FEDERATED PURCHASER INC, 10-K/A, 1998-03-02

FEDERATED PURCHASER INC
10-K/A, 1998-03-02
ELECTRONIC COMPONENTS & ACCESSORIES

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FORM 10-K/A

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT 1

ITEMS 10, 11, 12, 13

(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997 COMMISSION FILE
NUMBER: 0-7235

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ................ TO ................

FEDERATED PURCHASER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEW YORK 22-1589344
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

268 CLIFFWOOD AVENUE
CLIFFWOOD, NEW JERSEY 07721
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: (732) 290-2900
_________________

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

TITLE OF EACH CLASS:

Common Stock, $.10 par value

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No ______

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K/A or any
amendment to this Form 10-K/A. [ X ]

The aggregate market value of the 1,158,240 shares of the common stock of
the Registrant held by non-affiliates on February 26, 1998 based upon the
average of the bid and asked prices was approximately $122,158. The number of
shares of the registrant's common stock outstanding as of February 26,
1998 was 1,611,317 shares, par value $.10 per share.

DOCUMENTS INCORPORATED BY REFERENCE
None

<PAGE>

This Amendment 1 on Form 10-K/A to the Registrant's Annual Report for the
year ended October 31, 1997 on Form 10-K is submitted to reflect the amendment
of Items 10, 11, 12 and 13 in their entirety. Furthermore, Item 14(3) is
amended to reflect the filing of the Agreement referenced below as an exhibit
hereto. No other Items of the Registrant's Annual Report on Form 10-K are
amended.

Federated Purchaser, Inc. ("Federated") announced on October 1, 1997 that it
has signed an agreement (the "Agreement") with Wise Components, Inc. ("Wise"),
and its chairman and sole shareholder, Martin L. Blaustein ("Mr. Blaustein"),
under which Federated will issue 4,491,988 shares of its common stock to Mr.
Blaustein in a tax-free exchange (the "Exchange") for all of the outstanding
shares of Wise's stock. Upon closing, Wise will become a wholly-owned
subsidiary of Federated and Mr. Blaustein will become Federated's principal
shareholder, owning approximately 74% of Federated's common stock. The
remaining 26% will continue to be held by current shareholders of Federated.
The Agreement also provides that upon the occurrence of certain events during
the six months subsequent to the Exchange, Federated may issue up to an
additional 390,656 shares of Common Stock to Mr. Blaustein. Accordingly, a
total of 4,882,644 shares of Common Stock are to be issued.

A Current Report on Form 8-K reporting the Exchange was filed with the
Securities and Exchange Commission on October 1, 1997.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

THE BOARD OF DIRECTORS

The following table identifies each member of the Board of Directors, the
member's age, the period during which the member has served as a director, if
any, the member's current position(s) with Federated, if any, the member's
principal occupation and any other directorships held by the member in a
company with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or subject to the requirements of Section 15(d)
of such Act or in any company registered as an investment company under the
Investment Company Act of 1940.

<TABLE>
<CAPTION>
Member DIRECTOR OF FEDERATED Principal Occupation
Age Since
<S> <C> <C> <C>
Harry J. Fallon 70 1975 President of Federated
Edmund L. Hoener 66 1977 Former Vice President of the Howard Savings Bank;
Retired
Edwin S. Shortess 77 1989 Former President of Shortess-Rawson Associates;
Retired
Jane A. Christy 61 1989 Vice President/Operations of Federated
</TABLE>

Mr. Fallon, President of Federated since 1974, has been a director of
Federated since 1975. He is also a director of Hickok Electrical Instrument
Co., a manufacturer of electronic test equipment, located in Cleveland, Ohio.
After the death of Federated's Chairman of the Board, Arthur C. Kammerman, in
September 1992, Mr. Fallon served as acting Chairman of the Board of Federated
until the election of Mr. Albert Zlotnick in 1993. Mr. Fallon has been serving
as acting Chairman of the Board since Mr. Zlotnick's resignation of that
position in May, 1996.

Mr. Hoener became a director of Federated in 1977. He was a Vice
President of the Howard Savings Bank from October 1983 until his retirement in
June 1990.

-1-

Mr. Shortess became a director of Federated in 1989, and is not standing
for reelection. From 1969 until his retirement in 1986, he was the founder and
President of Shortess-Rawson Associates, a distributor of primarily electronic
instrumentation and educational systems in the sciences and electronics.

Ms. Christy became a director of Federated in 1989, and is not standing
for reelection. She is currently Vice President of Operations of Federated and
has been employed by Federated in various executive positions and offices for
more than five years.

It is a condition to closing the Exchange that all of the current members
of the Board of Directors resign. Under the terms of the Agreement, Mr. Fallon
has the right to name 25% of the Board for two years after the Exchange closes.
It is presently expected that New Federated's Board of Directors will consist
of five members, of which Mr. Fallon will appoint himself and Mr. Hoener. Wise
Components has indicated its intention to name Martin L. Blaustein and Steven
H. Fried to the Board of Directors, but has not named the third director it
will appoint.

None of the corporations or organizations with which Messrs. Hoener or
Shortess has been employed during the past five years is a parent, subsidiary
or other affiliate of Federated.

During Federated's last fiscal year, the Board of Directors held four
meetings; each director has attended at least 75% of the meetings of the Board
of Directors and the committees on which he or she served that were held during
Federated's last fiscal year.

The Audit Committee has the authority to make recommendations to the
Board of Directors concerning the selection of Federated's independent auditors
and to review with the independent auditors the scope and results of the annual
audit. The incumbent members of this Committee are Messrs. Hoener and Fallon.
During the last fiscal year, the Audit Committee held one meeting. As a member
of this Committee, Mr. Hoener receives $200 for each meeting he attends. Mr.
Fallon receives no remuneration for his activities as a Committee member.

The Executive Committee has general authority over the supervision and
direction of the finances and business of Federated and has the power and
authority of the Board in the management of the business and affairs of
Federated between meetings of the Board. The incumbent members of this
Committee are Messrs. Shortess and Fallon. No meetings were held during the
last fiscal year.

Federated's Board of Directors has no standing nominating or compensation
committees. The functions of the compensation committee were performed by the
Board of Directors as a whole during the fiscal year ended October 31, 1997.
The Board of Directors has assigned the responsibilities generally performed by
the compensation committee to the Executive Committee for the fiscal year
ending October 31, 1998.

-2-

EXECUTIVE OFFICERS

The executive officers of Federated are set forth in the table below.
All executive officers are chosen at the annual meeting or interim meetings of
the Board of Directors and serve at the pleasure of the Board of Directors. It
is anticipated that following the consummation of the Exchange, the three
persons named below will continue in their current positions, and at least two
additional persons will be named Executive Officers of Federated.

<TABLE>
<CAPTION>
NAME AGE POSITION PERIOD SERVED
<S> <C> <C> <C>
Harry J. Fallon 70 President Since 1974
Jane A. Christy 61 Vice President/Operations Since 1976
Marie Santasiri 69 Secretary Since 1986
</TABLE>

All of the executive officers listed in the preceding table have been
employed by Federated in various executive positions and offices for more than
five years.

ITEM 11. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The Summary Compensation Table set forth below shows the compensation of
the Chief Executive Officer of Federated for the past three fiscal years. The
Chief Executive Officer is the only executive officer whose total annual salary
and bonus exceeds $100,000.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL POSITION YEAR SALARY

Directors are not compensated for service as directors. Mr. Fallon
received no other compensation other than the salary listed above.

EMPLOYMENT CONTRACTS

In April 1986, Mr. Fallon entered into an employment agreement with
Federated, the term of which commenced on November 1, 1986, expired on October
31, 1991 and was subsequently extended annually until October 31, 1996. The
employment agreement provided that, among other things, Mr. Fallon will receive
an annual salary in the amount of $125,000. Mr. Fallon has voluntarily waived
the receipt of $20,000 of such annual salary for each of the years ended
October 31, 1995, October 31, 1996 and October 31, 1997. Mr. Fallon executed a
new Employment Agreement with Federated, on identical terms, as of May 1, 1997,
ending on October 31, 1997. The terms of the Employment Agreement are being
extended until the closing of the Agreement, at which point Mr. Fallon's sole
compensation will be in accordance with the Consulting Agreement described
below.

Under the terms of the Agreement, Mr. Fallon will enter into a Consulting
Agreement with Federated, for a period of two years at cash compensation of
$60,000 per year. Mr. Fallon's consulting services will include: overseeing
the integration of the Federated operations into those of Wise, maintaining

-3-

relationships with Federated's customers and suppliers, identifying
opportunities for expansion within the New Jersey and Pennsylvania markets,
advising management regarding strategic planning, and developing cost-control
programs. The Agreement also provides for an employment agreement of one
years' durations with Ms. Jane A. Christy, Vice President--Operations, at cash
compensation of $62,500, with a $15,000 bonus to be paid on the first
anniversary thereof.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Fallon and Ms. Christy each served as a member of the Board of
Directors, which acted in the place of a compensation committee during the
fiscal year ended October 31, 1997. Mr. Fallon and Ms. Christy are also
executive officers of Federated.

During the fiscal year ended October 31, 1997, Mr. Fallon and Ms. Christy
participated in deliberations concerning executive officer compensation in
their capacities as members of the Board of Directors.

BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION

Federated does not have a standing compensation committee. Decisions
regarding compensation of Federated's executive officers generally are made by
the Board of Directors as a whole. Pursuant to recently adopted rules designed
to enhance disclosure of companies' policies regarding executive compensation,
set forth below is a report submitted by Messrs. Fallon, Hoener, Shortess, and
Ms. Christy, as members of Federated's Board of Directors, addressing
Federated's compensation policies for 1997 as they affected Mr. Fallon, in his
capacity as Chief Executive Officer of Federated, and other executive officers.

Mr. Fallon is the only officer of Federated whose total compensation
exceeded $100,000 during the fiscal year ended October 31, 1997.

Mr. Fallon's current employment arrangement was negotiated by Federated
on an arm's length basis and was designed to be competitive with compensation
packages offered to other chief executive officers of similarly situated
companies in the industry.

During the fiscal year ending October 31, 1998, the Executive Committee
of the Board of Directors will perform the functions of the compensation
committee.

The foregoing report has been furnished by Messrs. Fallon, Hoener,
Shortess, and Ms. Christy.

PERFORMANCE GRAPH

The following line graph compares cumulative total shareholder return on
Federated's Common Stock since October 31, 1993, based on the market price and
assuming reinvestment of dividends, with the cumulative total return of
companies on Standard & Poor's Composite 500 Index and a peer group index
comprised of electronic parts distributors.

-4-

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FEDERATED PURCHASER, INC., S&P 500 COMPOSITE INDEX AND
PEER GROUP INDEX OF ELECTRONIC PARTS DISTRIBUTORS

[graph illustrates relative performance
of Company shares]

Assumes $100 invested on October 31, 1992, at the prior day's closing market
price in Federated's Common Stock, the S&P 500 Composite Index and a Peer Group
Index comprised of Electronic Parts Distributors.

<TABLE>
<CAPTION>
INDEXED RETURNS [10/31/92 = 100]

COMPANY/INDEX BASE YEAR 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
FEDERATED 100.00 136.35 81.81 46.70 63.51 75.84
PURCHASER
INC.
S&P 500 INDEX 100.00 114.94 119.39 150.96 187.33 247.48
PEER GROUP(1) 100.00 120.84 122.52 157.99 144.70 183.74
</TABLE>

_______________________

(1) The Peer Group Index is comprised of the following:

-5-

<PAGE>
Peer Group

All American Semiconductor Nu Horizons Electrs Corp.
Arrow Electronics Inc. Pioneer Standard Electronics
Avnet Inc. Premier Industrial CP.
Bell Industries Inc. Richardson Elec Ltd.
Electrocon Intl Inc. Savoir Technology Group, Inc.
Jaco Electronics Inc. SED International Hldgs Inc.
Kent Electronics Corp. Sterling Electronics
Marshall Industries Wyle Laboratories
Milgray Electronics Inc. Zing Technologies, Inc.

Although the foregoing companies are all distributors of electronic parts
and may be considered to be in the same industry as Federated, each has
significantly greater revenues and assets. Federated is unable to
construct a peer group index comprised of companies in the industry with
similar financial characteristics because such companies are privately
held.

Because Federated was delisted by NASDAQ in July, 1992, data from that
time through October 31, are as reported by the National Quotation Bureau, Inc.
and are based upon the average of high and low bid prices.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

COMMON STOCK OWNERSHIP OF DIRECTORS AND OFFICERS

The following table sets forth certain information respecting the number
of shares of Federated's Common Stock which will be beneficially owned by each
current director (and nominee for director) of Federated, the Chief Executive
Officer, by all current directors, nominees and officers of Federated as a
group, subsequent to the Exchange.

-6-
<PAGE>

<TABLE>
<CAPTION>
BEFORE EXCHANGE AFTER EXCHANGE
NAME OF
BENEFICIAL OWNER AMOUNT(1) PERCENT(2) AMOUNT(1) PERCENT(2)
<S> <C> <C> <C> <C>
Harry J. Fallon 304,285 18.9% 304,285 4.9%
Martin L. Blaustein 0 0.0% 4,491,988(2) 73.6%
Edmund L. Hoener 2,538 * 2,538 *
Edwin S. Shortess 3,178 * 3,178 *
Jane A. Christy 11,921 * 11,921 *
ALL DIRECTORS, CANDIDATES, AND 321,922
OFFICERS AS A GROUP (5 PERSONS)
</TABLE>

(1) All shares recorded in this table are, or will be, owned directly.

(2) Calculated assuming issuance only of the 4,491,988 shares to be issued in
the Exchange, and not any additional shares which may be issued upon the
occurrence of certain events subsequent to the Exchange. See "The
Agreement and Amendment -- Indemnification."

* Less than one percent of outstanding Common Stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

As noted above, Martin L. Blaustein has entered into an agreement dated
October 1, 1997 (the "Agreement") with Federated and Wise Components (of which
Mr. Blaustein is the sole shareholder). Under the Agreement, Federated will
issue 4,491,988 shares of its common stock to Mr. Blaustein in a tax-free
exchange for all of the outstanding shares of Wise's stock. Upon closing, Wise
will become a wholly-owned subsidiary of Federated and Mr. Blaustein will
become Federated's principal shareholder, owning approximately 74% of
Federated's common stock. The remaining 26% will continue to be held by
current shareholders of Federated. The Agreement also provides that upon the
occurrence of certain events during the six months subsequent to the Exchange,
Federated may issue up to an additional 390,656 shares of Common Stock to Mr.
Blaustein. Accordingly, a total of 4,882,644 shares of Common Stock may be
issued to Mr. Blaustein.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(3) EXHIBITS

The following exhibits are filed with this report:

SEQUENTIALLY
EXHIBIT NUMBER EXHIBIT DESCRIPTION NUMBERED PAGE

10 (d) Agreement by and among Federated
Purchaser, Wise Components, Inc. and
Martin L. Blaustein, dated October
1, 1997

-7-

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

FEDERATED PURCHASER, INC.

By:/S/ HARRY J. FALLON
--------------------------
HARRY J. FALLON, President
February 26, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the date indicated.

SIGNATURES: TITLE DATE

/S/ HARRY J. FALLON Acting Chairman, President, February 26, 1998
HARRY J. FALLON Principal Executive Officer,
Principal Financial
Officer, Principal
Accounting Officer and
Director

/S/ EDMUND L. HOENER Director February 26, 1998
EDMUND L. HOENER

/S/ EDWIN S. SHORTESS Director February 26, 1998
EDWIN S. SHORTESS

/S/ JANE A. CHRISTY Director, Vice February 26, 1998
JANE A. CHRISTY President Operations

-8-

<PAGE>
INDEX TO EXHIBITS

SEQUENTIALLY
EXHIBIT NUMBER EXHIBIT DESCRIPTION NUMBERED PAGE

10 (d) Agreement by and among Federated Purchaser, Wise
Components, Inc. and Martin L. Blaustein, dated October
1, 1997

-9-

<PAGE>
EXHIBIT 10(d)

AGREEMENT

THIS AGREEMENT (this "Agreement") entered into on this ______ day
of October, 1997, by and among Wise Components, Inc., a New York
corporation ("Wise"), Federated Purchaser, Inc., a New York corporation
("Federated"), and Martin L. Blaustein ("Blaustein"). Wise, Federated and
Blaustein are sometimes individually or collectively referred to herein as
"Party" or "Parties," as appropriate.

RECITALS

WHEREAS, Blaustein and Federated wish to effect a tax-free
exchange (the "Exchange") of all of the outstanding capital stock of Wise,
which following the Exchange shall be held by Federated, for which
Blaustein, being the holder of all of such outstanding capital stock of
Wise, will receive such number of shares of common stock of Federated as is
herein specified; and

NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the parties hereto agree as
follows:

ARTICLE 1

THE EXCHANGE

1.1 THE EXCHANGE. Each share of capital stock of Wise issued
and outstanding prior to consummation of the Exchange shall be delivered to
Federated, in exchange for the right to receive, as of the Closing Date,
4,491,988 shares of Federated Common Stock (the "Federated Common Shares").

1.2 EFFECT OF THE EXCHANGE. By virtue of the Exchange and upon
consummation of the Exchange, all of the capital stock of Wise will be held
by Federated; consequently, Wise shall become a wholly owned subsidiary of
Federated.

1.3 FRACTIONAL SHARES. No fractional Federated Common Shares
shall be issued in the Exchange. Any fractional Federated Common Shares
shall be rounded down.

1.4 EXCHANGE PROCEDURES.

(a) On or before the consummation of the Exchange, Federated
will deliver to a financial institution appointed by Federated with the
consent of Wise (the "Exchange Agent"), certificates representing the
Federated Common Shares and funds representing a sufficient amount of cash
payable in lieu of fractional shares.
(b) Upon surrender to Federated of one or more certificates for
shares of capital stock of Wise ("Wise Certificates"), accompanied by stock
powers duly endorsed in blank, the Exchange Agent shall, promptly after the
Exchange, deliver to Blaustein new certificates representing the Federated
Common Shares together with checks for payment of cash in lieu of
fractional interests.

(c) Until Wise Certificates have been surrendered to Federated
and exchanged as herein provided, each outstanding Wise Certificate shall
represent, on and after the consummation of the Exchange, solely the right
to receive Federated Common Shares as provided herein.

(d) No transfer taxes shall be payable by Wise or Blaustein in
respect of the issuance of new certificates.

(e) The Exchange Agent shall not be entitled to vote or exercise
any other rights of ownership with respect to any Federated Common Shares
held from time to time and will hold any dividends received with respect to
the new certificates for the benefit of the holder of such new
certificates.

1.5 CLOSING DATE. Subject to the terms and conditions set forth
in this Agreement and the satisfaction of all conditions precedent
specified herein, the closing of the Exchange shall take place on the
Closing Date, which shall be on or before January 31, 1998.

1.6 DOCUMENTS TO BE DELIVERED. At the closing, the Parties
shall deliver, or cause to be delivered, such documents or certificates as
may be necessary, in the reasonable opinion of the Parties, to effect the
transactions contemplated by this Agreement. From and after the date of
this Agreement, each of the Parties hereby covenants and agrees, without
the necessity of any further consideration whatsoever, to execute,
acknowledge and deliver any and all other documents and instruments and
take any and all such other action as may be reasonably necessary or
desirable to more effectively carry out the intent and purpose of this
Agreement, and the officers and directors of the Parties shall execute and
deliver, or cause to be executed and delivered, all such documents as may
be reasonably necessary or desirable to more effectively carry out the
intent and purpose of this Agreement.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF FEDERATED

Federated represents and warrants to Wise and Blaustein that the
statements contained in this Article II are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article II) except as set
forth in the corresponding section of the Federated Disclosure Schedule.

2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Federated
is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation. Federated is duly
authorized to conduct business and is in good standing under the laws of
New York, New Jersey and Pennsylvania.

2.2 CHARTER, BY-LAWS, ETC. True and complete copies of the
certificate or articles of incorporation (as the case may be) and by-laws,
each of the foregoing as amended to the date hereof, and the minute books
and all stock books and stock transfer records of Federated shall have been
delivered to Wise prior to the Closing Date. On the Closing Date, such
minute books will contain the true and complete minutes and records of any
meetings, proceedings and other actions of the shareholders and the Board
of Directors of Federated from the date of its incorporation to and
including the Closing Date.

2.3 ISSUANCE OF THE SHARES; CAPITALIZATION. Upon the issuance
of the Federated Common Shares as provided herein, such shares will be duly
authorized and validly issued, fully paid and non-assessable. The
Federated Common Shares, when issued and delivered to Blaustein, will not
be subject to preemptive rights. The issuance of the Federated Common
Shares is subject to the registration requirements of the Securities Act of
1933, and the requirements of applicable state securities laws. As of the
date of this Agreement, the authorized capital stock of Federated is as set
forth in Federated's most recent Quarterly Report on Form 10-Q.

2.4 AUTHORIZATION OF TRANSACTION. Following approval by
Federated's Board of Directors and shareholders, Federated shall have full
power, authority and capacity to execute and deliver this Agreement and any
related agreement and to perform its obligations hereunder and thereunder.
Following approval by Federated's Board of Directors and shareholders, this
Agreement and any related agreement shall constitute valid and legally
binding obligations of Federated, enforceable in accordance with their
terms and conditions, except in each case, as limited by the effect of
bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally, and general equity
principles.

2.5 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement and any related agreement, nor the consummation of the
transactions contemplated hereby and thereby, will (i) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice or consent under (A) any
agreement, contract, lease or commitment affecting the authority of
Federated to perform its obligations hereunder or (B) any related
agreement, license, instrument, or other arrangement (including any
shareholder agreement) to which Federated is a party or by which it is
bound or to which any of its assets is subject (or will result in the
imposition of any mortgage, pledge, lien, encumbrance, charge or other
security interest upon any of its assets); or (ii) violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, or other restriction of any governmental entity or court to
which Federated is subject; or (iii) conflict with or result in a breach of
any provision of the articles of incorporation or by-laws of Federated.

2.6 CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental entity, or any other person or entity, is required to be made
or obtained by Federated in connection with the execution, delivery and
performance of this Agreement or any related agreement and the consummation
of the transactions contemplated hereby and thereby, except for approval by
Federated's Board of Directors and shareholders, and any consents,
approvals, authorizations, declarations, filings and registrations required
pursuant to the federal securities laws and the securities or blue sky laws
of the various states, which Federated shall make.

2.7 EVENTS SUBSEQUENT TO JULY 31, 1997. Since July 31, 1997,
there has not been, individually or in the aggregate, any Federated
Material Adverse Effect.

2.8 SECURITIES REPORTS; FINANCIAL STATEMENTS.

(a) Federated has provided to Blaustein true and correct copies
of the following, including all exhibits thereto: (i) Federated's Annual
Report on Form 10-K for the years ended on October 31 of each of 1992,
1993, 1994, 1995 and 1996, (ii) Federated's Quarterly Reports on Form 10-Q
for the quarters ended January 31, April 30, and July 31 of 1997, (iii)
Federated's Annual Reports to the Shareholders for the years ended on
October 31 of each of 1992, 1993, 1994, 1995 and 1996, and (iv) Federated's
proxy statements filed on Form 14A in each of 1993, 1994, 1995, 1996 and
1997. The foregoing (i) comply in all material respects with, and were
filed with the U.S. Securities and Exchange Commission ("SEC") in
accordance with, the requirements of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as applicable, and the rules and
regulations of the SEC promulgated thereunder applicable thereto, and (ii)
did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

(b) The audited financial statements of Federated for the year
ended October 31, 1996, included in Federated's Annual Report on Form 10-K
filed with the SEC, fairly present in all material respects, the financial
condition and the results of operations and cash flows of Federated as of
October 31, 1996.

(c) Except as disclosed in Federated's Quarterly Reports on Form
10-Q, there has not been any Federated Material Adverse Effect since the
date of the financial statements contained in its Annual Report on Form 10-
K for the year ended October 31, 1996.

2.9 LITIGATION. There are no Actions pending or, to the
knowledge of Federated, threatened or anticipated, against or involving
Federated or an Affiliate of Federated relating to or affecting the
transactions contemplated by this Agreement or any related agreement.

2.10 BOOKS AND RECORDS. Federated's books and records have been
fully, properly and accurately maintained in all material respects, and
there are no material inaccuracies or discrepancies of any kind contained
or reflected therein, and they fairly present the financial position of
Federated in all respects. None of the records, systems, controls, data or
information of Federated are recorded, stored, maintained, operated or
otherwise wholly or partly dependent on or held by any means (including any
electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of Federated or
accountants retained by Federated.

2.11 NO MATERIAL ADVERSE EFFECT. There exist no facts,
conditions or circumstances that would be required to be disclosed under
any other Section of this Article II, except for such facts, conditions and
circumstances which, individually or in the aggregate, have not had and
would not reasonably be expected to have a Federated Material Adverse
Effect.

2.12 BROKERS' FEES. Federated has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which Blaustein or Wise
could become liable or obligated.

2.13 DISCLOSURE. No representation or warranty by Federated in
this Article II contains any untrue statement of a material fact, or omits
to state any material fact necessary to make the statements or facts
contained therein not misleading. The copies of all documents furnished to
Blaustein hereunder are true and complete copies of the originals thereof.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES CONCERNING WISE

Wise represents and warrants to Federated that the statements
contained in this Article III are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Article III), except as set forth in
the corresponding section of the Wise Disclosure Schedule.

3.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Wise is a
corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation. Wise is duly authorized
to conduct business and is in good standing under the laws of New York, New
Jersey and Connecticut.

3.2 CHARTER, BY-LAWS, ETC. True and complete copies of the
certificate or articles of incorporation (as the case may be) and by-laws,
each of the foregoing as amended to the date hereof, and the minute books
and all stock books and stock transfer records of Wise shall have been
delivered to Federated prior to the Closing Date. On the Closing Date,
such minute books will contain the true and complete minutes and records of
any meetings, proceedings and other actions of the shareholders and the
Board of Directors of Wise from the date of its incorporation to and
including the Closing Date.

3.3 CAPITALIZATION.

(a) The entire authorized capital stock of Wise is set forth in
Exhibit A of this Agreement. All of the issued and outstanding shares of
common stock of Wise have been duly authorized, are validly issued, fully
paid and nonassessable, and are held of record only by Blaustein. On the
Closing Date, all of the issued and outstanding shares of capital stock of
Wise will be held by Blaustein and there will be no options, warrants, or
other rights to purchase or obtain (including upon conversion, exchange or
exercise) any of such capital stock. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that
could require Wise to issue, sell, or otherwise cause to become outstanding
any of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Wise.

(b) Wise is not obligated to any person, including, but not
limited to Blaustein, to make any payments based upon or relating to the
results of operations or other financial performance of Wise.

3.4 AUTHORIZATION OF TRANSACTION. Following approval by Wise's
Board of Directors and shareholders, Wise shall have full corporate power,
authority and capacity to execute and deliver this Agreement and any
related agreement and to perform its obligations hereunder and thereunder.
Following approval by Wise's Board of Directors and shareholders, this
Agreement and any related agreement shall constitute the valid and legally
binding obligations of Wise, enforceable in accordance with their terms and
conditions, except in each case, as limited by the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally, and general equity principles.

3.5 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement and any related agreement, nor the consummation of the
transactions contemplated hereby and thereby, will (i) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice or consent under (A) any
agreement, contract, lease or commitment affecting the authority or ability
of Wise to perform its obligations hereunder or (B) any related agreement,
license, instrument, or other arrangement (including any shareholder
agreement) to which Wise is a party or by which it is bound or to which any
of its assets is subject (or will result in the imposition of any mortgage,
pledge, lien, encumbrance, charge or other security interest upon any of
its assets); (ii) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, or other restriction of any
governmental entity or court to which Wise is subject; or (iii) conflict
with or result in a breach of any provision of the articles of
incorporation or by-laws of Wise.

3.6 CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental entity, or any other person or entity, is required to be made
or obtained by Wise in connection with the execution, delivery and
performance of this Agreement or any related agreement and the consummation
of the transactions contemplated hereby and thereby, except for approval by
Wise's Board of Directors and shareholders, and any consents, approvals,
authorizations, declarations, filings and registrations required pursuant
to the federal securities laws and the securities or blue sky laws of the
various states, which Federated shall make.

3.7 EVENTS SUBSEQUENT TO JUNE 30, 1997. Since June 30, 1997,
there has not been, individually or in the aggregate, any Wise Material
Adverse Effect.

3.8 FINANCIAL STATEMENTS. Attached hereto as Exhibit B are the
following financial statements (collectively the "Financial Statements"):
(i) audited balance sheets as of December 31, 1996, 1995, 1994, 1993 and
1992 and the related statements of income, shareholders' equity, and cash
flows (including the notes thereto) for the fiscal years ended December 31,
1996, 1995, 1994, 1993 and 1992 for Wise, and (ii) compiled balance sheets
as of June 30, 1997 and related statements of income, shareholders' equity,
and cash flows for six months ended June 30, 1997 for Wise. The Financial
Statements (including the notes thereto) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered
thereby and present fairly in all material respects the financial condition
of Wise as of such dates and the results of operations of Wise for such
periods.

3.9 LITIGATION. There are no Actions pending or, to the
knowledge of Wise, threatened or anticipated, against or involving Wise or
an Affiliate of Wise relating to or affecting the transactions contemplated
by this Agreement or any related agreement.

3.10 BOOKS AND RECORDS. Wise's books and records have been
fully, properly and accurately maintained in all material respects, and
there are no material inaccuracies or discrepancies of any kind contained
or reflected therein, and they fairly present the financial position of
Wise in all respects. None of the records, systems, controls, data or
information of Wise are recorded, stored, maintained, operated or otherwise
wholly or partly dependent on or held by any means (including any
electronic, mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of Wise or accountants
retained by Wise.

3.11 NO MATERIAL ADVERSE EFFECT. There exist no facts,
conditions or circumstances that would be required to be disclosed under
any other Section of this Article III, except for such facts, conditions
and circumstances which, individually or in the aggregate, have not had and
would not reasonably be expected to have a Wise Material Adverse Effect.

3.12 BROKERS' FEES. Wise has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Federated could
become liable or obligated.

3.13 DISCLOSURE. No representation or warranty by Wise in this
Article III contains any untrue statement of a material fact, or omits to
state any material fact necessary to make the statements or facts contained
therein not misleading. The copies of all documents furnished to Federated
hereunder are true and complete copies of the originals thereof.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BLAUSTEIN

Blaustein hereby represents and warrants to Federated that the
statements contained in this Article IV are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article IV), except as set
forth in the corresponding section of the Wise Disclosure Schedule.

4.1 AUTHORIZATION OF TRANSACTION. Blaustein has full power,
authority and capacity to execute and deliver this Agreement and each
related agreement to which he is a party, and to perform his obligations
hereunder and thereunder. This Agreement and any such related agreement
constitute valid and legally binding obligations of Blaustein, enforceable
in accordance with their terms and conditions, except in each case, as
limited by the effect of bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting creditors' rights generally, and
general equity principles.

4.2 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement and any related agreement, nor the consummation of the
transactions contemplated hereby and thereby, will (i) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, or create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice or consent under (A) any
agreement, contract, lease or commitment affecting the authority or ability
of Blaustein or Wise to perform his or its obligations hereunder or (B) any
related agreement, license, instrument, or other arrangement (including any
shareholder agreement) to which Blaustein or Wise is a party or by which he
or it is bound or to which any of his or its assets is subject (or will
result in the imposition of any mortgage, pledge, lien, encumbrance, charge
or other security interest upon any of his or its assets); (ii) violate any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, or other restriction of any governmental entity or court to
which Blaustein or Wise is subject; or (iii) conflict with or result in a
breach of any provision of the articles of incorporation or by-laws of
Wise.

4.3 CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental entity, or any other person or entity, is required to be made
or obtained by Blaustein in connection with the execution, delivery and
performance of this Agreement or any related agreement and the consummation
of the transactions contemplated hereby and thereby, except for any
consents, approvals, authorizations, declarations, filings and
registrations required pursuant to the federal securities laws and the
securities or blue sky laws of the various states, which Federated shall
make.

4.4 WISE SECURITIES. Blaustein owns beneficially and holds of
record good and marketable title to all of the shares of common stock of
Wise, free and clear of any lien, pledge, claim, option, charge, easement,
security interest, transfer or voting restriction, right-of-way, or other
encumbrance of any kind or nature whatsoever (other than transfer
restrictions under the Securities Act of 1933 and state securities laws),
and taxes. Blaustein is not a party to any option, warrant, purchase
right, agreement, contract, lease or commitment that could require
Blaustein to sell, transfer, or otherwise dispose of any capital stock of
Wise (other than this Agreement). Blaustein is not a party to any voting
trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of Wise.

4.5 LITIGATION. There are no Actions pending or, to the
knowledge of Blaustein, threatened or anticipated, against or involving
Blaustein or an Affiliate of Blaustein relating to or affecting the
transactions contemplated by this Agreement or any related agreement.

4.6 NO MATERIAL ADVERSE EFFECT. There exist no facts,
conditions or circumstances that would be required to be disclosed under
any other Section of this Article IV, except for such facts, conditions and
circumstances which, individually or in the aggregate, have not had and
would not reasonably be expected to have a Wise Material Adverse Effect.

4.7 BROKERS' FEES. Blaustein has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for whichFederated could
become liable or obligated.

4.8 DISCLOSURE. No representation or warranty by Blaustein in
this Article IV contains any untrue statement of a material fact, or omits
to state any material fact necessary to make the statements or facts
contained therein not misleading.

ARTICLE 5

COVENANTS OF THE PARTIES

The Parties jointly and severally agree as follows with respect
to the period between the execution of this Agreement and the closing.

5.1 GENERAL. Each of the Parties will use his or its best
efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement.

5.2 NOTICES AND CONSENTS. Each Party will use its best efforts
to give notices to, and obtain consents from, any third party, which notice
or consent the other Party or Parties may reasonably require in connection
with the matters referred to in Articles II, III and IV above.

5.3 FULL ACCESS; CONFIDENTIALITY.

(a) Each of Wise and Federated will permit the other and its
respective representatives to have full access at all reasonable times, and
in a manner so as not to interfere with the normal business operations of
each other, to all premises, properties, personnel, books and records,
contracts, and documents of or pertaining to Wise or Federated.

(b) Each such Party covenants and agrees that it and its
representatives will hold in strict confidence all documents and
information concerning Wise or Federated so obtained (except to the extent
that such documents or information are a matter of public record or require
disclosure in any of the public information or any applications required to
be filed with any governmental or regulatory agency to obtain the approvals
and consents required to effect the transactions contemplated hereby), and
if the transactions contemplated herein are not consummated, such
confidence shall be maintained and, upon written request of a Party all
such documents shall be returned to said Party.

5.4 EXCLUSIVITY.

(a) Neither Wise nor Federated shall, directly or indirectly,
solicit, initiate, encourage or otherwise facilitate any inquiries or the
submission of any proposal or offer from any person relating to the
acquisition of all or substantially all of the capital stock or assets of
Wise or Federated (a "Competing Transaction," which term shall include any
acquisition structured as a merger, consolidation, share exchange or
similar transaction).

(b) Notwithstanding paragraph (a), Federated may (i) enter into
discussions or negotiations or provide information in connection with a
Competing Transaction if its Board of Directors, after consulting with
counsel, determines that such discussions or negotiations should be
commenced in the exercise of its fiduciary responsibilities or such
information should be furnished in the exercise of its fiduciary
responsibilities; and (ii) respond to inquiries from its shareholders in
the ordinary course of business.

(c) Each Party agrees to notify the other Parties immediately if
any such inquiries, proposals or offers are received by, any such
information is requested from, or any such discussions or negotiations are
sought to be initiated or continued with, any of its representatives
indicating, in connection with such notice, the name of such person and the
material terms and conditions of any proposals or offers and thereafter
shall keep the other Parties informed, on a current basis, on the status
and terms of any such proposals or offers and the status of any such
negotiations or discussions.

5.5 STANDSTILL. Each of Blaustein and Wise acknowledges that he
and it are aware of the provisions of the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder relating to insider
trading, and that if either Blaustein or Wise is privy to material, non-
public information regarding Federated, neither Blaustein nor Wise can
trade in Federated Common Shares or other securities of Federated.
Blaustein agrees and undertakes to Federated that at no time prior to the
closing will Blaustein or Wise buy, sell or engage in any transaction
(except the closing under this Agreement) involving any securities issued
by Federated (including any securities convertible into, or exchangeable
for, or warrants, options or rights to purchase or sell, such securities),
or induce any other person to do any of the foregoing.

5.6 CONDUCT OF BUSINESS. During the period from the date hereof
to the Closing Date, each Party will operate only in the ordinary course of
business, except to the extent that the other Parties provide prior written
consent to do otherwise, or as expressly permitted or required by this
Agreement. Without limiting the generality of the foregoing, each Party
agrees that, except as permitted by the other Parties (which permission
shall be deemed granted if the other Parties do not object in writing
within 5 business days of written notification to them of the Party's
intention to take any such action), that Party shall not take any action
which would cause the representations set forth in Sections 2.7 and 3.7
hereof to fail to be true and correct as of the Closing Date.

5.7 REGISTRATION STATEMENT. Each of the Parties agrees to
cooperate in the preparation of a registration statement on Form S-4 (the
"Registration Statement") to be filed by Federated with the SEC in
connection with the issuance of the Federated Common Shares, including the
proxy statement and prospectus constituting a part of said Registration
Statement. Each of the Parties agrees to use all reasonable efforts to
cause the Registration Statement to be declared effective under the
Securities Act of 1933 as promptly as reasonably practicable after filing
thereof. Each of Wise and Blaustein agrees to furnish to Federated all
information concerning Wise, its subsidiaries, officers, directors,
shareholders and Blaustein as may be reasonably requested in connection
with the foregoing.

5.8 SHAREHOLDER MEETING.

(a) Federated shall (i) take all steps reasonably necessary duly
to call, give notice of, convene and hold a meeting of Federated's
shareholders as soon as reasonably practicable for the purpose of securing
the approval by such shareholders of an amendment to Federated's
Certificate of Incorporation (the "Amendment"), which shall increase the
number of authorized shares of Federated's common stock, such that the
transactions contemplated under this Agreement may be consummated, and (ii)
subject to the qualification set forth in Section 5.4 hereof, recommend to
the shareholders of said Party the approval of the Amendment, and use its
best efforts to obtain, by January 31, 1998, such approval.

(b) Each Party shall cooperate and consult with the other
Parties as to each of the foregoing matters. In connection therewith, each
director of Federated agrees to vote the shares he or she owns in Federated
in favor of this Agreement.

5.9 FINANCIAL SUPPORT. From and after the date hereof, Wise
will use its best efforts, and Blaustein will cause Wise to use its best
efforts, to provide such financial assistance to Federated (which may
include purchases of Federated's inventory) as Federated may request in the
continued conduct of its business, PROVIDED THAT (a) the Board of Directors
of Wise shall determine in good faith that said assistance shall be in the
best interests of Wise, including post-closing considerations, and (b)
Fleet Bank, N.A. shall have provided any requisite consent under the
$400,000 Revolving Line of Credit and $600,000 Term Loan by and between
Fleet Bank, N.A. and Wise dated June 12, 1997, which consent Wise shall use
its best efforts to secure.

5.10 NOTICES. Each Party shall promptly notify the others of (a)
any Wise or Federated Material Adverse Effect and (b) any developments
causing any of the representations and warranties of the Parties in this
Agreement not to be true.

5.11 FILINGS, APPLICATIONS. The Parties will prepare promptly,
and Federated will file, any statements or applications necessary to obtain
the regulatory approvals required to consummate the transactions
contemplated by this Agreement.

ARTICLE 6

OTHER AGREEMENTS

The Parties agree as follows with respect to the period following
the closing.

6.1 GENERAL. In case at any time after the closing any further
action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any
other Party reasonably may request, all at the sole cost and expense of the
requesting Party.

6.2 TAX-FREE REORGANIZATION TREATMENT. Neither Blaustein, Wise
nor Federated will take or cause to be taken any action which would, or is
reasonably likely to, prevent or impede the Exchange from qualifying as a
reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986.

ARTICLE 7

CONDITIONS TO FEDERATED'S OBLIGATIONS

The obligation of Federated to consummate the transactions to be
performed by it in connection with the closing is subject to satisfaction
of the following conditions:

7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Articles III and IV above or in any related
agreement shall be true and correct at and as of the Closing Date as though
such representations and warranties were made or given on and as of the
Closing Date (other than the representations and warranties made as of a
particular date, which shall be true as of such date).

7.2 COVENANTS. Blaustein shall have performed and complied with
all of his covenants hereunder in all material respects through the
closing.

7.3 CERTIFICATES. Blaustein shall have delivered to Federated a
certificate to the effect that each of the conditions specified above in
Sections 7.1 and 7.2 is satisfied in all respects.

7.4 INJUNCTIONS. There shall not be any injunction, judgment,
order, decree, ruling, or charge in effect, or any litigation that has been
commenced or threatened, preventing consummation of any of the transactions
contemplated by this Agreement.

7.5 CONSENTS. Blaustein and Wise shall use their best efforts
to obtain all authorizations, consents and approvals as required under
Section 3.5, 3.6, 4.2 or 4.3 above, or any schedule thereto, prior to the
closing. Each such authorization, consent and approval shall be in form
and substance reasonably acceptable to Federated. Any filing required by
any governmental entity prior to the closing, including, without
limitation, the Registration Statement described in Section 5.7 above,
shall have been made to said entity in conformity with applicable law and
regulations, and any such filing that is material shall have been accepted
by said entity prior to the closing. Federated shall have received from
the SEC a declaration of effectiveness as to the Registration Statement.

7.6 CORPORATE APPROVALS. The Agreement and the transactions
contemplated hereby shall have been approved by the Board of Directors of
Wise within 30 days of the date of this Agreement.

7.7 ADDITIONAL DELIVERIES. All actions to be taken by Blaustein
and Wise in connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Federated.

7.8 NO MATERIAL ADVERSE CHANGE. No Wise Material Adverse Effect
shall have occurred.

7.9 FALLON CONSULTING AGREEMENT. The Parties shall have entered
into a Consulting Agreement with Harry Fallon, on terms mutually agreed
upon, which agreement shall be for a term of not less than 2 years, and for
cash compensation of not less than $60,000 per year, and which shall
provide Mr. Fallon with health insurance and other benefits, as agreed upon
between Mr. Fallon and the Parties.

7.10 BOARD OF DIRECTORS. Blaustein shall cause the designees of
Harry Fallon (who shall comprise not be less than 25% of the Board at any
given time) to be elected to the Board of Directors of Federated on the
Closing Date for a period of not less than 2 years. It is presently
anticipated that Fallon will constitute one such designee, and will serve
as Vice Chairman of the Board of Directors for a period of not less than 2
years, having such duties and responsibilities as shall be mutually agreed
upon by Fallon and the Parties.

7.11 EXECUTIVE EMPLOYMENT AGREEMENTS AND OTHER EMPLOYEE
ARRANGEMENTS.

(a) Federated shall have entered into an employment agreement
with Jane A. Christy, on terms mutually agreed upon by the Parties and Ms.
Christy, under which Ms. Christy shall continue to perform such services as
she currently performs for Federated, and shall have the title of Vice
President -- Operations, and which shall further provide: a term of one
year, cash compensation of $62,500, an incentive cash bonus of $15,000
payable on the first anniversary of said employment agreement, and benefits
including health insurance, lease payments on the car currently leased by
Federated for her, and such other benefits as are mutually agreed upon by
Ms. Christy and the Parties.

(b) Federated shall have entered into an employment agreement
with Donald Butz, on terms mutually agreed upon by the Parties and Mr.
Butz, which agreement shall be for a 1-year term, and which shall provide
cash compensation of not less than the amount he currently receives as an
employee of Federated, and benefits including health insurance and such
other benefits as are mutually agreed upon by Mr. Butz and the Parties.

(c) In addition, Federated shall have entered into employment
and non-compete agreements, in substantially the form of those used by Wise
with certain of its sales personnel, with each of Michael Bachman, Raymond
D'Amato, Diane D'Amato and Steven Parker.

7.12 NEW JERSEY FACILITY. The Parties shall maintain an office
facility in New Jersey on terms mutually agreed upon by the Parties.

ARTICLE 8

CONDITIONS TO BLAUSTEIN'S OBLIGATIONS

Blaustein's obligation to consummate the transactions to be
performed by him in connection with the closing is subject to satisfaction
of the following conditions:

8.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Article II above or in any related agreement shall
be true and correct in all material respects at and as of the Closing Date
as though such representations and warranties were made and given on and as
of the Closing Date (other than the representations and warranties made as
of a particular date, which shall be true as of such date).

8.2 COVENANTS. Federated shall have performed and complied with
all of its covenants hereunder in all material respects through the
closing.

8.3 CERTIFICATES. Federated shall have delivered to Blaustein a
certificate to the effect that each of the conditions specified above in
Sections 8.1 and 8.2 is satisfied in all respects.

8.4 INJUNCTIONS. There shall not be any injunction, judgment,
order, decree, ruling, or charge in effect, or any litigation that has been
commenced or threatened, preventing consummation of any of the transactions
contemplated by this Agreement.

8.5 CONSENTS. Federated shall use its best efforts to obtain
all authorizations, consents and approvals as required under Sections 2.5
and 2.6 above, or any schedule thereto, prior to the closing. Each such
authorization, consent and approval shall be in form and substance
reasonably acceptable to Blaustein. Any filing required by any
governmental entity prior to the closing, including, without limitation,
the Registration Statement described in Section 5.7 above, shall have been
made to said entity in conformity with applicable law and regulations, and
any such filing that is material shall have been accepted by said entity
prior to the closing. Federated shall have received from the SEC a
declaration of effectiveness as to the Registration Statement.

8.6 CORPORATE APPROVALS.

(a) The Agreement and the transactions contemplated hereby shall
have been approved by the Board of Directors of Federated within 30 days of
the date of this Agreement.

(b) The Amendment, as defined in Section 5.8, shall have been
approved by the shareholders of Federated not later than January 31, 1998.

8.7 ADDITIONAL DELIVERIES. All actions to be taken by Federated
in connection with consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to Blaustein.

8.8 NO MATERIAL ADVERSE CHANGE. No Federated Material Adverse
Effect shall have occurred.

8.9 RESIGNATION BY FEDERATED'S CURRENT BOARD OF DIRECTORS AND
EXECUTIVE OFFICERS. Except as provided in Sections 7.10 and 7.11 above, by
the Closing Date all members of Federated's Board of Directors and all
executive officers of Federated shall have resigned, and Federated shall
have accepted such resignations.

8.10 FEDERATED NET WORTH. On the Closing Date, Federated's
shareholders' equity, as determined by the accounting firm of Bederson &
Company, L.L.P., shall not be less than $400,000.

8.11 AUDITORS' OPINION. The accounting firm of Bederson &
Company, L.L.P., shall have delivered to Blaustein an opinion reasonably
satisfactory in form and substance to Blaustein (based on certain
assumptions and representations of Blaustein, Wise, and Federated), to the
effect that the Exchange qualifies as a reorganization under Section 368 of
the Code and that generally no income or gain will be recognized by
Blaustein for federal income tax purposes as a result of the transactions
contemplated by this Agreement.

8.12 EXECUTIVE EMPLOYMENT AGREEMENTS AND OTHER EMPLOYEE
ARRANGEMENTS.

Blaustein may waive any condition specified in this Article VIII
if he executes a writing so stating at or prior to the closing.

ARTICLE 9

TERMINATION

9.1 TERMINATION OF AGREEMENT. Certain of the Parties may
terminate this Agreement as provided below:

(a) Federated and Blaustein may terminate this Agreement by
mutual written consent at any time prior to the closing;

(b) Blaustein may terminate this Agreement by giving written
notice to Federated at any time prior to the closing if any of the
following events shall have occurred:

(i) FEDERATED'S BREACH. Federated has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, and Blaustein has notified Federated of the breach, and
the breach has continued without cure for a period of 10 days after the
notice of breach.

(ii) FAILURE TO CLOSE BECAUSE FEDERATED FAILS TO MEET
OBLIGATIONS. The closing shall not have occurred on or before January 31,
1998, by reason of the failure of any provision of Article VIII (conditions
precedent to Blaustein's performance), unless said failure shall have
resulted primarily from Blaustein's breaching any representation, warranty,
or covenant contained in this Agreement.

(c) Federated may terminate this Agreement by giving written
notice to Blaustein at any time prior to the closing if any of the
following events shall have occurred:

(i) BLAUSTEIN'S BREACH. Blaustein has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, and Federated has notified Blaustein of the breach, and
the breach has continued without cure for a period of 10 days after the
notice of breach.

(ii) FAILURE TO CLOSE BECAUSE BLAUSTEIN FAILS TO MEET
OBLIGATIONS. The closing shall not have occurred on or before January 31,
1998, by reason of the failure of any provision of Article VII (conditions
precedent to Federated's performance), unless said failure shall have
resulted primarily from Federated's breaching any representation, warranty,
or covenant contained in this Agreement.

(d) Federated may terminate this Agreement if its Board of
Directors determines in good faith that a written proposal for a Competing
Transaction under Section 5.4 above is more favorable from a financial
point of view to its shareholders than the transactions contemplated by
this Agreement (including any adjustment to the terms and conditions of the
transactions under this Agreement, proposed by the other Parties in
response to such Competing Transaction), and is in said shareholders' best
interests. Federated may terminate this Agreement and enter into an
agreement with respect to such Competing Transaction, PROVIDED THAT it has
complied with the provisions of Section 5.4(c) concerning notice to the
other Parties of negotiations, and at least 2 business days prior to any
such termination, Federated has provided the other Parties written notice
that it intends to terminate this Agreement pursuant to this Section
9.1(b), which notice shall identify the Competing Transaction then
determined to be more favorable.

9.2 EFFECT OF TERMINATION. Except as provided in Section 9.3
below, and except for any liability of any Party then in breach, if any
Party terminates this Agreement pursuant to Section 9.1 above, all rights
and obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party; PROVIDED, HOWEVER, that the
provisions of Section 5.3(b) (confidentiality), Article X (Indemnification)
and Section 12.13 (expenses) of this Agreement shall survive termination.

9.3 PAYMENT UPON TERMINATION. If Federated terminates this
Agreement pursuant to clause (d) of Section 9.1, then Federated shall pay
to Blaustein the reasonable documented out-of-pocket expenses incurred by
Blaustein in connection with the transactions contemplated hereby,
including the negotiation and execution of this Agreement, up to a maximum
of $50,000.

ARTICLE 10

INDEMNIFICATION

10.1 GENERAL. Subject to the limitations set forth in this
Article X, Federated agrees to indemnify, defend and hold Blaustein (the
"Indemnified Party") harmless from and against any and all claims, actions,
suits, demands, assessments, judgments, losses, liabilities, damages, costs
and expenses (including, without limitation, fines, penalties and, to the
extent permitted by law, reasonable attorneys' fees) ("Indemnity Claims")
suffered by said Indemnified Party resulting from the inaccuracy or
incorrectness of any representation or breach of any warranty made by
Federated under this Agreement, if, but only if, and then only to the
extent that, the inaccuracy or incorrectness or breach, as the case may be,
was knowing, intentional and deliberate on the part of Federated, AND
FURTHER PROVIDED THAT the Indemnity Notice described at Section 10.2 below
shall have been received within six months of the Closing Date. Except as
provided otherwise under Article IX (Termination), the provisions of this
Article X shall be the sole remedy available to the Parties for the breach
of this Agreement. In no event shall Federated's directors, officers,
employees, or agents have any liability arising out of this Agreement.

10.2 NOTICE; PAYMENT OF VALID CLAIMS. Subject to the limitations
set forth in this Article X, in the event that an Indemnified Party shall
assert an Indemnity Claim, said Indemnified Party shall have sent written
notice thereof (the "Indemnity Notice") to an independent committee of
directors (the "Independent Committee"), consisting of Harry J. Fallon,
Steven Fried, and a representative of Federated's independent auditors.
The Indemnity Notice shall provide (i) an identification of the particular
representation claimed to be incorrect or inaccurate, the warranty,
covenant or agreement claimed to have been breached and/or the basis of the
claim for indemnification, (ii) a statement in reasonable detail of the
facts giving rise to such alleged inaccuracy, incorrectness or breach
and/or claim for indemnification, (iii) a statement that the incorrectness
or inaccuracy or breach, as the case may be, was knowing, deliberate, and
intentional by Federated, and (iv) the amount in dollars by which the
Indemnified Party claims to have been damaged by reason of the alleged
inaccuracy, incorrectness or breach and/or the amount by which the
Indemnified Party is or may be entitled to indemnification pursuant to this
Article X (said written notice of claim from the Indemnified Party being
hereinafter called an "Indemnity Notice"). Except as provided in Section
10.3 (Third-Party Claims) below, upon receipt of an Indemnity Notice, the
Independent Committee shall, in not less than three (3) business days,
appoint a single arbitrator, who, in accordance with the rules of the
American Arbitration Association, shall determine the validity of the
Indemnity Claims described therein. The decision by said arbitrator shall
be final and binding on the Parties. If the arbitrator determines that
such Indemnity Claims are valid, Federated shall immediately issue to
Blaustein a number of shares of Federated Common Stock, valued at $.36 per
share (the "Indemnity Shares"), equal in value to the total amount by which
such valid Indemnity Claims, aggregated with all other Indemnity Claims
found valid in accordance with this Section 10.2, exceed $25,000; PROVIDED,
HOWEVER, THAT the number of Indemnity Shares issued under this Section 10.2
shall be limited to an amount that, when aggregated with the Federated
Common Shares described at Section 1.1, shall not exceed 80% of the total
shares of Federated's common stock issued and outstanding as of the Closing
Date.

10.3 THIRD-PARTY CLAIMS. Notwithstanding any provision to the
contrary in Section 10.2 above, if an Indemnity Claim should involve the
proposed settlement of litigation or threatened litigation against
Federated, Wise or Blaustein, the approval of the Independent Committee,
acting in its sole discretion by majority vote, without referral to an
arbitrator, shall be required. The decision by the Independent Committee
shall be final and binding on the Parties.

10.4 DEDUCTIBLE. In no event shall Federated be liable to an
Indemnified Party to the extent that all Indemnity Claims found valid under
this Article X do not exceed $25,000 in the aggregate, such that the
Indemnified Party shall absorb a total of the first $25,000 of losses,
costs, expenses or damages sustained by it relating to valid Indemnity
Claims made hereunder and after said Indemnified Party shall have absorbed
such total of $25,000 in respect to valid Indemnity Claims generally, the
balance of all such valid Indemnity Claims shall be subject to
indemnification as provided in this Article X, it being understood by the
Parties that said $25,000 deductible amount is a cumulative aggregate
deductible and is not applicable as a deduction to each Indemnity Claim
individually.

10.5 CONFORMITY WITH ARTICLE X. In no event shall an Indemnified
Party's right to reimbursement in respect of any one or more Indemnity
Claims be enforced or realized except in conformity with this Article X.
The Indemnified Party hereby acknowledges that this Article X has been
expressly bargained for in this transaction.

ARTICLE 11

DEFINITIONS

11.1 DEFINED TERMS. As used herein, the terms below shall have
the following meanings:

"ACTIONS" means (i) any outstanding criminal, civil or
administrative injunction, judgment, order, decree, ruling, or charge,
contingent or otherwise and whether or not required to be disclosed, or
(ii) any action, suit, proceeding, hearing, or investigation of, in, or
before any court or administrative agency of any federal, state, local, or
foreign jurisdiction.

"AFFILIATE" means, with respect to any person, any person
directly or indirectly controlling, controlled by, or under common control
with such other person. For purposes of this definition, "control"
(including with correlative meaning, the terms "controlled by" and "under
common control with") as used with respect to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through
ownership of voting securities, by contract or otherwise.

"FEDERATED MATERIAL ADVERSE EFFECT" means a material adverse
change in or effect on the consolidated financial condition, properties,
business or results of operations of Federated, taken as a whole.

"WISE MATERIAL ADVERSE EFFECT" means a material adverse change in
or effect on the consolidated financial condition, properties, business or
results of operations of Wise, taken as a whole.

ARTICLE 12

MISCELLANEOUS

12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in Articles II, III
and IV shall survive for six months following the Closing Date.

12.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the
subject matter of this Agreement prior to the closing without the prior
written approval of Federated and Blaustein; PROVIDED, HOWEVER, that any
Party may make any public disclosure it believes in good faith is required
by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
best efforts to advise the other Parties prior to making the disclosure).

12.3 THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.

12.4 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they have related in any
way to the subject matter hereof.

12.5 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of Federated and Blaustein.

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

12.7 PRONOUNS. Whenever the context requires, the use in this
Agreement of a pronoun of any gender shall be deemed to refer also to any
other gender, and the use of the singular shall be deemed to refer also to
the plural.

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

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

IF TO BLAUSTEIN:

Martin L. Blaustein, Chairman
Wise Components, Inc.
28 Henry Street
Greenwich, Connecticut 06830

Fax: (203) 531-7956

and copy to:

Smith, Ranscht, Connors, Mutino,
Nordell & Sirignano, P.C.
235 Main Street
White Plains, NY 10601
Attn: Michael Nordell, Esq.

Fax: (914) 946-8861

IF TO FEDERATED:

Federated Purchaser, Inc.
268 Cliffwood Avenue
Cliffwood, New Jersey 07721
Attn: Harry J. Fallon, Chairman

Fax: (908) 290-8008

and copy to:

Sills Cummis Zuckerman Radin
Tischman Epstein & Gross
One Riverfront Plaza
Newark, NJ 07102-5400
Attn: Victor H. Boyajian, Esq.

Fax: (973) 643-6500

IF TO WISE:

Wise Components, Inc.
28 Henry Street
Greenwich, Connecticut 06830
Attn: Martin L. Blaustein, Chairman

Fax: (203) 531-4859

and copy to:

Smith, Ranscht, Connors, Mutino,
Nordell & Sirignano, P.C.
235 Main Street
White Plains, NY 10601
Attn: Michael Nordell, Esq.

Fax: (914) 946-8861

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

12.10 JURISDICTION. Each of the Parties hereto, including all
persons joining in this Agreement, hereby expressly agrees that
jurisdiction respecting any dispute between or among them arising out of
this Agreement, shall be in the appropriate State Courts of New York, or
the United States District Court for the Southern District of New York.

12.11 AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by Federated, Blaustein and Wise. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

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

12.13 EXPENSES. Each party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby; PROVIDED, HOWEVER, that
Federated shall pay 50%, and Wise shall pay 50%, of all legal and
professional fees relating to the preparation and filing of the
Registration Statement.

12.14 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also
to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation.

12.15 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Disclosure Schedules identified in this Agreement are incorporated herein
by reference and made a part hereof.

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

FEDERATED PURCHASER, INC.

By:
Harry J. Fallon

Title: President

WISE COMPONENTS, INC.

By:
Martin L. Blaustein

Title: Chairman

MARTIN L. BLAUSTEIN

<PAGE>

EXHIBIT 27

Financial Data Schedule

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

[DESCRIPTION] ART. 5 FDS FOR YEAR END 10-K

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FEDERATED PURCHASER, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED OCTOBER 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1997
<PERIOD-START> Nov-01-1996
<PERIOD-END> Oct-31-1997
<CASH> 69,358
<SECURITIES> 0
<RECEIVABLES> 400,862
<ALLOWANCES> 16,803
<INVENTORY> 228,583
<CURRENT-ASSETS> 783,629
<PP&E> 147,287
<DEPRECIATION> 126,687
<TOTAL-ASSETS> 1,001,175
<CURRENT-LIABILITIES> 508,794
<BONDS> 0
<COMMON> 171,976
0
0
<OTHER-SE> 296,030
<TOTAL-LIABILITY-AND-EQUITY> 1,001,175
<SALES> 3,252,670
<TOTAL-REVENUES> 3,288,339
<CGS> 2,493,482
<TOTAL-COSTS> 2,493,482
<OTHER-EXPENSES> 1,066,808
<LOSS-PROVISION> 6,000
<INTEREST-EXPENSE> 2,850
<INCOME-PRETAX> (280,801)
<INCOME-TAX> 1,100
<INCOME-CONTINUING> (281,901)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (281,901)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)

</TABLE>