs approximately 73
persons and Storebro employs approximately 19 persons, all of which are full
time employees. The Company employs three persons, its executive officers,
Messrs. Haggqvist, Nysted and Sjostrand, one of which, Mr. Nysted, is the
President of Nortelco.

FACILITIES

NORTELCO. Nortelco leases approximately 30,000 square feet in Oslo, Norway,
pursuant to a lease expiring December 31, 2003, at a rate of $490,000 per year,
subject to an escalation clause based upon the Norwegian Consumer Price Index.
Payments on the lease are cross-guaranteed by Nortelco up to $270,000 and by
Nortelco System Teknikk up to approximately $130,000. The premises are used as
Nortelco's executive offices, warehouse, showroom and business office. The
premises were originally owned by Nortelco Real Estate, AS, a former subsidiary
of Nortelco AS, which sold the premises in March 1994 to a non-affiliated third
party for approximately $6,700,000. Nortelco also leases approximately 12,000
square meters in Solna, Sweden, which is used as the main sales office,
executive office, warehouse and workshop for Nortelco Audiatur pursuant to a
lease expiring December 31, 1999 at a rent of approximately $90,000 per year.
Nortelco also leases space in Gothenburg, Sweden, pursuant to a five-year lease
expiring June 30, 2001, at an annual rent of $9,600.

STOREBRO. Pursuant to a year-to-year lease, Storebro leases approximately
22,000 square feet in Storebro, Sweden. Of such 22,000 square feet, 6,000 square
feet is used as its executive and main offices and the remaining 16,000 square
feet is the workshop for assembling, re-tooling and repairing lathes. The lease
is renewable on six (6) months notice and the lease payment is approximately
$55,000 per annum, subject to an annual escalation clause based upon the Swedish
Consumer Price Index. Storebro also leases approximately an additional 8,000
square feet, also in Storebro, Sweden, which space is used to warehouse spare
parts for lathes that Storebro sells. The lease is renewable on nine (9) months
notice and the annual rent payments are approximately $7,500.

LEGAL PROCEEDINGS

The Company is not party to any material legal proceedings.

34
<PAGE> 37

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------- --- ------------------------------------------
<S> <C> <C>
Bjorn Nysted.............. 58 President and a Director
Goran Haggqvist........... 52 Chairman of the Board
Chief Financial Officer, Treasurer and
Kjell Sjostrand........... 40 Secretary
Espen Komnaes............. 44 Director
Jan Thunell............... 52 Director
</TABLE>

Set forth below is a brief background of the executive officers and
directors of the Company, based on information supplied by them.

GORAN HAGGQVIST has been the Chairman of the Board of the Company since May
1994. From May 1994 to September 1996, Mr. Haggqvist was President of the
Company. Since April 1993 and April 1994, Mr. Haggqvist has been the Chairman of
the Board of Directors of Storebro and Nortelco, respectively. Since 1992, Mr.
Haggqvist also has been the President and controlling shareholder of
Haggqvinvest AB a privately held international corporate finance firm that
invests in and provides advisory services in connection with domestic and
international corporate transactions. From 1985 to 1992, he was the President of
Societe Generale (Sweden), the Swedish subsidiary of Societe Generale France.
Prior to such time, he held a number of executive positions with two Swedish
banks including Executive Vice President of Gotabanken and President of Svenska
Handelsbanken S.A., Luxembours. Mr. Haggqvist also was the Assistant to the
Swedish Trade Commissioner in Zurich. Mr. Haggqvist received a master in
political science from the University of Gothenburg in 1970.

BJORN NYSTED has been the President of the Company since September 1996,
and he has been the Treasurer and a Director of the Company since May 1994. Mr.
Nysted has been the Managing Director, President, and a Director of Nortelco
since 1990 when he founded Nortelco. Mr. Nysted is also the Chairman of the
Board of Directors of Nordic Business Development Corp., a privately held
corporation controlled by Mr. Nysted and certain of his family members.

KJELL SJOSTRAND has been the Treasurer of the Company since September 1996,
and he has been the Chief Financial Officer and Secretary of the Company since
May 1994. Since 1990, Mr. Sjostrand has been the Chief Financial Officer and a
Director of AB Antion, a privately held Swedish corporate finance firm
controlled by Mr. Sjostrand and one other person. Mr. Sjostrand received a
master in economics from the University of Stockholm in 1979.

ESPEN KOMNAES has been a Director of the Company since September 1996. Mr.
Komnaes has been employed as an attorney at Meltvedt, Komnaes & Co., an Oslo,
Norway based law firm since 1983. Mr. Komnaes received a degree in jurisprudence
from the University of Bergen in 1979 and a B.A. in political science from Santa
Barbara City College in 1979.

JAN THUNELL has been a Director of the Company since September 1996. Since
1987, Mr. Thunell has served as President and a Director of Fidem Foretags &
Idemaklarna AB, a privately held Swedish management consulting and business
advisory firm controlled by Mr. Thunell. Mr. Thunell received a Master of
Science in Mechanical Engineering from the Royal Institute of Technology,
Stockholm in 1968.

Directors are elected annually by the shareholders and hold office until
the next annual meeting and until their respective successors are elected and
qualified. Executive officers are elected by the Board of Directors and hold
office until their respective successors are elected and qualified.

35
<PAGE> 38

against any claims arising out of his participation at meetings of the Board of
Directors. In lieu of the Representative's right to designate an advisor to the
Board of Directors, the Representative shall have the right during such three
year period, in its sole discretion, to designate one person for election as a
director of the Company and the Company will use its best efforts to obtain the
election of such person who shall be entitled to receive the same compensation,
expense reimbursements and other benefits as any other director. The identity of
such person has not been determined as of the date hereof, and it is not
expected that such right will be exercised in the immediate future.

EXECUTIVE COMPENSATION

The following table sets forth, in U.S. dollars, the cash compensation paid
by the Company or its subsidiaries for services rendered during the fiscal years
ended December 31, 1995 and 1994 and to each of its executive officers whose
compensation exceed $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- -------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER ALL
NAME AND ANNUAL RESTRICTED PLAN OTHER
PRINCIPAL SALARY BONUS COMPEN- STOCK OPTIONS PAYOUTS COMPEN-
POSITION YEAR ($)(1) ($) SATION($) AWARDS($) (#) ($) SATION($)
- ------------------------------ ---- ------- ------ --------- ---------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bjorn Nysted.................. 1995 92,000 15,000 -- -- -- --
</TABLE>

EMPLOYMENT AGREEMENTS

Pursuant to an employment agreement dated April 25, 1994, by and between
Nortelco and Mr. Nysted, Nortelco agreed to employ Mr. Nysted as its President
until April 1998 at an annual salary of approximately $92,064. In addition,
Nortelco also agreed to pay to Mr. Nysted an annual automobile and certain other
expenses in an amount not to exceed approximately $13,334 per annum. Such
employment contract also includes certain non-competitive provisions and
provides that Mr. Nysted can be terminated at the option of Nortelco on twelve
(12) months prior notice. Mr. Nysted, however, is entitled to receive all
compensation under his employment agreement notwithstanding if he is terminated
by Nortelco.

Pursuant to an employment agreement dated August 17, 1992 by and between
Storebro and Jan Uddgren, Storebro agreed to employ Mr. Uddgren as its
President. Although the agreement does not have a specified termination date, it
can be terminated by either party on six (6) months prior notice. Pursuant to
the employment agreement, Storebro pays to Mr. Uddgren approximately $70,000 per
annum, provided him with a one-time $23,000 lump sum pension payment which was
paid in 1993, and a company car, which to date Mr. Uddgren has not requested.

Although both Nortelco and Storebro have entered into employment agreements
with a number of their respective employees, the Company has not entered into
any other employment agreements.

1995 STOCK OPTION PLAN

The Company's 1995 Stock Option Plan (the "Stock Option Plan") was adopted
by the Board of Directors and the shareholders of the Company as of September
1995.

The Stock Option Plan provides for the granting of options to purchase up
to 250,000 shares of the Company's Common Stock that are intended to qualify
either as incentive stock options ("Incentive Stock Options") within the meaning
of Section 422 of the United States Internal Revenue Code or as options that are
not intended to meet the requirements of such section ("Nonstatutory Stock
Options"). Options to purchase shares may be granted under the Stock Option Plan
to persons who, in the case of Incentive Stock Options, are employees (including
officers) of the Company, or, in the case of Nonstatutory Stock Options, are
employees (including officers) or non-employee directors of the Company or
consultants to the Company.

36
<PAGE> 39

The Stock Option Plan provides for its administration by a committee chosen
by the Board of Directors comprised of directors who are disinterested persons
(as defined in Rule 16(b)(3) under Section 16(b) of the Securities Exchange Act
of 1934). Once the committee is chosen by the Board of Directors, the Stock
Option Committee shall have full discretionary authority, subject to certain
restrictions, to determine the number of shares for which Incentive Stock
Options and Nonstatutory Stock Options may be granted and the individuals to
whom, the times at which, and the exercise price for which options will be
granted.

The exercise price of all Incentive Stock Options granted under the Stock
Option Plan must be at least equal to the fair market value of such shares on
the date of the grant, or, in the case of Incentive Stock Options granted to the
holder of 10% or more of the Company's Common Stock, at least 110% of the fair
market value of such shares on the date of the grant. The maximum exercise
period for which Incentive Stock Options may be granted is ten years from the
date of grant (five years in the case of an individual owning more than 10% of
the Company's Common Stock). The aggregate fair market value (determined at the
date the option is granted) of shares with respect to which Incentive Stock
Options are exercisable for the first time by the holder of the option during
any calendar year shall not exceed $100,000. If such amount exceeds $100,000,
the Board of Directors or the Committee may, when the Options are exercised and
the shares transferred to an employee, designate those shares that will be
treated as Incentive Stock Options and those that will be treated as
Nonstatutory Stock Options.

As of the date hereof, no options under the Stock Option Plan have been
granted.

COMPENSATION OF DIRECTORS

Directors of the Company do not receive compensation for their services as
directors; however, the Board of Directors may authorize the payment of
compensation to directors for their attendance at regular and special meetings
of the Board and for attendance at meetings of committees of the Board as is
customary for similar companies. Directors will be reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
the Company. As of the date of this Prospectus, no person has received
compensation for serving as a director.

LIMITATION ON LIABILITY OF DIRECTORS

The Delaware General Corporation Law permits a corporation, through its
Certificate of Incorporation, to exonerate its directors from personal liability
to the corporation, or to its stockholders, for monetary damages for breach of
fiduciary duty of care as a director, with certain exceptions. The exceptions
include a breach of the director's duty of loyalty, acts or omissions not in
good faith or which involve intentional misconduct or knowing violation of law,
improper declarations of dividends, and transactions from which the directors
derived an improper personal benefit. The Company's Certificate of Incorporation
exonerates its directors from monetary liability to the extent permitted by this
statutory provision.

The Company has been advised that it is the position of the Commission that
insofar as the foregoing provision may be invoked to disclaim liability for
damages arising under the Act, that provision is against public policy as
expressed in the Act and is therefore unenforceable.

37
<PAGE> 40

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of September 1, 1996, certain
information concerning beneficial ownership of shares of Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii) the
executive officer(s) of the Company named in the Summary Compensation Table, and
(iv) all directors and officers of the Company as a group:

<TABLE>
<CAPTION>
AMOUNT AND APPROXIMATE APPROXIMATE
NATURE OF PERCENTAGE OF PERCENTAGE OF
BENEFICIALLY COMMON STOCK COMMON STOCK
NAME OWNED BEFORE OFFERING(1)(2) AFTER OFFERING
- ------------------------------------------------- ------------ --------------------- --------------
<S> <C> <C> <C>
Goran Haggqvist.................................. 699,063(3) 29.1% 22.0%
Karlaplan 10
Stockholm, Sweden
Bjorn Nysted..................................... 821,629(4) 34.2% 25.9%
c/o Nortelco AS
P.O. Box 116
Manglerud Olso, Norway
Kjell Sjostrand.................................. 125,447(5) 5.2% 3.9%
c/o AB. Antion
Sveavagen 60
Stockholm, Sweden
Espen Komnaes.................................... 0 0 0
c/o Meltvedt, Komnaels & Co.
Haakon VIIS GT. 2
Oslo, Norway
Jan Thunell...................................... 0 0 0
Norr Malarstrand 52
Stockholm, Sweden
All Officers and Directors as a Group (three (3)
persons)....................................... 1,649,139(6) 68.5% 51.9%
</TABLE>

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

* Less than 1% of issued and outstanding.

(1) Based upon 2,400,000 shares of Common Stock issued and outstanding. However,
each beneficial owner's percentage ownership is determined by assuming that
options, warrants and other convertible securities that are held by such
person (but not those held by any other person) and that are exercisable or
convertible within sixty (60) days have been exercised or converted. A
person is deemed to be the beneficial owner of securities that can be
acquired by such person within sixty (60) days upon the exercise of options
or warrants.

(2) Unless otherwise provided herein, the Company believes that all persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.

(3) Mr. Haggqvist is the Chairman and a Director of the Company and a Director
of Nortelco and Storebro. Of such 699,063 shares, 500,000 of such shares are
owned by the father of Mr. Haggqvist and the balance by Mr. Haggqvist. See
"Certain Transactions."

(4) All shares are owned by Nordic Business Development AS, a privately held
corporation controlled by Mr. Nysted and certain of his family members. Mr.
Nysted is the President and a Director of the Company, and the Managing
Director, President, and a Director of Nortelco. See "Certain Transactions."

(5) Includes 118,953 shares and 6,494 shares owned by AB Antion and Retrivum AB,
two privately held corporations controlled by Mr. Sjostrand and/or one other
person. See "Certain Transactions."

(6) See footnotes (3), (4) and (5).

38
<PAGE> 41

SELLING STOCKHOLDERS

The following table set forth certain information at September 1, 1996 and
as adjusted to reflect the sale of the Common Stock by the Selling Stockholders.

<TABLE>
<CAPTION>
SHARES OWNED
AFTER
SHARES SHARES PERCENTAGE OF OFFERING IF
BENEFICIALLY OWNED SHARES OWNED OVERALLOTMENT
NAME OF OWNED PRIOR SHARES AFTER AFTER IS EXERCISED
STOCKHOLDER TO OFFERING OFFERED OFFERING OFFERING IN FULL
- ------------------------------------ ------------ ------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Jeff Levine......................... 10,000 8,750 1,250 * -0-
Bruce Fixelle....................... 10,000 8,750 1,250 * -0-
Ballard Property Co. #1 Ltd......... 5,000 4,375 625 * -0-
Richard Metsch...................... 5,000 4,375 625 * -0-
George Rutland...................... 10,000 8,750 1,250 * -0-
Silverio Conte...................... 5,000 4,375 625 * -0-
Wayne Wiseman....................... 10,000 8,750 1,250 * -0-
Joseph Raimando..................... 5,000 4,375 625 * -0-
Deborah Caruso...................... 10,000 8,750 1,250 * -0-
Sierra Holding Trust................ 10,000 8,750 1,250 * -0-
Marscel Aronheim.................... 5,000 4,375 625 * -0-
ATB, Inc............................ 5,000 4,375 625 * -0-
Edward Wilkins...................... 5,000 4,375 625 * -0-
Joseph DiMarco...................... 5,000 4,375 625 * -0-
</TABLE>

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

* Less than 1%.

CERTAIN TRANSACTIONS

THE COMPANY

On April 11, 1994, Joe Vick ("Vick"), Mega Holding Corp. and Monkwell
Consultants, Inc. ("Monkwell"), a United Kingdom corporation controlled by Mr.
Mats Hartling, a former executive officer and director of the Company, entered
into a Stock Purchase Agreement pursuant to which Monkwell purchased 4,000
shares of Common Stock of Sherman, Goelz and Associates, a Nevada corporation
("SGA"), which shares constituted approximately 86% of the then issued and
outstanding Common Stock of SGA, from Vick for an aggregate of $190,000. To fund
the purchase of the 4,000 shares and certain other related expenses, on April
11, 1994 Monkwell borrowed approximately $240,000 from Mr. Goran Haggqvist
(currently the chairman of the board and a principal shareholder of the
Company), which sum was repaid, without interest, by the transfer of certain
shares of SGA as described below.

Subsequently, on April 25, 1994, Monkwell (controlled by Mr. Mats Hartling,
a former officer and director of SGA) transferred (i) approximately 419 shares
of Common Stock of SGA to Universal Commodity Trading Group, S.A. ("Universal"),
a corporation also controlled by Mr. Mats Hartling, (ii) approximately 445
shares of Common Stock of SGA to Nathan International Corp., a corporation
controlled by Mr. Tom Simeo, a former executive officer and director of the
Company. In addition, on June 2, 1994, Monkwell transferred approximately 1,726
shares of Common stock of SGA to Mr. Goran Haggqvist (currently the president, a
director and a principal shareholder of the Company), in consideration for the
cancellation of the $240,000 owed by Monkwell to Mr. Haggqvist.

Following the purchase of the 4,000 shares by Monkwell from Vick, on April
11, 1994, two persons, Messrs. Mats Hartling (a former officer and director of
SGA who is the control person of Monkwell and Universal) and Mr. Tom Simeo (a
former officer and director of SGA who is the control person of Nathan) were
terminated as directors and officers of SGA and were replaced by Messrs. Bjorn
Nysted and Kjell

39
<PAGE> 42

Sjostrand, which persons are currently executive officers, directors and/or
principal shareholders of the Company. In connection with their termination,
approximately 419 shares out of approximately 863 shares of Common Stock of SGA
then beneficially owned by such persons were transferred, in April 1994, for no
consideration by such persons to Ovington Investments Limited ("Ovington"), a
Gibraltar corporation controlled by Mr. Goran Haggqvist (currently an officer,
director and principal shareholder of the Company).

In May 1994, Monkwell (controlled by Mr. Mats Hartling, a former officer
and director of SGA who also controls Universal) and Nordic Business Development
AS ("NBD"), a Norwegian corporation controlled by Mr. Bjorn Nysted (currently
the president, a director and a principal shareholder of the Company) entered
into a Stock Purchase Agreement pursuant to which Monkwell acquired 80% of the
issued and outstanding stock of Nortelco. See "Certain Transaction-Nortelco"
below. Subsequent to such transaction, in May 1994, Monkwell transferred to
Universal (i) all of the shares of Nortelco owned by Monkwell, and (ii)
approximately $856,429 of the outstanding aggregate indebtedness owed by
Monkwell to Mr. Goran Haggqvist and certain of Mr. Haggqvist's family members,
and AB Antion, a corporation controlled by Mr. Kjell Sjostrand (currently the
chief financial officer, treasurer, secretary and a principal shareholder of the
Company) and Mr. Christer Janson. As described below, approximately $856,429 of
outstanding indebtedness was satisfied by the repayment from Universal to Mr.
Goran Haggqvist of the sum of $785,000 and the transfer of 581 shares of Common
Stock of SGA owned by Universal.

On November 23, 1994, SGA and Universal (controlled by Mr. Mats Hartling, a
former officer and director of SGA who also controls Monkwell) entered into a
Stock Purchase Agreement pursuant to which SGA acquired all of the issued and
outstanding common stock of Nortelco owned by Universal (80%) for an aggregate
consideration of $2,285,000, $785,000 of which was previously paid in May 1994
at a closing held pursuant to an original Stock Purchase Agreement entered into
between the parties, dated May 12, 1994, which agreement was subsequently
amended on October 4, 1994. Pursuant to the November 23, 1994 Stock Purchase
Agreement, which agreement amended the October 4, 1994 Stock Purchase Agreement,
the $1,500,000 balance of the purchase price was paid by the delivery to
Universal of 581 shares of Common Stock of SGA. The $2,285,000 purchase price
was determined by the parties based upon a multiple of estimated earnings before
taxes for Nortelco in the 1994 fiscal year.

On November 23, 1994, SGA and Ovington (controlled by Mr. Goran Haggqvist,
currently an officer, director and principal shareholder of the Company) entered
into a Stock Purchase Agreement pursuant to which SGA acquired all of the issued
and outstanding shares of common stock of Storebro from Ovington for an
aggregate consideration of $1,600,000, $215,000 of which was paid in May 1994 at
a closing held pursuant to an original Stock Purchase Agreement entered into
between the parties, dated May 16, 1994, which agreement was subsequently
amended on October 4, 1994. Pursuant to the November 23, 1994 Stock Purchase
Agreement, which agreement amended the October 4, 1994 Stock Purchase Agreement,
the $1,385,000 balance of the purchase price was paid by the delivery to
Ovington of 490 shares of Common Stock of SGA. The $1,600,000 purchase price was
determined by the parties based upon a multiple of estimated earnings before
taxes for Storebro in the 1994 fiscal year.

In December 1994, in exchange for a cancellation of a $77,000 invoice from
SGA to Nortelco for administrative services performed by certain officers of SGA
on behalf of Nortelco, Nortelco issued to SGA 500 shares of its common stock,
par value $153. The administrative services performed and provided by the
officers of SGA on behalf of Nortelco included bookkeeping and legal matters.
NBD (controlled by Mr. Bjorn Nysted, currently an officer, director and a
principal shareholder of the Company), then purchased from SGA 100 shares of
such stock for $15,000. Such purchase price was paid by a 10% promissory note
from NBD due December 31, 1995.

On January 5, 1995, SGA sold 126,271 shares of its Common Stock to Mayfair
Capital Limited at a purchase price of 1.75 per share, $221,832 (NOK 1,500,000)
in the aggregate. The Company subsequently loaned such $221,832 (NOK 1,500,000)
to Nortelco through a 10% subordinated note due December 31, 1996, which funds
were used to purchase 75% of the issued and outstanding stock of Brannteknikk.

In May 1995, the Company entered into an Agreement and Plan of Merger with
SGA, pursuant to which SGA was merged with and into the Company, with each share
of SGA being exchanged for one share of the

40
<PAGE> 43

Company. Prior to the merger, as described above, SGA had acquired Nortelco and
Storebro from NBD (controlled by Mr. Bjorn Nysted, currently an officer,
director and principal shareholder of the Company) and certain of his family
members, and AB Antion (controlled by Mr. Kjell Sjostrand, currently an officer
and a principal shareholder of the Company, and Mr. Christer Janson), in
exchange for cash and shares of Common Stock.

On September 15, 1995, the Company sold an aggregate of 1,793,939 shares of
Common Stock to Mr. Goran Haggqvist for approximately $1,000,000, which funds
had previously been provided to the Company on May 20, 1994, and were used by
the Company for, among other purposes, as part of the consideration used by the
Company to acquire Nortelco and Storebro. On September 15, 1995, Mr. Haggqvist
transferred, for no consideration, an aggregate of 868,850 shares to NBD
(controlled by Mr. Bjorn Nysted, currently an officer, director and a principal
shareholder of the Company) and 135,174 shares to AB Antion (controlled by Mr.
Kjell Sjostrand, currently an officer and a principal shareholder of the
Company, and Mr. Christer Janson).

NORTELCO

Effective as of April 1, 1994, Nortelco and Nortelco Audiatur acquired
certain assets of the Swedish and Norwegian operations of Dynatech Corporation,
a non-affiliated Massachusetts corporation, for an aggregate of approximately
$338,809. To fund such acquisition, Nortelco borrowed $240,350 (NOK 1,519,000)
from NBD (controlled by Mr. Bjorn Nysted, currently an officer, director and a
principal shareholder of the Company). In exchange for such funds, Nortelco
issued to NBD a 12% $240,350 (NOK 1,519,000) demand promissory note. Such note
is still currently outstanding.

In April 1994, Mr. Bjorn Nysted (currently the president, a director and a
principal shareholder of the Company) personally guaranteed approximately
$70,000 (NOK 500,000) of a credit facility maintained by Nortelco and Nortelco
System Teknikk with Den Norske Bank.

In May 1994, Monkwell (controlled by Mr. Mats Hartling, a former officer
and director of SGA who also controls Universal) and NBD (controlled by Mr.
Bjorn Nysted, currently an officer, director and a principal shareholder of the
Company) and certain of his family members, entered into a Stock Purchase
Agreement pursuant to which Monkwell acquired 80% of the issued and outstanding
stock of Nortelco for an aggregate of approximately $805,000 (NOK 5,500,000)
from NBD. To fund the purchase price for the 80% of the issued and outstanding
shares of Nortelco and certain other related expenses, Monkwell borrowed an
aggregate of $665,000 (NOK 5,000,000) from Mr. Goran Haggqvist and certain
family members and an additional $140,000 (NOK 1,050,000) from AB Antion (a
corporation controlled by Mr. Kjell Sjostrand, currently an officer and a
principal shareholder of the Company, and Mr. Christer Janson).

As described above, on November 23, 1994, SGA and Universal (controlled by
Mr. Mats Hartling, a former officer and director of SGA who also controls
Monkwell) entered into a Stock Purchase Agreement pursuant to which SGA acquired
all of the issued and outstanding common stock of Nortelco owned by Universal
(80%) for an aggregate consideration of $2,285,000, $785,000 of which was
previously paid in May 1994 at a closing held pursuant to an original Stock
Purchase Agreement entered into between the parties, dated May 12, 1994, which
agreement was subsequently amended on October 4, 1994. Pursuant to the November
23, 1994 Stock Purchase Agreement, which agreement amended the October 4, 1994
Stock Purchase Agreement, the $1,500,000 balance of the purchase price was paid
by the delivery to Universal of 581 shares of Common Stock of SGA.

On November 23, 1994, approximately $805,000 (NOK 6,050,000) of outstanding
indebtedness owed by Universal (controlled by Mr. Mats Hartling, a former
officer and director of SGA who also controls Monkwell) to Mr. Goran Haggqvist
and certain of his family members and AB Antion (a corporation controlled by Mr.
Kjell Sjostrand, currently an officer and principal shareholder of the Company,
and Mr. Christer Janson) (representing funds loaned to Monkwell for the purchase
of 80% of the issued and outstanding shares of Nortelco from NBD)(NBD is a
corporation controlled by Mr. Bjorn Nysted, currently an officer, director and a
principal shareholder of the Company) was satisfied by the repayment from

41
<PAGE> 44

Universal to Ovington of the sum of $785,000 and the transfer of 581 shares of
Common Stock of SGA owned by Universal.

In November 1995, the Company and NBD entered into a Stock Purchase
Agreement pursuant to which the Company acquired the remaining 20% of the issued
and outstanding shares of common stock of Nortelco for 216,000 shares of Common
Stock of the Company, which shares were provided to NBD from Messrs. Goran
Haggqvist and Mark Oldmar and NBD, Mayfair, AB Antion, Gusrae, Kaplan & Bruno
and Retrivum. The transfer of shares by such shareholders were made as
contributions to capital based upon the proportionate ownership interests of
such shareholders in the Company.

NORTELCO SUBSIDIARIES

In April 1993, Nortelco and Nortelo Audiatur (formerly known as Audiatur
AB) entered into a Stock Purchase Agreement, effective January 1, 1994, pursuant
to which Nortelco acquired 80% of the issued and outstanding shares of Nortelco
Audiatur for an aggregate of approximately $225,000.

On July 25, 1994, Monkwell (controlled by Mr. Mats Hartling, a former
officer and director of SGA who also controls Universal) entered into an
agreement with NBD pursuant to which Monkwell acquired all of the issued and
outstanding shares of common stock of Bror Mauritz Hansen AS, a Norwegian
corporation ("Bror") in consideration for the transfer by Monkwell to NBD of
approximately 1,410 shares of Common Stock of SGA.

On July 30, 1994, Nortelco acquired the remaining 20% of Nortelco Audiatur
from Mark Oldmar (the current President and former owner of Nortelco Audiatur)
for approximately 230 shares of Common Stock of SGA (50 shares of which were
transferred from NBD and the remaining 180 shares of which were issued by SGA).
The transfer of shares by NBD and the issuance of shares by SGA were made as
contributions to capital based upon the proportionate ownership interests of NBD
and SGA in Nortelco. Nortelco had previously acquired the initial 80% of
Nortelco Audiatur, effective January 1, 1994, from Mr. Oldmar for an aggregate
consideration of approximately $225,000.

On September 20, 1994, Monkwell entered into a Stock Purchase Agreement
pursuant to which it sold all of the issued and outstanding shares of common
stock of Bror to Nortelco System Teknikk, for approximately $145 (NOK 1,000).
Subsequently, on November 1, 1994, Bror was merged with and into Nortelco System
Teknikk. The purchase price for all of the issued and outstanding shares of
common stock of Bror was determined between the parties to the Stock Purchase
Agreement.

STOREBRO

On May 16, 1994, AB Grundstenen, a Swedish corporation, entered into an
agreement with Ovington (controlled by Mr. Goran Haggqvist, currently an
officer, director and principal shareholder of the Company), pursuant to which
AB Grundstenen sold all of the issued and outstanding shares of common stock of
Storebro to Ovington for approximately $75,000 (SEK 500,000) or 25 shares of
Common Stock of SGA. The purchase price for the shares of Common stock of
Storebro was paid for by Ovington in the form of a $75,000 (SEK 500,000)
convertible promissory note, which note was subsequently converted into 25
shares of Common Stock of SGA.

As described above, on November 23, 1994, Ovington (controlled by Mr. Goran
Haggqvist, currently an officer, director and principal shareholder of the
Company) and SGA entered into a Stock Purchase Agreement pursuant to which the
Company acquired all of the issued and outstanding shares of common stock of
Storebro from Ovington for an aggregate consideration of $1,600,000, $215,000 of
which was paid in May 1994 at a closing held pursuant to an original Stock
Purchase Agreement entered into between the parties, dated May 16, 1994, which
agreement was subsequently amended on October 4, 1994. Pursuant to the November
23, 1994 Stock Purchase Agreement, which agreement amended the October 4, 1994
Stock Purchase Agreement, the $1,385,000 balance of the purchase price was paid
by the delivery to Ovington of 490 shares of Common Stock of SGA.

42
<PAGE> 45

In connection with the acquisition of all of the issued and outstanding
shares of common stock of Storebro by SGA, on August 31, 1994, Storebro Svarv AB
("Storebro Svarv"), a Swedish corporation owned by a corporation controlled by
Messrs. Goran Haggqvist and Kjell Sjostrand (which persons are currently
executive officers, directors and/or principal shareholders of the Company) sold
all of Storebro Svarv's lathe spare parts inventory to Storebro for a $53,000
(SEK 400,000) promissory demand note, which note was subsequently repaid without
interest.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue up to 19,000,000 shares of Common Stock,
$.0001 par value per share, 2,400,000 of which are issued and outstanding as of
the date of this Prospectus. The holders of the Common Stock are entitled to
receive dividends equally when, as and if declared by the Board of Directors,
out of funds legally available therefore.

Subject to the rights that may be designated by the Board of Directors to
the holders of any preferred stock, the holders of the Common Stock have sole
voting rights, one vote for each share held of record, and are entitled upon
liquidation of the Company to share ratably in the net assets of the Company
available for distribution. Shares of the Company's Common Stock do not have
cumulative voting rights and vote as a class on all matters requiring
stockholder approval. Therefore, the holders of a majority of the shares of
Common Stock may elect all of the directors of the Company, control its affairs
and day to day operations. The shares of Common Stock are not redeemable and
have no preemptive or similar rights. All outstanding shares of the Company's
Common Stock are fully paid for and non-assessable.

PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of "blank check"
Preferred Stock par value $.0001 per share ("Preferred Stock"). The Preferred
Stock may be issued from time to time, in one or more series, upon authorization
by the Company's Board of Directors. The Board of Directors, without further
approval of the stockholders, will be authorized to fix the dividend rights and
terms, conversion rights, voting rights, redemption rights and terms,
liquidation preferences, and any other rights, preferences, privileges and
restrictions applicable to each series of Preferred Stock. The issuance of
Preferred Stock (subject to the prohibition of the Company issuing such shares
for two years from the Effective Date, without the consent of the Underwriters),
while providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, adversely effect the voting power
of the holders of the Common Stock and, under certain circumstances, make it
more difficult for a third party to gain control of the Company, discourage bids
for the Company's Common Stock at a premium or otherwise adversely effect the
market price of the Common Stock, if the Common Stock is ever publicly traded,
of which there are no assurances. As of the date hereof, the Company has no
plans to issue, or any present intention to issue any such shares.

REDEEMABLE COMMON STOCK PURCHASE WARRANTS

Each Warrant entitles its holder to purchase one share of Common Stock at
an exercise price of $8.40 per share, subject to adjustment, commencing one year
after the Effective Date until , 2003.

The Warrants will be issued pursuant to a warrant agreement (the "Warrant
Agreement") among the Company, the Underwriters and Olde Monmouth Stock Transfer
Co., Inc., the warrant agent, and will be evidenced by warrant certificates in
registered form.

The exercise price of the Warrants and the number and kind of shares of
Common Stock or other securities and property issuable upon exercise of the
Warrants are subject to adjustment in certain circumstances, including stock
splits, stock dividends, subdivisions, combinations, reclassification, or
issuances of stock at a price lower than the current market price. Additionally,
an adjustment will be made upon the sale of all or substantially all of the
assets of the Company in order to enable the holders of the Warrants to

43
<PAGE> 46

purchase the kind and number of shares of stock or other securities or property
(including cash) receivable in such event by a holder of the number of shares of
Common Stock that might otherwise have been purchased upon exercise of the
Warrants.

The Warrants do not confer upon the holder any voting or any other rights
of a stockholder of the Company. Upon notice to the holders of the Warrants, the
Company has the right to reduce the exercise price or extend the expiration date
of the Warrants.

Warrants may be exercised upon surrender of the Warrant certificate
evidencing those Warrants on or prior to the expiration date (or earlier
redemption date) of the Warrants to the Warrant Agent, with the form of
"Election to Purchase" on the reverse side of the Warrant certificate completed
and executed as indicated, accompanied by payment of the full exercise price (in
United States funds, by cash or certified bank check payable to the order of the
Warrant Agent) for the number of Warrants being exercised.

No fractional shares will be issued upon exercise of the Warrants. However,
if a holder of a Warrant exercises all Warrants then owned of record by him, the
Company will pay to that holder, in lieu of the issuance of any fractional share
which would otherwise be issuable, an amount in cash based on the market value
of the Common Stock on the last trading day prior to the exercise date.

No Warrant will be exercisable unless at the time of exercise the Company
has filed with the Commission a current prospectus covering the issuance of
shares of Common Stock issuable upon exercise of the Warrants and the issuance
of shares has been registered or qualified or is deemed to be exempt from
registration or qualification under the securities laws of the state of
residence of the holder of the Warrant. The Company has undertaken to use its
best efforts to maintain a current prospectus relating to the issuance of shares
of Common Stock upon the exercise of the Warrants until the expiration of the
Warrants, subject to the terms of the Warrant Agreement. While it is the
Company's intention to maintain a current prospectus, there is no assurance that
it will be able to do so. See "Risk Factors -- Current Prospectus and State Blue
Sky Registration Required to Exercise Warrants."

The Warrants are redeemable, in whole or in part, by the Company at a price
of $.05 per Warrant, commencing one year after the Effective Date and prior to
their expiration, provided that (i) prior written notice of not less than 30
days is given to the Warrantholders (ii) the closing bid price (as defined) of
the Company's Common Stock for the twenty consecutive trading days immediately
prior to the date on which the notice of redemption is given, shall have
exceeded $13.00 per share and (iii) Warrantholders shall have exercise rights
until the close of business the day preceding the date fixed for redemption. The
Warrants shall be exercisable until the close of the business day preceding the
date fixed for redemption. In addition, subject to the rules of the NASD, the
Company has agreed to engage the Underwriters as warrant solicitation agent, in
connection with which it would be entitled to a 5% fee upon exercise of the
Warrants. See "Underwriting."

TRANSFER AGENT AND WARRANT AGENT

The Transfer Agent for the Company's Common Stock and the Warrant Agent for
the Company's A Warrants is Olde Monmouth Stock Transfer Co., Inc., Middletown,
New Jersey.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of this Offering, the Company will have 3,175,000 shares
of Common Stock outstanding (3,306,250 shares if the Underwriters'
Over-allotment option is exercised in full). All of the shares of Common Stock
sold in this Offering will be freely tradeable without restriction or further
registration under the Securities Act of 1933, as amended (the "Securities
Act"), except for any shares purchased by an "affiliate" of the Company which
will be subject to certain limitations of Rule 144 adopted under the Securities
Act.

The 2,400,000 presently outstanding shares of Common Stock are restricted
securities and will be subject to the resale limitations provided for in Rule
144. Under Rule 144, as currently in effect, subject to the satisfaction of
certain other conditions, a person, including an affiliate of the company, who
has owned

44
<PAGE> 47

restricted shares of Common Stock beneficially for at least two years, is
entitled to sell, within any three month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common stock is quoted on an exchange, the average weekly
trading volume during the four calendar weeks preceding the sale. A nonaffiliate
who has not been an affiliate of the Company for at least the three months
immediately preceding the sale and who has beneficially owned shares of Common
Stock for at least three years is entitled to sell such shares under Rule 144
without regard to any of the limitations described above. In meeting the two and
three year holding periods described above, a holder who has purchased shares
can include the holding periods of a prior owner who was not an affiliate of the
Company.

All Company's securityholders, on the date hereof, have agreed not to
publicly sell, for a period of two (2) years from the date of this Prospectus,
any shares of the Company's Common Stock without the prior written consent of
the Representative. The Representative's decision whether to release such
individuals from their lock-ups will be dependent upon market conditions,
including the need to maintain orderly market conditions.

Prior to this Offering, there has been no sustained market for any
securities of the Company. The effect, if any, of public sales of the restricted
shares of Common Stock or the availability of such shares for future sale at
prevailing market prices cannot be predicted. Nevertheless, the possibility that
substantial amounts of restricted shares may be resold in the public market may
adversely affect prevailing market prices for the Common Stock and the Warrants,
if any such market should develop.

45
<PAGE> 48

UNDERWRITING

Subject to the terms and conditions contained in the underwriting agreement
between the Company and the Underwriters, for which Mason Hill & Co., Inc. is
acting as Representative (a copy of which agreement is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part), the Company
and the Selling Stockholders have agreed to sell to each of the Underwriters
named below, and each of such Underwriters has severally agreed to purchase the
number of shares of Common Stock and Warrants set forth opposite its name. All
875,000 shares and 1,750,000 Warrants offered must be purchased by the several
Underwriters if any are purchased. The Shares and Warrants are being offered by
the Underwriters subject to prior sale, when, as and if delivered to and
accepted by the Underwriters and subject to approval of certain legal matters by
counsel and to certain other conditions.

<TABLE>
<CAPTION>
NUMBER OF
----------------------
UNDERWRITER SHARES WARRANTS
------------------------------------------------------- -------- ----------
<S> <C> <C>
Mason Hill & Co., Inc. ................................
J.W. Barclay & Co., Inc. ..............................

--------
-
-------
Total........................................ 875,000 1,750,000
========= =======
</TABLE>

The Representative has advised the Company that the Underwriters propose to
offer the shares of Common Stock and the Warrants to the public at the offering
prices set forth on the cover page of this Prospectus and that the Underwriters
may allow to certain dealers who are members in good standing with the National
Association of Securities Dealers, Inc. ("NASD") concessions, not in excess of
$ per share of Common Stock and $ per Warrant. After the
initial public offering, the public offering price and concessions may be
changed by the Underwriters.

The Company has granted the Underwriters an option, exercisable for 45 days
from the date of this Prospectus, to purchase up to 131,250 shares of Common
Stock and 262,500 Warrants by the Company, at the public offering price less the
underwriting discounts set forth on the cover page of this Prospectus. The
Underwriters may exercise this option solely to cover over-allotments in the
sale of the shares of Common Stock and Warrants offered hereby.

The Company and the Selling Stockholders have agreed to pay the
Underwriters a non-accountable expense allowance of 3% of the gross proceeds of
the shares of Common Stock and Warrants sold in this Offering, or a total of
$170,625 and $21,000, respectively ($199,368.75 and $21,000, respectively, if
the Over-allotment Option is exercised in full), none of which has been paid
prior to the date hereof.

The underwriting agreement provides for reciprocal indemnification between
the Company and the Underwriters against certain civil liabilities, including
liabilities under the Securities Act of 1933.

The Company has agreed to sell to the Underwriters or their designees, at a
price of $10, the Underwriters' Warrants, which entitle the Underwriters to
purchase up to 87,500 shares of Common Stock of the Company and/or 175,000
Warrants, respectively. The securities issuable upon exercise of the
Underwriters' Warrants are identical to those offered pursuant to this
Prospectus. The Underwriters' Warrants will be exercisable at a price of $8.40
per share and $.18 per Warrant, respectively, for a period of four years
commencing one year from the date of this Prospectus, and they will not be
transferable except to underwriters and selected dealers and officers and
partners thereof. Any profit realized upon any resale of the Underwriters'
Warrants or upon any sale of the shares of Common Stock or Warrants underlying
same may be deemed to be additional Underwriters' compensation. The Company has
agreed that, upon written request of the then holder(s) of at least a majority
of the Underwriters' Warrants, the Company will register (or file a
post-effective amendment with respect to any registration statement registering)
the Underwriters' Warrants and the underlying securities under the Securities
Act at its sole expense. In addition, the Company has also

46
<PAGE> 49

agreed to certain "piggy-back" registration rights for the holders of the
Underwriters' Warrants and the underlying securities.

The Company has agreed that for a period of three years, the Representative
will have the right to designate a person to be a non-voting advisor to the
Company's Board of Directors who will receive the same compensation as a
nonofficer member of the Board of Directors and who will be indemnified by the
Company against any claims arising out of his participation at meetings of the
Board of Directors. In lieu of the Representative's right to designate an
advisor to the Board of Directors, the Representative shall have the right
during such three year period, in its sole discretion, to designate one person
for election as a director of the Company and the Company will use its best
efforts to obtain the election of such person who shall be entitled to receive
the same compensation, expense reimbursements and other benefits as any other
director. The identity of such person has not been determined as of the date
hereof, and it is not expected that such right will be exercised in the
immediate future.

The Underwriters have informed the Company that they do not expect sales of
shares and the Warrants to be made to discretionary accounts to exceed 1% of the
shares of Common Stock and Warrants offered hereby.

The Offering is subject to the agreement by all present stockholders of the
Company that they will not sell any shares of Common Stock to the public without
the prior written consent of the Representative for a period of twenty-four
months.

The Company has agreed to enter into an agreement with the Representative
retaining them as a financial consultant for a period of three years from the
date hereof, pursuant to which they will receive fees aggregating $100,000 which
fees will be payable in full at closing.

The foregoing is a summary of the principal terms of the underwriting
agreement, the Underwriter's Warrant, and the Consulting Agreement. Reference is
made to the copies of the underwriting agreement, the Underwriters' Warrant
Agreement and the Consulting Agreement which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.

In July and August 1996, the Company consummated two private placement
offerings. Pursuant to the July 1996 private placement, the Company sold 500,000
shares of Common stock at a purchase price of $.30 per share. In addition,
pursuant to the August 1996 private placement, the Company sold 10 units, each
unit consisting of $95,000 principal amount 10% promissory note and 10,000
shares of Common Stock, at a purchase price of $100,000 per unit. The
Representative acted as placement agent for these private offerings, and
received an aggregate of $134,500 in commissions and non-accountable expenses.

Prior to the Offering, there has been no sustained public market for the
Common Stock and no public market for the Warrants. Consequently, the Offering
Price of the Common Stock and Warrants and the exercise price and other terms of
the Warrants have been determined by the Company and the Underwriters and are
not related to the Company's asset value, earnings, book value or other such
criteria of value. Factors considered in determining the Offering Price of the
Common Stock and Warrants and the exercise price and other terms of the Warrants
include principally, the prospects for the industry in which the company
operates, the Company's management, the general condition of the securities
markets and the demand for securities in similar industries.

LEGAL MATTERS

The validity of the issuance of the shares offered hereby will be passed
upon for the Company By Gusrae, Kaplan & Bruno, Esqs., New York, New York. The
firm of Gusrae, Kaplan & Bruno owns 56,565 shares of the Common Stock of the
Company. Certain legal matters in connection with this Offering will be passed
upon for the Underwriters by Gersten Savage Kaplowitz, Fredericks & Curtin, LLP,
New York, New York.

47
<PAGE> 50

EXPERTS

The consolidated balance sheets of the company as of December 31, 1993,
1994 and 1995 appearing in this Prospectus and Registration Statement have been
audited by McManus & Co., P.C., independent auditors, as stated in their report
appearing elsewhere herein and have been so included in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.

48
<PAGE> 51

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT.................................................. F-2
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets.............................................. F-3
Consolidated Statement of Earnings....................................... F-4
Consolidated Statement of Changes in Stockholders' Equity................ F-5
Consolidated Statements of Cash Flows.................................... F-6
Notes to Consolidated Financial Statements............................... F-7 - F-17
</TABLE>

F-1
<PAGE> 52

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
of Nordic Equity Partners Corp:

We have audited the accompanying consolidated balance sheet of Nordic Equity
Partners Corp. and Subsidiaries as of December 31, 1995 and 1994 and the related
consolidated statements of earning, stockholders equity, and cash flows for each
of the three years in the period ended December 31, 1995. These consolidated
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. We did not audit the financial statements of
Nortelco AS, or Storebro Machine AB, which are included in the financial
statements, and which statements reflect total assets constituting 48 percent
and 49 percent, respectively of the related consolidated totals as of December
31, 1995 and 1994 and total revenues constituting 48 percent, 46 percent and 47
percent, respectively of the related consolidated totals for each of the three
years in the period ended December 31, 1995. Those statements were audited by
other auditors whose reports have been furnished to us, and our opinion insofar
as it relates to the amounts included for Nortelco AS and Storebro Machine AB is
based solely on the reports of the other auditors.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principals used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit and the report of the other auditors
provides a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects the financial position of Nordic Equity Partners Corp. and
Subsidiaries as of December 31, 1995 and 1994 and the result of its operations,
stockholder's equity and its cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.

/s/ McMANUS & CO., P.C.
- ------------------------------------------------------

McManus & Co., P.C.
Certified Public Accountants

April 26, 1996

F-2
<PAGE> 53

NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ SEPTEMBER 30,
1995 1994 1996
------- ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash in Banks............................................. $ 518 $ 815 $ 1,030
Accounts Receivable (Net of allowance for doubtful
accounts) (Note 1)..................................... 3,934 2,820 4,477
Prepaid Expenses.......................................... 291 21 31
Other Current Receivables................................. 63 229 55
Inventories (Note 1 & 4).................................. 4,516 3,580 5,147
------- ------ -------
Total Current Assets.............................. 9,322 7,465 10,740
------- ------ -------
Property and Equipment (Net) (Note 1 & 3)................... 1,239 1,128 1,052
------- ------ -------
OTHER ASSETS:
Organization Costs, Net of Amortization................... 245 231 374
Goodwill.................................................. 434 345 397
------- ------ -------
Total Other Assets................................ 679 576 771
------- ------ -------
Total Assets...................................... $11,240 $9,169 $12,563
======= ====== =======
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable.......................................... $ 3,533 $2,903 $ 3,442
Accrued Expenses.......................................... 2,077 1,198 2,107
Note Payable -- Credit Line (Note 5)...................... 1,094 735 1,264
Note Payable -- Credit Line (Note 5)...................... 242 0 0
Note Payable -- Bank (Note 6)............................. 321 433 1,368
Other Current Liabilities................................. 407 1,189 410
------- ------ -------
Total Current Liabilities......................... 7,674 6,458 8,591
LONG-TERM LIABILITIES:
Notes Payable -- Bank (Note 6)............................ 484 710 398
Deferred Taxes............................................ 73 14 0
Due to Officers........................................... 43 47 43
Due Minority Shareholders -- Nortelco..................... 0 140 0
Other Long-Term Liabilities............................... 676 429 733
------- ------ -------
Total Long-Term Liabilities....................... 1,276 1,340 1,174
------- ------ -------
Total Liabilities................................. 8,950 7,798 9,765
------- ------ -------
STOCKHOLDERS' EQUITY:
Common Stock, $.001 par value, authorized 100,000 shares,
issued and outstanding 1,800,000 and 5,934,841 shares
respectively at December 31, 1995 and 1994 (Note 14)
and 2,400,000 shares at September 30, 1996............. 2 6 2
Paid In Capital........................................... 1,085 737 1,240
Retained Earnings......................................... 1,232 645 1,595
Cumulative Currency Translation Adjustment................ (29) (17) (39)
------- ------ -------
Total Stockholders' Equity........................ 2,290 1,371 2,798
------- ------ -------
Commitments and Contingencies (Notes 15 and 16)
Subsequent Events (Note 18)
Total Liabilities and Stockholders' Equity........ $11,240 $9,169 $12,563
======= ====== =======
</TABLE>

See Accompanying Accountants Report and Notes to the Consolidated Financial
Statements.

F-3
<PAGE> 54

NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EARNINGS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- -----------------------
1995 1994 1993 1996 1995
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net Sales......................... $ 25,531 $ 21,081 $ 11,527 $ 19,234 $ 18,861
Cost of Goods Sold................ 15,318 12,296 6,445 11,382 11,201
--------- --------- --------- --------- ---------
Gross Profit...................... 10,213 8,785 5,082 7,852 7,660
--------- --------- --------- --------- ---------
Operating Expenses:
Selling, General and
Administrative............... 8,707 7,408 3,910 6,715 6,312
Interest........................ 536 511 830 387 382
Depreciation and Amortization... 503 376 300 350 416
--------- --------- --------- --------- ---------
9,746 8,295 5,040 7,452 7,110
--------- --------- --------- --------- ---------
467 490 42 400 550
--------- --------- --------- --------- ---------
Other Income/(Loss):
Interest Earned................. 84 30 18 160 62
Miscellaneous................... 210 62 41 (36) 105
--------- --------- --------- --------- ---------
294 92 59 124 167
--------- --------- --------- --------- ---------
Earnings Before Taxes,
Extraordinary Expense and
Minority Interest............... 761 582 101 524 717
--------- --------- --------- --------- ---------
Extraordinary Expense (Note 7).... 0 0 (155) 0 0
--------- --------- --------- --------- ---------
Earnings/(Loss) Before Taxes and
Minority Interest............... 761 582 (54) 524 717
Provision for Taxes............... 254 136 35 161 205
--------- --------- --------- --------- ---------
Earnings/(Loss) Before Minority
Interest........................ 507 446 (89) 363 512
Minority Interest................. 0 54 (31) 0 78
--------- --------- --------- --------- ---------
Net Earnings/(loss)............... $ 507 $ 392 $ (58) $ 363 $ 434
========= ========= ========= ========= =========
Net Earnings/(Loss) Per Share:
Net Earnings/(Loss) Before
Extraordinary Item...... $ 0.28 $ 0.22 $ 0.05 $ 0.19 $ 0.24
Net Earnings/(Loss)........ $ 0.28 $ 0.22 $ (0.03) $ 0.19 $ 0.24
Weighted Average Number of
Common Shares
Outstanding............. 1,800,000 1,799,705 1,799,690 1,937,500 1,800,000
</TABLE>

See Accompanying Accountants Report and Notes to the Consolidated Financial
Statements.

F-4
<PAGE> 55

NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

(IN THOUSANDS)

<TABLE>
<CAPTION>
CUMULATIVE TOTAL
ADDITIONAL CURRENCY STOCK-
JANUARY 1, 1993 COMMON PAID IN RETAINED TRANSLATION HOLDERS'
TO SEPTEMBER 30, 1996 STOCK CAPITAL EARNINGS ADJUSTMENT EQUITY
- ----------------------------------------- ------ ---------- -------- ------------ -------
<S> <C> <C> <C> <C> <C>
January 1, 1993.......................... $ 6 $ 141 $ 311 $ 111 $ 569
Foreign Currency Adjustment.............. (17) (17)
Net Loss 1993............................ (58) (58)
--- ------ ------ ----- ------
Total Stockholders' Equity,
December 31, 1993............ 6 141 253 94 494
Foreign Currency Adjustment.............. (111) (111)
Reverse Stock Split 1 X 50............... (5) 33 28
Sale of Stock............................ 4 186 190
0
Capital Contributions.................... 377 377
Common Stock Issued...................... 1 1
Net Earnings 1994........................ 392 392
--- ------ ------ ----- ------
Total Stockholders' Equity,
December 31, 1994............ 6 737 645 (17) 1,371
Untaxed Reserve.......................... 80 80
Foreign Currency Adjustment.............. (12) (12)
Common Stock Issued...................... 1 220 221
Reverse Stock Split 1 X 1000............. (6) 6 0
Capital Contributions.................... 123 123
Common Stock Issued to Chairman of Board
and Various Other Parties.............. 1 (1) 0
Net Earnings 1995........................ 507 507
--- ------ ------ ----- ------
Total Stockholders' Equity,
December 31, 1995............ 2 1,085 1,232 (29) 2,290
Foreign Currency Adjustment (Unaudited
) ...................................... (10) (10)
Net Earnings for the Nine Months Ended
September 30, 1996 (Unaudited)......... 363 363
Private Placement........................ 50 50
Private Placement........................ 105 105
--- ------ ------ ----- ------
Total Stockholders Equity,
September 30, 1996
(Unaudited).................. $ 2 $1,240 $1,595 $ (39) $ 2,798
=== ====== ====== ===== ======
</TABLE>

See Accompanying Accountants Report and Notes to the Consolidated Financial
Statements.

F-5
<PAGE> 56

NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
----------------------------- -----------------
1995 1994 1993 1996 1995
------- ------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flow from Operating Activities:
Net Income (Loss)....................................... $ 507 $ 392 $ (58) $ 363 $ 434
Adjustments to Reconcile Net Income/(Loss) to Net Cash
Provided/(Used) in Operating Activities:
Depreciation and Amortization......................... 503 376 300 350 416
(Increase)/Decrease in Accounts Receivable............ (1,114) (867) (295) (543) (1,418)
(Increase)/Decrease in Other Receivables.............. 158 117 42 8 24
(Increase)/Decrease in Inventories.................... (936) (1,743) (709) (631) (658)
(Increase)/Decrease in Deferred Taxes................. 59 14 10 (73) (20)
(Increase)/Decrease in Prepaid Expenses............... (270) (21) (23) 260 29
Increase/(Decrease) in Accounts Payable............... 630 767 812 (91) 392
Increase (Decrease) in Other Liabilities.............. (535) 265 656 60 332
Increase (Decrease) in Accrued Expenses............... 879 1,119 (1,177) 30 98
-------- -------- -------- ------- --------
Total Adjustments.............................. (626) 27 (384) (630) (805)
Net Cash Provided (Used) by Operating Activities........ (119) 419 (442) (267) (371)
-------- -------- -------- ------- --------
Cash Flow From Investing Activities:
(Purchase) of Property, Plant & Equipment............. (536) (279) 0 (101) (172)
Disposal of Property, Plant & Equipment............... 70 4,781 0 26 48
(Increase)/Decrease in Goodwill....................... (175) (380) 0 0 (175)
Increase/(Decrease) in Minority interest.............. (140) 138 0 0 (78)
(Increase)/Decrease in Organization Costs............. (68) (172) 0 (180) (43)
-------- -------- -------- ------- --------
Net Cash Provided (Used) by Investing Activities........ (849) 4,088 0 (255) (420)
Cash Flow from Financing Activities:
Increase/(Decrease) in Note Payable-Credit Line....... 359 (66) (11) 170 (217)
Increase/(Decrease) in Note Payable-Credit Line....... 242 0 0 (242) 176
Increase/(Decrease) in Paid in Capital................ 348 596 0 155 348
Increase/(Decrease) in Notes Payable-Bank(Current).... (112) (2,538) 271 1,047 119
Increase/(Decrease) in Notes
Payable-Bank(Long-Term)............................. (226) (1,896) 308 (86) 152
Increase/(Decrease) in Common Stock................... (4) 4 0 0 (4)
Increase/(Decrease) in Cumulative Currency Translation
Adjustment.......................................... (12) (111) (17) (10) (8)
Increase/(Decrease) in Due to Officers................ (4) 47 0 0 21
Increase/(Decrease) in Untaxed Reserve................ 80 0 0 0 0
-------- -------- -------- ------- --------
Net Cash Provided (Used) by Financing Activities........ 671 (3,964) 551 1,034 587
Net Increase/Decrease in Cash........................... (297) 543 109 512 (204)
Cash -- At Beginning of Year/Period..................... 815 272 163 518 815
-------- -------- -------- ------- --------
Cash -- At End of Year/Period........................... $ 518 $ 815 $ 272 $1,030 $ 611
======== ======== ======== ======= ========
Supplementary Disclosure of Cash Flow Information
Cash Paid During the Year For:
Interest............................................ $ 536 $ 511 $ 830 $ 387 $ 382
Income Taxes........................................ 254 136 35 161 205
</TABLE>

See Accompanying Accountants Report and Notes to the Consolidated Financial
Statements.

F-6
<PAGE> 57

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation:

The consolidated financial statements are presented in US dollars and in
accordance with accounting principles accepted in the United States.

(b) Corporate Reorganization:

On May 26, 1994 Nortelco AS, a Norwegian corporation, Storebro Machine AB,
a Swedish corporation and Sherman, Goelz & Associates, a United States
corporation combined businesses. The combination was accounted for by the
pooling of interest method. 1,071,000 shares of common stock were issued in the
business combination. Prior to the combination Nortelco AS had net sales of
$5,055,049; extraordinary income of $416,103 and net earnings of $25,896.
Storebro Machine AB had net sales of $698,719; extraordinary income of $ -0-,
and net income of $128,295. There were no changes in net assets and retained
earnings as a result of combining enterprises.

Sales and expenses denominated in foreign currencies are translated at
average exchange rates in effect during the period. The assets and liabilities
of foreign operations are translated into US dollars using the current exchange
rate. Translation gains and losses are accumulated as a separate component of
stockholders equity.

(d) Revenue:

Sales are recorded net of returns of merchandise. Revenue is recognized
when the merchandise is shipped. Costs are expensed when incurred, accordingly,
the Company does not defer any costs.

(e) Inventories:

Inventories have been valued using the first in - first out method. Raw
materials and purchased manufactured and semi-manufactured products have been
valued at the lowest of purchase price or replacement costs.

Manufactured and semi-manufactured products have been valued to
manufacturing costs, including appropriate share of indirect costs.

(f) Net Earnings/(Loss) Per Common Share:

Net earnings/(loss) per common share is determined by dividing the weighted
average number of common shares outstanding during the year into net earnings.
Common share equivalents in the form of options and warrants are excluded from
the calculation since they have an anti-dilutive effect on per share figures.

F-7
<PAGE> 58

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

(g) Equipment:

Equipment is stated at cost less accumulated depreciation as follows:

<TABLE>
<CAPTION>
ASSET METHOD RATE
- ------------------------ -------------- ----
<S> <C> <C>
Computer Equipment Straight Line 20%
Machinery and Equipment Straight Line 20%
Furniture and Fixtures Straight Line 20%
Cars Straight Line 20%
</TABLE>

(h) Income Taxes:

Effective January 1, 1993, the Company adapted the provisions of Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes",
which requires a change from the deferral method to assets and liability method
of accounting for income taxes.

(i) Interim Financial Statements:

In the opinion of management, the unaudited interim financial statements
for the nine months ended September 30, 1996 are presented on a basis consistent
with the audited annual financial statements and reflect all adjustments
consisting only of normal recurring accruals necessary for fair presentation of
the results of such periods. The results of operations for the period ended
September 30, 1996 are not necessarily indicative of the results expected for
the year ended December 31, 1996.

(j) Allowance for Doubtful Accounts:

The Company has established an allowance for doubtful accounts equal to the
estimated amount of uncollectible accounts receivable. Management's allowance
for doubtful accounts of approximately $13,000 and $14,000 at December 31, 1995
and 1994 respectively, and $13,000 at September 30, 1996 are considered adequate
based upon an analysis of accounts receivable.

(k) Intangible Assets:

Organization costs are amortized on the straight-line method over a life of
60 months. Goodwill is amortized on the straight-line method over forty years.
Accumulated amortization is $139,000 and $61,000 at December 31, 1995 and 1994
respectively and $197,000 at September 30, 1996.

(l) Stock Split:

On September 15, 1995 and May 10, 1994 the Board of Directors of the
Company authorized a 1 to 1000 and 1 to 50 reverse stock split respectively. The
common shares referred to in these financial statements have been retroactively
adjusted to give effect to the split for all periods presented.

(m) Warranties:

The Company is mandated by law to provide the customer with a two year
warranty. Since the majority of sales are comprised of goods bought for resale
the warranty would in fact be against the original manufacturer.

F-8
<PAGE> 59

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 2 -- CORPORATE REORGANIZATION AND POOLING OF INTEREST

The Corporation was incorporated under the name Pearl Ventures in November
1, 1986 in the State of Nevada.

In April 1988 the name of the Corporation was changed to Sherman, Goelz and
Associates. In May of 1994 Nordic entered into a business combination with
Nortelco AS and Storebro Machine AB (see Note 1). This combination was done
through the exchange of 1,071,000 shares of common stock and $1,000,000 from
Nordic to the stockholders of record of Nortelco AS and Storebro Machine AB.

These transactions, under Common Control, are accounted for at historical
cost which is in accordance with a pooling of interest business combination.

NOTE 3 -- PROPERTY AND EQUIPMENT

Property and equipment and related accumulated depreciation for the years
ended December 31, 1995 and 1994 and for the nine months ended September 30,
1996 are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1995 1994 1996
------------ ------------ -------------
<S> <C> <C> <C>
Machinery and Equipment................. $ 2,634,000 $ 2,257,000 $ 2,779,000
Automobiles............................. 582,000 493,000 582,000
Less Accumulated Depreciation........... (1,977,000) (1,622,000) (2,309,000)
----------- ----------- -----------
$ 1,239,000 $ 1,128,000 $ 1,052,000
=========== =========== ===========
</TABLE>

NOTE 4 -- INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1995 1994 1996
------------ ------------ -------------
<S> <C> <C> <C>
Raw Materials............................ $ 650,000 $ 293,000 $ 672,000
Work in Process.......................... 339,000 249,000 367,000
Finished Goods........................... 3,527,000 3,038,000 4,108,000
---------- ---------- ----------
Total.......................... $4,516,000 $3,580,000 $ 5,147,000
========== ========== ==========
</TABLE>

NOTE 5 -- NOTE PAYABLE

Credit Line:

The Company has an open line of credit of approximately $1,400,000 with the
bank, secured by accounts receivable, inventory, and fixed assets of which the
Company has used approximately $1,094,083 as of December 31, 1995. Approximately
$70,000 of the total line of credit is personally guaranteed by Bjorn Nysted,
President of Nortelco AS. The line of credit bears interest at a rate of
approximately 10%.

The Company has a second line of credit of approximately $250,000 with
Handelsbanken. The credit line is secured by accounts receivable, inventory and
fixed assets of the Company and bears interest at a rate of approximately
8 1/2%. As of December 31, 1995, the Company had approximately $242,000
outstanding under the second line of credit.

F-9
<PAGE> 60

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 6 -- NOTES PAYABLE

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ SEPTEMBER 30,
1995 1994 1996
--------- ----------- -------------
<S> <C> <C> <C>
Handelsbaken Bank secured by accounts
receivable, inventory and fixed assets,
bearing interest at approximately 12%.
(Due in Swedish Krona; 1,026,613 and
1,550,998 respectively.)............... -0- 137,588 234,007
Dynatech installment loan secured by
accounts receivable, inventory and
fixed assets, due April 1997, bearing
no interest. (Due in Swedish Krona and
Norwegian Krona; 318,000 and 108,000
and 159,000 and 54,268
respectively.)......................... 41,109 -0- 32,731
DenNorske Bank notes payable, secured by
accounts receivable, inventory and
fixed assets as follows:
Bearing interest at 12% per annum
due 1996. Due in Norwegian Krona,
(128,724 and 432,416
respectively.).................... 20,371 63,948 -0-
Bearing interest at approximately
12% per annum due 1997. Due in
Norwegian Krona, (819,492, 709,983
& 950,855 respectively.).......... 129,687 104,996 146,128
Bearing interest at approximately
12% per annum due 1997. Due in
Norwegian Krona (131,208 &
197,579, respectively.)........... 20,764 29,219 -0-
Bearing interest at 9.5% per annum
due 1998. Due in Norwegian Krona,
(2,499,999, 3,641,073 & 1,747,930
respectively.).................... 395,632 538,461 268,623
Bearing interest at 9.5% per annum
due 1998. Due in Norwegian Krona,
(1,249,999, 1,820,533 & 874,998
respectively.).................... 197,816 269,230 134,460
Promissory note due in United States
Dollars bearing interest @ 10% due the
earlier of the closing of the public
offering (see subsequent events
Note -- 18) or February 15, 1998....... -0- -0- 950,000
Total.................................... 805,379 1,143,442 1,765,949
Less: Current portion of long term
debt................................... 321,292 433,135 1,368,317
--------- ----------- -------------
Long term debt........................... $ 484,087 $ 710,307 $ 397,632
======== ========= ==========
</TABLE>

Principal repayment in each of the next four years are as follows:

F-10
<PAGE> 61

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 7 -- SECURED LOAN

The bank has a Security Loan of approximately $720,000 on Storebro AS
manufactured machinery. The bank has guaranteed delivery of purchased machinery
to certain customers; if the Company fails to deliver, the bank is liable to
reimburse all monies paid to the Company by the customer up to $720,000.

NOTE 8 -- PENSION

The Company finances its pension liability through a collective pension
agreement which is equivalent to a defined benefit plan. This plan is for
Nortelco only and works as follows. The benefit is for all employees, including
management. All expenses are covered by the Company. When a person retires at
the age of 67, he/she will receive a monthly payment of approximately 60% of the
difference between the salary earned 5 years before retirement and the public
pension plan. To receive this benefit, it is necessary to have been employed by
Nortelco for 30 years.

NOTE 9 -- EXTRAORDINARY EXPENSE

The extraordinary expense of $155,000 results from the sale on Nortelco's
previous daughter company Norpump AS.

NOTE 10 -- MINORITY INTEREST

In November, 1994, the Company and Universal entered into an agreement
pursuant to which the company acquired all of the issued and outstanding common
stock of Nortelco owned by Universal (80%).

In November, 1995, the Company and Nordic Business Development entered into
an agreement pursuant to which the company acquired the remaining 20% of the
issued and outstanding common stock of Nortelco.

NOTE 11 -- UNTAXED RESERVE

The untaxed reserves are made up of appropriations from income before tax,
(Storebro only), which are allowable deductions for Swedish income tax purposes.
When these reserves are brought back to income, either in accordance with tax
regulations or voluntarily, they will be taxed at the rates then applicable.

NOTE 12 -- ADVERTISING

All advertising costs are expensed as incurred. The Company does not incur
any cost for direct-response advertising.

F-11
<PAGE> 62

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 13 -- INCOME TAXES

a) As discussed in Note 1, the Company adopted the provisions of Statement
of Financial Standards (SFAS) No. 109 "Accounting for Income Taxes". The
effective tax rate for the Company is reconcilable to statutory tax
rates as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
---------------------- -------------
1994 1993 1996 1995
---- ---- ---- ----
1995 % % % %
----
%
<S> <C> <C> <C> <C> <C>
Norway Statutory Tax Rate................. 28 28 28 28 28
Sweden Statutory Tax Rate................. 28 28 28 28 28
United States Statutory Tax Rate.......... 34 34 34 34 34
</TABLE>

b) The Company has a temporary difference that gives rise to a deferred tax
liability in Norway amounting to $73,000 and $14,000 as of December 31,
1995 and 1994.

c) All of the Company's income is generated from Nortelco and subsidiaries,
Norwegian Companies and Storebro, a Swedish company. As such, the income
is not taxable in the United States.

d) Deferred taxes in the profit and loss account are taxes calculated for
temporary differences between tax and accounting result. Instead of
showing the year's tax gross disposals in the account, the effect of tax
is entered as a part of the year's tax cost. Deferred taxes are set
aside as long-term liabilities in the balance sheet.

NOTE 14 -- CAPITAL STOCK

a) Authorized Capital:

100,000,000; $0.001 par value voting common shares.

b) Issued and outstanding:

2,400,000; $0.001 par value voting common shares.

c) Share Transaction:

During the year, the Company had the following share transactions:

(I) Sold 180 shares of the Company's common stock to Mark Oldmar
for all the outstanding securities of Nortelco Audiatur, AB.

(II) Sold 490 shares of the Company's common stock to Ovington
Investments for all the outstanding securities of Storebro Machine, AB.

(III) Sold 581 shares of the Company's common stock to Universal
Commodity Trading Group, S.A. for all of the outstanding securities of
Nortelco, AS.

(IV) 126,271 shares were issued at $1.75 per share to a third
party.

(V) A 1 for 1,000 reverse split of issued and outstanding shares

(VI) Stock Issue:

1,793,939 shares were issued to Goran Haggqvist, Chairman of
the Board of the company.

F-12
<PAGE> 63

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

(VII) 999,550 shares were transferred from Goran Haggqvist,
Chairman of the Board of the Company, to various other parties.

(VIII) 216,000 shares were transferred from various parties to
Nordic Business Development A/S for the final 20% of Nortelco AS.

(IX) 500,000 shares were issued in a private placement.

(X) 100,000 shares were issued in a private placement.

NOTE 15 -- LEASE

The Company has entered into long term leases with minimum annual rental
payments approximately as follows:

<TABLE>
<S> <C>
1996............................................. $ 494,800
1997............................................. 490,000
1998............................................. 490,000
1999............................................. 490,000
2000............................................. 490,000
Thereafter....................................... 1,110,000
----------
Total $3,564,800
==========
</TABLE>

Rent expense for the year ended December 31, 1995 and 1994, amounted to $534,600
and $713,339 respectively.

NOTE 16 -- STOCK OPTIONS AND STOCK WARRANTS

The Company had no outstanding stock options or stock warrants at December
31, 1995.

A Stock Option Plan was instituted in 1995 where by 250,000 shares were
reserved for issuance as incentive stock options.

These options will be issued at fair market value at time of granting. As
of December 31, 1995, no options have been granted under the Stock Option Plan.

F-13
<PAGE> 64

NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995 IS UNAUDITED)

NOTE 17 -- INDUSTRY SEGMENTAL INFORMATION

The Company operates in three industry segments. The first is the
distribution of electrical and audio visual equipment. The second is the design
and installation of conference rooms and auditoriums. The third is the
manufacturing and distribution of lathes. The segments are summarized as
follows:

<TABLE>
<CAPTION>
DESIGN & MANUFACTURING
DISTRIBUTION INSTALLATION DISTRIBUTION TOTAL
------------ ------------ ------------- ----------
<S> <C> <C> <C> <C>
1995
Net Sales...................... 19,278,000 2,034,000 4,219,000 25,531,000
Gross Profit................... 7,619,000 811,000 1,783,000 10,213,000
General Corporate Expenses..... 6,846,000 655,000 1,415,000 8,916,000
Interest Expense............... 507,000 27,000 2,000 536,000
Income Before Provision for
Taxes........................ 266,000 129,000 366,000 761,000
Identifiable Assets............ 8,642,000 230,000 2,368,000 11,240,000
Capital Expenditures........... 507,000 27,000 2,000 536,000
Depreciation & Amortization.... 474,000 17,000 12,000 503,000

1994
Net Sales...................... 16,833,000 1,376,000 2,423,000 20,632,000
Gross Profit................... 6,220,000 520,000 1,596,000 8,336,000
General Corporate Expenses..... 5,526,000 485,000 1,232,000 7,243,000
Interest Expenses.............. 489,000 21,000 1,000 511,000
Income Before Provision for
Taxes........................ 205,000 14,000 363,000 582,000
Identifiable Assets............ 7,374,000 205,000 1,590,000 9,169,000
Capital Expenditures........... 489,000 21,000 1,000 511,000
Depreciation & Amortization.... 355,000 16,000 5,000 376,000
</TABLE>

NOTE 18 -- SUBSEQUENT EVENTS

Public Offering:

On April 30, 1996, the Company executed a letter of intent for a proposed
public offering. The offering consists of $775,000 shares of common stock, $.001
par value of the Company and 2,600,000 redeemable common stock purchase
warrants.

The warrants are redeemable, in whole or in part, by the Company at a price
of $.05 per Warrant, commencing one year after the Effective Date and prior to
their expiration, provided that prior written notice of not less than thirty
days is given to the Warrantholders, the closing bid price of the Company's
common stock for the twenty consecutive trading days immediately prior to the
date on which the notice of redemption is given, shall have exceeded $13.00 per
share, and Warrantholders shall have exercise rights until the close of business
the day preceding the date fixed for redemption.

F-14
<PAGE> 65

AUDITOR'S REPORT

STOREBRO MACHINE AKTIEBOLAG

I have examined the Annual Reports, the Accounting Records and the
administration by the Board of Directors and the Managing Director for January 1
to December 31, 1994 and for January 1 to December 31, 1995. The examination was
carried out in accordance with generally accepted auditing standards.

The Annual Reports has been prepared in accordance with the Swedish
Companies Act.

I recommend

that the Income Statement and Balance Sheet be adopted,

that the Net income be distributed in accordance with the recommendation of
the Board of Directors.

that the members of the Board of Directors and the Managing Director be
discharged from personal liability for the financial year.

/s/ MATS LANDEN
- ------------------------------------------------------
Mats Landen
Authorized Public Accountant

May 23, 1996

F-15
<PAGE> 66

AUDITORS' REPORT FOR 1994

To the Annual Shareholders' Meeting of Nortelco AS

We have audited the annual financial statements of Nortelco AS for 1994, showing
a net income for the year of NOK 3,936,822 for the parent company and a
consolidated net income for the year of NOK 1,892,618. The annual financial
statements, which comprise the Board of Directors' report, profit and loss
account, balance sheet cash flow statement and notes to the accounts and
consolidated accounts, are presented by the company's Board of Directors.

Our responsibility is to examine the company's annual financial statements, its
accounting records and other related matters.

We have conducted our audit in accordance with relevant laws, regulations and
Norwegian generally accepted auditing standards. We have performed those audit
procedures considered necessary to confirm that the annual financial statements
are free of material misstatements. We have examined selected parts of the
evidence supporting the accounts and assessed the accounting principles applied,
the estimates made by management, and the content and presentation of the annual
financial statements. To the extent required by Norwegian generally accepted
auditing standards, we have reviewed the company's internal control and the
management of its financial affairs.

The Board of Directors' proposal for the allocation of the net income and
transfer between equity accounts complies with the provisions of the Norwegian
Joint-Stock Companies Act.

In our opinion, the annual financial statements have been prepared in accordance
with the requirements of the Norwegian Joint-Stock Companies Act and present
fairly the financial position of the company and group as of December 31, 1994
and the result of its operations for the year then ended, in conformity with
Norwegian generally accepted accounting principles.

Without having impact on the conclusion above, we would like to emphasize that
the taxes withheld are not deposited in a separate bank account as set forth in
sec. 11 in the tax payment law.

Oslo, March 29, 1995
ERNST & YOUNG AS

/s/ ERLAND STENBERG
- ------------------------------------------------------
Erland Stenberg
State Authorized Public Accountant (Norway)

Note: The translation into English has been prepared for information purposes
only.

F-16
<PAGE> 67

AUDITORS' REPORT FOR 1995

To the Annual Shareholders' Meeting of Nortelco AS

We have audited the annual financial statements of Nortelco AS for 1995, showing
a net income for the year of NOK 1,071,084 for the parent company and a
consolidated net income for the year of NOK 1,168,331. The annual financial
statements, which comprise the Board of Directors' report, profit and loss
account, balance sheet cash flow statement and notes to the accounts and
consolidated accounts, are presented by the company's Board of Directors.

Our responsibility is to examine the company's annual financial statements, its
accounting records and other related matters.

The Board of Directors' proposal for the allocation of the net income and
transfer between equity accounts complies with the provisions of the Norwegian
Joint-Stock Companies Act.

In our opinion, the annual financial statements have been prepared in accordance
with the requirements of the Norwegian Joint-Stock Companies Act and present
fairly the financial position of the company and group as of December 31, 1995
and the result of its operations for the year then ended, in conformity with
Norwegian generally accepted accounting principles.

Without having impact on the conclusion above, we would like to emphasize that
the taxes withheld are not deposited in a separate bank account as set forth in
sec. 11 in the tax payment law.

Oslo, April 22, 1996
ERNST & YOUNG AS

/S/ ERLAND STENBERG
- ------------------------------------------------------
Erland Stenberg
State Authorized Public Accountant (Norway)

Note: The translation into English has been prepared for information purposes
only.

F-17
<PAGE> 68

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE COMMON STOCK OFFERED BY THIS PROSPECTUS, OR AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY, BY ANY PERSON
IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION IN THIS PROSPECTUS IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 4
Risk Factors.......................... 9
Use of Proceeds....................... 15
Dilution.............................. 16
Dividend Policy....................... 17
Capitalization........................ 18
Market for Securities................. 18
Selected Financial Information........ 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 21
Business.............................. 27
Management............................ 35
Principal Stockholders................ 38
Selling Stockholders.................. 39
Certain Transactions.................. 39
Description of Securities............. 43
Shares Eligible for Future Sale....... 44
Underwriting.......................... 46
Legal Matters......................... 47
Experts............................... 48
Index to Financial Statements......... F-1

UNTIL , 1997 (25 DAYS AFTER THE
DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE SHARES OF
COMMON STOCK OFFERED HEREBY, WHETHER OR NOT
PARTICIPATING IN THE DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- --------------------------------------------
- --------------------------------------------
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
NORDIC EQUITY
PARTNERS CORP.

875,000 SHARES
OF COMMON STOCK AND
1,750,000 COMMON STOCK
PURCHASE WARRANTS

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

PROSPECTUS
--------------------

MASON HILL & CO., INC.

J.W. BARCLAY & CO., INC.

, 1997

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 69

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses of this Offering all of which are to be paid by the
Registrant in connection with the issuance and distribution of the securities
being registered are as follows:

<TABLE>
<S> <C>
SEC registration fee............................................ $ 8,026.41
NASD filing fee................................................. 4,435.23
NASDAQ-NMS listing and Filing fee............................... 33,875.00
Printing and engraving expenses................................. 60,000.00
Accounting fees and expenses.................................... 50,000.00
Legal fees and expenses......................................... 175,000.00
Blue sky fees and expenses...................................... 75,000.00
Transfer agent fees............................................. 10,000.00
Miscellaneous expenses.......................................... 13,663.36
-----------
Total................................................. $430,000.00
===========
</TABLE>

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

* Estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

In general, Section 145 of the Delaware General Corporation Law provides
that persons who are officers or directors of a corporation may be indemnified
by the corporation for acts performed in their capacities as such. The
Registrant's by-Laws authorize indemnification in accordance with and to the
extent permitted by said statute.

The Company's Certificate of Incorporation and By-Laws provide for
indemnification to the fullest extent permitted by law.

Reference is also made to Section 8 of the Underwriting Agreement filed as
Exhibit 1.1 to this Registration Statement, pursuant to which the underwriter
has agreed to indemnify and hold harmless the company and its directors,
officers and controlling persons against certain liabilities.

Except as hereinafter set forth, there is no charter provision, by-law,
contract, arrangement or statute under which any director or officer of the
Company is indemnified in any manner against any liability which he may incur in
his capacity as such.

Article SEVENTH of the Company's Certificate of Incorporation provides as
follows:

Directors of the corporation shall not be liable either to the
corporation or its stockholders for monetary damages for breach of
fiduciary duties unless the breach involves: (1) a director's duty of
loyalty to the corporation or its stockholders; (2) acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law; (3) liability for unlawful payments of dividends or
unlawful stock purchase or redemption by the corporation; or (4) a
transaction from which the director derived any improper personal benefit.

Article X of the Company's By-Laws provides as follows:

The Corporation shall indemnify to the full extent authorized by law
any person made or threatened to be made a party to an action or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee or agent of the Corporation or any predecessor of the
Corporation or serves or served any other enterprise as a director, officer
or employee or agent at the request of the Corporation or any predecessor
of the Corporation.

II-1
<PAGE> 70

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Except as set forth below, there were no sales of unregistered securities
by the Registrant during the past three (3) years:

In April 1994, Nortelco issued a 12% $240,350 principal amount
promissory note, payable upon demand, to Mr. Bjorn Nysted in consideration
of a loan made by Mr. Nysted in connection with the acquisition by Nortelco
of certain assets of the Norwegian operations of Dynatech Corporation, a
Massachusetts corporation, for approximately $240,350. This transaction was
exempt from registration under the Section 4(2) of the Act as not involving
a public offering.

Effective as of July 30, 1994, the Registrant sold 180 shares of the
Company's Common Stock to Mark Oldmar in consideration for the acquisition
of all of the outstanding securities of Nortelco Audiatur AB. This
transaction was exempt from registration under the Section 4(2) of the Act
as not involving a public offering.

Effective as of November 23, 1994, the Registrant sold 490 shares of
the Company's Common Stock to Ovington Investments Limited in consideration
for the acquisition of all of the outstanding securities of Storebro
Machine AB. This transaction was exempt from registration under Section
4(2) of the Act as not involving a public offering.

Effective as of November 23, 1994, the Registrant sold 581 shares of
the Company's Common Stock to Universal Commodity Trading Group, S.A. in
consideration for the acquisition of all of the outstanding securities of
Nortelco AS. This transaction was exempt from registration under Section
4(2) of the Act as not involving a public offering.

In January 1995, the Registrant sold 126,271 shares of the Company's
Common Stock to Mayfair Capital Limited for an aggregate consideration of
$220,974.25. This transaction was exempt from registration under Section
4(2) of the Act as not involving a public offering.

In May 1995, the Registrant issued 4,680,002 shares of Common Stock to
the holders of Common Stock of Sherman, Goelz & Associates. This
transaction was exempt from registration under Section 4(2) of the Act as
not involving a public offering.

In September 1995, the Registrant sold 1,793,939 shares of the
Company's Common Stock to Mr. Goran Haggqvist for aggregate consideration
of $1,000,000. This transaction was exempt from registration under the
Securities Act of 1933, as amended (the "Act"), under Section 4(2) of the
Act as not involving a public offering.

In July 1996, the Registrant issued an aggregate of 500,000 shares of
Common Stock to a total of 2 private investors, who paid total gross
consideration of $150,000. These transactions were exempt from registration
under the Act, under Section 4(2) and Rule 506 of Regulation D of the Act
as not involving a public offering. Mason Hill & Co., Inc. acted as
Placement Agent for these issuances and received an aggregate of $19,500 in
commissions (10%) and non-accountable expense allowances (3%). The
recipients of all of the foregoing securities represented that such
securities were being acquired for investment and not with a view to the
distribution thereof. In addition, the certificates evidencing such
securities bear restrictive legends.

In August 1996, the Registrant issued an aggregate of $950,000
principal amount twelve percent (12%) promissory notes, and 100,000 shares
of Common Stock to a total of 14 private investors, who paid total gross
consideration of $1,000,000. These transactions were exempt from
registration under the Act, under Section 4(2) and Rule 506 of Regulation D
of the Act as not involving a public offering. Mason Hill & Co., Inc. acted
as Placement Agent for these issuances and received an aggregate of
$115,000 in commissions (10%) non-accountable expenses (1.5%). The
recipients of all of the foregoing securities represented that such
securities were being acquired for investment and not with a view to the
distribution thereof. In addition, the certificates evidencing such
securities bear restrictive legends.

II-2
<PAGE> 71

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

<TABLE>
<S> <C>
1.1 Form Underwriting Agreement
1.2 Form of Selected Dealers Agreement*
2.1 Agreement and Plan of Merger, dated as of May 15, 1995, by and between Sherman,
Goelz and Associates and the Company**
3.1 Articles of Incorporation, as amended and restated to date (including
certificate of merger)**
3.2 By-Laws**
4.1 Form of Underwriter's Warrant*
4.2 Form of Financial Advisory and Investment Banking Agreement with the
Underwriter*
4.3 Form of Common Stock Certificate**
4.4 Form of Common Stock Purchase Warrant**
4.5 Form of Promissory Note used for Bridge Loans**
4.6 Form of Warrant Agreement*
5.1 Opinion of Gusrae Kaplan & Bruno*
10.1 Registrant's 1996 Stock Option Plan**
10.2 Employment Agreement with Goran Haggqvist**
10.3 Employment Agreement with Bjorn Nysted**
10.4 Employment Agreement with Kjell Sjostrand**
10.5 Agreement dated May 12, 1994 by and between Universal Commodity Trading Group,
S.A. and the Registrant, as amended
10.6 Agreement dated November 30, 1995 by and between Nordic Business Development
and the Registrant**
10.7 Agreement dated May 15, 1994 by and between Nortelco AS, the Registrant and
Marc Olmar, as amended**
10.8 Stock Purchase Agreement dated September 20, 1994 by and between Monkwell
Consultants, Ltd. and Nortelco System Teknikk AS**
10.9 Stock Purchase Agreement dated May 16, 1994 by and between Ovington Investments
Ltd. and the Registrant, as amended
10.10 Agreement between Storebro Machine AB and MWD-Vertriebs GmbH
10.11 Agreement, dated April 14, 1993, between Nortelco AS and Audiatur AB.
21.1 List of Subsidiaries of the Registrant**
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in Exhibit 5.1)*
23.2 Consent of McManus & Co., P.C.
23.3 Consent of Ohrlings Coopers & Lybrand
23.4 Consent of Ernst & Young
</TABLE>

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

* To be filed by Amendment.

** Previously Filed.

All other schedules are omitted, as the required information is either
inapplicable or presented in the financial statements or related notes.

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

II-3
<PAGE> 72

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;

(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(5) The undersigned registrant hereby undertakes to provide to the
underwriters, at the closing, specified in the underwriting agreement,
certificates in such denominations and registered in such names as required
by the underwriter to permit prompt delivery to each purchaser.

II-4
<PAGE> 73

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, New York, on the 14th day of January 1997.

NORDIC EQUITY PARTNERS CORP.

By: /s/ BJORN NYSTED
Bjorn Nysted
President and Director

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form S-1 has been signed below by the following
persons in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- ---------------------------- -----------------
<C> <S> <C>

/s/ BJORN NYSTED President and Director January 14, 1997
- -----------------------------------------------
Bjorn Nysted

/s/ GORAN HAGGQVIST Chairman of the Board January 14, 1997
- -----------------------------------------------
Goran Haggqvist

/s/ JAN THUNELL Director January 14, 1997
- -----------------------------------------------
Jan Thunell

/s/ ESPEN KOMNAES Director January 14, 1997
- -----------------------------------------------
Espen Komnaes

/s/ KJELL SJOSTRAND Chief Financial Officer, January 14, 1997
- ----------------------------------------------- Treasurer, and Secretary
Kjell Sjostrand (Principal Accounting and
Financial Officer)
</TABLE>

II-5
<PAGE> 74

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------ -------------------------------------------------------------------------------
<S> <C> <C>
1.1 Form Underwriting Agreement.......................................
1.2 Form of Selected Dealers Agreement*...............................
2.1 Agreement and Plan of Merger, dated as of May 15, 1995, by and
between Sherman, Goelz and Associates and the Company**...........
3.1 Articles of Incorporation, as amended and restated to date
(including certificate of merger)**...............................
3.2 By-Laws**.........................................................
4.1 Form of Underwriter's Warrant*....................................
4.2 Form of Financial Advisory and Investment Banking Agreement with
the Underwriter*..................................................
4.3 Form of Common Stock Certificate**................................
4.4 Form of Common Stock Purchase Warrant**...........................
4.5 Form of Promissory Note used for Bridge Loans**...................
4.6 Form of Warrant Agreement*........................................
5.1 Opinion of Gusrae Kaplan & Bruno*.................................
10.1 Registrant's 1996 Stock Option Plan**.............................
10.2 Employment Agreement with Goran Haggqvist**.......................
10.3 Employment Agreement with Bjorn Nysted**..........................
10.4 Employment Agreement with Kjell Sjostrand**.......................
10.5 Agreement dated May 12, 1994 by and between Universal Commodity
Trading Group, S.A. and the Registrant, as amended................
10.6 Agreement dated November 30, 1995 by and between Nordic Business
Development and the Registrant**..................................
10.7 Agreement dated May 15, 1994 by and between Nortelco AS, the
Registrant and Marc Olmar, as amended**...........................
10.8 Stock Purchase Agreement dated September 20, 1994 by and between
Monkwell Consultants, Ltd. and Nortelco System Teknikk AS**.......
10.9 Stock Purchase Agreement dated May 16, 1994 by and between
Ovington Investments Ltd. and the Registrant, as amended..........
10.10 Agreement between Storebro Machine AB and MWD-Vertriebs GmbH......
10.11 Agreement, dated April 14, 1993, between Nortelco AS and Audiatur
AB................................................................
21.1 List of Subsidiaries of the Registrant**..........................
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in Exhibit
5.1)*.............................................................
23.2 Consent of McManus & Co., P.C.....................................
23.3 Consent of Ohrlings Coopers & Lybrand.............................
23.4 Consent of Ernst & Young..........................................
</TABLE>

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

* To be filed by Amendment.

** Previously Filed.

<PAGE> 1
NORDIC EQUITY PARTNERS CORP.

UNDERWRITING AGREEMENT

New York, New York

____________, 1997

Mason Hill & Co., Inc.
110 Wall Street, 6th Floor
New York, New York 10005

J.W. Barclay & Co., Inc.
One Battery Park Plaza
New York, New York 10004
809-5800

Dear Sirs:

The undersigned, Nordic Equity Partners Corp., a Delaware
corporation (the "Company"), hereby confirms its agreement with Mason Hill &
Co., Inc. ("Mason Hill" or the "Representative") and J.W. Barclay & Co., Inc.
("Barclay;" Mason Hill and Barclay collectively being referred to herein
alternatively as "you" or the "Underwriters"), as follows:

1. INTRODUCTION. The Company and certain Selling Stockholders
propose to issue and sell to the Underwriters, severally and not jointly, in the
respective amounts set forth opposite their names on Schedule I hereto, an
aggregate of 875,000 shares of common stock, $.0001 par value (the "Common
Stock") of the Company (775,000 shares by the Company and 100,000 shares by the
Selling Stockholders), and the Company proposes to issue and sell to the
Underwriters, severally and not jointly, in the respective amounts set forth the
respective amounts set forth opposite their names on Schedule I hereto,
1,750,000 redeemable warrants, each exercisable to purchase one share of Common
Stock (the "Redeemable Warrants"). The shares of Common Stock and
<PAGE> 2

Redeemable Warrants are hereinafter referred to as the "Firm Securities." Upon
your request, as provided in Section 3 of this Agreement, the Company shall also
issue and sell to you up to an additional 131,250 shares of Common Stock and/or
262,500 Redeemable Warrants for the purpose of covering over-allotments in the
sale of the Firm Securities (the "Over-allotment Option"). Such additional
securities are hereinafter referred to as the "Option Securities." The Firm
Securities and the Option Securities are hereinafter sometimes referred to
collectively as the "Securities." The Company also proposes to issue and sell to
you, pursuant to the terms of the warrant agreement, dated ___________, 1997
between you and the Company (the "Underwriters' Warrant Agreement"), warrants
(the "Underwriters' Warrants") to purchase up to 87,500 shares of Common Stock
and/or 175,000 Redeemable Warrants. The Underwriters' Warrants shall be
exercisable during the four (4) year period commencing one (1) year from the
date of the Prospectus (as defined in Section 2(a) hereof) at a price of $8.40
per Share and $.18 per Redeemable Warrant, subject to adjustment in certain
events to protect against dilution. The Securities issuable upon exercise of the
Underwriters' Warrants are hereinafter sometimes referred to as the
"Underwriters' Securities." The Securities, the Underwriters' Warrants and the
Underwriters' Securities are more fully described in the Registration Statement
and the Prospectus referred to below.

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Underwriters as of the date hereof that:

a. The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Registration Statement"), and
an amendment or amendments thereto, on Form S-1 (No. 333-12841), including any
related preliminary prospectus (the "Preliminary Prospectus"), for the
registration of the Securities and the Underwriters' Securities, under the
Securities Act of 1933, as amended (the "Act"), which registration statement and
amendment or amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations (the "Regulations") of
the Commission promulgated under the Act. Before the Registration Statement
becomes effective, the Company will not file any amendment to such Registration
Statement to which you shall have reasonably objected after having been
furnished with a copy thereof. Except as the context may otherwise require, such
Registration Statement, as amended, on file with the Commission at the time the
Registration Statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as of
such time pursuant to paragraph (b) of Rule 430(A) of the Regulations), is
hereinafter called the "Registration Statement," and the form of prospectus, in
the form first filed with the Commission pursuant to

2
<PAGE> 3
Rule 424(b) of the Regulations (or included in the Registration Statement, if no
filing under Rule 424 is required), is hereinafter called the "Prospectus."

b. On the date upon which the Registration Statement is declared
effective by the Commission (the "Effective Date") and at all times subsequent
thereto up to Closing Date I and Closing Date II, if any (as such terms are
defined in Section 3(d) hereof), the Registration Statement and the Prospectus
will comply in all material respects with the applicable provisions of the Act
and the Regulations; neither the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The representation and warranty made in
this Section 2(b) does not apply to statements made or statements omitted in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use in the Registration Statement or
Prospectus or any amendment thereof or supplement thereto.

c. This Agreement, the Underwriters' Warrant Agreement and the
Financial Advisory and Investment Banking Agreement (as defined in Section 5(s)
hereof), have been duly and validly authorized by the Company, and this
Agreement constitutes, and the Public Warrant Agreement, the Underwriters'
Warrant Agreement and the Financial Advisory and Investment Banking Agreement,
when executed and delivered pursuant to this Agreement, will (assuming due
execution by the Underwriters) each constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its respective
terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting creditors' rights generally, (ii) as enforceability of any
indemnification, contribution or exculpation provision may be limited under
applicable Federal and state securities laws, and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. The Securities and the
Underwriters' Warrants to be issued and sold by the Company pursuant to this
Agreement, the Underwriters' Securities issuable upon exercise of the
Underwriters' Warrants and payment therefor, have been duly authorized and, when
issued and paid for, will be validly issued, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal liability by reason
of being such holders; the Securities, the Underwriters' Warrants and the
Underwriters' Securities are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for
the authorization,

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<PAGE> 4
issuance and sale of the Securities, the Underwriters' Warrants and the
Underwriters' Securities has been duly and validly taken. The Underwriters'
Warrants constitute a valid and binding obligation of the Company, enforceable
in accordance with its terms, to issue and sell, upon exercise in accordance
with the terms thereof, the number and type of the Company's securities called
for thereby; except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting creditors' rights generally, (ii) as enforceability of any
indemnification, contribution or exculpation provision may be limited under
applicable Federal and state securities laws, and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.

d. All issued and outstanding securities of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; the
issuances and sales of all such securities complied in all material respects
with applicable Federal and state securities laws; and none of such securities
were issued in violation of the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company.

e. Except as set forth in the Registration Statement and the
Prospectus, the Company has good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal property stated
in the Prospectus to be owned or leased by it, respectively, free and clear of
all liens, encumbrances, claims, security interests, defects and restrictions of
any material nature whatsoever, other than those referred to in the Prospectus
and liens for taxes not yet due and payable.

f. There is no action, suit, proceeding, inquiry, investigation,
litigation or governmental proceeding pending or to the knowledge of the Company
or the Company's subsidiaries (the "Subsidiaries") threatened against, or
involving the properties or business of the Company which if adversely
determined could reasonably be expected to materially and adversely affect the
financial position, or prospects, or business of the Company or its
Subsidiaries, except as referred to in the Registration Statement and
Prospectus.

g. All contracts and other documents required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been described in the Registration Statement or the
Prospectus or filed with the Commission as Exhibits to the Registration
Statement, as required.

h. The financial statements of the Company and the Subsidiaries,
together with the related notes, included in the

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<PAGE> 5
Registration Statement and Prospectus fairly present the financial position and
the results of operations of the Company, at the dates and for the periods to
which they apply; and such financial statements have been prepared in conformity
with generally accepted accounting principles, consistently applied throughout
the periods involved. There has been no material adverse change in financial
condition or results of operations of the Company, or to the knowledge of the
Company, any development involving a prospective change in the condition or
prospects of the Company, financial or otherwise, since the date of the
financial statements included in the Prospectus, except as disclosed therein.

i. McManus & Co., P.C., whose reports are filed with the Commission
as a part of the Registration Statement, are independent accountants as required
by the Act and the Regulations.

j. Except as otherwise set forth in the Prospectus, the Company does
not own, directly or indirectly, an interest in any corporation, partnership,
joint venture, trust or other business entity. The Company and each Subsidiary
is duly qualified and licensed and in good standing as a foreign corporation in
each jurisdiction in which its operations require such qualification or
licensing, except where the failure to be so qualified or licensed would not
have a material adverse affect on the Company. The Company and each Subsidiary
has all requisite corporate power and authority, and all necessary material
authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies, to own or lease its
properties and conduct its business as described in the Prospectus. The Company
and each Subsidiary is and has been doing business in compliance with all such
material authorizations, approvals, orders, licenses, certificates and permits
and with all applicable Federal, state and local laws, rules and regulations,
including but not limited to laws and regulations relating to environmental
matters and employee health and safety matters, except where non-compliance
would not have a material adverse effect on the Company or any Subsidiary, and
none of the aforementioned authorizations, approvals, orders, licenses,
certificates or permits have been suspended or revoked, nor to the knowledge of
the Company are there any proceedings pending or threatened which could result
in a suspension or revocation thereof. The Company has all requisite corporate
power and authority to enter into this Agreement, the Underwriters' Warrant
Agreement and the Financial Advisory and Investment Banking Agreement and to
carry out the provisions and conditions hereof and thereof, and all consents,
authorizations, approvals and orders required in connection therewith have been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the issuance of the Securities
and the Underwriters' Securities, pursuant to this Agreement and the
Underwriters' Warrant Agreement, and as contemplated by the Prospectus, except
with respect to applicable Federal and state securities laws.

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<PAGE> 6
k. The outstanding debt, the property and the business of the
Company conforms in all material respects to the descriptions thereof contained
in the Registration Statement and Prospectus.

l. The Securities, the Underwriters' Warrants, the Underwriters'
Securities and any other securities issued or to be issued by the Company on or
before the Closing Dates (as defined in Section 3(d) hereof) described herein
conform, or will conform when issued, in all material respects to all statements
with respect thereto contained in the Registration Statement and the Prospectus.

m. Except as set forth in the Registration Statement and Prospectus,
no material default exists in the due performance and observance of any term,
covenant or condition of any license, contract, indenture, mortgage, deed of
trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company is a party or by which the Company may be bound
or to which any of the property or assets of the Company are subject which
default would reasonably be expected to have a materially adverse effect on the
financial condition or business of the Company.

n. The Company and the Subsidiaries are not in violation of any term
or provision of their respective Certificates of Incorporation or By-Laws.
Neither the execution and delivery of this Agreement, nor the issuance and sale
of the shares of Common Stock, the Redeemable Warrants, the Underwriters'
Warrants and the Underwriters' Securities, nor the consummation of any of the
transactions contemplated herein, nor the compliance by the Company with the
terms and provisions hereof has materially conflicted with or will materially
conflict with, or has resulted in or will result in a material breach of, any of
the terms and provisions of, or has constituted or will constitute a material
default under, or has resulted in or will result in the creation or imposition
of any lien, charge or encumbrance upon the property or assets of the Company or
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, note, loan or credit agreement or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company or Subsidiary is a party, or by which the
Company is or may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject; nor will such action result in any
material violation of the provisions of the Certificates of Incorporation or the
By-Laws of the Company or the Subsidiaries or any contract or agreement, or any
statute or any order, rule or regulation applicable to the Company or the
Subsidiaries or any other regulatory authority or other governmental body having
jurisdiction over the Company or the Subsidiaries.

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<PAGE> 7
o. Except as disclosed in the Registration Statement and Prospectus,
all taxes which are due and payable from the Company or any Subsidiary have been
paid in full, unless being contested in good faith by the Company or any
Subsidiary, and the Company or any Subsidiary does not have any tax deficiency
or claim outstanding, proposed or assessed against it.

p. Subsequent to the respective dates as of which information is
given in the most recently circulated Preliminary Prospectus included as a part
of the Registration Statement, and except as may otherwise be indicated or
contemplated herein or therein, (i) the Company has not issued any securities,
(ii) declared or paid any dividend or made any other distribution on or in
respect to its capital stock; (iii) incurred any material liability or
obligation, direct or contingent, for borrowed money; or (iv) entered into any
transaction other than in the ordinary course of business.

q. To the Company's knowledge, the Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus or part
thereof.

r. On the Effective Date, (i) the authorization of capital stock of
the Company is as set forth in the Registration Statement, and (ii) not more
than an aggregate of 2,400,000 shares of Common Stock shall be issued and
outstanding excluding: (A) the 1,750,000 shares of Common Stock issuable upon
the exercise of the Redeemable Warrants; (B) up to an additional 131,250 shares
of Common Stock issuable upon the exercise of the Over-allotment Option or the
262,500 shares issuable upon the exercise of the Redeemable Warrants issuable
upon the exercise of the Over-allotment Option; (C) the 87,500 shares issuable
upon exercise of the Underwriters' Warrants or the 175,000 shares issuable upon
exercise of the Redeemable Warrants issuable upon the exercise of the
Underwriters' Warrant (which warrants are identical to the Redeemable Warrants);
and (D) up to 250,000 shares of Common Stock reserved for issuance pursuant to
the Company's 1996 Stock Option Plan (the "Stock Option Plan"). Other than the
shares of Common Stock already issued (within the meaning of the immediately
preceding sentence), the Securities, the Underwriters' Warrants and the
Underwriters' Securities to be offered in or in connection with the public
offering, no other shares of capital stock or securities convertible into
capital stock shall be outstanding or reserved for issuance at the completion of
the proposed public offering without the consent of the Underwriters.
Notwithstanding anything herein contained to the contrary, the Company shall be
authorized to issue options to purchase up to 250,000 shares of Common Stock
pursuant to the Company's Stock Option Plan.

s. Except for the registration rights granted under the
Underwriters' Warrant Agreement, to the Selling Stockholders named in the
Registration Statement, if any, or as disclosed in the

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<PAGE> 8
Prospectus, no holders of any securities of the Company or of any options,
warrants or convertible or exchangeable securities of the Company exercisable
for or convertible or exchangeable for securities of the Company have the right
to include any securities issued by the Company in the Registration Statement or
any registration statement to be filed by the Company.

t. Assuming that there will be two "market makers" for the Common
Stock, at least 300 beneficial owners of the Common Stock and a sufficient
"public float" of the Shares, and that the Company's registration of the Common
Stock pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") becomes effective (all as contemplated by the requirements of the National
Association of Securities Dealers, Inc.), the Common Stock is eligible for
quotation on the Nasdaq Stock Market ("Nasdaq"). The Company has filed a
registration statement with the Commission pursuant to Section 12(g) of the
Exchange Act, and has used its best efforts to have the same declared effective
by the Commission on an accelerated basis on the Effective Date.

u. Except as described in the Prospectus, to the Company's
knowledge, there are no claims, payments, issuances, arrangements or
understandings for services in the nature of a finder's or origination fee with
respect to the sale of the Securities hereunder or any other arrangements,
agreements, understandings, commitments, payments or issuances of securities
with respect to the Company that may affect the Underwriters' compensation, as
determined by the National Association of Securities Dealers, Inc. ("NASD").

v. Neither the Company, nor, to the knowledge of the Company, any of
its employees or officers or directors, agents or any other person acting on
behalf of the Company has, directly or indirectly, given or agreed to give any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent
of a customer, supplier, or official or governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who was, is, or may be in a
position to help or hinder the business of the Company (or assist it in
connection with any actual or proposed transaction) which (i) could reasonably
be expected to subject the Company to any material damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, could reasonably be expected to have had a materially adverse effect
on the assets, business or operations of the Company as reflected in any of the
financial statements contained in the Prospectus, or (iii) if not continued in
the future, could reasonably be expected to materially adversely affect the
assets, business, operations or prospects of the Company.

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<PAGE> 9
w. The Company owns or possesses the requisite licenses or rights to
use all trademarks, service marks, service names, trade names, patents and
patent applications, copyrights, methods, protocols, techniques, technologies,
procedures and other rights (collectively the "Intangibles") described as owned
or used by the Company in the Registration Statement. To the Company's
knowledge, there is no claim, action or proceeding by any person, pending or
threatened, which pertains to or challenges the rights of the Company with
respect to any Intangibles used in the conduct of the business of the Company,
except as described in the Prospectus. To the Company's knowledge, current
products, services and processes of the Company and the Subsidiaries do not
infringe on any Intangibles held by any third party.

x. Except as set forth in the Registration Statement, the Company is
not under any obligation to pay royalties or fees of any kind whatsoever to any
third party with respect to Intangibles it has developed, uses, employs or
intends to use or employ.

y. The Company has generally enjoyed satisfactory employer/employee
relationships with its employees and is in material compliance in all material
respects with all Federal, state and local laws and regulations respecting the
employment of their respective employees and employment practices, terms and
conditions of employment and wages and hours relating thereto. To the Company's
knowledge, there are no material pending or threatened investigations involving
the Company by the U.S. Department of Labor or corresponding foreign agency, or
any other governmental agency responsible for the enforcement of such Federal,
state or local laws and regulations. To the Company's knowledge, there is no
unfair labor practice charge or complaint against the Company pending before the
National Labor Relations Board or corresponding foreign agency or any strike,
picketing, boycott, dispute, slowdown or stoppage pending or threatened against
or involving the Company, or any predecessor entity, and none has occurred. No
representation question exists respecting the employees of the Company. No
collective bargaining agreement or modification thereof is currently in effect
or being negotiated by the Company and its employees. No grievance or
arbitration proceeding is pending under any expired or existing collective
bargaining agreements of the Company.

aa. Neither the Company, nor, to the Company's knowledge, any of its
officers or directors or any of its employees or stockholders, have taken,
directly or indirectly, any action designed to or which has constituted or which
could reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.

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<PAGE> 10
ab. The Company does not maintain nor has it maintained, sponsored
or contributed to any program or arrangement that is an "employee pension
benefit plan," an "employee welfare benefit plan" or a "multiemployer plan" as
such terms are defined in Sections 3(2), 3(1) and 3(37), respectively of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") ("ERISA
Plans"), except for the Stock Option Plan described in the Prospectus. The
Company neither presently maintains or contributes or at any time in the past,
maintained or contributed to a defined benefit plan, as defined in Section 3(35)
of ERISA. The Company has never completely or partially withdrawn from a
"multiemployer plan."

ac. Except as set forth in the Prospectus under "MANAGEMENT" or
"CERTAIN TRANSACTIONS," the Company is not a party to any agreement with any
officer, director or stockholder of the Company or any subsidiary or any
affiliate or associate of any such person or entity which is required to be
disclosed in the Prospectus pursuant to Regulation SK. Except as set forth in
the Prospectus, to the Company's knowledge, no officer, director or stockholder
of the Company or any "affiliate" or "associate" (as these terms are defined in
Rule 405 promulgated under the Regulations) of any such person or entity or the
Company or the Subsidiaries, has or has had, either directly or indirectly, (i)
an interest in any person or entity which (A) furnishes or sells services or
products which are furnished or sold or are proposed to be furnished or sold by
the Company, or (B) purchases from or sells or furnishes to the Company any
goods or services, or (ii) a beneficial interest in any contract or agreement to
which the Company is a party or by which it may be bound or affected.

ad. The minute books of the Company have been made available to
counsel to the Underwriters and contain all available minutes of meetings and
actions by unanimous consent of directors and stockholders since the time of
incorporation and reflect all transactions referred to in such minutes
accurately in all material respects.

ae. The statements in the Prospectus under "RISK FACTORS,"
"BUSINESS," "CERTAIN TRANSACTIONS," "MANAGEMENT" and "DESCRIPTION OF
SECURITIES," insofar as they refer to statements of law, descriptions of
statutes, licenses, rules or regulations or legal conclusions are correct in all
material aspects.

3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES AND UNDERWRITERS'
WARRANTS.

a. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriters 775,000 shares of Common Stock and 1,750,000
Redeemable Warrants, and the Selling Shareholders agree to sell to the

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<PAGE> 11
Underwriters 100,000 shares of Common Stock and the Underwriters agree to
purchase from the Company and the Selling Shareholders such Securities on a firm
commitment basis at a purchase price of $6.30 per share of Common Stock and
$.135 per Redeemable Warrant, to be sold by the Underwriters at an initial
public offering price of $7.00 per share and $.15 per Redeemable Warrant.

b. In addition, upon not less than two (2) days' notice from the
Underwriters to the Company, for a period of forty-five (45) days from the date
of the Prospectus, the Company agrees to sell to the Underwriters at a purchase
price of $6.30 per share of Common Stock and $.135 per Redeemable Warrant, all
or any part of the Option Securities, to be sold by the Underwriters hereunder
at an initial public offering price of $7.00 per share of Common Stock and $.15
per Redeemable Warrant. Delivery of the Option Securities shall be made
concurrently with tender of payment therefore. Option Securities may be
purchased by the Underwriters only for the purpose of covering over-allotments
in the sale of the Firm Securities, and the Underwriters shall have no
obligation to make any over-allotments. No Option Securities shall be delivered
unless the Firm Securities shall be simultaneously delivered or shall
theretofore have been delivered as herein provided.

c. On Closing Date I (defined below in Section 3(d)), the Company
shall issue and sell to the Underwriters, the Underwriters' Warrants, which
warrants shall entitle the holder thereof to purchase up to 87,500 shares of
Common Stock and/or 175,000 Redeemable Warrants. The total purchase price of the
Underwriters' Warrants shall be $10. The Underwriters' Warrants shall be
exercisable in whole or in part for up to an additional 175,000 shares of Common
Stock and/or 175,000 Redeemable Warrants for a period of four (4) years
commencing one (1) year from the date of the Prospectus at a price of $8.40 per
share and $.18 per Redeemable Warrant (120% of the initial public offering price
of the Securities). The Underwriters' Warrant Agreement and form of
Underwriters' Warrant Certificate shall be substantially in the form filed as
Exhibit ______ to the Registration Statement.

d. Payment for the Underwriters' Warrant shall be made on Closing
Date I. Payment for the Firm Securities and the Option Securities shall be made
on each of Closing Date I and Closing Date II, respectively, at the
Underwriters' election by certified or bank cashier's check in New York Clearing
House funds, payable to the order of the Company at the offices of the
Underwriters, or at such other place as agreed upon by the Underwriters and the
Company by wire transfer, upon delivery of certificates (in form and substance
reasonably satisfactory to the Underwriters) representing the Securities or by
confirmation of electronic transfer of the Securities to the Underwriters for
the account of the Underwriters. Delivery and payment for the Firm Securities
shall be made at 10:00 A.M. New York time, on or before the fifth business day
following the public offering or at such

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<PAGE> 12
earlier time as the Underwriters shall determine, or at such other time as shall
be agreed upon by the Underwriters and the Company. The hour and date of
delivery and payment for the Firm Securities are called "Closing Date I." The
Firm Securities shall be registered in such name or names and in such authorized
denominations as the Underwriters may request in writing at least two (2) full
business days prior to Closing Date I. The Company will permit the Underwriters
to examine and package any certificates representing the Firm Securities for
delivery, at least one (1) full business day prior to Closing Date I. Delivery
for each of the Option Securities as provided above shall be made within the two
(2) business day period after notice of exercise to the Company, and against
payment therefor, as provided above. The hour and date of such delivery and
payment made subsequent to Closing Date I for Option Securities is referred to
as "Closing Date II." The Option Securities shall be registered in such name or
names and in such denominations as the Underwriter may request in writing at the
time of exercise of the Over-allotment Option.

e. The Company shall not be obligated to sell or deliver any Firm
Securities except upon tender in U.S. Clearing House funds of payment by the
Underwriter for all the Firm Securities.

4. PUBLIC OFFERING. The Underwriters are to make a public offering of
the Firm Securities and such of the Option Securities as it may determine. The
Securities are to be initially offered to the public at the offering price set
forth on the cover page of the Prospectus (such price being hereinafter called
the "Public Offering Price"). The Underwriters may, at their own expense, enter
into one or more agreements as the Underwriters, in their sole discretion, deems
advisable, with one or more broker-dealers who shall act as dealers or
co-underwriters in connection with such public offering.

5. COVENANTS OF THE COMPANY. The Company covenants and agrees that it
will:

a. Use its best efforts to cause the Registration Statement to
become effective and will notify the Underwriters immediately, and confirm the
notice in writing, (i) when the Registration Statement and any post-effective
amendment thereto becomes effective, (ii) of the issuance by the Commission of
any stop order or of the initiation, or the threatening, of any proceeding for
that purpose, (iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Securities and the
Underwriters' Securities for offering or sale in any jurisdiction or of the
initiation, or the threatening, of any proceeding for that purpose, and (iv) of
the receipt of any comments from the Commission. If the Commission or any state
securities commission shall enter a stop order or

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<PAGE> 13
suspend such qualification at any time, the Company will make every reasonable
effort to obtain promptly the lifting of such order.

b. File the Prospectus (in form and substance reasonably
satisfactory to the Underwriters) or transmit the Prospectus by a means
reasonably calculated to result in filing with the Commission in accordance with
Rule 424, if the Prospectus is required to be so filed.

c. During the time when a prospectus is required to be delivered
under the Act, use all its reasonable best efforts to comply with all
requirements imposed upon it by the Act and the Exchange Act, as now and
hereafter amended, and by the Regulations, as from time to time in force, so far
as necessary to permit the continuance of sales of or dealings in the Securities
and the Underwriters' Securities in accordance with the provisions hereof and
the Prospectus. If at any time when a prospectus relating to the Securities or
the Underwriters' Securities is required to be delivered under the Act, any
event shall have occurred as a result of which, in the opinion of counsel for
the Company or counsel for the Underwriters, the Prospectus, as then amended or
supplemented, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the Prospectus to
comply with the Act, the Company will notify the Underwriters promptly and
prepare and file with the Commission an appropriate amendment or supplement in
accordance with Section 10 of the Act.

d. Deliver to the Underwriters, without charge, such number of
copies of each Preliminary Prospectus and the Prospectus as the Underwriters may
reasonably request and, as soon as the Registration Statement or any amendment
or supplement thereto becomes effective, deliver to the Underwriters two (2)
signed copies of the Registration Statement, including exhibits, and all
post-effective amendments thereto and copies of all exhibits filed therewith or
incorporated therein by reference and signed copies of all consents of certified
experts.

e. Endeavor in good faith, in cooperation with the Underwriters, and
Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP at or prior to the time the
Registration Statement becomes effective, to qualify the Securities and the
Underwriters' Securities for offering and sale under the securities laws of such
jurisdictions as the Underwriters may reasonably designate, provided that no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Underwriters agree that such action is not at the

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<PAGE> 14
time necessary or advisable, use its reasonable best efforts to file and make
such statements or reports at such times as are or may reasonably be required by
the laws of such jurisdiction.

f. Make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Effective Date, an earnings statement (which need not be
certified by independent public or independent certified public accountants
unless required by the Act or the Regulations, but which shall satisfy the
provisions of Section 11(a) of the Act) covering a period of at least twelve
(12) consecutive months beginning after the Effective Date.

g. For a period of five (5) years from the Effective Date, furnish
to the Underwriters copies of such financial statements and other periodic and
special reports as the Company from time to time furnishes generally to holders
of any class of its securities, and promptly furnish to the Underwriters (i) a
copy of each periodic report the Company shall file with the Commission, (ii) a
copy of every press release and every news item and article with respect to the
Company, any Subsidiary or their respective affairs which was released by the
Company or any Subsidiary, (iii) a copy of each Form 8-K prepared by the
Company, and (iv) such additional documents and information with respect to the
Company, the Subsidiaries and their respective affairs or any future
subsidiaries or affiliates of the Company or the Subsidiaries as the
Underwriters may from time to time reasonably request.

h. Apply the net proceeds from the offering received by it in a
manner consistent in all material respects with the caption "USE OF PROCEEDS" in
the Prospectus.

i. Deliver to the Underwriters, prior to filing, any amendment or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Underwriters shall reasonably object, after being furnished such copy, in
writing with reasonable specificity as to the nature and extent of any
objection.

j. For a period of three (3) years from Closing Date I, provide the
Underwriters, upon their request, at the Company's sole expense, (i) with access
to daily consolidated financial transfer sheets relating to the Common Stock and
designate Olde Monmouth Stock Transfer Co., Inc. as transfer agent for the
Company's securities or such other transfer agent mutually agreeable by the
Company and the Underwriters and (ii) to cause the Company's depository to fax a
"special security position report" to the Underwriters on a weekly basis.

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<PAGE> 15
k. For a period of three (3) years after Closing Date I, nominate
and use its best efforts to engage a designee of the Representative, as a
nonvoting advisor to the Company's Board of Directors (the "Advisor") or in lieu
thereof, at the Representative's option, to designate an individual for election
as a director, in which case the Company shall use its best efforts to have such
individual elected as a director. The designee may be a director, officer,
partner, employee or affiliate of the Underwriters and the Representative shall
designate such person in writing to the Board. In the event the Underwriters
shall not have designated such individual at the time of any meeting of the
Board or such person is unavailable to serve, the Company shall notify the
Representative of each meeting of the Board. An individual, if any, designated
by the Representative shall receive all notices and other correspondence and
communications sent by the Company to members of the Board. Such Advisor or
director, as the case may be, shall be entitled to receive reimbursement for all
reasonable costs incurred in attending such meetings including, but not limited
to, food, lodging, and transportation. In addition, such Advisor or Director
shall be entitled to the same compensation as the Company gives to other
non-employee directors for acting in such capacity. The Company further agrees
that, during said three (3) year period, it shall give the Advisor or Director,
as the case may be, the same notice of any meeting of the Company's Board of
Directors as it affords its other directors.

The Company agrees to indemnify and hold the Underwriters and such
Advisor harmless against any and all claims, actions, damages, costs and
expenses, and judgments arising solely out of the attendance and participation
of the Advisor at any such meeting described herein. In the event the Company
maintains a liability insurance policy affording coverage for the acts of its
officers and directors, it agrees, if possible to include the Advisor as an
insured under such policy.

l. Until the sooner of (i) seven (7) years from the date hereof, or
(ii) the sale to the public of the Underwriters' Securities, the Company shall
not take any action or actions which are in the Company's direct control which
may prevent or disqualify the Company's use of Form S-1 (or another appropriate
form) for the registration under the Act of the Underwriters' Securities and the
shares of Common Stock underlying the Redeemable Warrants.

m. For a period of five (5) years from the Effective Date, use its
best efforts to maintain the quotation by Nasdaq of the Securities.

n. Supply the Underwriter with two (2), and Gersten, Savage,
Kaplowitz, Fredericks & Curtin, LLP, counsel to the Underwriters, with three (3)
bound volumes of the underwriting materials within a reasonable time after the
latest Closing Date.

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o. For a period of two (2) years from the Effective Date, not issue
any other shares of Common Stock or Preferred Stock or securities convertible
into or exercisable for Common Stock or Preferred Stock without the prior
written consent of the Representative, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, the Company may issue securities (A)
upon (i) the exercise of any warrants or options outstanding on the date hereof
pursuant to the terms thereof, and (ii) the exercise of the Underwriters'
Warrant, (B) pursuant to the Stock Option Plan described in the Prospectus or
subsequently adopted or (C) in connection with any merger or acquisition of
another entity by the Company.

p. So long as the Securities or the Underwriters' Securities are
registered under the Exchange Act, hold an annual meeting of stockholders for
the election of directors within 180 days after the end of each of the Company's
fiscal years and, within 150 days after the end of each of the Company's fiscal
years, provide the Company's stockholders with the audited financial statements
of the Company as of the end of the fiscal year just completed prior thereto.
Such financial statements shall be those required by Rule 14a-3 under the
Exchange Act and shall be included in an annual report pursuant to the
requirements of such Rule.

q. Engage a financial public relations firm reasonably satisfactory
to the Representative as soon as possible after Closing Date I, and continuously
engage such firm, or an acceptable substitute firm for at least the period
ending twelve (12) months after Closing Date I.

r. Enter into the Underwriters' Warrant Agreement and the Financial
Advisory and Investment Banking Agreement (the "Consulting Agreement") in
substantially the form filed as Exhibits to the Registration Statement.

s. As soon as possible after Closing Date I, but in no event later
than 10 trading days after the Effective Date, take all necessary and
appropriate actions to be included in Standard and Poor's Corporation
Descriptions or other equivalent securities manual and to maintain its listing
therein for a period of five (5) years from the Effective Date.

t. Cause all of the Company's stockholders, to enter into written
agreements (the "Lock-up Agreements") that, for a period of two years from the
Effective Date, they will not, without the consent of the Underwriters, (i)
publicly sell any securities of the Company owned directly or beneficially by
them (as defined in the Exchange Act); or (ii) otherwise sell, or transfer such
securities unless the transferee agrees in writing to be bound by an identical
lock-up.

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<PAGE> 17
u. Use its best efforts to obtain key-man life insurance in the
amount of $1,000,000 on the life of Rodney I. Smith with the Company as
beneficiary of such policy.

v. Use its best efforts to qualify its Common Stock and Redeemable
Warrants for listing on the NASDAQ National Market System ("NMS") or in the
alternative the Boston Stock Exchange (the "BSE").

w. For a period of two years from the Effective Date, the Company
shall not issue any of its securities in any offering pursuant to Regulation S
under the 1933 Act, without the prior written consent of the Representative,
which consent shall not be unreasonably withheld.

x. Designate the Representative as the Company's exclusive Warrant
Solicitation Agents in the event of any third-party solicitation of the exercise
of the Redeemable Warrants, in connection with a redemption of the Redeemable
Warrants or otherwise, and shall pay to the Representative a Warrant
Solicitation fee of five (5%) percent of the exercise price of all such
solicited Redeemable Warrants, subject to the rules and regulations of the NASD
with regard to such fees.

y. Neither the Company nor any representative of the Company has
made or shall make any written or oral representation in connection with the
Offering and sale of the Securities or the Underwriters' Warrant which is not
contained in the Prospectus, which is otherwise inconsistent with or in
contravention of anything contained in the Prospectus, or which shall constitute
a violation of the Act, the Rules and Regulations, the Exchange Act or the rules
and regulations promulgated under the Exchange Act.

z. For so long as any Redeemable Warrant is outstanding, the Company
shall, at its own expense: (i) use its reasonable best efforts to cause
post-effective amendments to the Registration Statement, or new registration
statements relating to the Redeemable Warrants and the Common Stock underlying
the Redeemable Warrants to become effective in compliance with the Act and
without any lapse of time between the effectiveness of the Registration
Statement and of any such post-effective amendment or new registration
statement; provided, however, that the Company shall have no obligation to
maintain the effectiveness of such Registration Statement or file a new
Registration Statement, or to keep available a prospectus at any time at which
such registration or prospectus is not then required; (ii) cause a copy of each
Prospectus, as then amended, to be delivered to each holder of record of a
Redeemable Warrant; (iii) furnish to the Underwriters and dealers as many copies
of each such Prospectus as the Underwriters or dealers may reasonably request;
and (iv) maintain the "blue sky" qualification or registration of the Redeemable

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<PAGE> 18
Warrants and the Common Stock underlying the Redeemable Warrants, or have a
currently available exemption therefrom, in each jurisdiction in which the
Securities were so qualified or registered for purposes of the Offering.

ab. The Company shall engage Gersten, Savage, Kaplowitz, Fredericks
& Curtin, LLP to provide the Underwriters, at the Closing and quarterly
thereafter, until the sooner of (i) three years from the Effective Date; or (ii)
such time as the Common Stock is quoted on the Nasdaq National Market, with an
opinion setting forth those states in which the Common Stock may be traded in
non-issuer transactions under the blue sky laws of the 50 states. The Company
shall pay such counsel a one-time fee of $12,500 at the Closing for such
opinions.

6. PAYMENT OF EXPENSES.

a. The Company hereby agrees to pay all expenses (other than fees of
counsel to the Underwriters) in connection with the Offering, including but not
limited to, (i) the preparation, printing, filing and mailing (including the
payment of postage and overnight delivery with respect to such mailing) of the
Registration Statement and the Prospectus and related documents, including the
cost of all copies thereof and of the Preliminary Prospectus and of the
Prospectus and any amendments thereof or supplements thereto supplied to the
Underwriters in quantities as hereinabove stated, (ii) the printing, engraving,
issuance and delivery of the shares of Common Stock, the Redeemable Warrants,
and the Underwriters' Warrants, (iii) the qualification of the Securities, the
Underwriters' Warrants and the Underwriters' Securities under state or foreign
securities or "Blue Sky" laws and determination of the status of such securities
under legal investment laws, including the costs of printing and mailing the
"Preliminary Blue Sky Memorandum," and "Supplemental Blue Sky Memorandum" and
"Legal Investments Survey," if any, and the fees and disbursements of counsel
for the Underwriters relating to Blue Sky matters (all of which fees under this
item (iii) shall be payable by the Company in the sum of $35,000 of which
$10,000 has previously been paid), (iv) advertising costs and expenses including
but not limited to the reasonable costs and expenses in connection with the
"road show," information meetings and presentations, bound volumes, cubes and
"tombstones" in the Wall Street Journal, New York Times, and Washington Post and
prospectus memorabilia, altogether in an amount not to exceed $15,000, (v) fees
and expenses of the transfer agent and warrant agent, (vi) application and
listing fees for inclusion in Moody's OTC Manual or Standard and Poor's
Corporation Descriptions or other equivalent securities manuals, and (vii) the
fees payable to the NASD and Nasdaq. The $35,000 payment to counsel for the
Underwriters shall not include fees of special counsel if same is required to be
incurred in a merit review state which may require local counsel. In this
connection, Blue Sky applications shall be

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<PAGE> 19
made in such states and jurisdictions as shall be requested by the Underwriters.
Payments due shall be made on Closing Date I.

b. The Company shall pay to the Underwriters an aggregate
non-accountable expense allowance, in addition to the expenses payable pursuant
to Section 6(a), equal to three (3%) percent of the gross proceeds received by
the Company from the sale of the Securities. In the event that the Underwriters
terminate the Offering or is unable to consummate the Offering within nine (9)
months of the date hereof, the advances toward the non-accountable expense
allowance shall become accountable and shall be returnable to the Company to the
extent the Underwriters' out-of-pocket expenses are less than the amount
advanced to the Underwriter, so that the Underwriters is reimbursed only for its
actual accountable out-of-pocket expenses.

7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Securities, as provided herein, shall be
subject to the continuing accuracy in all material aspects of the
representations and warranties of the Company as of the date hereof and as of
each of the Closing Dates, to the accuracy in all material respects of the
statements of officers of the Company made pursuant to the provisions hereof and
to the performance by the Company of its obligations hereunder in all material
respects and to the following conditions:

a. The Registration Statement shall have become effective not later
than 5:00 p.m., New York time, on the date of this Agreement or such later date
and time as shall be consented to in writing by you, and, at each of the Closing
Dates, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or contemplated by the Commission and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Gersten, Savage, Kaplowitz &
Curtin, LLP, counsel to the Underwriters.

b. At Closing Date I, the Underwriters shall have received the
favorable opinion of Gusrae, Kaplan & Bruno, counsel to the Company, dated
Closing Date I, addressed to the Underwriters and in form and substance mutually
satisfactory to Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP, counsel to
the Underwriters, and Gusrae, Kaplan & Bruno.

c. On or prior to each of Closing Date I and Closing Date II,
counsel for the Underwriters shall have been furnished such documents,
certificates and opinions as it may reasonably require for the purpose of
enabling it to review or pass upon the matters referred to in Section 7(b), or
in order to

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<PAGE> 20
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.

d. Prior to each of Closing Date I and Closing Date II, (i) there
shall have been no material adverse change, or development involving a material
adverse prospective change, in the condition or prospects of the business
activities, financial or otherwise, of the Company and its Subsidiaries taken as
a whole from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus; (ii) there shall have been no
transaction, not in the ordinary course of business, entered into by the Company
or the Subsidiaries from the latest date as of which their respective financial
conditions are set forth in the Registration Statement and Prospectus which is
materially adverse to the Company; (iii) the Company or the Subsidiaries shall
not be in default under any provision of any instrument relating to any
outstanding indebtedness which default would have a material adverse effect on
the Company; (iv) no amount of the assets of the Company or the Subsidiaries
shall have been pledged or mortgaged, except as set forth in the Registration
Statement and Prospectus; (v) no action, suit or proceeding, at law or in
equity, shall be pending or threatened against the Company or the Subsidiaries
before or by any court or Federal or state commission, board or other
administrative agency wherein an unfavorable result, decision, ruling or finding
would adversely affect the business, prospects, operations, or financial
condition or income of the Company, except as set forth in the Registration
Statement and Prospectus; (vi) no stop order shall have been issued under the
Act and no proceedings with respect thereto shall have been initiated or
threatened by the Commission; (vii) the market for securities in general or
political, financial or economic conditions shall not have materially adversely
changed from those reasonably foreseeable as of the date hereof as to render it
impracticable in the Underwriter's reasonable judgment to make a public offering
of the Securities, and there has not been a material adverse change in market
levels for securities in general or financial or economic conditions which
render it inadvisable in the Underwriters' judgment to proceed; and (viii) there
shall not have commenced or occurred any war or Act of God or other calamity
which would have a material adverse effect on, or result in a material loss to,
the Company.

The Company agrees and acknowledges that the Underwriters shall be
the sole determining parties as to the presence of any such conditions, events,
occurrences and provisions set forth in this Section 7(d).

e. At each of Closing Date I and Closing Date II, the Underwriters
shall have received a certificate of the Company signed by the President and the
Secretary of the Company, dated Closing Date I and Closing Date II,
respectively, to the effect that the conditions set forth in section 7(d)(i)
through (vi) above

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<PAGE> 21
have been satisfied and that, as of Closing Date I and Closing Date II,
respectively, the representations and warranties of the Company set forth in
Section 2 hereof are true and correct.

f. By the Effective Date, the Underwriters shall have received
clearance from the NASD as to the amount of compensation allowable or payable to
the Underwriters, as described in the Registration Statement.

g. At the time this Agreement is executed, and at each of Closing
Date I and Closing Date II, the Underwriters shall have received a letter,
addressed to the Underwriters and in form and substance reasonably satisfactory
in all respects (including the nonmaterial nature of the changes or decreases,
if any, referred to in clause (3) below) to the Underwriters and to Gersten,
Savage, Kaplowitz, Fredericks & Curtin, LLP, counsel for the Underwriters, from
McManus & Co., P.C., dated, as of the date of this Agreement and as of each of
Closing Date I and Closing Date II:

(1) confirming that they are independent accountants with
respect to the Company within the meaning of the Act and the applicable
Regulations;

(2) stating that in their respective opinions the financial
statements of the Company included in the Registration Statement and
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
Regulations thereunder;

(3) stating that, on the basis of a reading of the latest
available minutes of the stockholders and boards of directors and the
various committees of the boards of directors of the Company and any
current or former subsidiaries of the Company, consultations with
officers and other employees of the Company and the Subsidiaries
responsible for financial and accounting matters, a reading of the
latest interim financial statements of the Company and the Subsidiaries
(which, with respect to the Company, shall be as of a date not later
than thirty (30) days prior to the Effective Date) and other specified
procedures and inquiries, nothing has come to their attention which
would lead them to believe that (A) either the audited consolidated
financial statements for the years ended December 31, 1993, 1994 and
1995 of the Company in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the Act, and the Regulations or are not fairly
presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited

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<PAGE> 22
financial statements of the Company included in the Registration
Statement, (B) at a date not more than five (5) days prior to the
Effective Date, there was any change in the capital stock or long-term
debt of the Company, or any decrease in the stockholders' equity of the
Company as compared with amounts shown in the December 31, 1995 balance
sheet included in the Registration Statement, other than as set forth
in or contemplated by the Registration Statement, or, if there was any
decrease, setting forth the amount of such decrease, and (C) during the
period from December 31, 1995 to a specified date not more than five
(5) days prior to the Effective Date there was any decrease in net
revenues, increase in net losses or increases in net losses per common
share of the Company, in each case as compared with the corresponding
period beginning December 31, 1995 other than as set forth in or
contemplated by the Registration Statement, or, if there was any such
increase or decrease, setting forth the amount of such increase or
decrease;

(4) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and
other financial information pertaining to the Company and the
Subsidiaries set forth in the Prospectus in each case to the extent
that such amounts, numbers, percentages, statements and information may
be derived from the general accounting records, including worksheets,
of the Company and the Subsidiaries and excluding any questions
requiring an interpretation by legal counsel, with the results obtained
from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an
examination in accordance with generally accepted auditing standards)
set forth in the letter and found them to be in agreement; and

(5) statements as to such other matters incident to the
transaction contemplated hereby as the Underwriter may reasonably
request.

h. All proceedings taken in connection with the authorization,
issuance or sale of the Securities, the Underwriters' Warrants and the
Underwriters' Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Underwriters and to Gersten, Savage, Kaplowitz,
Fredericks & Curtin, LLP counsel to the Underwriters.

i. On each of Closing Date I and Closing Date II, there shall have
been duly tendered to you for your account the

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<PAGE> 23
appropriate number of Securities and individually for each Underwriter's own
account the Underwriters' Warrants.

j. No order suspending the sale of the Securities in any
jurisdiction designated by you pursuant to Section 5(e) hereof shall have been
issued on either Closing Date I or Closing Date II, and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Underwriters or
the Company, shall be contemplated.

k. Prior to each of the Closing Date I and Closing Date II there
shall not have been received or provided by the Company's independent public
accountants or attorneys, qualifications to the effect of either difficulties in
furnishing certifications as to material items including, without limitation,
information contained within the footnotes to the financial statements, or as
affecting matters incident to the issuance and sale of the Securities or as to
corporate proceedings or other matters.

l. On or prior to Closing Date I, the Underwriters' Warrant
Agreement and the Financial Advisory and Investment Banking Agreement shall have
been executed and delivered by the Company, and the Lock-Up Agreements shall
have been executed and delivered by all of the Company's existing stockholders.

Any certificate signed by any officer of the Company and delivered to
the Underwriters or to counsel to the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the
statements made therein. If any condition to the Underwriters' obligations
hereunder to be fulfilled prior to or at any Closing Date is not so fulfilled,
the Underwriters may terminate this Agreement or, if the Underwriters so elect,
may waive any such conditions which have not been fulfilled or extend the time
for their fulfillment.

8. INDEMNIFICATION.

a. The Company shall indemnify and hold each of the Underwriters,
and each controlling person, if any, who controls each of the Underwriters
(within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act), harmless against any and all liabilities, claims, lawsuits, including any
and all awards and/or judgments to which it may become subject under the Act,
the Exchange Act or any other Federal or state statute, at common law or
otherwise, insofar as said liabilities, claims and lawsuits (including awards
and/or judgments) arise out of or are in connection with the Registration
Statement, Prospectus and related Exhibits filed under the Act, except for any
liabilities, claims and lawsuits (including awards and/or judgments), arising
out of acts or omissions of the Underwriters. In addition, the Company shall
also indemnify and hold each of the Underwriters harmless

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<PAGE> 24
against any and all costs and expenses, including reasonable counsel fees,
incurred or relating to the foregoing liabilities, claims and lawsuits to which
the indemnity applies.

The Underwriters shall give the Company within two (2) business days
of the time that the Underwriters first become aware thereof notice of any such
liability, claim or lawsuit which the Underwriters contend is the subject matter
of the Company's indemnification, and the Company thereupon shall be granted the
right to take any and all necessary and proper action, at its sole cost and
expense, with respect to such liability, claim and lawsuit, including the right
to settle, compromise and dispose of such liability, claim or lawsuit.

The Underwriters, severally and not jointly, shall indemnify and
hold the Company, and each controlling person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, harmless against any and all liabilities, claims, lawsuits, including any
and all awards and/or judgments to which it may become subject under the Act,
the Exchange Act or any other Federal or state statute, at common law or
otherwise, insofar as said liabilities, claims and lawsuits (including awards
and/or judgments) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact required to be stated or necessary to make
the statement therein, not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Company by or on behalf of
the Underwriters for inclusion in the Registration Statement or Prospectus or
any amendment or supplement thereto. In addition, the Underwriters, severally
and not jointly, shall also indemnify and hold the Company harmless against any
and all costs and expenses, including reasonable counsel fees, incurred or
relating to the foregoing.

The Company shall give to the Underwriter within two (2) business
days of the time that the Company first becomes aware thereof prompt notice of
any such liability, claim or lawsuit which the Company contends is the subject
matter of the Underwriters' indemnification and the Underwriters thereupon shall
be granted the right to take any and all necessary and proper action, at its
sole cost and expense, with respect to such liability, claim and lawsuit,
including the right to settle, compromise or dispose of such liability, claim or
lawsuit.

b. In order to provide for just and equitable contribution under the
Act in any case in which (i) any person entitled to indemnification under this
Section 8 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 8

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<PAGE> 25
provides for indemnification in such case, or (ii) contribution under the Act
may be required on the part of any such person in circumstances for which
indemnification is provided under this Section 8, then, and in each such case,
the Company and each of the Underwriters shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after any
contribution from others) in such proportion taking into consideration the
relative benefits received by each party from the offering covered by the
Prospectus (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was assessed, the
opportunity to correct and prevent any statement or omission and other equitable
considerations appropriate under the circumstances; provided, however, that
notwithstanding the above in no event shall the Underwriters, in the aggregate,
be required to contribute any amount in excess of 10% of the initial public
offering price of the Securities; and provided, that, in any such case, no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

Within fifteen (15) days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action,
suit or proceeding, such party will, if a claim for contribution in respect
thereof is to be made against another party (the "contributing party"), notify
the contributing party of the commencement thereof, but the omission so to
notify the contributing party will not relieve it from any liability which it
may have to any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and such party
notifies a contributing party or his or its representative of the commencement
thereof within the aforesaid fifteen (15) days, the contributing party will be
entitled to participate therein with the notifying party and any other
contributing party similarly notified. Any such contributing party shall not be
liable to any party seeking contribution on account of any settlement of any
claim, action or proceeding effected by such party seeking contribution without
the written consent of such contributing party. The indemnification provisions
contained in this Section 8 are in addition to any other rights or remedies
which either party hereto may have with respect to the other or hereunder.

9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Dates, and such representations, warranties and
agreements of the Underwriters and the Company, including the indemnity
agreements contained in Section 8 hereof, shall remain operative and in full
force and effect regardless of any investigation made

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<PAGE> 26
by or on behalf of any of the Underwriters, the Company or any controlling
person, and shall survive termination of this Agreement or the issuance and
delivery of the Securities to the Underwriters until the earlier of the
expiration of any applicable statute of limitations or the third anniversary of
Closing Date II, at which time the representations, warranties and agreements
shall terminate and be of no further force and effect.

10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION HEREOF.

a. This Agreement shall become effective at 9:30 a.m., New York
time, on the first full business day following the day on which the Registration
Statement becomes effective or at the time of the initial public offering by the
Underwriters of the Securities, whichever is earlier. The time of the initial
public offering, for the purpose of this Section 10, shall mean the time, after
the Registration Statement becomes effective, of the release by the Underwriters
for publication of the first newspaper advertisement which is subsequently
published relating to the Securities or the time, after the Registration
Statement becomes effective, when the Securities are first released by the
Underwriters for offering by the Underwriters or dealers by letter or telegram,
whichever shall first occur. The Underwriters may prevent this Agreement from
becoming effective without liability to any other party, except as noted below,
by giving the notice indicated below in this Section 10 before the time this
Agreement becomes effective. The Underwriters agree to give the undersigned
notice of the commencement of the offering described herein.

b. The Underwriters shall have the right, in their sole discretion,
to terminate this Agreement, including without limitation, the obligation to
purchase the Firm Securities and the obligation to purchase the Option
Securities after the exercise of the Over-Allotment Option, by notice given to
the Company prior to delivery and payment for all the Firm Securities or the
Option Securities, as the case may be, only if any of the conditions enumerated
in Section 7 are not either fulfilled or waived by the Underwriters on or before
any Closing Date.

c. If the Underwriters elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section 10, the
Company shall be notified on the same day as such election is made by the
Underwriters by telephone or telegram, confirmed by letter.

d. Notwithstanding any contrary provision contained in this
Agreement, any election hereunder or termination of this Agreement, and whether
or not this Agreement is otherwise carried out, the provisions of Section 8
shall not be in any way affected by such election or termination or failure to
carry out the terms of this Agreement or any part hereof.

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<PAGE> 27
11. NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to Mason Hill, shall be
mailed, delivered or telegraphed and confirmed to Mason Hill & Co., Inc., 110
Wall Street, New York, New York 10005, Attention: President, if to Barclay,
shall be mailed, delivered or telegraphed and confirmed to J.W. Barclay, One
Battery Park Plaza, New York, New York 10005, Attention: President, if to either
of or both Underwriters, with a copy to Gersten, Savage, Kaplowitz, Fredericks &
Curtin, LLP, 101 East 52nd Street, New York, New York 10022, Attention: Jay
Kaplowitz, Esq., and if to the Company, shall be mailed, delivered or
telegraphed and confirmed to Nordic Equity Partners Corp., 120 Wall Street, New
York, New York 10005, Attention: Bjorn Nysted, with a copy to Gusrae, Kaplan &
Bruno, 120 Wall Street, New York, New York 10005, Attention: Richard Friedman,
Esq.

12. PARTIES. This Agreement shall inure solely to the benefit of and
shall be binding upon, the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 8 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained.

13. CONSTRUCTION. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflict of laws. The parties agree to submit themselves to the
jurisdiction of the courts of the State of New York or of the United States of
America for the Southern District of New York, which shall be the sole tribunals
in which any parties may institute and maintain a legal proceeding against the
other party arising from any dispute in this Agreement. In the event either
party initiates a legal proceeding in a jurisdiction other than in the courts of
the State of New York or of the United States of America for the Southern
District of New York, the other party may assert as a complete defense and as a
basis for dismissal of such legal proceeding that the legal proceeding was not
initiated and maintained in the courts of the State of New York or of the United
States of America for the Southern District of New York, in accordance with the
provisions of this Section 13.

14. ENTIRE AGREEMENT. This Agreement, the Underwriters' Warrant
Agreement and the Financial Advisory and Investment Banking Agreement contain
the entire agreement between the parties hereto in connection with the subject
matter hereof and thereof.

27
<PAGE> 28
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.

Very truly yours,

NORDIC EQUITY PARTNERS CORP.

By: __________________________________________
Name:
Title

NORDIC EQUITY PARTNERS CORP., pursuant to its
power of attorney as granted to it by the
Selling Stockholders.

______________________________________________

Accepted as of the date first above written.

New York, New York

MASON HILL & CO., INC., Acting on behalf of itself and as the Representative of
the other Underwriter named in Schedule I hereof

By: ________________________________
Name:
Title:

28
<PAGE> 29
SCHEDULE I

<TABLE>
<CAPTION>
Number of Number of
Name of Underwriters Shares Warrants
- -------------------- ------ --------
<S> <C> <C>
Mason Hill & Co., Inc.
------- ---------
J.W. Barclay & Co., Inc.
------- ---------
TOTAL 875,000 1,750,000
======= =========
</TABLE>

<PAGE> 1
Exhibit 10.5

AGREEMENT
---------

This agreement, made and entered into this 12th day of May, 1994, is by and
between UNIVERSAL COMMODITY TRADING GROUP S.A. as seller (hereinafter referred
to as "the Seller") and SHERMAN, GOELZ & ASSOCIATES (under name change to First
Nordic Equity Partners Corp) as buyer (hereinafter reffered to as "the Buyer").

WHEREAS: Universal Commodity Trading Group S.A. owns 80%, or 1,920 shares of the
total 2,400 shares of common stock, par value NOK 1,000:-, issued and
outstanding in the Norwegian company NORTELCO A/S, registered in Norway No:
954543323 (hereinafter referred to as "the Company").

WHEREAS: The Buyer is willing to buy all 1,920 shares owned by the Seller.

WHEREAS: The Seller is willing to sell all the 1,920 shares the Buyer is willing
to purchase.

WHEREAS: The Buyer have conducted a due dilligence of the Company and its
subsidiaries.

NOW, THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as follows:

1). Upon and subject to the terms and conditions set forth in this agreement,
the Seller hereby agrees to sell to the Buyer on the Closing date provided for
in section 2 hereof, free and clear of all liens, pledges and encumbrances of
every kind, character and descriptions whatsoever, 1,920 shares of the issued
and outstanding shares of the Company's common stock.

2). (a). The sale and purchase provided for in this agreement shall be
consummated at a closing to be held at the offices of Hagginvest AB, Stockholm,
Sweden ("the Agent"), on the 26th day of May, 1994 ("Closing date", "Closing");
and after all conditions precedent to the consummation thereof have been
satisfied or at such other date, time and place as the Seller and Buyer mutually
agree upon.

(b). At the Closing the Seller shall deliver to the Buyer:
(i) certificates evidencing and representing of the issued and outstanding
shares of Common Stock of the Copmany, all of which are being sold hereunder,
duly endorsed in blank or accompanied by stock powers duly executed in blank,
with signatures guaranteed, in proper form for transfer; (ii) a copy of the
articles of incorporation of the Company and its subsidiaries and all, if any,
amendments thereto, a copy of the Company's and the subsidiaries certificates of
incorporation; (iii) correct and complete copies of the by-laws, minutes of
directors meetings or consent to action by the shareholders of the Company and
its subsidiaries, and similar corporate documents of the Company and the
subsidiaries.

3). The consideration to be paid to the Seller by the Buyer for 1,920 shares of
the issued and outstanding Common Stock of the Company, shall be NOK
30,000,000:-, inclusive of all commissions due. Such purchase price shall be
paid as follows:

<PAGE> 2

(a). Five Million Five Hundred Thousand Norwegian Crowns (5,500,000: -) in
cash at the closing, the cash consideration shall be paid by the Buyer to, a
by the Agent, nominated bank account on behalf of the Seller.

(b). Six Million Seven Hundred Thousand Norwegian Crowns (NOK 6,700,000:-)
shall be paid in the form of shares of the Buyer's Common Stock, before or
latest by 25.10.94, the amount of shares the Seller shall receive shall be
determined by the trading price of the Buyer's Common Stock on either the NASD
bullentin board, the AMEX Stock Exchange, New York or the NASDAQ Stock
Exchange, Whasington. Irrespectively of whichever of the mentioned market
places the Buyer's Common Stock is at that date trading and at which price it
is trading, the Seller shall receive the equivalent amount in USD of NOK
6,700,000 in shares of the Buyer's Common Stock. EX formula: Trading price /
$6,00 = 151,927 shares / (exchange rate NOK/USD = 7,35), 151,927 x $6,00 =
$911,562 x 7,35 = NOK 6,700,000.

(c). The remaining balance of the purchase price i.e. NOK 17,800,000:-,
shall be paid by the Buyer in cash latest by 31.12.94, the Seller shall receive
an interest of 12% p.a. on the outstanding balance, interest payments shall
irrevocably be made by the Buyer on a regular monthly basis to the Seller's
nominated bank account, commencing 25.06.94, and running until the outstanding
balance of the purchase price have been fully paid. The 1,920 shares of Common
Stock in Nortelco A/S purchased by the Buyer pursuant to this agreement, shall
be pledged to the Seller as collateral for the Buyers fulfillment of its
obligations under this agreement (exhibit "A", Pledge Agreement).

4). The Seller have good and marketable title to the issued and outstanding
Common Stock of the Company to be transferred and the absolute right hereunder
and necessary authority to sell, assign and transfer all of said stock to the
Buyer, free and clear of all liens, claims, pledges and encumbrances of any
kind.

5). The Seller / Company will, on or before Closing, provide the Buyer with
audited consolidated financial statements for fiscal years ended December 31,
1990, 1991, 1992 and 1993, further, the Seller / Company shall provide the Buyer
with unaudited consolidated financial statements for the first quarter 1994,
including the financial statements for the recently acquired subsidiaries
Audiatur AB, Audiatur A/S and Dynatech AB.

6). Prior to the Closing Date, the Seller will not, except with written prior
consent of the Buyer, permit the Company to declare or pay dividend, issue or
authorize the issuance of any stock, declare any stock split, or issue any other
security convertible into stock or any warranty or option or right for the
purchase of any stock, sell or otherwise dispose of any asset, except in the
ordinary course of business or borrow money or incur any debt or other
obligation, will not permit the Company to be a party to any merger,
consolidation, reorganization or recapitalization, and the Seller will cause
the Company to conduct its affairs in the usual and ordinary course of
business.

7). The Seller will on Closing Date provide the Buyer with up to date (day
before Closing) unaudited financial statements for the Company and its
subsidiaries, guaranteeing and evidencing that there have been no adverse change
in the financial condition, operations, properties and assets of the Company or
the subsidiaries since the Buyer cuncluded its due dilligence work.

<PAGE> 3

8). The Seller and the Buyer shall bear their own expenses and costs in
connection with this agreement and the transactions contemplated herein.

9). This instrument contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby and shall not be changed or
terminated except by written amendment signed by the parties hereto.

10). This agreement shall be construed in accordance with and goverened by
English law, any dispute arising from this agreement, which the parties
themselvs can not resolve, shall be referred to Arbitration in London.

Stockholm, as above

/s/ Kjell G. Lowgren /s/ Mats U. Hartling
- ---------------------------- ------------------------
Kjell G. Lowgren Mats U. Hartling
Universal Commodity Trading Group S.A. Sherman, Goelz & Associates
Seller Buyer

<PAGE> 4

STOCK PURCHASE AGREEMENT

This agreement, made and entered into this 4th day of October, 1994, is by and
between Universal Commodity Trading Group S.A. as seller (hereinafter referred
to as "the Seller") and First Nordic Equity Partners Corp. (formerly Sherman,
Goelz & Associates) as buyer (hereinafter referred to as "FNEPC" or
"the Buyer").

Whereas: University Commodity Trading Group S.A. has sold 1,920 shares (or 80%)
of the total 2,400 shares of Common Stock issued and outstanding in the
Norwegian company Nortelco AS, registered in Norwas No 954543323, (hereinafter
referred to as "the Company") to FNEPC.

Whereas: The original purchase agreement drawn up by the parties hereto was
signed by the parties on May 12, 1994.

Whereas: The parties now have agreed to amend the original terms and conditions
for the sale (as incorporated hereinto), and subsequently, by signing this
agreement, declared the original purchase agreement and exhibit "A" attached
thereto, dated May 12, 1994, null and void.

Whereas: The Seller has received NOK 5,500,000 in cash, as downpayment for the
shares sold and transferred to FNEPC.

Whereas: The Buyer has conducted a due diligence of the Company and its
subsidiaries, and received in his possession all documentation concerning the
Company and its subsidiaries, their business and affairs, such as books,
bankaccounts, articles of incorporation, by-laws, registration certificates
etc.

Now, therefore, in consideration of the mutual agreement hereinafter set forth,
the parties hereto agree as follows:

1) Upon and subject to the terms and conditions set forth in this agreement,
the Seller hereby agrees to sell to the Buyer, free and clear of all liens,
pledges and encumbrances of every kind, character and description whatsoever,
1,920 (or 80%) of the total outstanding 2,400 shares of Common Stock in the
Company.

2) The consideration to be paid to the Seller by the Buyer for the 1,920 shares
of the Company's Common Stock, shall be NOK (Norwegian Crowns) 16,000,000:-
inclusive of all commissions etc. Such purchase price has been paid/shall be
paid as follows:
a) A downpayment of NOK 5,500,000:- (Five Million Five Hundred Thousand) in
cash has been paid by the Buyer and received by the Seller.
b) The balance of NOK 10,500,000:- shall be paid by the Buyer in form of
580,803 shares of the Buyer's Common Stock (par value $.001), the Seller shall
receive said number of shares within 60 calendar days from the date of this
agreement.

3) The Seller has good and marketable title to the 1,920 shares of the Common
Stock of the Company to be transferred and the absolute ritht hereunder and
necessary authority to sell, assign and transfer all of said stock to the Buyer,
free and clear of all liens, claims, pledges and encumbrances of any kind.

<PAGE> 5

4) This instrument contains the entire agreement between the parties hereto with
respect to the transactions contemplated hereby and shall not be changed or
terminated except by written amendment signed by the parties hereto.

5) This agreement shall be construed in accordance with, and governed by,
English law, any dispute arising from this agreement, which the parties
hereto can not resolve themselves, shall be referred to Arbitration in London.

Stockholm as above

/s/ Mats Hartling /s/ Mats Hartling
- ----------------------------- ----------------------------------
Mats Hartling Mats Hartling
Universal Commodity Trading Group S.A. First Nordic Equity Partners Corp.
Seller Buyer

<PAGE> 6

STOCK PURCHASE AGREEMENT

This agreement, made and entered into this 23rd day of November, 1994, is by
and between Universal Commodity Trading Group, S.A. (hereinafter referred to as
"the Seller") and First Nordic Equity Partners Corp. (hereinafter referred to
as "FNEPC" or "the Buyer").

WHEREAS, pursuant to a Stock Purchase Agreement dated May 12, 1994 (the
"Original Stock Purchase Agreement"), annexed hereto as Exhibit
1, Universal Commodity Trading Group, S.A. agreed to sell 1,920
shares (or 80%) of the total 2,400 shares (the "Shares") of
common stock issued and outstanding in the Norwegian company
Nortelco AS, registered in Norway as No. 954543323 (hereinafter
referred to as the "Company"), to FNEPC; and

WHEREAS, pursuant to a subsequent Stock Purchase Agreement dated October
4, 1994 (the "Second Stock Purchase Agreement"), annexed hereto
as Exhibit 2, by and between the Seller and FNEPC, the parties
agreed that the Original Stock Purchase Agreement was null and
void and the terms and conditions of the purchase of the 1,920
Shares of the Company by FNEPC from the Seller would be governed
by the Second Purchase Agreement; and

WHEREAS, the Seller and FNEPC now desire to have the Second Purchase
Agreement declared null and void, and enter into this stock
purchase agreement (the "Agreement") setting forth the terms and
conditions of the FNEPC purchase of the Shares; and

WHEREAS, the Seller has previously received from the Buyer Norwegian
Crowns ("NOK") 5,500,000 in cash, as down payment for the Shares
sold and transferred to FNEPC;

NOW THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as
follows:

1. Upon, and subject to, the terms and conditions set forth in this
agreement, the Seller hereby agrees to sell to the Buyer, free and clear
of all liens, pledges and encumbrances of every kind, character and
description whatsoever, 1,920 (or 80%) of the total outstanding 2,400
shares of common stock of the Company.

2. The consideration to be paid to the Seller by the Buyer for the 1,920
Shares of the Company's common stock shall be NOK 16,000,000, inclusive of
all commissions and other payments. Such purchase price has been
paid/shall be paid as follows:

a. An initial cash payment of NOK 5,500,000 (five million five hundred
thousand). The parties hereby acknowledge and represent that such payment
has been made by the Buyer and received by the Seller.

b. The balance of NOK 10,500,000 (ten million five hundred thousand) shall
be paid by the Buyer in form of 580,803 shares of the Buyer's common
stock, par value $.001. The Seller hereby agrees that, as a condition to
the issuance of such Shares, the Buyer shall complete the attached
document annexed hereto as Exhibit A. The Seller shall receive such number
of Shares within 60 calendar days from the date of this agreement.

3. The Seller hereby represents and warrants that it has good and marketable
title to the 1,920 Shares of the common stock of the company to be
transferred pursuant to this Agreement, and has the absolute right and
necessary authority to sell, assign and transfer all of said Shares to the
Buyer, free and clear of all liens, claims, pledges and encumbrances of
any kind. The Seller also hereby represents and warrants that it has taken
all action necessary to sell the Shares to the Buyer.

<PG$PX>

<PAGE> 7

4. This instrument contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby, and shall not be
changed or terminated except by written amendment signed by the parties
hereto.

5. The parties hereby agree that this Agreement supersedes all agreements
between the parties, oral or otherwise, including the Original Stock
Purchase Agreement and the Second Stock Purchase Agreement (collectively,
the "Previous Agreements"), and that the Previous Agreements are hereby
null and void and without further effect.

6. This agreement shall be construed in accordance with, and governed by, New
York law.

UNIVERSAL COMMODITY TRADING GROUP, S.A.

By: /s/ Mats Hartling

FIRST NORDIC EQUITY PARTNERS CORP.

By: /s/ Goran Haggqvist

<PG$PX>

<PAGE> 8

Exhibit A

Gentlemen:

The undersigned entity who is acquiring 580,803 shares of common stock ("the
Shares") of First Nordic Equity Partners Corp, a Nevada corporation (the
"Company"), pursuant to a Stock Purchase Agreement dated November 23, 1994, by
and between the Company and the undersigned, hereby acknowledges, represents,
warrants, and covenants as follows:

1. The Shares being acquired have not been registered under the Securities
Act of 1933, as amended (the "Act") and are not freely tradeable. The
Shares must be held indefinitely, unless either a registration statement
with respect to the shares is filed and declared effective under the Act
or an exemption from the registration requirements of the Act is
available.

2. The Company has no obligation to register any or all of the Shares under
the Act for distribution or sale. The Company has not agreed with anyone
to comply with Regulation A or any other exemption under the Act
respecting the resale or other transfer of the Shares.

3. The Shares are being acquired for investment purposes only for the
undersigned's own account and not with a view to sale or resale,
distribution (as that term is defined in the Act), or transfer, or to
offers in connection therewith. When the shares have been issued to the
undersigned, no other person will have a beneficial interest in the
Shares.

4. The Company will affix a legend in substantially the following form to the
certificates evidencing the shares:

"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
pledged, hypothecated, donated, or otherwise transferred, wether or not
for consideration, unless either the shares have been registered under
said Act or an exemption from such registration requirement is available.
If the shares are to be sold or transferred pursuant to an exemption from
the registration requirements, the Company may require a written opinion
of counsel, satisfactory to counsel for the Company, to the effect that
registration is not required and that such transfer will not violate the
Act or applicable state securities law."

5. Prior to any proposed sale, pledge, hypothecation, gift or other transfer,
for value or otherwise, of any or all of the shares or of any interest
therein (hereinafter, a "transfer"), the undersigned shall give written
notice to the Company describing the transfer, unless the shares have
first been registered under the Act. The undersigned shall not effect any
transfer unless and until (a) the Company receives an opinion of the
undersigned's counsel that the shares have been registered under the Act,
or in form and substance acceptable to counsel for the Company, that the
transfer may be effected without registration under the Act, and without
registration or qualification under applicable state securities laws, and
(b) satisfaction of such other conditions as may be required by counsel to
the Company in order to assure compliance with the Act and with applicable
state securities laws.

Very truly yours,

UNIVERSAL COMMODITY TRADING GROUP, S.A.

By: /s/ Mats Hartling
-----------------------------------

<PG$PX>

<PAGE> 9

PLEDGE AGREEMENT, EXHIBIT A
---------------------------

First Nordic Equity Partners Corp (formerly Sherman, Goelz & Associates) (FNEPC)
C/O Nathan International, One Dag Hammarskjold Plaza, New York, N.Y. 10017, USA,
hereby irrevocably pledges all of its 1,920 shares of Common Stock in the
Norwegain company Nortelco A/S, registered in Norway No: 954543323, to the
seller of said shares, Universal Commodity Trading Group S.A. (UCTGSA), as
collateral for all its obligations under the purchase agreement of which this
pledge agreement forms an integral part. The Shares will be pledged to UCTGSA
as long as any debt whatsoever remains outstanding (including any interest),
whereafter the Shares will be free of any liens, pledges or encumbrances
whatsoever and in the sole possession and ownership of FNEPC. FNEPC are under
no circumstances allowed in any way to use the Shares as collateral for any
other purpose whatsoever, until UCTGSA have received full payment for the
shares in accordance with the purchase agreement.
Should FNEPC not fulfill its obligations, i.e. payment of the outstanding
balance of the purchase price, under the purchase agreement, shall all shares
acquired by FNEPC under the purchase agreement unconditionally, irrevocably and
free of cost to UCTGSA be transferred back to the seller (UCTGSA), unless the
parties does not, in writing, otherwise agree. UCTGSA shall have the undisputed
and unconditional right to retain all consideration paid by FNEPC for the
Shares to this date as compensation should FNEPC default on the purchase
agreement.

Stockholm May 12, 1994

/s/ Mats U. Hartling
--------------------
Mats U. Hartling
President
First Nordic Equity Partners Corp.

<PAGE> 1

Exhibit 10.9

AGREEMENT
---------

This agreement, made and entered into this 16th day of May, 1994, is by and
between OVINGTON INVESTMENTS LIMITED as seller (hereinafter referred to as "the
Seller") and SHERMAN, GOELZ & ASSOCIATES (under name change to First Nordic
Equity Partners Corp) as buyer (hereinafter referred to as "the Buyer").

WHEREAS: Ovington Investments Limited owns 100%, or all 3000 shares, par value
SEK 100:-, of common stock issued and outstanding in the Swedish company
STOREBRO MACHINE AB, registered in Sweden No: 556327-9146 (hereinafter referred
to as "the Company").

WHEREAS: The Buyer is willing to buy all 3000 shares owned by the Seller.

WHEREAS: The Seller is willing to sell all the 3000 shares the Buyer is willing
to purchase.

WHEREAS: The Buyer have conducted a due diligence of the Company.

NOW, THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as follows:

1). Upon and subject to the terms and conditions set forth in this agreement,
the seller hereby agrees to sell to the Buyer on the Closing date provided for
in section 2 hereof, free and clear of all liens, pledges and encumbrances of
every kind, character and descriptions whatsoever, all 3000 issued and
outstanding shares of common stock in the Company.

2). (a). The sale and purchase provided for in this agreement shall be
consummated at a closing to be held at the offices of Hagginvest AB, Stockholm,
Sweden ("the Agent"), on the 27th day of May, 1994 ("Closing date", "Closing") ;
and after all conditions precedent to the consummation thereof have been
satisfied or at such other date, time and place as the Seller and Buyer mutually
agree upon.

(b). At the Closing the Seller shall deliver to the Buyer: (i) certificates
evidencing and representing of the issued and outstanding shares of Common Stock
of the Company, all of which are being sold hereunder, duly endorsed in blank or
accompanied by stock powers duly executed in blank, with signatures guaranteed,
in proper form for transfer; (ii) a copy of the articles of incorporation of
the Company and all, if any, amendments thereto, and a copy of the Company's
certificate of incorporation; (iii) correct and complete copies of the by-laws,
minutes of directors meetings or consent to action by the shareholders of the
Company and similar corporate documents of the Company.

<PAGE> 2

3). The consideration to be paid to the Seller by the Buyer for the issued and
outstanding 3000 shares of the Company's Common Stock, shall be SEK
15,000,000:-, inclusive of all commissions due. Such purchase price shall be
paid as follows:

(a). One Million Nine Hundred Seventy Five Thousand Swedish Crowns in cash
at the closing, the cash consideration shall be paid by the Buyer to, a by the
Agent, nominated bank account on behalf of the Seller.

(b). The remaining balance of the purchase price i.e. SEK 13,025,000:-,
shall be paid by the Buyer in cash latest by 31.12.94, the Seller shall receive
an interest of 12% p.a. on the outstanding balance, interest payments shall
irrevocably be made by the Buyer on a regular monthly basis to the Seller's
nominated bank account, commencing 25.06.94, and running until the outstanding
balance of the purchase price have been fully paid. The 3000 shares of Common
Stock in Storebro Machine AB purchased by the Buyer pursuant to this agreement,
shall be pledged to the Seller as collateral for the Buyers fulfillment of its
obligations under this agreement (exhibit "A", Pledge Agreement).

5). The Seller / Company will, on or before Closing, provide the Buyer with
audited financial statements for fiscal years ended December 31, 1991, 1992 and
1993, further, the Seller / Company shall provide the Buyer with unaudited
financial statements for the first quarter 1994.

6) . Prior to the Closing Date, the Seller will not, except with written prior
consent of the Buyer, permit the Company to declare or pay dividend, issue or
authorize the issuance of any stock, declare any stock split, or issue any other
security convertible into stock or any warranty or option or right for the
purchase of any stock, sell or otherwise dispose of any asset, except in the
ordinary course of business or borrow money or incur any debt or other
obligation, will not permit the Company to be a party to any merger,
consolidation, reorganization or recapitalization, and the Seller will cause the
Company to conduct its affairs in the usual and ordinary course of business.

7). The Seller shall on Closing Date provide the Buyer with up to date (day
before Closing) unaudited financial statements for the Company, guaranteeing and
evidencing that there have been no adverse change in the financial condition,
operations, properties and assets of the Company since the Buyer concluded its
due diligence.

8). The Seller and the Buyer shall bear their own expenses and costs in
connection with this agreement and the transactions contemplated herein.

<PAGE> 3

10). This agreement shall be construed in accordance with and governed by
English law, any dispute arising from this agreement, which the parties hereto
can not resolve themselves, shall be referred to Arbitration in London.

Stockholm, as above

/s/ Peter Janson /s/ Mats U. Hartling
- ---------------------------- -------------------------
Peter Janson Mats U. Hartling
Ovington Investments Limited Sherman, Goelz & Assoc.
Seller Buyer
By Power of Attorney

<PAGE> 4

STOCK PURCHASE AGREEMENT

This agreement, made and entered into this 4th day of October, 1994, is by and
between OVINGTON INVESTMENTS LTD as seller (hereinafter referred to as "the
Seller") and FIRST NORDIC EQUITY PARTNERS CORP. (formerly Sherman, Goelz &
Associates) as buyer (hereinafter referred to as "FNEPC" or "the Buyer").

WHEREAS: OIL has sold all 3,000 shares of Common Stock issued and outstanding in
the Swedish company Storebro Machine AB, registered in Sweden as no 556327-9146
(hereinafter referred to as "the Company") to FNEPC.

WHEREAS: The original purchase agreement drawn up by the parties hereto was
signed by the parties on May 16, 1994.

WHEREAS: The parties now have agreed to amend the original terms and conditions
for the sale (as incorporated hereinto), and subsequently, by signing this
agreement, declared the original purchase agreement and exhibit "A" attached
thereto, dated May 16, 1994, null and void.

WHEREAS: The Seller has received SEK 1,975,000 in cash, as downpayment for the
shares sold and transferred to FNEPC.

WHEREAS: The Buyer has conducted a due diligence of the Company and its
subsidiaries, and received in his possession all documentation concerning the
Company and its subsidiaries, their business and affairs, such as books,
bank accounts, articles of incorporation, by-laws, registration certificates
etc.

NOW, THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto agree as follows:

1) Upon and subject to the terms and conditions set forth in this agreement, the
Seller hereby agrees to sell to the Buyer, free and clear of all liens, pledges
and encumbrances of every kind, character and description whatsoever, all 3,000
issued and outstanding shares of Common Stock in the Company.

2) The consideration to be paid to the Seller by the Buyer for the issued and
outstanding shares of the Company's Common Stock, shall be SEK (Swedish Crowns)
12,000,000:- inclusive of all commissions etc. Such purchase price has been
paid/shall be paid as follows:
a) A downpayment of SEK 1,975,000:- (One Million Nine Hundred and
Seventy-five Thousand) in cash has been paid by the Buyer and received by the
Seller.
b) The balance of SEK 10,025,000:- (Ten Million Twenty-five Thousand) shall
be paid by the Buyer in form of 490,197 shares of the Buyer's Common Stock (par
value $.001), the Seller shall receive said number of shares within 60 calendar
days from the date of this agreement.

3) The Seller has good and marketable title to the 3,000 shares of the Common
Stock of the Company to be transferred and the absolute right hereunder and
necessary authority to sell, assign and transfer all of said stock to the Buyer,
free and clear of all liens, claims, pledges and encumbrances of any kind.

<PAGE> 5

5) This agreement shall be construed in accordance with, and governed by,
English law, any dispute arising from this agreement, which the parties hereto
can not resolve themselves, shall be referred to Arbitration in London.

Stockholm, as above

/s/ Goran Haggqvist /s/ Mats Hartling
- -------------------------- ---------------------------
Goran Haggqvist Mats Hartling
Ovington Investments Ltd. First Nordic Equity Partners Corp.
Seller Buyer

<PAGE> 6

STOCK PURCHASE AGREEMENT

This agreement, made and entered into this 23rd day of November, 1994, is by and
between Ovington Investments Ltd (hereinafter referred to as "the Seller") and
First Nordic Equity Partners Corp. (hereinafter referred to as "FNEPC" or "the
Buyer").

WHEREAS, pursuant to a Stock Purchase Agreement dated May 16, 1994 (the
"Original Stock Purchase Agreement"), annexed hereto as Exhibit
1, Ovington Investments Ltd agreed to sell 3,000 shares (or
100%) of the outstanding shares (the "Shares") of common stock
issued and outstanding in the Swedish company Storebro Machine
AB, registered in Sweden as No. 556327-9146 (hereinafter
referred to as the "Company"), to FNEPC; and

WHEREAS, pursuant to a subsequent Stock Purchase Agreement dated October
3, 1994 (the "Second Stock Purchase Agreement"), annexed hereto
as Exhibit 2, by and between the Seller and FNEPC, the parties
agreed that the Original Stock Purchase Agreement was null and
void and the terms and conditions of the purchase of the 3,000
Shares of the Company by FNEPC from the Seller would be governed
by the Second Purchase Agreement; and

WHEREAS, the Seller has previously received from the Buyer Swedish Crowns
("SEK") 1,975,000.- in cash, as down payment for the Shares sold
and transferred to FNEPC;

NOW THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as
follows:

1. Upon, and subject to, the terms and conditions set forth in this
agreement, the Seller hereby agrees to sell to the Buyer, free and clear
of all liens, pledges and encumbrances of every kind, character and
description whatsoever, 3,000 (or 100%) of the total outstanding shares of
common stock of the Company.

2. The consideration to be paid to the Seller by the Buyer for the 3,000
Shares of the Company's common stock shall be SEK 12,000,000.-, inclusive
of all commissions and other payments. Such purchase price has been
paid/shall be paid as follows:

a. An initial cash payment of SEK 1,975,000.- (one million nine hundred
and seventyfive thousand). The parties hereby acknowledge and represent
that such payment has been made by the Buyer and received by the Seller.

b. The balance of SEK 10,025,000.- (ten million twentyfive thousand) shall
be paid by the Buyer in form of 490,197 shares of the Buyer's common
stock, par value $.001. The Seller hereby agrees that, as a condition to
the issuance of such Shares, the Buyer shall complete the attached
document annexed hereto as Exhibit A. The Seller shall receive such number
of Shares within 60 calendar days from the date of this agreement.

3. The Seller hereby represents and warrants that it has good and marketable
title to the 3,000 Shares of the common stock of the company to be
transferred pursuant to this Agreement, and has the absolute right and
necessary authority to sell, assign and transfer all of said Shares to the
Buyer, free and clear of all liens, claims, pledges and encumbrances of
any kind. The Seller also hereby represents and warrants that it has taken
all action necessary to sell the Shares to the Buyer.

<PG$PX>

<PAGE> 7

6. This agreement shall be construed in accordance with, and governed by, New
York law.

OVINGTON INVESTMENTS LTD

By: /s/ Goran Haggqvist
-------------------------------

FIRST NORDIC EQUITY PARTNERS CORP.

By: /s/ Goran Haggqvist /s/ Kjell Sjostrand
-------------------------------------------

<PG$PX>

<PAGE> 8
EXHIBIT A

Gentlemen:

The undersigned entity who is acquiring 490,197 shares of common stock ("the
Shares") of First Nordic Equity Partners Corp., a Nevada corporation (the
"Company"), pursuant to a Stock Purchase Agreement dated November 23, 1994, by
and between the Company and the undersigned, hereby acknowledges, represents,
warrants, and covenants as follows:

4. The Company will affix a legend in substantially the following form to the
certificates evidencing the shares:

"The securities represented by this certificate have nor been registered
under the Securities Act of 1933, as amended, and may not be sold,
pledged, hypothecated, donated, or otherwise transferred, whether or not
for consideration, unless either the shares have been registered under
said Act or an exemption from such registration requirement is available.
If the shares are to be sold or transferred pursuant to an exemption from
the registration requirements, the Company may require a written opinion
of counsel, satisfactory to counsel for the Company, to the effect that
registration is not required and that such transfer will not violate the
Act or applicable state securities law."

Very truly yours,

OVINGTON INVESTMENTS LTD

By: /s/ [ILLEGIBLE]
--------------------------

<PG$PX>

<PAGE> 9

PLEDGE AGREEMENT, EXHIBIT A
---------------------------

First Nordic Equity Partners Corp (formerly Sherman, Goelz & Associates) (FNEPC)
C/O Nathan International, One Dag Hammarskjold Plaza, New York, N.Y. 10017,
USA, hereby irrevocably pledges all of its 3,000 shares of Common Stock in the
Swedish company Storebro Machine AB, registered in Sweden No: 556327-9146, to
the seller of said shares, Ovington Investments Limited (OIL), as collateral for
all its obligations under the purchase agreement, of which this pledge agreement
forms an integral part. The Shares will be pledged to OIL as long as any debt
whatsoever remains outstanding (including any interest), whereafter the Shares
will be free of any liens, pledges or encumbrances whatsoever and in the sole
possession and ownership of FNEPC. FNEPC are under no circumstances allowed in
any way to use the Shares as collateral for any other purpose whatsoever, until
OIL have received full payment for the shares in accordance with the purchase
agreement.
Should FNEPC not fulfill its obligations, i.e. payment of the outstanding
balance of the purchase price, under the purchase agreement, shall all shares
acquired by FNEPC under the purchase agreement unconditionally, irrevocably and
free of cost to OIL be transferred back to the seller (OIL), unless the parties
does not, in writing, otherwise agree. OIL shall have the undisputed and
unconditional right to retain all consideration paid by FNEPC for the Shares to
this date as compensation should FNEPC default on the purchase agreement.

Stockholm May 16, 1994

/s/ Mats U. Hartling
--------------------
Mats U. Hartling
First Nordic Equity Partners Corp.

<PAGE> 1
Exhibit 10.10

STOREBRO MACHINE AB

TRANSLATION

Between the companies MWD-Vertriebs GmbH, Heerstrasse 30, D-89079
Vohringen-Illerberg (hereafter referred to as MWD) and Storebro Machine AB,
P.O. Box 19. S-590 83 Storebro (hereafter referred to as STM) the following
agreement has been made:

AGENCY AGREEMENT
- ---------------

Clause 1 - Object of the Agency

CNC-lathe-program in standard and special design as well as the conventional
lathe-model "SB-N".

Clause 2 - District of the Agency

Post code areas 6-7-8 as well as 90, 91, 92, 93, 94, 95, 96, 97 and 98.
Additional districts on inquiry and after approval. (by STM)

Clause 3 - Competitors/competing manufacture

Beyond the existing agency programmes "Angelini" and "Padovani", no additional
CNC-Machine products may be included, offered or sold under the programme.

Clause 4 - Sales budget

The sales budget for the following calendar year shall be established two to
three months before the end of the current calendar year.

Clause 5 - Firm orders

An order consisting of at least 12 CNC machines with delivery dates shall be
guaranteed for each calandar year.

Clause 6 - Purchase prices

The purchase prices shall be agreed upon before the placing of the firm, annual
order.

Clause 7 - Sales prices

The sales price shall be determined by agreement between MWD and STM.

<PAGE> 2

STOREBRO MACHINE AB

Clause 8 - Terms of delivery

The terms of delivery are free customer's address inclusive of packaging.

Clause 9 - Terms of payment

By bank comfirmation on proof of preparedness to deliver.

Clause 10 - Guarantees

The guarantee period is twelve months or 3000 working hours counting from the
date of putting into service. For demonstration machines or machines in stock
the guarantee period is based on the date of delivery from Storebro.

Repairs to Storebro machines may be performed only by MWD during the gaurantee
period.

Clause 11 - Provisions concerning putting into service

The putting into service must be performed by STM according to the record
(protocol) of putting into service. A copy of the record shall after completion
be sent to STM without delay.

Clause 12 - Performance of work during the guarantee period

Work during the guarantee period relating to control system, electricity,
electronics as well as mechanics may only be performed after approval by STM and
under an assignment number. STM will refuse to pay for work performed without
an assignment number.

Clause 13 - Exhibitions and advertisement

Exhibitions, advertisement and similar activities where STM participates
financially or in some other form, must be approved in writing by STM. Amounts
that are invoiced without this approval will not be accepted.

Clause 14 - Special terms and conditions

All special terms and conditions must be confirmed in writing.

<PAGE> 3

STOREBRO MACHINE AB

Clause 15 - Period of validity

This agreement shall be valid for one calendar year. If neither of the
contracting parties cancels the agreement three months before the end of the
calendar year, the period of validity will be extended by one calendar year.

Clause 16 - Immediate termination

If one of the contracting parties is fundamentally in breach of any part of this
agreement and does not immediately remedy this breach at the request of the
other party, this agreement shall be terminated with immediate effect. The
agreement shall also be terminated forthwith in case of suspension of payments
or bankruptcy.

Clause 17 - Return of documentation

If this agreement is terminated for any reason, all technical documentation
shall be returned (to STM)

Clause 18 - Discharge/Termination

STM agrees to invoice all business made within the area of the agency through
MWD.

Notice of termination shall be given by registered letter.

This agreement has been drawn up in duplicate.

Storebro, 23 September 1995 Illerberg, 4 October 1995
STOREBRO MACHINE AB MWD Vertriebs GmbH

<PAGE> 1
Exhibit 10.11

STOCK PURCHASE AGREEMENT, AUDIATUR AB, STOCKHOLM

1. Nortelco AS, Oslo, buys 80% of the shares in Audiatur AB and 100% of the
subsidiary company Audiatur AS, Horten.

2. The total price is amounting to SEK 1,500,000,-. of this NOK 50,000.- for
Audiatur AS.

The purchase split is as follows:

Nortelco AS buys 50% from Marc Oldmar - 2,500 shares at the price of SEK
1,050,000,-.

Nortolco AS buys 10% from Carl Eric Modin - 500 shares at the price of SEK
150,000,-.

Nortelco AS buys 10% from Britt Geijer - 500 shares at the price of SEK
150,000,-.

Nortelco AS buys 10% from Kjell Carling - 500 shares at the price of
SEK 150,000,-.

3. Payment of SEK 100,000,- to Carl Eric Modin, Britt Geijer, Kjell
Carling is to be made to each on September 1, 1993, and SEK 50,000, to
each of the three mentioned above on July 1, 1994. Payment to Marc Oldmar
is to be made by two equal payments: SEK 525,000,- on July 1, 1995
(interest-free on SEK 1,050,000,-) and SEK 525,000,- plus interest at a
rate as high-interest account when due on July 1, 1995. All secured. Of
the amount SEK 1,050,000,-, SEK 300,000,- is dependant on profit in
such a way that 70% of the budgets not result for Audiatur AB in 1994
will be reached included the effects of possible new products added
through the year. If a new investor in Nortelco AS gives the possibility,
Marc Oldmar will be paid SEK 200,000,- when capital from a new investor is
available.

4. New employment agreement for Marc Oldmar is a condition.

5. It is a condition that the value of the assets and inventory is according
to financial statement and balance, and that agreements as pension
agreements, guarantee responsibilies, shareholder agreements unknown at
the acquisition do not exist.

6. The purchase is current from January 1, 1994.

7. The purchase is to be made subject to approval from the board of directors/
shareholders's meeting with both parties, and also approval from Auditor's
main connections.

Oslo, April 14,1993

Nortelco AS Audiatur AB

- ----------------------- ----------------------
/s/ B. Nysted /s/ M. Oldmar

<PAGE> 1
Exhibit 23.2

McManus & Co., PC, Certified Public Accountants
[graphic]
188 Speedwell Avenue, Morris Plains, NJ 07950 - Tel: 201-285-0012
- Fax: 201-285-0939
350 5th Avenue, Suite 1423, New York, NY 10118

CONSENT OF INDEPENDENT AUDITORS

We consent to the inclusion in this Registration Statement on Form S-1 of
our report dated April 26, 1996, on our audit of the financial statements of
Nordic Equity Partners Corp. and subsidiaries. We also consent to the reference
to our firm under the captions "Selected Financial Data" and "Experts".

/s/ McManus & Co., P.C.
McManus & Co., P.C.
Certified Public Accountants
Morris Plains, NJ 07950

January 14, 1997

Members: American Institute of Certified Public Accountants and New Jersey
Society of Certified Public Accountants

<PAGE> 1
Exhibit 23.3
[logo]
Ohrlings
Coopers
& Lybrand

CONSENT OF INDEPENDENT AUDITORS

I consent to the inclusion in this Registration Statement on Form S-1 of our
report dated May 23, 1996 on our audit of the financial statements of Storebro
Machine AB. I also consent to the reference to our firm under the captions
"Selected Financial Data" and "Experts".

/s/Mats Landen
Mats Landen
Authorized Public Accountant

January 14, 1997

<PAGE> 1
Exhibit 23.4

[logo]
ERNST AND YOUNG

o Statsautoriserte revisorer o Revisornr. og Organisasjonsnr.:
NO 810 718 722
Ernst & Young AS
Tullins gate 2 Tel. +47 2203 6000
Postboks 6834 St. Olavs plass Fax +47 2211 0095
N-0130 Oslo

Medlemmer av Norges Statsautoriserte Revisorers Forening

Consent of independent auditors

We consent to the inclusion in this Registration Statement on Form S-1 of our
auditors report dated March 29, 1995 and April 22, 1996, on our audit of the
financial statements of Nortelco AS and its subsidiaries for the financial years
1994 and 1995. We also consent to the reference to our firm under the captions
"Selected Financial Data" and "Experts".

Oslo, January 14, 1997
ERNST & YOUNG AS

/s/ Erland Stenberg

Erland Stenberg
State Authorized Public Accountant (Norway)

o Arendal, Bergen, Bodo, Bo, Drammen, Eegersund,
Finnsnes, Harstad, Holmestrand, Horten, Kongsbrg,
Kragero, Kristiansand, Larvik, Lillehammer, Mo i Rana,
Moss, Narvik, Notodden, Oslo, Otta, Porsgrunn/Skien,
Sandefjord, Sandnessjoen, Sortland, Stavanger, Tromso,
Trondheim, Tonsberg, Vikersund, Alesund