SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549 
FORM 8-K 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 
 	
November 13, 2003	
	
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)	
 			
ROPER INDUSTRIES, INC			
			
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)			

DELAWARE	
	
(STATE OR OTHER JURISDICTION OF INCORPORATION)	
 	 	 	
1-12273	 	51-0263969	
	 		
(COMMISSION FILE NUMBER)	 	(IRS EMPLOYER IDENTIFICATION NO.)	
 	 	 	
2160 SATELLITE BLVD., SUITE 200, DULUTH, GEORGIA	 	    30097	
	
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)	 	(ZIP CODE)	
 	
(770) 495-5100	
	
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)	

 
Explanatory Note: 
     On October 21, 2003, Roper Industries, Inc. (the “Company”, “Roper” or “we”) entered into a stock purchase agreement pursuant to which we have agreed to acquire all of the outstanding capital stock of Neptune Technology Group Holdings Inc. (“Neptune”) from the selling shareholders named in the agreement for a cash purchase price of approximately $475 million, which is net of cash acquired and includes debt assumed. The purpose of this Current Report on Form 8-K is to file certain historical financial statements of Neptune as well as pro forma financial statements of Roper, which give effect to the acquisition and related transactions. 
Item 7.     Financial Statements, Pro Forma Financial Information and Exhibits 
(a)	 	Financial Statements of Business Acquired	
 		
 	 	The following financial statements of Neptune Technology Group Holdings, Inc. are included as Exhibit 99.1 and are incorporated herein by reference in their entirety:	
 	(1)	 	the Condensed Consolidated Financial Statements for the nine months ended September 30, 2003, including:	
 	 	 	(a)	the Condensed Consolidated Balance Sheets as of December 31, 2002 and the nine months ended September 30, 2003;	
 		
 	 	 	(b)	the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2003 and September 30, 2002;	
 		
 	 	 	(c)	the Condensed Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Earnings from December 31, 2002 through September 30, 2003;	
 		
 	 	 	(d)	the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2003 and September 30, 2002; and	
 		
 	 	 	(e)	the Notes to the Condensed Consolidated Financial Statements; and	
 	(2)	 	the Consolidated Financial Statements for the fiscal year ended December 31, 2002, including:	
 	 	 	(a)	the Report of Independent Accountants, dated January 31, 2002;	
 		
 	 	 	(b)	the Consolidated Balance Sheets as of December 31, 2002 and December 31, 2001;	
 		
 	 	 	(c)	the Consolidated Statements of Operations for the fiscal year ended December 31, 2002, the period from November 1, 2001 to October 31, 2001, the period from	

 
 	 	 	 	January 1, 2001 to October 31, 2001 and the fiscal year ended December 31, 2000;	
 		
 	 	 	(d)	the Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income from December 31, 1999 through December 31, 2002;	
 		
 	 	 	(e)	the Consolidated Statements of Cash Flows for the fiscal year ended December 31, 2002, the period from November 1, 2001 to December 31, 2001, the period from January 1, 2001 to October 31, 2001 and the fiscal year ended December 31, 2000; and	
 		
 	 	 	(f)	the Notes to Consolidated Financial Statements.	
(b)	 	Pro Forma Financial Information	
 	(1)	 	The following Unaudited Pro Forma Financial Statements of Roper Industries, Inc. and Neptune Technology Group Holdings, Inc. are included as Exhibit 99.2 and are incorporated herein by reference in their entirety:	
 	 	 	(a)	Pro Forma Consolidated Balance Sheets as of September 30, 2003;	
 		
 	 	 	(b)	Pro Forma Consolidated Statements of Operations for the year ended October 31, 2002;	
 		
 	 	 	(c)	Pro Forma Consolidated Statements of Operations for the nine months ended September 30, 2003; and	
 		
 	 	 	(d)	the Notes to such financial statements.	
(c)	 	Exhibits	
 	 	 	
2.1.*	 	Stock Purchase Agreement, dated as of October 21, 2003, by and among Neptune Technology Group Holdings, Inc., a Delaware corporation, the selling shareholders named in the agreement, and Roper Industries, Inc., a Delaware corporation.	
 		
23.1	 	Consent of PricewaterhouseCoopers, LLP.	
 		
99.1	 	Financial Statements of Neptune Technology Group Holdings, Inc., as described in Item 7(a) of this Current Report on Form 8-K.	
 		
99.2	 	Pro Forma Unaudited Condensed Financial Information of Roper Industries, Inc. and Neptune Technology Group Holdings, Inc., as described in Item 7(b) of this Current Report on Form 8-K.	

 
 	 	 	
 	 	*Pursuant to Item 601(b)(2) of Regulation S-K, the Registrant agrees to furnish supplementally to the Securities and Exchange Commission, upon request, any omitted schedules or similar attachments.	

 
SIGNATURE 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 	 	 	
 	 	Roper Industries, Inc.	
 		
 	 	BY: /s/ Martin S. Headley

Martin S. Headley,
Vice President, Chief Financial Officer	
 		
Date: November 13, 2003	 	 	

 
EXHIBIT INDEX 
 	 	 	
Exhibit No.	 	Description	
	 		
2.1*	 	Stock Purchase Agreement, dated as of October 21, 2003, by and among Neptune Technology Group Holdings, Inc., a Delaware corporation, the selling shareholders named in the agreement, and Roper Industries, Inc., a Delaware corporation.	
23.1	 	Consent of PricewaterhouseCoopers, LLP.	
99.1	 	Financial Statements of Neptune Technology Group Holdings, Inc., as described in Item 7(a) of this Current Report on Form 8-K.	
99.2	 	Pro Forma Unaudited Condensed Financial Information of Roper Industries, Inc. and Neptune Technology Group Holdings, Inc., as described in Item 7(b) of this Current Report on Form 8-K.	
*	 	Pursuant to Item 601(b)(2) of Regulation S-K, the Registrant agrees to furnish supplementally to the Securities and Exchange Commission, upon request, any omitted schedules or similar attachments.	

                                                                     EXHIBIT 2.1

                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                     NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.,
                               THE SHAREHOLDERS OF
                     NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
                      LISTED ON THE SIGNATURE PAGES HERETO

                                       AND

                             ROPER INDUSTRIES, INC.

                          Dated as of October 21, 2003

                            STOCK PURCHASE AGREEMENT

                                TABLE OF CONTENTS

                                                                                                               PAGE
                                                                                                               ----

ARTICLE I DEFINITIONS.............................................................................................2

   SECTION 1.1.         DEFINITIONS...............................................................................2

ARTICLE II PURCHASE AND REDEMPTION OF SHARES AND TREATMENT OF OPTIONS.............................................9

   SECTION 2.1.         AGREEMENT FOR THE PURCHASE AND SALE OF SHARES.............................................9
   SECTION 2.2.         AGGREGATE PURCHASE PRICE.................................................................10
   SECTION 2.3.         PAYMENT OF PURCHASE PRICE................................................................10
   SECTION 2.4.         FUNDS FLOW STATEMENT.....................................................................12
   SECTION 2.5.         PAYMENTS OF OTHER AMOUNTS PAYABLE AT CLOSING.............................................12
   SECTION 2.6.         CLOSING DATE.............................................................................12

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................13

   SECTION 3.1.         CORPORATE ORGANIZATION...................................................................13
   SECTION 3.2.         CORPORATE AUTHORITY......................................................................13
   SECTION 3.3.         CAPITAL STOCK............................................................................14
   SECTION 3.4.         SUBSIDIARIES.............................................................................16
   SECTION 3.5.         FINANCIAL STATEMENTS.....................................................................16
   SECTION 3.6.         ABSENCE OF CERTAIN CHANGES...............................................................17
   SECTION 3.7.         NO UNDISCLOSED LIABILITIES...............................................................18
   SECTION 3.8.         TAXES....................................................................................18
   SECTION 3.9.         GOVERNMENTAL PERMITS.....................................................................20
   SECTION 3.10.        OWNED REAL PROPERTY......................................................................20
   SECTION 3.11.        REAL PROPERTY LEASES.....................................................................20
   SECTION 3.12.        INTELLECTUAL PROPERTY....................................................................21
   SECTION 3.13.        LABOR RELATIONS..........................................................................21
   SECTION 3.14.        EMPLOYEE BENEFIT PLANS...................................................................22
   SECTION 3.15.        CERTAIN CONTRACTS........................................................................23
   SECTION 3.16.        GOVERNMENTAL CONSENTS AND APPROVALS......................................................24
   SECTION 3.17.        LITIGATION...............................................................................24
   SECTION 3.18.        ENVIRONMENTAL MATTERS....................................................................24
   SECTION 3.19.        INSURANCE................................................................................25
   SECTION 3.20.        FINDERS..................................................................................25
   SECTION 3.21.        TITLE TO ASSETS..........................................................................25
   SECTION 3.22.        TRANSACTIONS WITH AFFILIATES.............................................................25
   SECTION 3.23.        NOTES....................................................................................26
   SECTION 3.24.        PRODUCT AND SERVICE WARRANTIES...........................................................26
   SECTION 3.25.        CLOSING DATE TRANSACTION EXPENSE STATEMENT...............................................26

                                                                                                              
ARTICLE IV INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE CONVERTIBLE PREFERRED
                        STOCKHOLDERS.............................................................................26

   SECTION 4.1.         REPRESENTATIONS OF CONVERTIBLE PREFERRED STOCKHOLDERS....................................26
   SECTION 4.2.         REPRESENTATIONS OF SELLERS...............................................................27

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................28

   SECTION 5.1.         ORGANIZATION.............................................................................28
   SECTION 5.2.         AUTHORITY RELATIVE TO THIS AGREEMENT.....................................................29
   SECTION 5.3.         NONCONTRAVENTION.........................................................................29
   SECTION 5.4.         GOVERNMENTAL CONSENTS....................................................................29
   SECTION 5.5.         INVESTMENT INTENT........................................................................29
   SECTION 5.6.         STATUS AS ACCREDITED INVESTOR............................................................29
   SECTION 5.7.         FINANCIAL CAPABILITY; SOLVENCY...........................................................30
   SECTION 5.8.         NO OUTSIDE RELIANCE......................................................................30

ARTICLE VI ADDITIONAL COVENANTS..................................................................................30

   SECTION 6.1.         CONDUCT OF BUSINESS OF THE NEPTUNE COMPANIES.............................................30
   SECTION 6.2.         CONFIDENTIALITY..........................................................................33
   SECTION 6.3.         CERTAIN EFFORTS..........................................................................33
   SECTION 6.4.         NO PUBLIC ANNOUNCEMENT...................................................................34
   SECTION 6.5.         DIRECTORS' AND OFFICERS' INDEMNIFICATION.................................................35
   SECTION 6.6.         INVESTIGATION OF THE COMPANY BY PURCHASER................................................36
   SECTION 6.7.         NO SOLICITATION; ACQUISITION PROPOSALS...................................................36
   SECTION 6.8.         REGISTRATION STATEMENT ON FORM S-3.......................................................36
   SECTION 6.9.         EMPLOYEE BENEFIT PLANS...................................................................36
   SECTION 6.10.        INTERIM FINANCIALS; COOPERATION WITH FINANCING...........................................37
   SECTION 6.11.        CHARTER AND STOCKHOLDER AGREEMENT........................................................38
   SECTION 6.12.        DAP......................................................................................38

ARTICLE VII CONDITIONS TO OBLIGATIONS OF PURCHASER...............................................................38

   SECTION 7.1.         NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES...............................38
   SECTION 7.2.         RESIGNATIONS OF DIRECTORS................................................................39
   SECTION 7.3.         LITIGATION...............................................................................39
   SECTION 7.4.         GOVERNMENTAL APPROVALS...................................................................39
   SECTION 7.5.         NO MATERIAL ADVERSE EFFECT...............................................................39
   SECTION 7.6.         CLOSING DATE PAYOFF LETTERS; RELEASE OF LIENS............................................40
   SECTION 7.7.         CLOSING DATE TRANSACTION EXPENSE STATEMENT...............................................40
   SECTION 7.8.         STOCKHOLDER AGREEMENT....................................................................40
   SECTION 7.9.         REDEMPTION...............................................................................40
   SECTION 7.10.        STOCK AND OPTION CERTIFICATES............................................................41
   SECTION 7.11.        GENERAL..................................................................................41
   SECTION 7.12.        FIRPTA AFFIDAVIT.........................................................................41

                                       ii

                                                                                                              
   SECTION 7.13.        CLOSING DATE EXHIBIT A...................................................................41
   SECTION 7.14.        FUNDS FLOW STATEMENT.....................................................................41
   SECTION 7.15.        DAP......................................................................................41

ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY, THE SELLERS AND THE CONVERTIBLE
                        PREFERRED STOCKHOLDERS...................................................................41

   SECTION 8.1.         NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES...............................42
   SECTION 8.2.         LITIGATION...............................................................................42
   SECTION 8.3.         GOVERNMENTAL APPROVALS...................................................................42

ARTICLE IX TERMINATION...........................................................................................42

   SECTION 9.1.         TERMINATION..............................................................................42

ARTICLE X INDEMNIFICATION........................................................................................43

   SECTION 10.1.        ARTICLE III INDEMNIFICATION OBLIGATIONS..................................................43
   SECTION 10.2.        ARTICLE IV INDEMNIFICATION OBLIGATIONS...................................................43
   SECTION 10.3.        CLAIMS PERIOD............................................................................44
   SECTION 10.4.        LIMITATIONS..............................................................................44

ARTICLE XI MISCELLANEOUS.........................................................................................44

   SECTION 11.1.        AMENDMENT AND MODIFICATION...............................................................44
   SECTION 11.2.        NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................................44
   SECTION 11.3.        PARTIAL INVALIDITY.......................................................................44
   SECTION 11.4.        EXECUTION IN COUNTERPARTS................................................................44
   SECTION 11.5.        ASSIGNMENT; SUCCESSORS AND ASSIGNS.......................................................45
   SECTION 11.6.        TITLES AND HEADINGS......................................................................45
   SECTION 11.7.        SCHEDULES AND EXHIBITS...................................................................45
   SECTION 11.8.        KNOWLEDGE................................................................................45
   SECTION 11.9.        WAIVERS..................................................................................45
   SECTION 11.10.       WAIVER OF JURY TRIAL.....................................................................46
   SECTION 11.11.       EXPENSES.................................................................................46
   SECTION 11.12.       NOTICES..................................................................................46
   SECTION 11.13.       ENTIRE AGREEMENT.........................................................................47
   SECTION 11.14.       NO THIRD PARTY BENEFICIARIES.............................................................47
   SECTION 11.15.       GOVERNING LAW; JURISDICTION; FORUM.......................................................47
   SECTION 11.16.       NO IMPLIED REPRESENTATIONS...............................................................48

                                      iii

SCHEDULES

Schedule 1                 Sellers and Convertible Preferred Stockholders
Schedule 1.1(a)            Bonus Agreements
Schedule 1.1(b)            Robert Geckle Payment
Schedule 3.1               Foreign Qualifications
Schedule 3.2               Conflicts
Schedule 3.3(c)            Agreements Regarding Capital Stock
Schedule 3.3(d)            Authorization of Capital Stock
Schedule 3.4               Subsidiaries
Schedule 3.6               Absence of Certain Changes
Schedule 3.7               Debt
Schedule 3.8               Taxes
Schedule 3.9               Governmental Permits
Schedule 3.10              Owned Real Property
Schedule 3.11              Scheduled Leases
Schedule 3.12              Intellectual Property
Schedule 3.13              Labor Relations
Schedule 3.14              ERISA Matters
Schedule 3.15              Company Contracts
Schedule 3.16              Governmental Consents and Approvals
Schedule 3.17(a)           Litigation
Schedule 3.17(b)           Asbestos Litigation
Schedule 3.18              Environmental Matters
Schedule 3.19              Insurance
Schedule 3.20              Finders
Schedule 3.21              Title to Assets
Schedule 3.22              Transactions with Affiliates
Schedule 3.23              Notes
Schedule 3.24              Product and Service Warranties
Schedule 5.3               Purchaser Conflicts
Schedule 6.1               Conduct of Business
Schedule 11.8              Knowledge of Certain Persons

EXHIBITS

Exhibit A:                 Capital Stock
Exhibit 1.1:               Adjustment Amount
Exhibit 6.11:              Amended Certificate of Designation
Exhibit 7.14:              Form of Funds Flow Statement Acknowledgement
Exhibit 10.1:              Seller's Percentage

                                       iv

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of October
21, 2003, is entered into by and among NEPTUNE TECHNOLOGY GROUP HOLDINGS INC., a
Delaware corporation (the "Company"), those Persons listed on Schedule 1 hereto,
and ROPER INDUSTRIES, INC., a Delaware corporation (the "Purchaser").

                                    RECITALS

         A.       As of the date hereof, the outstanding equity securities of
the Company consist of shares of (i) Class A Common Stock, par value $0.01 per
share (the "Class A Common Stock"), held by the holders (the "Class A
Stockholders") listed on Exhibit A hereto, (ii) Class D Common Stock, par value
$0.01 per share (the "Class D Common Stock"), held by the holders (the "Class D
Stockholders" and together with the Class A Stockholders, the "Sellers") listed
on Exhibit A hereto and (iii) Series A Participating Convertible Preferred
Stock, par value $0.01 per share (the "Convertible Preferred Stock"), held by
the holders (the "Convertible Preferred Stockholders") listed on Exhibit A
hereto.

         B.       After giving effect to the amendment to the Company's charter
as contemplated by this Agreement and in accordance with the terms of such
amended charter, all of the outstanding shares of Convertible Preferred Stock
will, immediately prior to the closing contemplated by this Agreement, either be
converted into shares of Class B Common Stock, par value $0.01 per share (the
"Class B Common Stock") and sold pursuant to this Agreement or redeemed by the
Company.

         C.       The outstanding options to purchase equity securities of the
Company consist of options (the "Options") to purchase Class A Common Stock held
by the holders (the "Option Holders") listed on Exhibit A hereto.

         D.       The Sellers are, in the aggregate, the owners of 100% of the
outstanding shares of Class A Common Stock and Class D Common Stock and, to the
extent the Convertible Preferred Stock has been converted into Class B Common
Stock as of the closing contemplated by this Agreement, the Convertible
Preferred Stockholders will be, in the aggregate, the owners of 100% of the
outstanding shares of Class B Common Stock.

         E.       The Sellers and Convertible Preferred Stockholders desire to
sell to Purchaser and Purchaser desires to purchase from the Sellers and
Convertible Preferred Stockholders all of the outstanding shares of Class A
Common Stock, Class B Common Stock and Class D Common Stock.

         F.       Pursuant to the terms of the Option Agreements and this
Agreement, upon closing of the transactions contemplated by this Agreement, each
Option will be cancelled and the holder thereof will be entitled to receive, on
a per share basis, with respect to the entire exercisable but unexercised
portion of such Option, the same consideration that the Class A Stockholders
will receive per share less the applicable exercise price and applicable
withholding taxes.

         G.       As a result of the foregoing, upon consummation of the
transactions contemplated hereby Purchaser will acquire ownership of 100% of the
outstanding shares of capital stock of the Company and all Options will either
be fully exercised or otherwise cancelled.

         H.       In order to induce Purchaser to enter into this Agreement,
concurrently with the execution of this Agreement, each of Charles C. DiLaura,
Henry T. Golden, Lawrence M. Russo, Thierry W. Swinson, Kent O. Murray, David
Stoddart, Joe Irving Breeding, James W. Nusbaum and Joseph M. Bridges (all of
whom are stockholders of the Company) has entered into (a) an employment
agreement with the Company and Purchaser and (b) a noncompete agreement with
Purchaser.

         I.       In order to induce Purchaser to enter into this Agreement,
concurrently with the execution of this Agreement, Investcorp International,
Inc., a Delaware corporation ("III") (which is an affiliate of certain
stockholders of the Company), has entered into a Nondisclosure and
Nonsolicitation Agreement with Purchaser.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:

                                   ARTICLE I

                                   DEFINITIONS

         Section 1.1. Definitions. In addition to the other words and terms that
may be defined elsewhere in this Agreement, as used in this Agreement, the
following words and terms shall have the meanings specified or referred to
below:

         "Acquisition Proposal" shall have the meaning specified in Section 6.7
of this Agreement.

         "Adjustment Amount" shall have the meaning specified in Exhibit 1.1 of
this Agreement.

         "Affiliate" of any specified Person means any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.

         "Agreement" shall mean this Agreement.

         "Assignee" shall have the meaning specified in this Agreement.

         "Assignor" shall have the meaning specified in Section 3.12(e) of this
Agreement.

         "Bonus Agreements" shall have the meaning specified in the Bonus
Expenses definition.

                                       2

         "Bonus Expenses" shall mean the sum of (a) the aggregate amount payable
to or for the benefit of certain employees of the Neptune Companies as a result
of the transactions contemplated by this Agreement pursuant to the bonus
agreements (the "Bonus Agreements") by and between the Company and such
employees, dated April 1, 2003, and listed on Schedule 1.1(a) and (b) Two
Hundred Fifty-Nine Thousand Nine Hundred Dollars and Thirty-One Cents
($259,900.31) payable to Robert Geckle pursuant to item (i) in Schedule 1.1(b).

         "Business Day" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the city of New York, New
York.

         "Certificate of Designation" shall have the meaning specified in
Section 3.3(d) of this Agreement.

         "Charter" shall have the meaning specified in Section 3.3(d) of this
Agreement.

         "Class A Common Stock" shall have the meaning specified in the recitals
of this Agreement.

         "Class B Common Stock" shall have the meaning specified in the recitals
of this Agreement.

         "Class D Common Stock" shall have the meaning specified in the recitals
of this Agreement.

         "Class A Stockholders" shall have the meaning specified in the recitals
of this Agreement.

         "Class D Stockholders" shall have the meaning specified in the recitals
of this Agreement.

         "Closing" shall have the meaning specified in Section 2.6 of this
Agreement.

         "Closing Date" shall have the meaning specified in Section 2.6 of this
Agreement.

         "Closing Date Exhibit A" shall have the meaning specified in Section
7.13 of this Agreement.

         "Closing Date Transaction Expense Statement" shall have the meaning
specified in Section 7.7 of this Agreement.

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

         "Commitment Letter" means that letter agreement, dated the date hereof,
between Purchaser and Merrill Lynch Capital Corporation relating to certain
financing commitments made by Merrill Lynch Capital Corporation in connection
with the transactions contemplated by this Agreement.

         "Company" shall have the meaning specified in the preamble of this
Agreement.

         "Company Contracts" shall have the meaning specified in Section 3.15 of
this Agreement.

                                       3

         "Company Option Plan" shall have the meaning specified in Section
3.3(c) of this Agreement.

         "Control," "Controlling" or "Controlled by" means, when used with
respect to any specified Person, the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

         "Convertible Preferred Stock" shall have the meaning specified in the
recitals of this Agreement.

         "Convertible Preferred Stockholders" shall have the meaning specified
in the recitals of this Agreement.

         "DAP" means DAP Technologies Ltd., a corporation organized and existing
under the federal laws of Canada.

         "DAP Option Purchase Expenses" means the aggregate amount (net of any
applicable exercise price) paid by the Neptune Companies to consummate the DAP
Option Purchase.

         "DAP Options" shall have the meaning specified in Section 6.12 of this
Agreement.

         "DAP Option Purchase" shall have the meaning specified in Section 6.12
of this Agreement.

         "Debt" of any Person means all obligations of such Person, without
duplication, (a) for borrowed money, (b) evidenced by notes, bonds, debentures
or similar instruments, (c) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the Ordinary Course), (d)
under capital leases, (e) for bankers acceptances payable, (f) in the nature of
Guarantees of the obligations described in clauses (a) through (e) above of any
other Person; provided, however, that surety/performance bonds and undrawn
letters of credit in support of surety/performance bonds, workers' compensation
insurance obligations and other like obligations shall be excluded from the
definition of Debt for purposes of this Agreement.

         "Effective Date" means the date that the Securities and Exchange
Commission declares the Registration Statement effective.

         "Employee Pension Plan" shall have the meaning specified in section
6.9(b) of this Agreement.

         "Employee Plan" shall have the meaning specified in Section 3.14 of
this Agreement.

         "Encumbrances" shall mean all mortgages, liens, pledges, security
interests, charges, claims or other encumbrances.

                                       4

         "Environmental Laws" shall have the meaning specified in Section 3.18
of this Agreement.

         "ERISA" shall have the meaning specified in Section 3.14 of this
Agreement.

         "ERISA Affiliate" shall have the meaning specified in Section 3.14 of
this Agreement.

         "Financial Statements" shall have the meaning specified in Section 3.5
of this Agreement.

         "Fully Diluted Number" means the sum of (a) the aggregate number of
shares of Class A Common Stock, Class B Common Stock (if any) and Class D Common
Stock outstanding as of immediately prior to the Closing, (b) the aggregate
number of shares of Class A Common Stock issuable upon exercise of all
unexercised vested Options outstanding as of immediately prior to the Closing
and (c) provided that the Company notifies Purchaser in writing prior to the
Closing that the applicable shareholder approval meeting the requirements of
Section 280G(b)(5) of the Code has been obtained, 2,136.257, which represents
the number of notional shares set forth in Schedule 1.1(b).

         "Funded Indebtedness" means the total required to prepay all of the
following as of the applicable date: (i) all amounts payable under the
$220,000,000 senior secured credit facility of the Company's wholly-owned
Subsidiary, Neptune Technology Group Inc., a Delaware corporation ("NTGI"),
pursuant to the Credit Agreement, dated as of April 1, 2003, with UBS AG,
Stamford Branch, as administrative agent for the Lenders party thereto (the
"Senior Credit Facility") (including any interest accrued thereon as of the
applicable date and all prepayment premiums and penalties and any other fees and
expenses payable pursuant to the Senior Credit Facility upon payment in full of
the Senior Credit Facility as of the applicable date), (ii) all amounts payable
under NTGI's 14% Senior Subordinated Notes due 2010 and related Indenture dated
as of April 1, 2003 (the "Subordinated Notes") (including any interest accrued
thereon as of the applicable date and all prepayment premiums and penalties and
any other fees and expenses payable pursuant to the Subordinated Notes upon
payment in full of the Subordinated Notes as of the applicable date), (iii) all
amounts payable under the Company's 10% Senior Note due November 2011, all
related notes issued as interest payments and related Indenture dated November
1, 2001 (the "Senior Notes") (including any interest accrued thereon as of the
applicable date and all prepayment premiums and penalties and any other fees and
expenses payable pursuant to such Senior Note and related interest payment notes
upon payment in full of such Senior Note and related interest payment notes as
of the applicable date), (iv) the Note issued to Kenneth J. Szolosi, dated
December 6, 2002, in the aggregate amount of $1,377,116.89 (including any
interest accrued thereon as of the applicable date and all prepayment premiums
and penalties and any other fees and expenses payable pursuant to such Note upon
payment in full of such Note as of the applicable date), (v) the Note issued to
Timothy L. Weidner, dated December 6, 2002, in the aggregate amount of
$1,323,007.02 (including any interest accrued thereon as of the applicable date
and all prepayment premiums and penalties and any other fees and expenses
payable pursuant to such Note upon payment in full of such Note as of the
applicable date), (vi) the Note issued to Jonathan G. Greisz, dated December 6,
2002, in the aggregate amount of $299,876.08 (including any interest accrued
thereon as of the applicable date and all prepayment premiums and penalties and
any other fees and expenses payable

                                       5

pursuant to such Note upon payment in full of such Note as of the applicable
date), (vii) all amounts payable under the credit facility pursuant to the
Confirmation of Credit, dated August 11, 2003, between DAP and Royal Bank of
Canada and (viii) all amounts payable pursuant to any other indebtedness for
borrowed money incurred or guaranteed by any of the Neptune Companies (which
amounts shall be disclosed to Purchaser in accordance with Sections 3.7(b) and
7.6(a) of this Agreement) (the amounts described in this clause (viii) are
referred to herein as the "Supplemental Debt").

         "Funds Flow Statement" shall have the meaning specified in Section 7.14
of this Agreement.

         "GAAP" means United States generally accepted accounting principles.

         "Governmental Entity" means any federal, state or local or foreign
government, any political subdivision thereof or any court, administrative or
regulatory agency, department, instrumentality, body or commission or other
governmental authority or agency, domestic or foreign.

         "Governmental Permits" shall have the meaning specified in Section 3.9
of this Agreement.

         "Guarantee" means (a) any guarantee of the payment or performance of,
or any contingent obligation in respect of, any indebtedness or other obligation
of any other Person, (b) any other arrangement whereby credit is extended to one
obligor on the basis of any promise or undertaking of another Person (i) to pay
the indebtedness of such obligor, (ii) to purchase any obligation owed by such
obligor, (iii) to purchase or lease assets (other than inventory in the Ordinary
Course) under circumstances that would enable such obligor to discharge one or
more of its obligations, or (iv) to maintain the capital, working capital,
solvency or general financial condition of such obligor, and (c) any liability
as a general partner of a partnership or as a venturer in a joint venture in
respect of indebtedness or other obligations of such partnership or venture.

         "HSR Act" shall have the meaning specified in Section 3.16 of this
Agreement.

         "III" shall have the meaning specified in the recitals of this
Agreement.

         "Insurance Coverage Expenses" shall mean the aggregate amount paid at
the Closing to obtain the insurance coverage for the fourth, fifth and sixth
years following the Closing Date, if requested under Section 6.5(b) of this
Agreement.

         "Insurance Coverage Premiums" shall mean the aggregate amount payable
to obtain the insurance coverage as required under Section 6.5(b) of this
Agreement.

         "Intellectual Property" shall have the meaning specified in Section
3.12(a) of this Agreement.

         "Laws" means any federal, state, local or foreign law, code, regulation
rule or decree.

                                       6

         "Leased Real Property" shall have the meaning specified in Section
3.11(a) of this Agreement.

         "Material Adverse Effect" shall have the meaning specified in Section
3.1 of this Agreement.

         "NTGI" shall have the meaning specified in the Funded Indebtedness
definition.

         "Neptune Companies" shall mean the Company and each Subsidiary of the
Company.

         "Neptune Predecessor Entities" shall mean each of the Neptune
Companies, Schlumberger Resource Management Services, Inc., a Delaware
corporation, Schlumberger Canada Limited, a corporation amalgamated under the
laws of the Province of Ontario, Schlumberger Distribucion S.A. de C.V., a
Mexican corporation, Schlumberger Servicios S.A de C.V., a Mexican corporation
and each predecessor entity of each of the foregoing.

         "Net Cash" means an amount equal to the total amount of cash and cash
equivalents of the Neptune Companies as of the close of business on the
Settlement Date, as determined in accordance with GAAP, consistently applied..

         "Net Funded Indebtedness" means an amount equal to (a) the aggregate
amount sufficient to prepay in full all of the Funded Indebtedness as of the
Settlement Date less (b) the Net Cash.

         "Notional Exercise Price" shall have the meaning specified in Section
2.3(a)(vi) of this Agreement.

         "Notional Options" means the notional shares described in item (ii) of
Schedule 1.1(b).

         "Option Agreements" shall have the meaning specified in Section 3.3(c)
of this Agreement.

         "Option Exercise Price" shall have the meaning specified in Section
2.3(a)(v) of this Agreement.

         "Option Holders" shall have the meaning specified in the recitals of
this Agreement.

         "Options" shall have the meaning specified in the recitals of this
Agreement.

         "Ordinary Course" shall mean the ordinary course of business consistent
with past practice.

         "Owned Real Property" shall have the meaning specified in Section
3.10(a) of this Agreement.

         "Patent Agreement" shall have the meaning specified in Section 3.12(e)
of this Agreement.

         "Permitted Encumbrances" shall have the meaning specified in Section
3.10(a) of this Agreement.

                                       7

         "Per Share Amount" shall mean an amount (carried up to 6 decimal places
as designated by the Company) equal to (a) the sum of (i) the Purchase Price,
(ii) the Option Exercise Price, and (iii) the Notional Exercise Price divided by
(b) the Fully Diluted Number.

         "Person" means any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated organization, Governmental
Entity or other legally recognized entity.

         "Preferred Stock" shall have the meaning specified in Section 3.3(a) of
this Agreement.

         "Purchase Price" shall have the meaning specified in Section 2.2 of
this Agreement.

         "Purchaser" shall have the meaning specified in the preamble of this
Agreement.

         "Purchaser Indemnified Parties" shall have the meaning specified in
Section 10.1 of this Agreement.

         "Recapitalization" shall mean the recapitalization of the Company
pursuant to the Purchase Agreement, dated as of April 1, 2003, by and among the
Company and "Purchasers" named therein.

         "Registration Statement" shall have the meaning specified in Section
6.8 of this Agreement.

         "Scheduled Leases" shall have the meaning specified in Section 3.11(a)
of this Agreement.

         "Securities Act" shall have the meaning specified in Section 5.5 of
this Agreement.

         "Seller Transaction Expenses" means the legal, accounting, financial
advisory and other third party advisory or consulting fees and expenses incurred
from and after the Settlement Date and prior to the Closing Date for the account
of any of the Neptune Companies or any of the Sellers in connection with the
transactions contemplated hereby and other related matters (including, without
limitation, amounts payable to (a) Gibson, Dunn & Crutcher LLP, (b) III or any
Affiliates of III other than payments in respect of Shares pursuant to this
Agreement, (c) Barg Coffin Lewis & Trapp, LLP, and (d) White & Case LLP).
Notwithstanding the foregoing, the term "Seller Transaction Expenses" shall not
include any fees or expenses incurred by any of the Neptune Companies in
connection with Purchaser's financing for the transaction contemplated hereby
(including, without limitation, any fees and expenses incurred by the Neptune
Companies in providing the information requested by Purchaser pursuant to the
second sentence of Section 6.10).

         "Sellers" shall have the meaning specified in the recitals of this
Agreement.

         "Seller's Percentage" means as to each Seller, the percentage set forth
beside such Seller's name on Exhibit 10.1.

                                       8

         "Senior Credit Facility" shall have the meaning specified in the Funded
Indebtedness definition.

         "Settlement Date" means August 31, 2003.

         "Shareholder Loans" shall have the meaning specified in Section 3.23 of
this Agreement.

         "Shares" shall have the meaning specified in Section 2.1 of this
Agreement.

         "Stockholder Agreement" shall mean the Stockholder Agreement, dated
April 1, 2003, by and among the Company and certain shareholders of the Company
signatory thereto.

         "Subordinated Notes" shall have the meaning specified in the Funded
Indebtedness definition.

         "Subsidiary" shall have the meaning specified in Section 3.4 of this
Agreement.

         "Supplemental Debt" shall have the meaning specified in the Funded
Indebtedness definition.

         "Tax Return" means any report, return, declaration, claim for refund,
or other information, return or statement required to be supplied to a
Governmental Entity in connection with Taxes, including any schedule or
attachment thereto and any amendment thereof.

         "Taxes" means all taxes, assessments, charges, duties, fees, levies and
other governmental charges, including income, franchise, capital stock, real
property, personal property, tangible, withholding, employment, payroll, social
security, social contribution, unemployment compensation, disability, transfer,
sales, use, excise, gross receipts, value-added and all other taxes of any kind,
whether disputed or not, and any charges, interest or penalties imposed thereon,
and including any obligation to indemnify, assume or otherwise succeed to any
Tax liability of any other Person.

         "Transaction Payments" shall mean the Bonus Expenses, the Seller
Transaction Expenses, the Insurance Coverage Expenses, the Insurance Coverage
Premiums, the DAP Option Purchase Expenses and the DAP Purchase Price.

         "Treasury Regulations" means the Income Tax Regulations, promulgated
under the Code.

         "Undesignated Common Stock" shall have the meaning specified in Section
3.3(a) of this Agreement.

                                   ARTICLE II

           PURCHASE AND REDEMPTION OF SHARES AND TREATMENT OF OPTIONS

         Section 2.1. Agreement for the Purchase and Sale of Shares. Subject to
the terms and conditions hereof, at the Closing, (a) the Class A Stockholders
and the Class D Stockholders will sell, transfer and deliver to Purchaser, and
Purchaser will purchase and acquire from the Class A

                                       9

Stockholders and the Class D Stockholders all of the outstanding Class A Common
Stock and Class D Common Stock, free and clear of all Encumbrances, (b) the
Convertible Preferred Stockholders will sell, transfer and deliver to Purchaser,
and Purchaser will purchase and acquire from the Convertible Preferred
Stockholders all of the outstanding Class B Common Stock issued upon conversion
of the Convertible Preferred Stock not otherwise redeemed on the Closing Date in
accordance with the Certificate of Designation, free and clear of all
Encumbrances (together with the Class A Common Stock and Class D Common Stock,
the "Shares"), (c) the Options will be cancelled and (d) the Company will redeem
the Convertible Preferred Stock to be redeemed on the Closing Date in accordance
with the Certificate of Designation. Notwithstanding any other provision in the
Certificate of Designation, the parties agree that, for the purposes of this
Agreement, all shares of Convertible Preferred Stock which are converted into
shares of Class B Common Stock pursuant to Section 6.1 of the Certificate of
Designation shall be deemed converted immediately prior to the Closing and the
shares of Class B Common Stock issued pursuant to such conversion shall be
deemed issued and outstanding immediately prior to Closing.

         Section 2.2. Aggregate Purchase Price. The aggregate cash amount to be
paid by Purchaser at the Closing shall be Five Hundred Million Dollars
($500,000,000) minus the sum of (i) the Net Funded Indebtedness, (ii) the
aggregate amount of all Seller Transaction Expenses, (iii) the aggregate amount
of all Bonus Expenses, (iv) the aggregate amount of all Insurance Coverage
Expenses, (v) Three Million Nine Hundred Thousand Dollars ($3,900,000), (vi) One
Million Seven Hundred Fifty Thousand Dollars ($1,750,000), (vii) the aggregate
amount of all DAP Option Purchase Expenses, (viii) the Adjustment Amount, if
any, (ix) the aggregate amount paid by the Company from and after the Settlement
Date to redeem or repurchase any shares of Class A Common Stock pursuant to
Section 6.1(a)(iv) of this Agreement and (x) the aggregate amount payable to
redeem the Convertible Preferred Stock to be redeemed on the Closing Date in
accordance with the Certificate of Designation as set forth in Section 2.3(a)(i)
(such net cash amount being referred to herein as the "Purchase Price").

         Section 2.3. Payment of Purchase Price.

                  (a)      On the Closing Date, Purchaser shall:

                           (i)      on behalf of the Company, pay to each
         Convertible Preferred Stockholder whose shares of Convertible Preferred
         Stock are required to be redeemed pursuant to the Certificate of
         Designation, to such account or accounts as such Convertible Preferred
         Stockholder specifies to Purchaser in writing at least two Business
         Days prior to the Closing Date, an amount equal to (A) the aggregate
         number of shares of Convertible Preferred Stock owned by such
         Convertible Preferred Stockholder that are to be redeemed in accordance
         with the Certificate of Designation as of the Closing multiplied by (B)
         the applicable redemption price per share for such Convertible
         Preferred Stock as of the Closing Date, calculated pursuant to the
         Certificate of Designation;

                           (ii)     pay to each Class A Stockholder, to such
         account or accounts as such Class A Stockholder specifies to Purchaser
         in writing at least two Business Days prior to the Closing Date, an
         amount equal to (A) the Per Share Amount multiplied by

                                       10

         (B) the number of shares of Class A Common Stock owned by such Class A
         Common Stockholder as of the Closing provided, however, that, with
         respect to any Class A Stockholder who is the obligor on any
         Shareholder Loan outstanding as of the Closing, the amount payable to
         such Class A Stockholder shall be reduced by the outstanding principal
         and accrued interest on such Class A Stockholder's Shareholder Loan
         through the Closing;

                           (iii)    pay to each Class D Stockholder, to such
         account or accounts as such Class D Stockholder specifies to Purchaser
         in writing at least two Business Days prior to the Closing Date, an
         amount equal to (A) the Per Share Amount multiplied by (B) the number
         of shares of Class D Common Stock owned by such Class D Common
         Stockholder as of the Closing;

                           (iv)     pay to each Convertible Preferred
         Stockholder whose shares of Convertible Preferred Stock are to be
         automatically converted into Class B Common Stock pursuant to the
         Certificate of Designation, to such account or accounts as such
         Convertible Preferred Stockholder specifies to Purchaser in writing at
         least two Business Days prior to the Closing Date, an amount equal to
         (A) the Per Share Amount multiplied by (B) the number of shares of
         Class B Common Stock held by such Convertible Preferred Stockholder as
         of the Closing;

                           (v)      pay to each Option Holder of vested Options,
         to such account or accounts as each such Option Holder specifies to
         Purchaser in writing at least two Business Days prior to the Closing
         Date, an amount (rounded to the nearest whole cent) equal to (I)(A) the
         Per Share Amount multiplied by (B) the number of shares of Class A
         Common Stock issuable on the exercise of such Option owned by such
         Option Holder as of the Closing minus (II) the aggregate option
         exercise price for such Option (as set forth on Exhibit A) (the total
         option exercise price for all such Options cancelled hereunder which
         have an exercise price per share less than the Per Share Amount is
         referred to herein as the "Option Exercise Price"); and

                           (vi)     Subject to the Company's prior written
         notification to Purchaser that applicable shareholder approval meeting
         the requirements of Section 280G(b)(5) of the Code has been obtained,
         pay to Robert Geckle, to such account or accounts as Robert Geckle
         specifies to Purchaser in writing at least two Business Days prior to
         the Closing Date, an amount (rounded to the nearest whole cent) equal
         to (I) the product of (A) the Per Share Amount multiplied by (B)
         2,136.1257 minus (II) Two Hundred Fifty-Six Thousand Three Hundred
         Thirty-Five Dollars ($256,335) (the "Notional Exercise Price") (which
         represents the product of $120.00 multiplied by 2,136.1257).

                  (b)      All payments required pursuant to Section 2.3(a)
shall be made by wire transfer of immediately available funds (in each case,
against delivery of (i) the applicable stock certificates representing the
shares of Class A Common Stock, Class D Common Stock, Class B Common Stock and
Convertible Preferred Stock, as applicable, being sold or redeemed or (ii) the
applicable receipts representing acknowledgment of cancellation of the Options
being cancelled, in each case in proper form and duly endorsed for transfer).

                                       11

                  (c)      With respect to each payment made pursuant to Section
2.3(a)(v) to a Seller who is an employee of any of the Neptune Companies,
Purchaser shall be entitled to deduct, withhold and remit to the appropriate
Governmental Entities (or cause to be deducted, withheld and remitted) any and
all Taxes required by Law with respect to such payment. Any such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the party who otherwise would have received such amounts but for such
withholding of Taxes.

         Section 2.4. Funds Flow Statement. Notwithstanding anything in this
Agreement to the contrary, it is understood that Purchaser shall be fully
entitled to rely upon the accuracy of, and to make payments in accordance with,
the Funds Flow Statement and shall have no responsibility or liability
whatsoever to the Sellers and the Convertible Preferred Stockholders (in their
capacity as holders of equity securities and not debt securities of the Company)
for any inaccuracies or omissions in the Funds Flow Statement.

         Section 2.5. Payments of Other Amounts Payable at Closing. On the
Closing Date, Purchaser shall:

                  (a)      on behalf of the Company, pay to such account or
accounts as the Company specifies to Purchaser in writing at least two Business
Days prior to the Closing Date, the aggregate amount of all Funded Indebtedness
as of the Closing Date to the extent not paid prior to the Closing Date;

                  (b)      on behalf of the Company, pay to such account or
accounts as the Company specifies to Purchaser in writing at least two Business
Days prior to the Closing Date, the aggregate amount of all Seller Transaction
Expenses to the extent not paid prior to the Closing Date;

                  (c)      on behalf of the Company, pay to such account or
accounts as the Company specifies to Purchaser in writing at least two Business
Days prior to the Closing Date, the aggregate amount of all Bonus Expenses to
the extent not paid prior to the Closing Date;

                  (d)      on behalf of the Company, pay to such account or
accounts as the Company specifies to Purchaser in writing at least two Business
Days prior to the Closing Date, the aggregate amount of Insurance Coverage
Premiums to the extent not paid prior to the Closing Date; and

                  (e)      on behalf of the Company or any of its direct or
indirect Subsidiaries, pay to such account or accounts as the Company specifies
to Purchaser in writing at least two Business Days prior to the Closing Date,
the aggregate amount of the DAP Purchase Price and DAP Option Purchase Expenses.

         Section 2.6. Closing Date. Subject to the terms and conditions hereof,
the consummation of the transactions provided for in this Article II (the
"Closing") shall take place on the latest of (a) the fifth Business Day after
the date on which each of the conditions set forth in Articles VII and VIII have
been satisfied or waived by the party or parties entitled to the benefit of such
conditions (it being understood that, in the case of a waiver of any conditions
for the benefit of the Company, the Sellers and the Convertible Preferred
Stockholders, such waiver may be made by the Company on behalf of itself and
each of the Sellers and the Convertible

                                       12

Preferred Stockholders; provided, that only a Convertible Preferred Stockholder
required pursuant to Section 2.1 to sell its Class B Common Stock may waive the
Purchaser's obligation pursuant to Sections 2.1 and 2.3 to purchase such Class B
Common Stock), (b) the date which is the earlier of (1) February 27, 2004 or (2)
the first Business Day after the 90th day after the Effective Date, and (c) such
other date as Purchaser and the Company (on behalf of itself and the Sellers and
the Convertible Preferred Stockholders) mutually agree. The date on which the
Closing actually occurs is hereinafter referred to as the "Closing Date." The
Company shall provide notice of the proposed Closing Date to the other parties
hereto at least two Business Days prior to such date. Such notice shall attach
the proposed Funds Flow Statement, and the Company shall update the other
parties hereto with respect to any changes in such proposed Funds Flow
Statement. The Closing shall take place at the offices of King & Spalding LLP,
191 Peachtree Street, Atlanta, Georgia 30303 or at such other place as Purchaser
and the Company (on behalf of itself and the Sellers and the Convertible
Preferred Stockholders) mutually agree.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES
                                 OF THE COMPANY

         The Company hereby represents and warrants to Purchaser as follows:

         Section 3.1. Corporate Organization. Each of the Neptune Companies is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization. Each of the Neptune Companies is duly qualified to transact
business as a foreign corporation and is in good standing in each other
jurisdiction in which the ownership or leasing of its properties or assets or
the conduct of its business requires such qualification, except where the
failure to so qualify or to be in good standing has not had and would not have a
Material Adverse Effect. Schedule 3.1 lists all jurisdictions in which each
Neptune Company is duly qualified to conduct business. As used herein, "Material
Adverse Effect" means any circumstance, change or effect that, individually or
when taken together with all other such circumstances, changes or effects, is
materially adverse to the results of operations, financial condition or business
of the Company and its Subsidiaries taken as a whole, except for effects and
changes (i) resulting from any general national, international or regional
economic or financial conditions or securities markets, including any such
effects or changes resulting from acts of war (whether or not declared) or
terrorism, (ii) generally affecting the industry in which the Company and its
Subsidiaries operate and (iii) resulting from the announcement of the
transactions contemplated hereby. Each of the Neptune Companies has the
requisite corporate power to own or lease and to operate and use its properties
and assets and to carry on its business as now conducted. The Company has
delivered to Purchaser complete and correct copies of the certificate of
incorporation and bylaws (or comparable governing documents) of each of the
Neptune Companies, each as in effect on the date hereof.

         Section 3.2. Corporate Authority.

                  (a)      The Company has the requisite corporate power to
execute and deliver this Agreement and to fulfill its obligations herein. The
execution, delivery and performance of this

                                       13

Agreement by the Company have been duly authorized by all requisite corporate
action. This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company enforceable in
accordance with its terms, except that such enforceability (a) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally, and (b) is subject to general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).

                  (b)      Except as set forth in Schedule 3.2, neither the
execution and delivery by the Company or any Seller of this Agreement nor the
consummation by the Company or any Seller of the transactions contemplated
hereby, nor compliance by the Company or any Seller with or fulfillment of its
respective obligations hereunder will:

                           (i)      conflict with or violate any provision of
         the Company's Charter, Certificate of Designation or bylaws;

                           (ii)     materially contravene any Law;

                           (iii)    result in the acceleration of, or entitle
         any party to accelerate (whether after the giving of notice or lapse of
         time or both), any debt obligation of any of the Neptune Companies in
         excess of $2,500,000 in the aggregate;

                           (iv)     constitute a default under or violate, or
         result, with giving of notice or lapse of time or both in any default
         under or violation of, or result in the creation or imposition of, any
         Encumbrance upon any of the assets or properties any of the Neptune
         Companies or any of the Shares pursuant to any provision of, any
         mortgage, lease, agreement, indenture, license or instrument to which
         any of the Neptune Companies is a party or by which any of them or any
         of their respective properties or assets is bound, other than
         conflicts, violations, creations and impositions that would not result
         in a Material Adverse Effect;

                           (v)      constitute an event permitting modification,
         amendment or termination of a mortgage, lease, agreement, indenture,
         license, instrument, order, arbitration award, judgment or decree to
         which any of the Neptune Companies is a party or by which any of them
         or any of their assets or properties is bound, other than
         modification(s), amendment(s) or termination(s) that would not result
         in a Material Adverse Effect; or

                           (vi)     require the approval, consent, authorization
         or act of, or the making by any of the Neptune Companies, of any
         declaration, filing or registration with any Governmental Entity or
         other Person, except to the extent that the failure to obtain or make
         any of the foregoing would not result in a Material Adverse Effect.

         Section 3.3. Capital Stock.

                  (a)      The authorized capital stock of the Company consists
of (i) 1,026,652.6674 shares of Common Stock, par value $0.01 per share (the
"Undesignated Common Stock"), (ii) 897,500 shares of Class A Common Stock, (iii)
128,000 shares of Class B

                                       14

Common Stock, (iv) 1,152.6674 shares of Class D Common Stock, and (v) 500,000
shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
127,029.6432 shares of which have been designated as Convertible Preferred
Stock.

                  (b)      As of the date hereof, (i) 459,914.4413 shares of
Class A Common Stock are outstanding, (ii) 1,152.6674 shares of Class D Common
Stock are outstanding, (iii) 127,029.6432 shares of Convertible Preferred Stock
are outstanding, (iv) no other shares of Preferred Stock are outstanding and (v)
no shares of Undesignated Common Stock or Class B Common Stock are outstanding.
As of the date hereof, all of the outstanding shares of Class A Common Stock are
held by the Class A Stockholders in the respective amounts listed on Exhibit A
hereto. As of the date hereof, all of the outstanding shares of Class D Common
Stock are held by the Class D Stockholders in the respective amounts listed on
Exhibit A hereto. As of the date hereof, all of the Convertible Preferred Stock
is held by the Convertible Preferred Stockholders in the respective amounts
listed on Exhibit A hereto.

                  (c)      As of the date hereof, the Options consist of stock
options to purchase 32,328.2891 shares of Class A Stock pursuant to stock option
agreements ("Option Agreements") entered into pursuant to the 2001 Stock
Incentive Plan of the Company as amended and restated (the "Company Option
Plan"). As of the date hereof, all of the Options are held by the Option Holders
in the respective amounts listed on Exhibit A hereto and, as of the Closing,
100% of such Options are expected to be exercisable pursuant to Section 3(b) of
the Option Agreements governing such Options. The exercise price of each Option
is listed on Exhibit A hereto. Except for this Agreement, the Options and as
disclosed in Schedule 3.3(c), there are no agreements, warrants, puts, calls,
rights, options or other commitments of any character to which the Company is a
party relating to the issuance, sale, purchase, redemption, conversion,
exchange, registration, voting or transfer of any shares of capital stock of the
Company.

                  (d)      All of the outstanding shares of Class A Common
Stock, Class D Common Stock and Convertible Preferred Stock are duly authorized,
validly issued, fully paid and nonassessable, free of any preemptive or
subscription rights (except as set forth in Schedule 3.3(d)), and, upon delivery
to Purchaser pursuant to Article II hereof, the then outstanding shares of Class
A Common Stock, Class B Common Stock and Class D Common Stock hereof will be
free of any preemptive or subscription rights and, to the Company's knowledge,
free and clear of all Encumbrances, other than those contained in the Company's
Second Amended and Restated Certificate of Incorporation as filed with the
Delaware Secretary of State (the "Charter") including the Certificate of
Designation with respect to the Convertible Preferred Stock as filed with the
Delaware Secretary of State as amended pursuant to Section 6.11 (the
"Certificate of Designation") and other than limitations imposed by federal and
state securities laws.

                  (e)      There are no dividends which have accrued or been
declared but are unpaid on any of the capital stock of the Company. declared but
are unpaid on any of the capital stock of the Company.

                  (f)      All of the information on Exhibit A is true and
complete as of the date hereof. All of the information on the Closing Date
Exhibit A shall be true and complete as of the Closing Date.

                                       15

                  (g)      All of the information on the Funds Flow Statement
shall be true and complete as of the Closing Date.

         Section 3.4. Subsidiaries. Schedule 3.4 lists each Subsidiary of the
Company. As used in this Agreement, "Subsidiary" means any corporation,
partnership, joint venture or other legal entity of which the Company owns,
directly or indirectly, 50% or more of the stock or other equity interests the
holders of which generally are entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, joint
venture or other legal entity. Except as set forth in Schedule 3.4, there are no
agreements, warrants, puts, calls, rights, options, subscriptions, preemptive
rights or other commitments of any character to which any of the Neptune
Companies is a party or by which any of the Neptune Companies is bound which
obligates any of the Neptune Companies to issue, deliver or sell any outstanding
or additional shares of capital stock of any Subsidiary or any securities or
instruments convertible into or exchangeable for any such outstanding or
additional shares of capital stock. Each outstanding share of capital stock of
each Subsidiary that is a corporation or other ownership interest of each
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
free of preemptive rights, and (except as set forth in Schedule 3.4) each such
share is owned by the Company or another Subsidiary, free and clear of
Encumbrances, except any Encumbrances arising under the Senior Credit Facility
and limitations composed by federal and state securities laws. Except for the
Subsidiaries, no Neptune Company owns any equity interest in any Person.

         Section 3.5. Financial Statements. The Company has delivered to
Purchaser (a) the audited consolidated balance sheet of the Company and its
Subsidiaries for each of the two fiscal years ended as of December 31, 2001 and
December 31, 2002, and the related audited consolidated statements of
operations, changes in stockholders' equity and cash flows of the Company and
its Subsidiaries at December 31, 2002 and 2001, and results of operations and
cash flows for the Company and its Subsidiaries for the year ended December 31,
2002, the period November 1, 2001 to December 31, 2001, the period January 1,
2001 to October 31, 2001 and the year ended December 31, 2001, together with all
related notes and schedules thereto and (b) the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of and for the month ended August
31, 2003 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows of the Company and its Subsidiaries at
August 31, 2003, and results of operations and cash flows for the Company and
its Subsidiaries for the eight months ended August 31, 2003, together with all
related notes and schedules thereto (collectively the "Financial Statements").
The Financial Statements have been prepared from, and are in accordance with,
the books and records of the Company and its Subsidiaries. The Financial
Statements were prepared in accordance with generally accepted accounting
principles applied on a consistent basis and fairly present, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as of the applicable dates thereof and for the applicable periods
then ended (subject, in the case of unaudited financial statements, to normal
year-end and quarter end adjustments and the absence of notes to such
statements). Since December 31, 2002, there has been no material change in any
accounting (or tax accounting) policy, practice or procedure of the Company or
any of its Subsidiaries.

                                       16

         Section 3.6. Absence of Certain Changes. Except as described in
Schedule 3.6 and except for the transactions permitted by this Agreement, since
December 31, 2002:

                  (a)      as of the date hereof, there has not been a Material
Adverse Effect;

                  (b)      the business of the Neptune Companies has been
conducted, in all material respects, in the Ordinary Course; and

                  (c)      none of the Neptune Companies has taken any of the
following actions:

                           (i)      amended its certificate of incorporation or
         bylaws or other organizational documents;

                           (ii)     split, combined or reclassified any shares
         of its capital stock or declared, set aside or paid any dividends or
         made any other distributions (whether in cash, stock or other property)
         in respect of such shares, except for dividends and distributions
         payable by a Subsidiary of the Company to another Subsidiary of the
         Company or to the Company;

                           (iii)    redeemed, purchased or otherwise acquired
         for any consideration any outstanding shares of its capital stock or
         securities carrying the right to acquire or which are convertible into
         or exchangeable or exercisable for such capital stock, except in
         connection with the Recapitalization and except for the cancellation of
         Options and the redemption or repurchase of shares of Class A Common
         Stock in connection with termination of employment;

                           (iv)     issued, authorized for issue, transferred,
         sold or delivered any shares of its capital stock (or options or other
         securities convertible into or exchangeable or exercisable for, with or
         without additional consideration, such capital stock) or any other
         interest therein, except in connection with the exercise of Options or
         conversion of the Convertible Preferred Stock;

                           (v)      incurred any indebtedness for borrowed
         money, except the issuance of the Subordinated Notes, borrowings under
         the Senior Credit Facility, and borrowings not in excess of $2,000,000
         in the Ordinary Course;

                           (vi)     made any acquisition or disposition of stock
         or other securities or other ownership interests or assets of any
         Person except (A) acquisitions or dispositions of inventory, equipment
         and services in the Ordinary Course and (B) other acquisitions or
         dispositions of assets not in excess of $2,500,000;

                           (vii)    created, assumed or suffered to be incurred
         any Encumbrance on any of its properties or assets other than in
         connection with the Senior Credit Facility, Permitted Encumbrances and
         other Encumbrances not in excess of $1,000,000;

                           (viii)   since the Settlement Date, made any payment
         with respect to any portion of the Funded Indebtedness other than
         payments required to be made pursuant to the terms of any note or other
         document related to the Funded Indebtedness, in which

                                       17

         case such required payment will be the minimum amount required to be
         paid pursuant thereto;

                           (ix)     except in connection with the
         Recapitalization, made any payment or distribution to any Seller or any
         Affiliate of any Seller other than payments or distributions required
         to be made pursuant to any contract, license, agreement, commitment,
         arrangement, understanding or other instrument disclosed in Schedule
         3.23 of this Agreement and made in the Ordinary Course;

                           (x)      amended, supplemented or modified any
         agreement material to the Neptune Companies taken as a whole except in
         the Ordinary Course; or

                           (xi)     committed to do any of the foregoing.

         Section 3.7. No Undisclosed Liabilities.

                  (a)      Except as set forth in the Financial Statements, none
of the Neptune Companies are subject to any claims, obligations or liabilities
of any nature (whether accrued, absolute, contingent or otherwise) of the type
required to be reflected on a balance sheet prepared in accordance with GAAP,
other than (a) obligations pursuant to or in connection with this Agreement or
the transactions contemplated hereby, (b) liabilities and obligations incurred
in the Ordinary Course (c) liabilities incurred in connection with the
Recapitalization and (d) other liabilities not exceeding $1,000,000 in the
aggregate.

                  (b)      Except as set forth on Schedule 3.7, as of the
Settlement Date, no Neptune Company had any Debt outstanding other than the
Funded Indebtedness. Schedule 3.7 sets forth the amount, if any, of Supplemental
Debt which was outstanding as of the Settlement Date.

         Section 3.8. Taxes. Except as set forth in Schedule 3.8:

                  (a)      each of the Neptune Companies has timely filed or
caused to be timely filed all Tax Returns (taking into account applicable
extension periods) to the extent required to be filed by the Neptune Companies
under applicable Law;

                  (b)      all Taxes due have been paid in full and no Neptune
Company is currently the beneficiary of any extension of time within which to
file a Tax Return;

                  (c)      all Tax Returns are true, complete and accurate in
all material respects and have been prepared in substantial compliance with all
applicable Laws;

                  (d)      there are no Encumbrances (other than Permitted
Encumbrances) on any of the assets of the Neptune Companies that arose in
connection with any failure (or alleged failure) to pay any Tax;

                  (e)      no taxing authority in a jurisdiction where any
Neptune Company does not file Tax Returns has claimed in writing that a Neptune
Company is or may be subject to taxation by that jurisdiction;

                                       18

                  (f)      each Neptune Company has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, leased employee, independent contractor, creditor, stockholder,
or other third party;

                  (g)      no foreign, federal, state, or local Tax audits or
administrative or judicial Tax proceedings are pending or being conducted with
respect to any Neptune Company, and no Neptune Company has received from any
federal, foreign, state, or local taxing authority any (i) notice indicating an
intent to open or reopen an audit or other review, (ii) request for information
related to Tax matters, or (iii) notice of deficiency or proposed adjustment for
any amount of Tax proposed, asserted, or assessed by any taxing authority
against any Neptune Company;

                  (h)      the Neptune Companies have delivered to Purchaser
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by any
Neptune Company filed or received since December 31, 2001;

                  (i)      no Neptune Company has waived any statute of
limitations with respect to Taxes or agreed to any extension of time with
respect to the assessment of Taxes;

                  (j)      all accounting periods and methods used by each
Neptune Company for Tax purposes are permissible periods and methods, and no
Neptune Company is or will be required to make any adjustment to its income
under Section 481 of the Code in connection with a change in accounting method
used in taxable years for which Tax Returns have been filed prior to the date
hereof;

                  (k)      no Neptune Company has made any payment, is obligated
to make any payment, or is a party to any agreement, contract, arrangement, or
plan that, has resulted or would result, separately or in the aggregate, in any
payment not deductible under Section 280G of the Code;

                  (l)      no Neptune Company is a party or bound by any Tax
allocation or sharing agreement;

                  (m)      no Neptune Company (i) has been a member of an
affiliated group filing a consolidated federal income Tax return in any taxable
year (other than the group of which the Company is the Common Parent) or (ii)
has liability for the Taxes of any Person (other than a Neptune Company) under
Treasury Regulation Section 1.1502-6 or any similar provision of state, local,
or foreign Law, as a transferee or successor, by contract, or otherwise;

                  (n)      the Company has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code;
and

                  (o)      the unpaid Taxes of the Neptune Companies (i) did
not, as of the date of the most recent Financial Statements, exceed the reserve
for Tax liability (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth on the balance
sheet included with the most recent Financial Statements and (ii) do not

                                       19

exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of the Neptune Companies in
filing their Tax Returns.

         Section 3.9. Governmental Permits. Each of the Neptune Companies has
all governmental notifications, licenses, franchises, permits, privileges,
immunities, approvals and other authorizations or documents which are reasonably
necessary for the ownership, leasing, operation and use of its assets and
properties and which are reasonably required for their carrying on and
conducting their respective businesses in all material respects (considered as a
whole) as currently conducted (herein collectively called "Governmental
Permits"). Each Governmental Permit is valid and in full force and effect in all
material respects and, to the knowledge of the Company, no suspension or
cancellation of any of them is threatened. The execution of the transactions
contemplated by this Agreement shall not adversely affect in any material
respect any Governmental Permit held by any of the Neptune Companies.

         Section 3.10. Owned Real Property.

                  (a)      All real property owned by any of the Neptune
Companies is identified in Schedule 3.10 and is hereinafter referred to as the
"Owned Real Property". The Neptune Company shown on such Schedule 3.10 as owning
such Owned Real Property holds good, marketable fee title to the Owned Real
Property shown as so owned, free of all Encumbrances except (i) for easements,
covenants, restrictions and other matters that do not impair in any material
respect the use, or enjoyment of the property, (ii) for liens for Taxes not yet
due and payable or being contested in good faith by appropriate proceedings,
(iii) for liens of carriers, warehousemen, mechanics, materialmen and other
similar liens incurred in the Ordinary Course and not yet delinquent (the
matters set forth in the foregoing clauses (i), (ii) and (iii) are referred to
herein as "Permitted Encumbrances"), (iv) liens created pursuant to the Senior
Credit Facility, and (v) as set forth in Schedule 3.10.

                  (b)      As of the date hereof, the Company does not have
actual knowledge that any improvements on the Owned Real Property do not conform
in any respect to applicable zoning and other land use ordinances and building
codes or are not in compliance with any applicable Laws except where the failure
to conform or comply would not have a Material Adverse Effect. As of the date
hereof, to the actual knowledge of the Company, there are no pending or any
threatened condemnation, eminent domain or similar proceeding with respect to
any of the Owned Real Property that would have a Material Adverse Effect.

         Section 3.11. Real Property Leases.

                  (a)      Schedule 3.11 contains an accurate and complete list
of all real property leased by any of the Neptune Companies (the "Scheduled
Leases"). The applicable Neptune Company holds good and valid leasehold title to
each of the properties which are the subject of the Scheduled Leases (the
"Leased Real Property"), in each case free of all Encumbrances, except for liens
created pursuant to the Senior Credit Facility and Permitted Encumbrances.

                  (b)      Except as disclosed in Schedule 3.11, there are no
existing material defaults under any Scheduled Lease, and no event has occurred
which with notice or lapse of time, or both, would constitute a material event
of default under any Scheduled Lease.

                                       20

                  (c)      To the knowledge of the Company, no portion of the
Leased Real Property, or any building or improvement located thereon, violates,
in any material respect, any Law, including those Laws relating to zoning,
building, land use, environmental, health and safety, fire, air, sanitation and
noise control.

                  (d)      The Owned Real Property and the Leased Real Property
constitute all of the material real property occupied or operated by the Neptune
Companies in the operation of their businesses.

         Section 3.12. Intellectual Property.

                  (a)      Schedule 3.12 lists all patents, patent applications,
registered trademarks, trademark applications, registered service marks, service
mark applications, trade names and registered copyrights which are material to
the business of the Neptune Companies taken as a whole (the "Intellectual
Property").

                  (b)      The right, title or interest of the Neptune Companies
in each item of Intellectual Property is free and clear of Encumbrances, other
than liens created pursuant to the Senior Credit Facility, Permitted
Encumbrances and other Encumbrances not in excess of $1,000,000.

                  (c)      To the knowledge of the Company, none of the Neptune
Companies has received written notice that is still pending to the effect that
any of the Neptune Companies has infringed any patent, trademark, service mark,
trade name, copyright, brand name, logo, symbol or other intellectual property
right of any third party and there is no action pending or, to the Company's
knowledge, threatened against any of the Neptune Companies claiming that any of
the Neptune Companies has infringed or misappropriated any Intellectual Property
of any third party, except in each case for matters which would not have a
material adverse effect on the use of such intellectual property by the Neptune
Companies or which could reasonably be expected to expose the Neptune Companies
to damages in excess of $1,000,000.

                  (d)      The Neptune Companies have not notified in writing
any other Person that such Person is infringing any Intellectual Property,
except for matters which would not have a Material Adverse Effect.

                  (e)      The Company has delivered to Purchaser a true and
complete copy of the Patent Assignment Agreement (the "Patent Agreement"), dated
as of September 26, 2003, among Schlumberger S.A. ("Assignor"), Schlumberger
Sema, Inc. and Neptune Technology Group Inc. ("Assignee"). On or prior to
October 3, 2003, Assignee paid Assignor $1,750,000 in accordance with Section
1.4 of the Patent Agreement.

         Section 3.13. Labor Relations. Except as set forth on Schedule 3.13,
(a) no Neptune Company is a party to any collective bargaining agreement,
contract or legally binding commitment to any trade union or employee
organization or group in respect of or affecting employees; (b) no Neptune
Company is currently engaged in any negotiation with any trade union or employee
organization; (c) no Neptune Company has engaged in any unfair labor practice
within the meaning of the National Labor Relations Act, and, there is no pending
or, to the knowledge of the Company, threatened complaint regarding any alleged
unfair labor

                                       21

practices as so defined; (d) there is no strike, labor dispute, work slow down
or stoppage pending or, to the knowledge of the Company, threatened against any
Neptune Company; (e) there is no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement which is pending or, to the
knowledge of the Company, threatened against any Neptune Company; (f) no Neptune
Company has experienced any material work stoppage; and (g) no Neptune Company
is subject of any union organization effort.

         Section 3.14. Employee Benefit Plans. As used in this Agreement, the
term "Employee Plan" means any pension, retirement, profit-sharing, deferred
compensation, stock purchase, stock option, bonus or incentive plan, any
medical, vision, dental or other health plan, any life insurance plan, vacation,
severance, disability or other employee benefit plan, program, policy, or
arrangement, whether written or unwritten, including, without limitation, any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which any of the Neptune
Companies maintains or contributes to or for which any of the Neptune Companies
has any actual, contingent, primary or secondary liability. Except as set forth
in Schedule 3.14, no Neptune Company, or any entity which is considered to be
one company with any of such Companies pursuant to Section 1001 of ERISA or
Section 414 of the Internal Revenue Code of 1986, as amended (the "Code") (an
"ERISA Affiliate") has sponsored, maintained or had any obligation with respect
to any Employee Plan which is a defined benefit plan as defined in Section 3(35)
of ERISA, or contributed to, participated in or had any obligation with respect
to, any multiemployer plan within the meaning of Section 3(37) of ERISA. Each
Employee Plan that purports to be qualified under Section 401(a) of the Code and
any trust under any such Employee Plan that purports to be exempt from income
tax under Section 501(a) of the Code has received one or more favorable
determination letters from the U.S. internal revenue service to such effect or
there is currently pending a request for such determination letter, or the
deadline for filing a request for such determination letter has not yet expired.
To the knowledge of the Company, each Employee Plan intended to be qualified
under Section 401 of the Code has been administered in all material respects
according to its terms, and, to the knowledge of the Company, nothing has
occurred which would be reasonably likely to adversely affect its qualified
status or the qualified status of any related trust. The Employee Plans are in
compliance in all material respects with all other Laws (including, without
limitation, ERISA and the Code) applicable to Employee Plans. All material
reports and material disclosures relating to the Employee Plans required to be
filed with or furnished to any Governmental Entity have been filed or furnished
in a timely manner and in accordance with applicable Laws. With respect to any
Employee Plan, no prohibited transaction (within the meaning of Section 406 of
ERISA and/or Section 4975 of the Code) exists which could subject any of the
Neptune Companies or any "disqualified person" to any excise tax or penalty
pursuant to Section 502(1) of ERISA or under Section 4975 of the Code, except in
each case as have not resulted or would not result in damages to the Neptune
Companies in excess of $1,000,000. Each of the Neptune Companies has made full
and timely payment of all amounts which are required to be paid as contributions
to each Employee Plan that is an employee pension benefit plan (as defined in
Section 3(2) of ERISA). Each of the Neptune Companies has complied in all
material respects with the continuation coverage requirements of Part 6 of Title
I of ERISA, as amended. There is no contract, agreement, plan or arrangement
with any person which provides for any payment to any employee by any of the
Neptune Companies, which payment would not be deductible under Code Sections
162(m)(i) or 404 or would fail to be deductible by reason of Section 280G of the
Code.

                                       22

         Section 3.15. Certain Contracts. Except as set forth in Schedule 3.15,
none of the Neptune Companies is a party to, or bound by, nor are any of their
respective properties subject to, or bound by any contract, license, agreement,
commitment, arrangement, understanding, or other instrument (in each case
whether oral or written) relating to the following ("Company Contracts"):

                  (a)      payments by or to any of the Neptune Companies of
more than $2,500,000 in any 12-month period (other than the Funded
Indebtedness);

                  (b)      the employment of any officer or employee (other than
any contract which is terminable without liability upon notice of 90 days or
less), or any contract of employment with a former officer or employee, in each
case pursuant to which payments in excess of $125,000 in any 12-month period are
required to be made by any of the Neptune Companies after the date hereof;

                  (c)      any outstanding indebtedness or guarantees for
borrowed money by any of the Neptune Companies, other than borrowings under the
Funded Indebtedness and borrowings not in excess of $1,000,000 in the Ordinary
Course;

                  (d)      except for guarantees of obligations between or among
the Neptune Companies and except pursuant to the Funded Indebtedness, any
guarantee or other contingent liability in respect of any indebtedness or
obligation of any Person outside of the Ordinary Course;

                  (e)      any collective bargaining agreement;

                  (f)      any agreement prohibiting, partially restricting, or
otherwise limiting the ability of any Neptune Company to compete, solicit
customers, or otherwise conduct any business anywhere in the world;

                  (g)      through the date hereof, capital expenditures other
than those forecasted in the current operating budget;

                  (h)      any joint venture or partnership agreement providing
for the sharing of profits;

                  (i)      any agreement requiring the consent of any party
thereto to the consummation of the transactions contemplated by this Agreement
where the failure to obtain such consent could cause a Material Adverse Effect;

                  (j)      any executory agreement relating to the acquisition
or sale of any company, business, division, or other enterprise;

                  (k)      any material agreement for the purchase and sale of
any goods or services at rates or terms which are materially different from
generally available rates or terms;

                                       23

                  (l)      any agreement that provides for an increased payment,
bonus or benefit, or accelerated vesting, upon the execution hereof or the
Closing or in connection with the transactions contemplated hereby;

                  (m)      any agreement granting to any Person an option or a
first refusal, first-offer or similar preferential right to purchase or acquire
any assets of any of the Neptune Companies;

                  (n)      any agreement with any agent, distributor or
representative that is not terminable without penalty on sixty (60) days' or
less notice; and

                  (o)      any agreement providing for the indemnification or
holding harmless of any officer, director, manager employee or Seller.

True, correct and complete copies of all Company Contracts have been made
available to Purchaser. To the knowledge of the Company, there is no existing
material default or breach by any Neptune Company under any material Company
Contract (or event or condition that, with notice or lapse of time or both could
constitute a material default or material breach).

         Section 3.16. Governmental Consents and Approvals. Except as set forth
in Schedule 3.16 or as may be required under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended (the "HSR Act"), no filing with, or notice
to, and no permit, authorization, consent or approval of any Governmental Entity
is necessary for the execution and delivery by the Company of this Agreement or
the consummation of the transactions contemplated hereby, except where the
failure to obtain such permits, authorization, consents or approvals or to make
such filings or give such notice would not have a Material Adverse Effect.

         Section 3.17. Litigation.

                  (a)      Except as set forth in Schedule 3.17(a), there is no
suit, claim, action, proceeding or investigation pending or, to the knowledge of
the Company, threatened against any of the Neptune Companies or any of their
respective properties or assets before any Governmental Entity which could
reasonably be expected to expose the Neptune Companies to damages in excess of
$1,000,000. Except as set forth in Schedule 3.17(a), no Neptune Company is
subject to any writ, injunction or decree of any Governmental Entity.

                  (b)      Except for the lawsuits listed on Schedule 3.17(b),
to the knowledge of the Company, no Neptune Company has been a party to any
suit, claim, action, proceeding or investigation relating to asbestos. Except as
may be otherwise specified in Schedule 3.17(b), each of the lawsuits listed on
Schedule 3.17(b) has been dismissed with respect to all of the Neptune
Companies.

         Section 3.18. Environmental Matters. Except as set forth in Schedule
3.18, (a) each of the Neptune Companies is in compliance in all material
respects with all applicable Environmental Laws; (b) each of the Neptune
Companies has all of the material permits and material licenses required by all
applicable Environmental Laws; (c) none of the Neptune Companies is aware of any
proposed new requirements of any applicable Environmental Law which would
require the expenditure of more than $1,000,000 to bring any Neptune Company

                                       24

into compliance with the new requirement; (d) none of the Neptune Companies is
subject to any notice of violation, enforcement proceeding, compliance order,
consent decree or injunction issued by any Governmental Entity relating to any
Environmental Law which could reasonably be expected to expose the Neptune
Companies to damages or require expenditure of more than $1,000,000; (e) none of
the Neptune Companies has been notified in writing that it may be a responsible
party or potentially responsible party under or in violation of or out of
compliance with any Environmental Law which could reasonably be expected to
expose the Neptune Companies to damages or require expenditure of more than
$1,000,000; (f) to the knowledge of the Company, there are no events or facts
that would cause any of the Neptune Companies to be such a responsible party or
potentially responsible party or in violation of or not in compliance with any
Environmental Law which could reasonably be expected to expose the Neptune
Companies to damages or require expenditure of more than $1,000,000; (g) to the
knowledge of the Company, no real property owned or operated by any of the
Neptune Companies is contaminated with any hazardous substance to an extent or
in a manner or condition now requiring remediation under any Environmental Law
which could reasonably be expected to expose the Neptune Companies to damages or
require expenditure of more than $1,000,000; and (h) none of the Neptune
Companies manufactures any product containing asbestos and none of the Neptune
Predecessor Entities has in the past manufactured any water meter or water meter
reading system containing asbestos. As used herein, "Environmental Laws" means
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss. 9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. ss. 6901, the Federal Water Pollution Control Act, 33 U.S.C. ss. 1201,
the Clean Water Act, 33 U.S.C. ss. 1321, the Clean Air Act, 42 U.S.C. ss. 7401
and the Toxic Substances Control Act, 15 U.S.C. ss. 2601, in each case, as
amended from time to time, or any other enforceable federal, state, local or
foreign law, ordinance, regulation or rule dealing with the protection of
natural resources or the environment or public health and safety.

         Section 3.19. Insurance. Schedule 3.19 lists all currently effective
material insurance policies or binders of insurance which relate to the business
of the Neptune Companies (excluding insurance funded Employee Plans).

         Section 3.20. Finders. Except as set forth on Schedule 3.20, no Neptune
Company will be obligated to pay any fee or commission to any broker, finder or
similar intermediary for or on account of the transactions contemplated by this
Agreement.

         Section 3.21. Title to Assets. Except as set forth on Schedule 3.21,
the Neptune Companies have good title to all of their respective property and
assets that are material to the Neptune Companies taken as a whole, free and
clear of all Encumbrances except Permitted Encumbrances.

         Section 3.22. Transactions with Affiliates. Except as set forth on
Schedule 3.22 or on Exhibit A hereto, no officer or director of any Neptune
Company, no Person with whom any such officer or director has any direct or
indirect relation by blood, marriage or adoption, no entity in which any such
officer, director or Person owns any beneficial interest (other than a publicly
held corporation whose stock is traded on a national securities exchange or in
the over-the counter market and less than five percent of the stock of which is
beneficially owned by all such officers, directors and Persons in the
aggregate), no Affiliate of any of the foregoing, no

                                       25

current or former Affiliate of any Neptune Company, and no Seller has any
interest in: (a) any contract, arrangement or understanding with, or relating
to, any Neptune Company or the properties or assets of any Neptune Company; (b)
any loan, arrangement, understanding, agreement or contract for or relating to
any Neptune Company or the properties or assets of any Neptune Company; or (c)
any property (real, personal or mixed), tangible or intangible, used or
currently intended to be used by any Neptune Company. Schedule 3.22 also sets
forth a complete list as of the date hereof, of all accounts receivable, notes
receivable and other receivables and accounts payable owed to or due from any
Affiliate (other than a Subsidiary) of any Neptune Company.

         Section 3.23. Notes. All notes receivable (the "Shareholder Loans") of
any of the Neptune Companies owing by any director, officer or employee of any
Neptune Company or any Seller has been paid in full prior to the date hereof or
shall have been paid as of the Closing. Schedule 3.23 sets forth a complete list
of all Shareholder Loans and the outstanding balance and applicable interest
rate under each Shareholder Loan as of the date hereof.

         Section 3.24. Product and Service Warranties. To the knowledge of the
Company, there are no facts or circumstances that would cause any of the Neptune
Companies to be subject to any extraordinary product recall or warranty exposure
in excess of the aggregate net amount reserved for warranty expenses on the
Company's consolidated balance sheet as of August 31, 2003 plus $3,000,000.

         Section 3.25. Closing Date Transaction Expense Statement. The Closing
Date Transaction Expense Statement shall be true and accurate.

                                   ARTICLE IV

                                   INDIVIDUAL
                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS
                   AND THE CONVERTIBLE PREFERRED STOCKHOLDERS

         Section 4.1. Representations of Convertible Preferred Stockholders.
Each Convertible Preferred Stockholder severally (as to himself, herself or
itself and not as to any other Convertible Preferred Stockholder) hereby
represents and warrants to Purchaser as follows:

                  (a)      Each Convertible Preferred Stockholder has full legal
right, power, capacity and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby and, for Convertible
Preferred Stockholders other than natural persons, such Convertible Preferred
Stockholder is duly organized, validly existing and in good standing (to the
extent applicable) under the laws of its jurisdiction of organization and has
taken all corporate action necessary to authorize the execution, delivery and
performance by such Convertible Preferred Stockholder of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by such Convertible Preferred
Stockholder and constitutes a valid and legally binding obligation of such
Convertible Preferred Stockholder enforceable against such Convertible Preferred
Stockholder in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors'

                                       26

rights generally, and (ii) is subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).

                  (b)      Each Convertible Preferred Stockholder has good title
to the aggregate number and class of shares of capital stock of the Company
listed beside its name on Exhibit A and such shares are the only shares of
capital stock of the Company owned by such Convertible Preferred Stockholder.
Except for this Agreement and the transactions contemplated hereby, and except
as provided in the Certificate of Designation and the Preferred Stock
Registration Rights Agreement entered into in connection with the
Recapitalization, there are no agreements, arrangements, warrants, options,
puts, calls, or other rights, of any character to which such Convertible
Preferred Stockholder is a party or by which any shares of capital stock of the
Company or options convertible into capital stock of the Company owned by such
Convertible Preferred Stockholder are bound relating to the issuance, sale,
purchase, redemption, conversion, exchange, registration, voting or transfer of
any such shares or options, other than those which, pursuant to their terms,
will terminate immediately on the Closing Date. As of the Closing Date, the
shares of Class B Common Stock, if any, to be sold by the Convertible Preferred
Stockholder will be transferred to Purchaser free of any preemptive or
subscription rights and free and clear of all Encumbrances (other than those
contained in the Charter, including the Certificate of Designation, and other
than such limitations as may be imposed by federal and state securities laws).

         Section 4.2. Representations of Sellers. Each Seller severally (as to
himself, herself or itself and not as to any other Seller) hereby represents and
warrants to Purchaser as follows:

                  (a)      Each Seller has full legal right, power, capacity and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and, for Sellers other than natural persons,
such Seller is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has taken all corporate action
necessary to authorize the execution, delivery and performance by such Seller of
this Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by such Seller
and constitutes a valid and legally binding obligation of such Seller
enforceable against such Seller in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally, and (ii) is subject to general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).

                  (b)      Each Seller has good title to the aggregate number
and class of shares of capital stock of the Company or options convertible into
capital stock of the Company listed beside its name on Exhibit A and such shares
or options are the only shares of capital stock of the Company or options
convertible into capital stock of the Company owned by such Seller. Except for
this Agreement and the transactions contemplated hereby, and except as provided
in the Certificate of Designation and the Registration Rights Agreement, dated
March 26, 2003, there are no agreements, arrangements, warrants, options, puts,
calls, or other rights, of any character to which such Seller is a party or by
which any shares of capital stock of the Company or options convertible into
capital stock of the Company owned by such Seller are bound relating to the
issuance, sale, purchase, redemption, conversion, exchange, registration, voting
or transfer

                                       27

of any such shares or options, other than those which, pursuant to their terms,
will terminate immediately on the Closing Date. As of the Closing Date, the
shares or options to be sold by the Seller will be transferred to Purchaser free
of any preemptive or subscription rights and free and clear of all Encumbrances
(other than those contained in the Charter, including the Certificate of
Designation, and other than such limitations as may be imposed by federal and
state securities laws).

                  (c)      The execution, delivery and performance by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
hereby do not or shall not (as the case may be), and with the passing of time or
the giving of notice or both do not or shall not:

                           (i)      violate, conflict with, result with the
         giving of notice or lapse of time or both in a breach of the terms,
         conditions or provisions of, or constitute a default, an event of
         default or an event creating rights of acceleration, amendment,
         termination or cancellation or a loss of rights under, or result in the
         creation or imposition of any Encumbrance upon, any of the assets or
         properties of such Seller or any of the Neptune Companies, any articles
         of organization, bylaws, trust agreement, partnership agreement or
         certificate of partnership or other constitutive documents of such
         Seller, or, except as would not prevent or materially delay the
         consummation of the transactions contemplated hereby, any note,
         instrument, agreement, mortgage, lease, license, franchise,
         Governmental Permit or judgment, order, award or decree to which such
         Seller is a party or by which the Seller is bound, or any Law affecting
         such Seller; or

                           (ii)     except for compliance with the HSR Act,
         require the approval, consent, authorization or act of, or the making
         by such Seller of any declaration, filing or registration with, any
         Governmental Entity or other Person.

                  (d)      Except as set forth in Schedule 3.20, Seller has not
made any arrangement which would obligate Purchaser or the Company to pay any
fee or commission (or reimburse expenses) to any broker, finder or similar
intermediary for or on account of the transactions contemplated by this
Agreement.

                  (e)      Except as set forth on Schedule 3.23 or Exhibit A
hereto, no Seller (nor any Affiliate thereof) has any contract, arrangement,
agreement or contract with any of the Neptune Companies.

                                    ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         Purchaser hereby represents and warrants to the Company, the Sellers
and the Convertible Preferred Stockholders as follows:

         Section 5.1. Organization. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Purchaser has delivered to the Company true and
correct copies of its certificate of incorporation and bylaws as in effect on
the date hereof and as proposed to be in effect immediately prior to the Closing
Date.

                                       28

         Section 5.2. Authority Relative to this Agreement. Purchaser has the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser and the consummation of the transactions
contemplated hereby have been duly and validly authorized and approved by all
necessary corporate action and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes a valid and binding
agreement of Purchaser, enforceable against it in accordance with its terms,
except that such enforceability (a) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally, and (b) is subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).

         Section 5.3. Noncontravention. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(a) conflict with or result in any violation of any provision of the articles of
incorporation or bylaws (or equivalent governing instruments) of Purchaser or
any of its Subsidiaries, (b) except as set forth on Schedule 5.3, require any
consent, approval or notice under, or conflict with or result in a violation or
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any contracts of Purchaser
or any of its Subsidiaries or (c) subject to the approvals, filings and consents
referred to in Section 5.4, violate any legal requirements applicable to
Purchaser or any of its Subsidiaries, except, in the case of clauses (b) and
(c), with respect to matters that would not impair the ability of Purchaser to
perform its obligations under this Agreement in any material respect or
otherwise delay in any material respect or prevent the consummation of any of
the transactions contemplated by this Agreement.

         Section 5.4. Governmental Consents. No consent, approval or
authorization of, or declaration or filing with, any Governmental Entity on the
part of Purchaser or any of its Subsidiaries that has not been obtained or made
is required in connection with the execution or delivery by Purchaser of this
Agreement or the consummation by Purchaser of the transactions contemplated
hereby, other than (a) compliance with the notification and waiting period
requirements of the HSR Act, (b) such filings as may be required by any
applicable state securities or "blue sky" laws or state takeover laws, and (c)
consents, approvals, authorizations, declarations or filings that, if not
obtained or made, would not impair the ability of Purchaser to perform its
obligations under this Agreement in any material respect or otherwise delay in
any material respect or prevent the consummation of any of the transactions
contemplated hereby.

         Section 5.5. Investment Intent. Purchaser is purchasing the shares of
capital stock of the Company pursuant to Article II solely for its own account
and with no intention of distributing or reselling such shares or any part
thereof, or interest therein, in any transaction that would be in violation of
the Securities Act of 1933, as amended (the "Securities Act"), or any other
securities laws of the United States of America or any state thereof.

         Section 5.6. Status as Accredited Investor. Purchaser is an "accredited
investor" (as that term is defined in Rule 501 of Regulation D under the
Securities Act). Purchaser has such knowledge and experience in business and
financial matters so that Purchaser is capable of

                                       29

evaluating the merits and risks of an investment in the shares being acquired
hereunder. Purchaser understands the full nature and risk of an investment in
such shares. Purchaser further acknowledges that it has had access to the books
and records of the Company, is generally familiar with the business being
conducted by the Company and has had an opportunity to ask questions concerning
the Company and the Company's securities.

         Section 5.7. Financial Capability; Solvency.

                  (a)      Purchaser has entered into the Commitment Letter for
the purpose of ensuring that it has, immediately prior to the Closing, funds
sufficient to consummate the transactions contemplated hereby. The Commitment
Letter is in full force and effect. Purchaser acknowledges and agrees that its
obligations to consummate the transactions contemplated hereby are not
contingent upon its ability to obtain any third party financing.

                  (b)      Immediately following the Closing, the Company will
be Solvent. For purposes of this Agreement, "Solvent" when used with respect to
the Company, means that, immediately following the Closing Date, (i) the amount
of the Present Fair Salable Value of its assets will, as of such date, exceed
all of its liabilities, contingent or otherwise, as of such date, (ii) the
Company will not have, as of such date, an unreasonably small amount of capital
for the business in which it is engaged or will be engaged and (iii) the Company
will be able to pay its Debts as they become absolute and mature, taking into
account the timing of and amounts of cash to be received by it and the timing of
and amounts of cash to be payable on or in respect of its indebtedness. The term
"Solvency" shall have its correlative meaning. For purposes of the definition of
"Solvent," (A) "Debt" means liability on a "Claim;" and (B) "Claim" means (i)
any right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) the right to an
equitable remedy for breach on performance if such breach gives rise to a right
to payment, whether or not such equitable remedy is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured. "Present Fair Salable Value"
means the amount that may be realized if the aggregate assets of the Company
(including goodwill) are sold as an entirety with reasonable promptness in an
arms length transaction under present conditions for the sale of comparable
business enterprises.

         Section 5.8. No Outside Reliance. Purchaser has not relied on nor is it
relying on any statement, representation or warranty concerning the Company, any
of its Subsidiaries or the Sellers or the Convertible Preferred Stockholders
other than those expressly made in this Agreement.

                                   ARTICLE VI

                              ADDITIONAL COVENANTS

         Section 6.1. Conduct of Business of the Neptune Companies. For the
period commencing on the date hereof and ending on the Closing Date, except as
expressly contemplated by this Agreement, or set forth in Schedule 6.1, or
otherwise consented to in

                                       30

advance in writing by Purchaser (which consent shall not be unreasonably
withheld), the Company hereby agrees that:

                  (a)      None of the Neptune Companies shall:

                           (i)      amend its articles of incorporation or
         bylaws or other organizational documents;

                           (ii)     issue, authorize for issue, transfer, sell
         or deliver any shares of its capital stock (or options or other
         securities convertible into or exchangeable or exercisable for, with or
         without additional consideration, such capital stock) or any other
         interest therein, except in connection with the exercise of Options or
         conversion of Convertible Preferred Stock;

                           (iii)    split, combine or reclassify any shares of
         its capital stock or declare, set aside or pay any dividends or make
         any other distributions (whether in cash, stock or other property) in
         respect of such shares, except for dividends and distributions payable
         by a Subsidiary of the Company to another Subsidiary of the Company
         (except DAP) or to the Company;

                           (iv)     redeem, purchase or otherwise acquire for
         any consideration any outstanding shares of its capital stock or
         securities carrying the right to acquire or which are convertible into
         or exchangeable or exercisable for, with or without additional
         consideration, such capital stock, except the redemption or repurchase
         of shares of Class A Stock from employees in connection with the
         termination of such employee's employment (in which event, the Company
         and the Sellers will prior to the Closing Date amend Exhibit A to
         reflect such redemption or repurchase);

                           (v)      incur any indebtedness for borrowed money,
         except borrowings under the Funded Indebtedness and other borrowings
         not in excess of $1,000,000;

                           (vi)     create any Subsidiary or make any
         acquisition or disposition of stock or other securities or assets of
         any Person except acquisitions or dispositions of inventory and
         equipment in the Ordinary Course;

                           (vii)    merge or consolidate with any corporation or
         other entity;

                           (viii)   (A) create, grant, assume or suffer to be
         incurred any Encumbrance of any kind on any of its properties or assets
         other than liens created pursuant to the Senior Credit Facility and
         Permitted Encumbrances and other Encumbrances not to exceed $1,000,000,
         (B) incur any liability or obligation (absolute, accrued or
         contingent), except liabilities and obligations incurred in the
         Ordinary Course and other liabilities and obligations not in excess of
         $1,000,000, (C) make any commitment for any capital expenditure to be
         made on or following the date hereof other than capital expenditures
         that are not materially in excess of those forecasted in the Company's
         current operating budget;

                                       31

                           (ix)     enter into, amend, supplement or modify any
         agreement material to the Neptune Companies taken as a whole except in
         the Ordinary Course;

                           (x)      other than in the Ordinary Course, dispose
         of or permit to lapse any right to the use of any patent, trademark,
         trade name, service mark, license or copyright of any Neptune Company
         which is material to the business of the Neptune Companies taken as a
         whole (including any of the Intellectual Property), or dispose of or
         disclose to any Person, any material trade secret, formula, process,
         technology or know-how of any Neptune Company not heretofore a matter
         of public knowledge;

                           (xi)     increase in any manner the base compensation
         of, or enter into any new bonus or incentive agreement or arrangement
         with, any of its Affiliates, employees, officers, directors or
         consultants, except in the Ordinary Course of business consistent with
         past practice;

                           (xii)    adopt, amend or terminate any Employee Plan
         or increase the benefits provided under any Employee Plan, or promise
         or commit to undertake any of the foregoing in the future or enter into
         any new collective bargaining agreement;

                           (xiii)   make any payment with respect to any portion
         of the Funded Indebtedness other than payments required to be made
         pursuant to the terms of the Funded Indebtedness, in which case such
         required payment will be the minimum amount required to be paid
         pursuant thereto;

                           (xiv)    make any payment or distribution to any
         Seller or any Affiliate of any Seller other than (A) payments or
         distributions required to be made pursuant to any contract, license,
         agreement, commitment, arrangement, understanding or other instrument
         disclosed in Schedule 3.22 of this Agreement and made in the Ordinary
         Course and (B) payments or distributions in respect of salary, benefits
         and other compensation paid or provided in the Ordinary Course to Class
         A Stockholders who are employees of a Neptune Company in their capacity
         as such employees; or

                           (xv)     commit, authorize or agree to do or do, as
         applicable, any of the foregoing; and

                  (b)      Each of the Neptune Companies shall:

                           (i)      conduct its business in the Ordinary Course;

                           (ii)     use its commercially reasonable efforts to
         preserve intact the goodwill and business organization of each Neptune
         Company, keep the officers and employees of each Neptune Company
         available to Purchaser and preserve the relationships and goodwill of
         each Neptune Company with customers, distributors, suppliers, employees
         and other Persons having business relations with any Neptune Company;

                                       32

                           (iii)    maintain its existence and good standing in
         its jurisdiction of organization and in each jurisdiction in which the
         ownership or leasing of its property or the conduct of its business
         requires such qualification; and

                           (iv)     duly and timely, including applicable
         extensions, file or cause to be filed all material reports and returns
         required to be filed with any Governmental Entity and promptly pay or
         cause to be paid when due, including applicable extensions, all Taxes,
         assessments and governmental charges, including interest and penalties
         levied or assessed, unless contested in good faith by appropriate
         proceedings.

         In connection with the continued operation of the Neptune Companies
during the period commencing on the date hereof and ending on the Closing Date,
the Company shall confer, and shall cause the Neptune Companies to confer, in
good faith on a regular and frequent basis with Purchaser regarding operational
matters and the general status of on-going operations of the Neptune Companies
to the extent reasonably requested by Purchaser. Each Seller hereby acknowledges
that Purchaser does not and shall not waive any right it may have hereunder as a
result of such consultations.

         Section 6.2. Confidentiality. Any information provided to Purchaser or
its representatives pursuant to this Agreement shall be held by Purchaser and
its representatives in accordance with, and shall be subject to the terms of,
the Confidentiality Agreement dated February 1, 2003 by and between Purchaser
and III. Notwithstanding any conditions of confidentiality imposed by this
Agreement or such Confidentiality Agreement, the parties (and each employee,
representative, or other agent of the parties) may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated herein and all materials of any kind (including
opinions or other tax analyses) provided to such party relating to such tax
treatment and tax structure; provided, however, that no party (and no employee,
representative, or other agent thereof) shall disclose any information that is
not necessary to understanding the tax treatment and tax structure (as such
terms are used in Sections 6011 and 6112 of the Code and the regulations
thereunder) of the transactions contemplated herein (including the identity of
the parties, any information that could lead another to determine the identity
of the parties, any pricing or financial information (except to the extent such
pricing or financial information is related to the transaction's tax treatment
or tax structure), any other term or detail not relevant to the transaction's
tax treatment or the tax structure, or any other information to the extent that
such disclosure could result in a violation of any federal or state securities
law). The foregoing is not intended to waive the attorney-client privilege or
other privileges, including the tax advisor privilege under Section 7525 of the
Code.

         Section 6.3. Certain Efforts. Each of the parties hereto shall use his,
her or its reasonable best efforts to perform such party's obligations hereunder
and to take, or cause to be taken, or do, or cause to be done, all things
necessary, proper, or advisable under applicable Law to obtain all regulatory
approvals and to cause the transactions contemplated hereby to be completed in
accordance with the terms hereof and shall cooperate fully with each other party
and their respective officers, directors, employees, agents, counsel,
accountants, and other designees in connection with any steps required to be
taken as a part of their respective obligations under this Agreement, including
without limitation:

                                       33

                  (a)      Promptly upon execution and delivery of this
Agreement, each of Purchaser, the Company and the Sellers will use their
reasonable best efforts to prepare and file as promptly as possible, or cause to
be prepared and filed, with the appropriate Governmental Entity, a notification
with respect to the transactions contemplated by this Agreement pursuant to the
HSR Act, supply all information requested by such Governmental Entity in
connection with the HSR Act notification and cooperate with each other in
responding to any such request. Each of the parties shall cooperate with each
other in promptly filing any other necessary applications, reports or other
documents with any Governmental Entity having jurisdiction with respect to this
Agreement and the transactions contemplated hereby, and in seeking necessary
consultation with and prompt favorable action by such Governmental Entity.
Notwithstanding any provision of this Agreement to the contrary, Purchaser shall
not be required under the terms of this Agreement to dispose of or hold separate
all or any portion of the businesses or assets of Purchaser or any of its
Affiliates or any of the Neptune Companies in order to remedy or otherwise
address the concerns (whether or not formally expressed) of any Governmental
Entity under the HSR Act or any other antitrust statute or regulation.

                  (b)      In the event any claim, action, suit, investigation,
or other proceeding by any Governmental Entity or other Person is commenced
which questions the validity or legality of the transactions contemplated hereby
or seeks damages in connection therewith, the parties agree to cooperate and use
all reasonable efforts to defend against such claim, action, suit,
investigation, or other proceeding and, if an injunction or other order is
issued in any such action, suit, or other proceeding, to use all reasonable
efforts to have such injunction or other order lifted, and to cooperate
reasonably regarding any other impediment to the consummation of the
transactions contemplated hereby; and

                  (c)      Each party shall give prompt written notice to the
others of (i) the occurrence, or failure to occur, of any event which occurrence
or failure would be likely to cause any representation or warranty of such party
contained in this Agreement or any agreement or document contemplated hereby to
be untrue or inaccurate at any time from the date hereof until the Closing or
that will or may result in the failure to satisfy any of the conditions
specified in Articles VII and VIII and (ii) any failure of any party hereto to
comply with or satisfy any covenant, condition, or agreement to be complied with
or satisfied by it hereunder. No such notification shall limit or otherwise
affect the terms of this Agreement or the Schedules delivered by the parties
pursuant to this Agreement on the date hereof.

                  (d)      The Company will use its reasonable best efforts to
obtain, prior to the Closing Date, shareholder approval meeting the requirements
of Section 280G(b)(5) of the Code and Treasury Regulations Section 1.280G-1 (as
if such Treasury Regulations were effective prior to January 1, 2004) with
respect to the acceleration of the vesting of the Options (as contemplated by
this Agreement). Within a reasonable period of time prior to seeking such
shareholder approval, the Company will deliver to Purchaser and its counsel a
copy of (i) the consent form on which such approval will be obtained and (ii)
the disclosure statement that will accompany such form.

         Section 6.4. No Public Announcement. Prior to the Closing Date, neither
Purchaser, the Company nor any Seller shall, without the approval of Purchaser
and the Company (which shall not be unreasonably withheld), make any press
release or other public announcement to the

                                       34

financial community, government agencies or the general public concerning the
transactions contemplated by this Agreement, except as and to the extent that
any such party shall be so obligated by Law or applicable rules of the New York
Stock Exchange, in which case Purchaser and the Company shall be advised, and
Purchaser and the Company shall use their reasonable efforts to give the other
party the advance opportunity to review and comment on such release or
announcement.

         Section 6.5. Directors' and Officers' Indemnification.

                  (a)      Purchaser agrees that (i) the certificate of
incorporation or the bylaws of the Company and its Subsidiaries immediately
after the Closing shall contain provisions with respect to indemnification and
exculpation from liability that are at least as favorable to the beneficiaries
of such provisions as those provisions that are set forth in the certificate of
incorporation and bylaws of the Company and its Subsidiaries, respectively, on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years following the Closing in any manner
that would adversely affect the rights thereunder of Persons who at or prior to
the Closing were directors, officers, employees or agents of the Company or any
of its Subsidiaries, unless such modification is required by law and (ii) all
rights to indemnification as provided in any indemnification agreements with any
current or former directors, officers and employees of the Company or any of its
Subsidiaries as in effect as of the date hereof with respect to matters
occurring at or prior to the Closing shall survive the Closing.

                  (b)      The parties agree that the Company (or a third party
at the direction of the Company) will pay an amount sufficient to enable the
Company to purchase "tail" coverage for a period of three years following the
Closing Date (or such longer period, up to a maximum of six years after the
Closing Date as shall be requested in writing by the Company to Purchaser at
least five (5) Business Days prior to the Closing Date) under the directors and
officers liability insurance policy of the Company, as in effect on the Closing
Date.

                  (c)      In the event Purchaser or the Company or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, Purchaser shall use its reasonable best
efforts to ensure that proper provisions shall be made so that the successors
and assigns of Purchaser or the Company (as applicable) assume the obligations
set forth in this Section 6.5.

                  (d)      This Section 6.5, which shall survive the Closing and
shall continue for the periods specified herein, is intended to benefit any
Person or entity referenced in this Section 6.5 or indemnified hereunder, each
of whom may enforce the provisions of this Section 6.5 (whether or not parties
to this Agreement).

                  (e)      Notwithstanding any provision in this Agreement or
the insurance policies contemplated by this Section 6.5, no provision or
indemnification right in such insurance policies shall limit in any way the
right of any Purchaser Indemnified Party or the obligation of any Seller
pursuant to Article X of this Agreement.

                                       35

         Section 6.6. Investigation of the Company by Purchaser. From the date
hereof until Closing or termination of this Agreement pursuant to Article IX
hereof, which ever occurs earlier, upon reasonable advance notice, the Company
shall afford to the officers and authorized representatives of Purchaser
(including, without limitation, independent public accountants and attorneys)
reasonable access during normal business hours to the offices, properties,
senior management, and business and financial records (including Tax Returns
filed and those in preparation) of the Neptune Companies, and shall furnish to
Purchaser or its authorized representatives such additional information
concerning the Neptune Companies and their respective properties, assets,
businesses and operations as shall be reasonably requested. Nothing in this
Section shall be interpreted so as to grant Purchaser the right to perform
invasive or subsurface investigations of the properties or locations of any of
the Neptune Companies.

         Section 6.7. No Solicitation; Acquisition Proposals. The Company and
each of the Sellers agree that from the date hereof through the Closing Date or
the date of termination of this Agreement in accordance with Article IX, as the
case may be, neither the Company nor any Seller will, directly or indirectly,
through any officer, director, employee, leased employee, partner, stockholder,
agent, or Affiliate or otherwise, except in furtherance of the transactions
contemplated by this Agreement (a) solicit, initiate, or encourage submission of
proposals or offers from any Person relating to any transactions contemplated
herein or to the direct or indirect purchase of a material amount of the assets
of, or any equity interest in, or any merger, consolidation, or business
combination with, any Neptune Company (collectively, an "Acquisition Proposal"),
(b) participate in any discussions or negotiations regarding, or furnish to any
other Person any information with respect to, or otherwise cooperate in any way
with or assist, facilitate, or encourage, any Acquisition Proposal by any
Person, (c) enter into any agreement, arrangement, or understanding with respect
to an Acquisition Proposal, or (d) sell, transfer, or otherwise dispose of, or
enter into any agreement, arrangement, or understanding with respect to, any
interest in the assets, capital stock or other equity interests of any Neptune
Company.

         Section 6.8. Registration Statement on Form S-3. As promptly as
reasonably practible but not later than November 14, 2003, Purchaser will
prepare and file with the Securities and Exchange Commission a registration
statement on Form S-3 or any other similar form (the "Registration Statement")
registering debt and equity securities, which may be sold by Purchaser from time
to time, and Purchaser will use its commercially reasonable efforts to cause
such Registration Statement to be declared effective as promptly as possible
after filing.

         Section 6.9. Employee Benefit Plans.

                  (a)      Prior to the Closing Date, the Neptune Companies
shall make all required contributions and pay all premiums required under each
Employee Plan, including any employer matching and profit sharing contributions,
and periodic premium payments for retired employee health benefits. Purchaser
acknowledges that, on and after the Closing, the Neptune Companies shall remain
liable for all accumulated postretirement benefit obligations of the Neptune
Companies under Financial Accounting Standard No. 106.

                  (b)      Prior to the Closing Date, the Neptune Companies
shall take all action required (i) to make any amendments to the Employee Plans
required to comply with applicable

                                       36

Law for periods on or before the Closing Date; (ii) to provide pro rata matching
and non-elective contributions from January 1, 2004, to the Closing Date for
each Employee Plan that is a pension plan as defined in ERISA Section 3(2)
("Employee Pension Plan"); and (iii) to file or furnish all documentation
related to the Employee Plans that are required to be filed with or furnished to
any Governmental Entity to comply with applicable Laws for periods on or before
the Closing Date. Prior to the Closing Date, the Neptune Companies shall provide
to Purchaser all documentation reasonably requested by Purchaser related to all
Employee Pension Plans. After the Closing, Purchaser agrees to assume
sponsorship of the Employee Pension Plans sponsored by the Neptune Companies in
accordance with their respective terms.

                  (c)      With respect to employees of the Neptune Companies
(and their dependents and beneficiaries where appropriate), Purchaser shall as
of the Closing: (i) provide coverage under its employee benefit plans that is no
less favorable than the plans it makes available to other similar employees of
Purchaser including Group RRSP or other retiree arrangements for DAP employees;
(ii) recognize such employees' employment service with the Neptune Companies
(including credit for service with predecessor employers as currently recognized
under the applicable Neptune Company plan) for participation, vesting and
benefit eligibility purposes under any employee benefit plan Purchaser may
provide to such employees; (iii) not require such employees, in the plan year in
which the Closing occurs, to satisfy any deductible, co-payment, out of pocket
maximum or similar requirements under Purchaser's plans to the extent of amounts
previously credited for such purposes under the applicable Neptune Company plan,
but, if the Closing occurs after January 1, 2004, Purchaser will credit such
employees with payments toward the deductible, co-payment and out-of-pocket
maximum of Purchaser's plan provided that such employee provides Purchaser with
documentation that is reasonably satisfactory to Purchaser; (iv) not apply to
such employees any waiting periods, pre-existing condition exclusions and
requirements to show evidence of good health contained in Purchaser's plans
under the definitions of the Health Insurance Portability and Accountability Act
of 1996; and (v) honor in full all accrued vacation not taken for the calendar
year in which the Closing occurs.

                  (d)      The Neptune Companies shall be permitted to pay its
respective employees bonuses with respect to the calendar year 2003 in the
Ordinary Course upon prior written consent of Purchaser, which consent shall not
be unreasonably withheld. In the event such bonuses become payable after the
Closing, Purchaser shall cause the Neptune Companies to pay such bonuses.

         Section 6.10. Interim Financials; Cooperation with Financing. During
the period prior to the Closing Date, the Company shall provide to Purchaser
consolidated monthly balance sheets, statements of operations, stockholders'
equity (deficiency), and cash flow within twenty (20) Business Days after the
end of each month. Further, the Company shall, and shall cause the other Neptune
Companies to, cooperate in connection with the arrangement of Purchaser's
financing including, without limitation, (a) cooperating with Purchaser to
provide the banks and other institutions arranging or providing Purchaser's
financing all information (financial and other) with respect to the Neptune
Companies and the transactions contemplated by this Agreement reasonably
requested by Purchaser, (b) causing the Company's senior officers and other
Company representatives to be available to Purchaser and the banks and other
institutions arranging or providing Purchaser's financing to participate in due
diligence sessions and to

                                       37

participate in presentations related to any transaction comprising Purchaser's
financing, including "road show" presentations to rating agencies, potential
lenders and other investors, (c) assisting in the preparation of one or more
appropriate offering documents and assisting Purchaser and the banks and other
institutions arranging or providing Purchaser's financing in preparing other
appropriate marketing materials, in each case to be used in connection with such
financing, and (d) requesting the Company's independent auditors to prepare and
deliver "comfort letters", dated the date of each offering document used in
connection with any transaction comprising Purchaser's financing (with
appropriate bring down comfort letters delivered on the closing date for each
financing), in compliance with professional standards.

         Section 6.11. Charter and Stockholder Agreement. The Sellers shall, and
shall cause the Neptune Companies to, take all appropriate steps to terminate
the Stockholder Agreement, which termination shall be effective as of the
Closing and to amend the Certificate of Designation to the effect attached
hereto as Exhibit 6.11. Each Seller hereby agrees to waive (and agrees to cause
the Company to waive) any rights of first refusal or other rights to acquire,
bid for or otherwise purchase any Class A Common Stock, Class B Common Stock,
Class D Common Stock, Convertible Preferred Stock or Options or approve the
transactions contemplated by this Agreement, as the case may be.

         Section 6.12. DAP. Prior to the Closing, the Company or one of its
direct or indirect Subsidiaries shall take all actions necessary in order to
purchase and/or cancel (the "DAP Option Purchase") all of the options
outstanding as of the date hereof (the "DAP Options") to purchase shares of DAP
from the holders of such options. The DAP Option Purchase shall be effected
solely through a cash payment to be made on or before the Closing Date and
pursuant to documents which are reasonably satisfactory to Purchaser.

                                  ARTICLE VII

                     CONDITIONS TO OBLIGATIONS OF PURCHASER

         The obligation of Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions:

         Section 7.1. No Misrepresentation or Breach of Covenants and
Warranties.

                  (a)      The Company shall have performed in all material
respects all agreements required to be performed by it at or prior to Closing.

                  (b)      (i) The representations and warranties of the
Company, the Sellers and the Convertible Preferred Stockholders contained in
Sections 3.2(a), 3.3, 3.4, 3.7(b), 3.18(h), 3.20, 4.1(a), 4.1(b), 4.2(a), 4.2(b)
and 4.2(d) shall be true and correct as of the date hereof and shall be true and
correct as of the Closing Date as though made on and as of the Closing Date and
(ii) the remaining representations and warranties of the Company and the Sellers
contained in Article III and Article IV shall have been true and correct as of
the date hereof and shall be true and correct as of the Closing Date as though
made on and as of the Closing Date (except for representations and warranties
that speak as of a specific date prior to the Closing Date which need only be
true

                                       38

and correct as of such earlier date); provided, however, that the condition in
this Section 7.1(b)(ii) shall be deemed satisfied unless any and all
inaccuracies in such representations and warranties, in the aggregate, result in
a Material Adverse Effect (ignoring for the purposes of this Section 7.1(b)(ii)
any qualifications by Material Adverse Effect or otherwise by material adversity
and any materiality qualification or words of similar import contained in such
representations or warranties). Notwithstanding anything herein to the contrary,
the representation and warranty contained in Section 3.7(b) shall be deemed to
be true and accurate as of the date hereof and as of the Closing Date so long as
the calculations reflected in the Funds Flow Statement accurately take into
consideration the full amount of the Funded Indebtedness as of the Settlement
Date.

                  (c)      Each Seller shall have performed in all material
respects all agreements required to be performed by such Seller at or prior to
Closing.

                  (d)      The Purchaser shall have received a certificate
executed by the Company and the Sellers as to compliance with this Section 7.1.

         Section 7.2. Resignations of Directors. The Company shall have
furnished Purchaser with signed resignations, effective as of the Closing, of
each director of each Neptune Company, other than those directors of the Neptune
Companies identified at least two (2) Business Days prior to the Closing as
Persons whose resignations are not required by Purchaser.

         Section 7.3. Litigation.

                  (a)      As of the Closing Date, there shall be no Law,
injunction, writ, preliminary restraining order, restraining order or decree of
any nature of any court or other Governmental Entity of competent jurisdiction
that is in effect that restrains or prohibits the consummation of the
transactions or other material obligations of the parties hereto as contemplated
hereby; and

                  (b)      No proceeding or lawsuit shall have been commenced
before any court or other Governmental Entity for the purpose of obtaining such
injunction, writ, preliminary restraining order, restraining order or decree;
provided that this condition set forth in this Section 7.3(b) shall be deemed
satisfied unless proceeding with the Closing is likely to result in a Material
Adverse Effect.

         Section 7.4. Governmental Approvals. The filing and waiting period
requirements of the HSR Act shall have been complied with to the extent
applicable. Similarly, the filing and waiting period requirements (and, if
required, governmental approvals) under the Laws of Canada and Mexico shall have
been complied with (or obtained) to the extent applicable. All other required
authorizations, consents and approvals of (or filings with) any Governmental
Entity shall have been obtained or made except for those authorizations,
consents and approvals which if not obtained would not have a Material Adverse
Effect.

         Section 7.5. No Material Adverse Effect. The Neptune Companies shall
not have suffered a Material Adverse Effect or any development likely to result
in a Material Adverse Effect from the date of this Agreement through the Closing
Date. Purchaser shall have received a certificate executed by the Company as to
compliance with this Section 7.5.

                                       39

         Section 7.6. Closing Date Payoff Letters; Release of Liens. The Company
shall have delivered to Purchaser:

                  (a)      evidence reasonably satisfactory to Purchaser of the
aggregate amount that would have been necessary to prepay in full the Funded
Indebtedness as of the Settlement Date;

                  (b)      evidence reasonably satisfactory to Purchaser of the
aggregate amount of principal outstanding and interest accrued under the Senior
Credit Facility, the Subordinated Notes and the Supplemental Debt through the
Closing Date; and

                  (c)      (i) a payoff letter from the administrative agent for
the lenders party to the Senior Credit Facility which includes (A) the aggregate
amount outstanding of indebtedness under the Senior Credit Facility on the
Closing Date (including any interest accrued thereon, any prepayment premiums
and penalties and any accrued fees and expenses associated with the prepayment
of the Senior Credit Facility, in each case, outstanding as of and payable on
the Closing Date) and (B) an agreement that, if such aggregate amount so
identified is paid to the administrative agent, on the Closing Date, the
administrative agent on behalf of the lenders, will release any and all
Encumbrances granted to the lenders under the Senior Credit Facility and will
take all actions reasonably requested to evidence such release and (ii) upon
satisfaction of the relevant requirements set forth in the Indenture related to
the Subordinated Notes, an instrument from the trustee under the Indenture
acknowledging satisfaction and discharge of the Indenture, on the terms set
forth in Section 8.03 of the Indenture; provided that, acceptance by Purchaser
of such payoff letter and instrument on the Closing Date shall evidence
satisfaction of the condition set forth in this Section 7.6(b).

         Section 7.7. Closing Date Transaction Expense Statement. The Company
shall have delivered to Purchaser a statement from the Company (executed by the
President and the Chief Financial Officer of the Company) (the "Closing Date
Transaction Expense Statement") which sets forth, by payee, the amount of
Transaction Payments which have been or will be made to any Person by the
Company after the Settlement Date and which further specifically sets forth (i)
the aggregate amount of such portion of the Transaction Payments which have been
or will be paid to such Person after the Settlement Date but prior to the
Closing Date and (ii) the aggregate amount of such portion of the Transaction
Payments which are to be paid to such Person on the Closing Date. In addition to
the Closing Date Transaction Expense Statement, the Company shall have delivered
to Purchaser documents which confirm to the reasonable satisfaction of Purchaser
that upon payment of the respective amounts specified in such Statement, each
Person that is to be paid in accordance with such Statement shall have been paid
in full by the Neptune Companies and the Sellers for all services rendered and
expenses incurred, to or on behalf of the Neptune Companies, on or prior to the
Closing Date.

         Section 7.8. Stockholder Agreement. All necessary actions shall have
been taken by the Sellers to terminate the Stockholder Agreement as of the
Closing.

         Section 7.9. Redemption. The Convertible Preferred Stock shall be
redeemed concurrently with the Closing in accordance with Section 2.3(a)(i) of
this Agreement to the extent required pursuant to the Certificate of
Designation.

                                       40

         Section 7.10. Stock and Option Certificates. In accordance with Section
2.3(b) of this Agreement, the Sellers and the Company shall have delivered to
Purchaser (a) stock certificates representing all of the issued and outstanding
shares of Class A Common Stock, Class B Common Stock and Class D Common Stock
and Convertible Preferred Stock (including the Convertible Preferred Stock to be
redeemed on the Closing Date in accordance with the Certificate of Designation)
and accompanying stock powers duly executed by the applicable Seller, evidencing
the transfer of such shares to Purchaser or the Company, as applicable, and (b)
documentation reasonably satisfactory to Purchaser that all of the outstanding
Options shall be terminated as of the Closing.

         Section 7.11. General. All corporate proceedings required to be taken
on the part of any Neptune Company in connection with the transactions
contemplated by this Agreement shall have been taken. Purchaser shall have
received copies of such customary good standing certificates and incumbency
certificates in connection with the transactions contemplated hereby.

         Section 7.12. FIRPTA Affidavit. The Company shall have delivered to
Purchaser an affidavit (which shall be signed under penalties of perjury, dated
as of the Closing Date, and in form and substance required by Treasury
Regulation ss. 1.897-2(h) so that Purchaser shall be exempt from withholding any
portion of the Purchase Price under Section 1445 of the Code) stating that the
Company is not and has not been during the period specified in Section
897(c)(1)(A)(ii) of the Code a United States real property holding corporation.

         Section 7.13. Closing Date Exhibit A. The Company shall have delivered
to Purchaser a final form of Exhibit A which is certified by the Company and the
Sellers as being true and correct as of the Closing Date (the "Closing Date
Exhibit A").

         Section 7.14. Funds Flow Statement. The Company shall have delivered to
Purchaser a statement (the "Funds Flow Statement") setting forth (i) the
calculation of the Fully Diluted Number and the Per Share Amount and (ii) the
amount of each payment to be made pursuant to Sections 2.3 and 2.5. The Funds
Flow Statement shall be accompanied by acknowledgements signed by each Seller,
Convertible Preferred Stockholder, Option Holder and Robert Geckle in the form
of Exhibit 7.14.

         Section 7.15. DAP. The Company or one of its direct or indirect
Subsidiaries shall have consummated the DAP Option Purchase and provided
reasonably satisfactory evidence of such to Purchaser.

                                  ARTICLE VIII

                       CONDITIONS PRECEDENT TO OBLIGATIONS
     OF THE COMPANY, THE SELLERS AND THE CONVERTIBLE PREFERRED STOCKHOLDERS

         The obligations of the Company, the Sellers and the Convertible
Preferred Stockholders to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of each of the following conditions:

                                       41

         Section 8.1. No Misrepresentation or Breach of Covenants and
Warranties.

                  (a)      Purchaser shall have performed in all material
respects all agreements required to be performed by it at or prior to Closing;
and

                  (b)      each of the representations and warranties of
Purchaser contained in Article V of this Agreement shall be true and correct in
all material respects on the Closing Date as though made on the Closing Date.

         Section 8.2. Litigation.

                  (a)      As of the Closing Date, there shall be no Law,
injunction, writ, preliminary restraining order, restraining order or decree of
any nature of any court or other Governmental Entity of competent jurisdiction
that is in effect that restrains or prohibits the consummation of the
transactions or other material obligations of the parties hereto as contemplated
hereby; and

                  (b)      No proceeding or lawsuit shall have been commenced
before any court or other Governmental Entity for the purpose of obtaining such
injunction, writ, preliminary restraining order, restraining order or decree;
provided that this condition set forth in this Section 8.2(b) shall be deemed
satisfied unless proceeding with the Closing is likely to result in a Material
Adverse Effect.

         Section 8.3. Governmental Approvals. The filing and waiting period
requirements of the HSR Act shall have been complied with to the extent
applicable. Similarly, the filing and waiting period requirements (and, if
required, governmental approvals) under the Laws of Canada and Mexico shall have
been complied with (or obtained) to the extent applicable. All other required
authorizations, consents and approvals of (or filings with) any Governmental
Entity shall have been obtained or made except for those authorizations,
consents and approvals which if not obtained would not have a Material Adverse
Effect.

                                   ARTICLE IX

                                   TERMINATION

         Section 9.1. Termination. This Agreement may be terminated and the
transaction contemplated hereby may be abandoned at any time prior to the
Closing Date:

                  (a)      by written consent of Purchaser and the Company (on
behalf of itself, the Sellers and the Convertible Preferred Stockholders);

                  (b)      by Purchaser or the Company (on behalf of itself, the
Sellers and the Convertible Preferred Stockholders) if:

                           (i)      any court or other Governmental Entity of
         competent jurisdiction shall have issued an order, decree or ruling or
         taken any other action restraining, enjoining or otherwise prohibiting
         such transaction and such order, decree, ruling or other action shall
         have become final and nonappealable; or

                                       42

                           (ii)     the Closing shall not have occurred on or
         prior to February 27, 2004; provided, however, that the right to
         terminate the Agreement under this Section 9.1(b)(ii) shall not be
         available to any party whose failure to fulfill any obligation under
         this Agreement has been the cause of, or resulted in, the failure of
         the Closing to occur on or before such date;

                  (c)      by Purchaser in the event of a material breach by the
Company or the Sellers of this Agreement which has not been cured within 30 days
after the giving of written notice to the Company or which is incapable of being
cured prior to February 27, 2004;

                  (d)      by the Company (on behalf of itself, the Sellers and
the Convertible Preferred Stockholders) in the event of a material breach by
Purchaser of this Agreement, which has not been cured within 30 days after the
giving of written notice to Purchaser or which is incapable of being cured prior
to February 27, 2004; or

                  (e)      by the Company (on behalf of itself, the Sellers and
the Convertible Preferred Stockholders) in the event the Effective Date has not
occurred on or prior to February 1, 2004.

                  (f)      No party may terminate this Agreement pursuant to
Sections 9.1(b), (c), or (d) if the failure of the condition (or failure of the
condition to be reasonably capable of being satisfied within the applicable time
period) giving rise to the right to terminate results from the breach by such
party of any of its obligations in this Agreement. If this Agreement is
terminated pursuant to this Section 9, all obligations of the parties under this
Agreement shall be terminated without liability or penalty on the part of any
party or its officers, directors or shareholders to any other party; provided,
however, that no such termination shall relieve any party from liability for
damages resulting from any breach by such party of this Agreement or otherwise
limit any remedy available to a party or parties on account of any such breach.

                                   ARTICLE X

                                 INDEMNIFICATION

         Section 10.1. Article III Indemnification Obligations. Each Seller
shall, pro rata according to each Seller's Seller's Percentage, indemnify,
defend and hold harmless Purchaser and its Affiliates, each of their respective
officers, directors, employees, agents and representatives and each of the
heirs, executors, successors and assigns of any of the foregoing (the "Purchaser
Indemnified Parties") from, against, and in respect of, any and all claims,
liabilities, obligations, damages, losses, costs, expenses, penalties, fines and
judgments (at equity or at law, including statutory and common) and damages
whenever arising or incurred (including amounts paid in settlement, costs of
investigation and reasonable attorneys' fees and expenses) arising out of or
relating to any breach or inaccuracy of any representation or warranty made by
any Seller or the Company in Sections 3.3, 3.4 and 3.7(b) of this Agreement.

         Section 10.2. Article IV Indemnification Obligations. Each Seller and
each Convertible Preferred Stockholder shall severally indemnify, defend and
hold harmless the Purchaser Indemnified Parties from, against, and in respect
of, any and all claims, liabilities, obligations,

                                       43

damages, losses, costs, expenses, penalties, fines and judgments (at equity or
at law, including statutory and common) and damages whenever arising or incurred
(including amounts paid in settlement, costs of investigation and reasonable
attorneys' fees and expenses) arising out of or relating to any breach or
inaccuracy of any representation or warranty made by such Seller or such
Convertible Preferred Stockholder in Sections 4.1(a), 4.1(b), 4.2(a) or 4.2(b),
as applicable, of this Agreement.

         Section 10.3. Claims Period. All claims by any Purchaser Indemnified
Party pursuant to Section 10.1 and Section 10.2 must be made on or before the
first anniversary of the Closing Date.

         Section 10.4. Limitations. Notwithstanding anything in this Article X,
the aggregate amount of indemnification obligations with respect to any Seller
or Convertible Preferred Stockholder shall be limited to the amount such Seller
or Convertible Preferred Stockholder receives as payment pursuant to Sections
2.3(a)(i) through 2.3(a)(iv), as applicable.

                                   ARTICLE XI

                                  MISCELLANEOUS

         Section 11.1. Amendment and Modification. This Agreement may be amended
only by a written agreement signed by Purchaser, the Sellers and the Company, as
well as any Convertible Preferred Stockholder adversely affected by such
amendment, at any time prior to the Closing Date with respect to any of the
terms contained herein.

         Section 11.2. Non-Survival of Representations and Warranties. Except
for the representations and warranties in Sections 3.3, 3.4, 3.7(b), 4.1(a),
4.1(b), 4.2(a) and 4.2(b) of this Agreement, which shall survive for a period of
one year following the Closing Date, the respective representations and
warranties of Purchaser, the Convertible Preferred Stockholders and the Company
contained in Articles III, IV and V of this Agreement shall terminate at, and
not survive, the Closing.

         Section 11.3. Partial Invalidity. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in the case that any provision contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been contained herein
unless the deletion of such provision or provisions would result in such a
material change as to cause completion of the transactions contemplated hereby
to be unreasonable.

         Section 11.4. Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement, and
shall become binding when one or more counterparts have been signed by each of
the parties and delivered to each of the Company and Purchaser.

                                       44

         Section 11.5. Assignment; Successors and Assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties except that Purchaser may, without the obligation to obtain the
prior written consent of any other party, assign this Agreement or all or any
part of its rights or obligations hereunder to one (1) or more direct or
indirect wholly-owned subsidiaries of Purchaser (in all or any of which cases
Purchaser shall remain responsible for the performance of all of its obligations
under this Agreement). Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors or permitted assigns, heirs, legatees, distributees, executors,
administrators and guardians.

         Section 11.6. Titles and Headings. Titles and headings to sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement. Unless
otherwise specified herein, all references to Articles, Sections, Exhibits and
Schedules shall refer to the Articles, Sections, Exhibits and Schedules,
respectively, of this Agreement. Unless this Agreement states otherwise, all
references to dollars in this Agreement shall refer to United States dollars.

         Section 11.7. Schedules and Exhibits. The schedules and exhibits
referred to in this Agreement shall be construed with and as an integral part of
this Agreement to the same extent as if the same had been set forth verbatim
herein. Except as expressly set forth herein, disclosure of any fact or item in
any schedule hereto shall, to the extent reasonably apparent by cross-reference
from the face of such schedule and relevant to any other schedule or schedules,
be deemed to be disclosed in such other schedule or schedules, notwithstanding
the lack of a specific cross-reference.

         Section 11.8. Knowledge. In each provision of this Agreement in which a
representation or warranty is qualified to the "knowledge" of a Person or to the
"best of the knowledge" of a person, unless otherwise stated in such provision,
each such phrase means that the Person does not have actual knowledge after due
investigation thereof of any state of facts which is different from the facts
described in the warranty or representation. With respect to the Company, such
knowledge shall refer solely to the "knowledge" of one or more of the Persons
identified in Schedule 11.8. In Article III of this Agreement where a
representation or warranty is qualified to the "actual knowledge" of a Person
each such phrase means that the Person does not have actual knowledge of any
state of facts which is different from the facts described in the warranty or
representation. With respect to the Company, such actual knowledge shall refer
solely to the "actual knowledge" of one or more of those Persons identified in
Schedule 11.8.

         Section 11.9. Waivers. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof, in each case in writing. The failure of any
party hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

                                       45

         Section 11.10. Waiver of Jury Trial. Each party acknowledges and agrees
that any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party
certifies and acknowledges that (i) no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each
party understands and has considered the implications of this waiver, (iii) each
party makes this waiver voluntarily, and (iv) each party has been induced to
enter into this agreement by, among other things, the mutual waivers and
certifications in this Section 11.10.

         Section 11.11. Expenses. In accordance with Section 2.5(b), to the
extent applicable, the Company will pay all costs and expenses incurred by the
Company or the Sellers in connection with the transactions contemplated by this
Agreement (including, without limitation, attorneys', accountants', brokers',
finders', and investment banking fees and expenses). Purchaser shall bear all
such costs and expenses incurred by Purchaser in connection with the
transactions contemplated by this Agreement. The fees and expenses related to
any filing made pursuant to the HSR Act shall be paid one half by Purchaser and
one half by the Company.

         Section 11.12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) upon receipt
if given by delivery in Person; or (b) on the next business day when sent by
overnight courier service, to the parties at the following addresses (or such
other address for a party as shall be specified by like notice):

                  If to Purchaser, to:

                       Roper Industries, Inc.
                       2160 Satellite Blvd.
                       Duluth, Georgia 30097
                       Attention: C. Thomas O'Grady
                                  Shanler D. Cronk

                       with a copy to:

                       King & Spalding LLP
                       191 Peachtree Street
                       Atlanta, Georgia 30303-1763
                       Attention: Russell B. Richards

         If to the Company, to:

                       Neptune Technology Group Holdings Inc.
                       c/o Neptune Technology Group Inc.
                       1600 Alabama Highway 229
                       Tallassee, Alabama 36078
                       Attention: Charles DiLaura (if prior to the Closing Date)
                                  James Mannebach (if after the Closing Date)

                                       46

                       with a copy to:

                       Investcorp International, Inc.
                       280 Park Avenue
                       36th Floor West
                       New York, New York 10017
                       Attention: Kevin Nickelberry

                       and

                       Gibson, Dunn & Crutcher LLP
                       200 Park Avenue
                       New York, New York 10166-0193
                       Attention: E. Michael Greaney

         If to the Sellers or the Convertible Preferred Stockholders, to:

                       the addresses set forth on Exhibit A hereto;

                       with a copy to:

                       Gibson, Dunn & Crutcher LLP
                       200 Park Avenue
                       New York, New York 10166-0193
                       Attention: E. Michael Greaney

         Section 11.13. Entire Agreement. This Agreement (including the exhibits
and other documents referred to herein) and the Confidentiality Agreement embody
the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both written and oral, among the parties, or between any of
them, with respect to the subject matter hereof and thereof.

         Section 11.14. No Third Party Beneficiaries. Except as expressly
provided in Section 6.5, this Agreement is not intended to, and does not, create
any rights or benefits of any party other than the parties hereto.

         Section 11.15. Governing Law; Jurisdiction; Forum. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without regard to principles of conflicts or choice of laws. Any case,
proceeding or action concerning any dispute arising out of or relating to this
Agreement must be brought in a court situated in the State of Delaware, and each
party hereto consents and submits to the jurisdiction of any state or federal
court sitting in the State of Delaware for any such case, proceeding or action.
Each party hereto waives any objection to the laying of venue in such courts and
any claim that any such action has been brought in an inconvenient forum. To the
extent permitted by law, any judgment in respect of a dispute arising out of or
relating to this Agreement may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified copy of such
judgment being conclusive evidence of the fact and amount of such judgment.

                                       47

         Section 11.16. No Implied Representations. Notwithstanding any other
provision of this Agreement, Purchaser acknowledges and agrees that neither the
Company, the Sellers, nor any other Person has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Company and its Subsidiaries except as expressly set
forth in this Agreement, and Purchaser is not relying on any information
concerning the Company and its Subsidiaries except as so expressly set forth in
this Agreement. Without limiting the foregoing, it is further expressly
understood and agreed that any projections or estimates that may have been
furnished to the Purchaser or its Affiliates or advisors are not and shall not
be deemed to be representations or warranties of the Company or any other
Person.

                      [Signature Pages Immediately Follow]

                                       48

                                       A-2
         IN WITNESS WHEREOF, each of the parties has caused this Stock Purchase
Agreement to be duly executed as of the day and year first above written.

                                NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.

                                By:    /s/ Charles C. DiLaura
                                       ----------------------------------------
                                       Name:  Charles C. DiLaura
                                       Title: President

                                ROPER INDUSTRIES, INC.

                                By:    /s/ C. T. O'Grady
                                       ----------------------------------------
                                       Name:  C. T. O'Grady
                                       Title: VP, Mergers & Acquisitions

                       (signatures continue on next page)

[Signature page to Stock Purchase Agreement]

                                             CLASS A SELLERS:

                                             ANDALUSIA LIMITED

                                             By: /s/ Peter Yates
                                                 ------------------------------
                                                 Name:  Martonmere Services Ltd.
                                                 Title: Director

                                             CLAIBORNE LIMITED

                                             By: /s/ Peter Yates
                                                 ------------------------------
                                                 Name:  Martonmere Services Ltd.
                                                 Title: Director

                                             FOSTERS LIMITED

                                             By: /s/ Peter Yates
                                                 ------------------------------
                                                 Name:  Martonmere Services Ltd.
                                                 Title: Director

                                             PETERMAN LIMITED

                                             By: /s/ Peter Yates
                                                 ------------------------------
                                                 Name:  Martonmere Services Ltd.
                                                 Title: Director

                                             INVESTCORP NEPTUNE LIMITED
                                              PARTNERSHIP

                                             By: /s/ Ebrahim H. Ebrahim
                                                 ------------------------------
                                                 Name:  Meter International
                                                        Limited
                                                 Title: Sole General Partner

                                             EQUITY NEA LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

                                             METER EQUITY LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

                                             METER HOLDINGS LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

                                             METER INVESTMENTS LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

                                             NEPTUNE EQUITY LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

                                             NEPTUNE IIP LIMITED

                                             By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                 Name:   The Director Ltd.
                                                 Title:  Director

[Signature page to Stock Purchase Agreement]

                                             NEPTUNE INTERNATIONAL LIMITED

                                              By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                  Name:   The Director Ltd.
                                                  Title:  Director

                                              TRIDENT EQUITY LIMITED

                                              By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                  Name:   The Director Ltd.
                                                  Title:  Director

                                              WATER EQUITY LIMITED

                                              By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                  Name:   The Director Ltd.
                                                  Title:  Director

                                              WATER HOLDINGS LIMITED

                                               By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                   Name:   The Director Ltd.
                                                   Title:  Director

                                               WATER INVESTMENTS LIMITED

                                               By:   /s/ Sydney J. Coleman
                                                 ------------------------------
                                                   Name:   The Director Ltd.
                                                   Title:  Director

                       (signatures continue on next page)

[Signature page to Stock Purchase Agreement]

                                                 /s/ Charles C. DiLaura
                                                 ------------------------------
                                                 CHARLES C. DILAURA

                                                 /s/ Joe Irving Breeding
                                                 ------------------------------
                                                 JOE IRVING BREEDING

                                                 /s/ Joseph M. Bridges
                                                 ------------------------------
                                                 JOSEPH M. BRIDGES

                                                 /s/ Kent O. Murray
                                                 ------------------------------
                                                 KENT O. MURRAY

                                                 /s/ Thierry Swinson
                                                 ------------------------------
                                                 THIERRY SWINSON

                                                 /s/ David Stoddart
                                                 ------------------------------
                                                 DAVID STODDART

                                                 /s/ Henry T. Golden
                                                 ------------------------------
                                                 HENRY T. GOLDEN

[Signature page to Stock Purchase Agreement]

                                                 /s/ Lawrence M. Russo
                                                 ------------------------------
                                                 LAWRENCE M. RUSSO

                                                 /s/ James W. Nusbaum
                                                 ------------------------------
                                                 JAMES W. NUSBAUM

                       (signatures continue on next page)

[Signature page to Stock Purchase Agreement]

                            CLASS D SELLERS:

                                INVESTCORP INVESTMENT EQUITY LIMITED

                                By:/s/ Sydney J. Coleman
                                   --------------------------------------------
                                    Name:   The Director Ltd.
                                    Title:  Director

                                BALLET LIMITED

                                By: /s/ Rishi Kapoor
                                    -------------------------------------------
                                    Name:   Rishi Kapoor
                                    Title:  Authorized Representative

                                DENARY LIMITED

                                By: /s/ Stephen J. Atkinson
                                    -------------------------------------------
                                    Name:   Stephen J. Atkinson
                                    Title:  Authorized Representative

                                GLEAM LIMITED

                                By: /s/ Christopher J. Carolan
                                    -------------------------------------------
                                    Name:   Christopher J. Carolan
                                    Title:  Authorized Representative

                                HIGHLANDS LIMITED

                                By: /s/ Meredith I. Brody
                                    -------------------------------------------
                                    Name:   Meredith I. Brody
                                    Title:  Authorized Representative

                                NOBLE LIMITED

                                By: /s/ Mufeed Rajab
                                    -------------------------------------------
                                    Name:   Mufeed Rajab
                                    Title:  Authorized Representative

[Signature page to Stock Purchase Agreement]

                                OUTRIGGER LIMITED

                                By: /s/ Stephen Ritchie
                                    -------------------------------------------
                                    Name:   Stephen Ritchie
                                    Title:  Authorized Representative

                                QUILL LIMITED

                                By: /s/ Kevin O'Shea
                                    -------------------------------------------
                                    Name:   Kevin O'Shea
                                    Title:  Authorized Representative

                                RADIAL LIMITED

                                By: /s/ John Ord
                                    -------------------------------------------
                                    Name:   John Ord
                                    Title:  Authorized Representative

                                SHORELINE LIMITED

                                By: /s/ Salman Javed
                                    -------------------------------------------
                                    Name:   Salman Javed
                                    Title:  Authorized Representative

                                ZINNIA LIMITED

                                By: /s/ Harin Wijeyeratne
                                    -------------------------------------------
                                    Name: Harin Wijeyerante
                                    Title: Authorized Representative

                            (signatures on next page)

[Signature page to Stock Purchase Agreement]

                                CONVERTIBLE PREFERRED STOCKHOLDERS:

                                DLJ INVESTMENT PARTNERS II, L.P.

                                By:  DLJ Investment Partners II, Inc.,
                                      its Managing General Partner

                                By: /s/ Charles W. Harper
                                    -------------------------------------------
                                    Name:  Charles W. Harper
                                    Title:    Principal

                                DLJ INVESTMENT PARTNERS, L.P.

                                By:  DLJ Investment Partners II, Inc.,
                                      its Managing General Partner

                                By: /s/ Charles W. Harper
                                    -------------------------------------------
                                    Name: Charles W. Harper
                                    Title:   Principal

                                DLJIP II HOLDINGS, L.P.

                                By:  DLJ Investment Partners II, Inc.,
                                       its General Partner

                                By: /s/ Charles W. Harper
                                    -------------------------------------------
                                    Name: Charles W. Harper
                                    Title:    Principal

                       (signatures continue on next page)

                                YORK STREET MEZZANINE PARTNERS, L.P.

                                By:  York Street Capital Partners, L.L.C.,
                                its general partner

                                By: /s/ Christopher A. Layden
                                    -------------------------------------------
                                    Name: Christopher A. Layden
                                    Title:   MD

                       (signatures continue on next page)

                                964536 ONTARIO LIMITED

                                By: /s/ J. Mark MacDonald
                                    -------------------------------------------
                                    Name:  J. Mark MacDonald
                                    Title:   Authorized Signatory

                       (signatures continue on next page)

                                    METROPOLITAN LIFE INSURANCE COMPANY

                                    By: /s/ Susan Garrett
                                        ---------------------------------------
                                        Name: Susan Garrett
                                        Title:   Director

                        CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the Registration
Statements of Roper Industries, Inc. on Form S-8 (Nos. 33-71094, 33-77770,
33-78026, 333-36897, 333-73139, 333-35666, 333-35672, 333-35648, 333-59130,
333-105919, 333-105920) of our reports dated January 31, 2003 relating to the
financial statements of Neptune Technology Group Holdings, Inc., and Water
Management which appear in this Form 8-K which is incorporated by reference in
this Form 8-K.

/s/ PricewaterhouseCoopers, LLP
- -------------------------------
PricewaterhouseCoopers, LLP
Atlanta, Georgia
November 13, 2003

                                                                    EXHIBIT 99.1

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003

                                                                               .
                                                                               .
                                                                               .

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC. AND SUBSIDIARIES
CONTENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------

                                                                                  PAGE(S)
                                                                                  -------
                                                                               
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets ..................................               2

Condensed Consolidated Statements of Operations ........................               3

Condensed Consolidated Statements of Changes in Stockholders' Equity and
Comprehensive Earnings .................................................               4

Condensed Consolidated Statements of Cash Flows ........................               5

Notes to Condensed Consolidated Financial Statements ...................            6-11

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

                                                                     SEPTEMBER 30,         DECEMBER 31,
                                                                         2003                 2002
                                                                     -------------         ------------
                                                                                 (UNAUDITED)
                                                                                     
ASSETS
Current assets:
  Cash ...................................................            $  24,159             $  17,046
  Receivables, less allowance for doubtful
    accounts of $187 and $150 ............................               25,677                29,289
  Inventories ............................................               14,631                11,623
  Deferred taxes on income ...............................                3,320                 2,185
  Other current assets ...................................                6,053                 5,024
                                                                      ---------             ---------
    Total current assets .................................               73,840                65,167
Property, plant and equipment, net .......................               26,085                25,993
Other assets .............................................                9,399                12,650
Deferred taxes on income .................................                1,043                    --
Intangible assets ........................................              180,644               190,867
Goodwill .................................................               77,231                74,013
                                                                      ---------             ---------
    Total assets .........................................            $ 368,242             $ 368,690
                                                                      =========             =========
LIABILITIES
Current liabilities:
  Accounts payable .......................................            $  10,360             $  10,402
  Accrued liabilities ....................................               16,604                15,869
  Current portion of long-term debt ......................               10,000                    --
                                                                      ---------             ---------
    Total current liabilities ............................               36,964                26,271
Postretirement benefits ..................................                2,827                 2,603
Deferred taxes on income .................................                7,578                 5,700
Long term debt ...........................................              277,304               200,529
                                                                      ---------             ---------
                                                                        324,673               235,103
Minority interest in equity of consolidated affiliates ...                4,512                 3,130
Redeemable preferred stock ...............................               29,017                    --
STOCKHOLDERS' EQUITY
Common stock .............................................                   10                    10
Additional paid-in capital ...............................              119,990               119,990
Note receivable from issuance of common stock ............                 (382)                 (482)
Treasury stock ...........................................             (120,770)                   --
Accumulated other comprehensive income (loss) ............                1,763                  (282)
Retained earnings ........................................                9,429                11,221
                                                                      ---------             ---------
Total stockholders' equity ...............................               10,040               130,457
                                                                      ---------             ---------
    Total liabilities and equity .........................            $ 368,242             $ 368,690
                                                                      =========             =========

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       2

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

                                                                    NINE MONTHS ENDED
                                                                      SEPTEMBER 30,
                                                            -------------------------------
                                                              2003                  2002
                                                            ---------             ---------
                                                                            
Revenues                                                    $ 147,473             $ 138,681
Cost of goods sold                                             83,773                79,991
                                                            ---------             ---------
    Gross profit                                               63,700                58,690

Selling, general and administrative                            21,844                17,803
Research and engineering                                        3,477                 3,760
Amortization expense                                           12,151                10,989
                                                            ---------             ---------
    Operating income                                           26,228                26,138

Interest expense                                               14,867                 9,784
Loss on extinguishment of debt                                  9,329                 1,353
Other (income) expense                                          2,556                  (440)
                                                            ---------             ---------
    Income (loss) before income taxes and
    minority interest in consolidated subsidiary                 (524)               15,441

Income taxes                                                      451                 5,814
                                                            ---------             ---------
    Income (loss) before minority interest                       (975)                9,627
Minority interest in consolidated subsidiary                     (817)                 (780)
                                                            ---------             ---------

    Net income (loss)                                       $  (1,792)            $   8,847
                                                            =========             =========

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       3

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND
COMPREHENSIVE EARNINGS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

                                                                                     NOTE
                                                                                  RECEIVABLE
                                           COMMON                                    FROM                 ACCUMULATED
                                           STOCK                      ADDITIONAL  ISSUANCE OF                OTHER
                                    ------------------    TREASURY     PAID-IN      COMMON     RETAINED  COMPREHENSIVE
                                    CLASS A    CLASS D     STOCK       CAPITAL      STOCK      EARNINGS     EARNINGS       TOTAL
                                    -------    -------    --------    ----------  -----------  --------  --------------  ---------
                                                                                                 
Balance at December 31, 2002          $9         $1     $       -     $119,990      $(482)     $11,221      $ (282)      $ 130,457

Net loss                                                                                        (1,792)                     (1,792)
  Currency translation adjustments                                                                           2,045           2,045
                                                                                                                         ---------
Comprehensive income                                                                                                           253
Management loan collection                                                            100                                      100
Shares repurchase                                        (120,770)                                                        (120,770)
                                      --         --     ---------     --------      -----      -------      ------       ---------
Balance at September 30, 2003         $9         $1     $(120,770)    $119,990      $(382)     $ 9,429      $1,763       $  10,040
                                      ==         ==     =========     ========      =====      =======      ======       =========

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       4

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

                                                                             NINE MONTHS ENDED
                                                                               SEPTEMBER 30,
                                                                     ------------------------------
                                                                       2003                  2002
                                                                     ---------             --------
                                                                                     
Cash flows from operating activities
  Net income (loss)                                                  $  (1,792)            $  8,847
  Adjustments to reconcile net income (loss) to net
  cash provided by operating activities
    Depreciation                                                         4,298                3,988
    Amortization                                                        12,151               10,989
    Loss on extinguishment of debt                                       9,329                1,353
    Deferred taxes on earnings                                            (300)               4,577
    Exchange rates translation adjustment                                1,329                 (294)
    Other, net                                                           4,192                3,789
    Minority interest in subsidiaries                                    1,382                2,305
                                                                     ---------             --------
      Net cash provided by operating activities                         30,589               35,554
Cash flows from investing activities
  Payments to acquire 33% of DAP                                            --               (5,878)
  Capital expenditures                                                  (4,254)              (4,450)
  Other, net                                                              (148)                (128)
                                                                     ---------             --------
      Net cash used in investing activities                             (4,402)             (10,456)
Cash flows from financing activities
  Debt borrowings                                                      260,000               25,000
  Debt payments                                                       (180,252)             (41,635)
  Sales of preferred stock                                              29,017                   --
  Cost of debt financing                                                (7,885)                  --
  Common stock shares repurchase                                      (120,770)                  --
  Other, net                                                               100                  527
                                                                     ---------             --------
      Net cash provided by (used in) financing activities              (19,790)             (16,108)
                                                                     ---------             --------
Effect of exchange rates on cash and cash equivalents                      716                 (119)
                                                                     ---------             --------
      Net increase in cash                                               7,113                8,871
                                                                     ---------             --------
Cash, beginning of period                                               17,046                5,850
                                                                     ---------             --------
Cash, end of period                                                  $  24,159             $ 14,721
                                                                     =========             ========

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       5

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

1.       BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements for the
         nine-month periods ended September 30, 2003 and 2002 are unaudited. In
         the opinion of management, the accompanying unaudited condensed
         consolidated financial statements reflect all adjustments, which
         include only normal recurring adjustments, necessary to present fairly
         the financial position, results of operations and cash flows of Neptune
         Technology Group Holdings, Inc. ("Neptune" or "the Company") and its
         subsidiaries for all periods presented.

         Neptune's management has made a number of estimates and assumptions
         relating to the reporting of assets and liabilities, reported amounts
         of revenues and expenses, and the disclosure of contingent assets and
         liabilities to prepare these condensed consolidated financial
         statements in conformity with accounting principles generally accepted
         in the United States of America ("GAAP"). Actual results could differ
         from those estimates.

         The results of operations for the nine-month periods ended September
         30, 2003 are not necessarily indicative of the results to be expected
         for the full fiscal year. These reports should be read in conjunction
         with the Company's consolidated financial statements and the notes.

2.       RECAPITALIZATION

         In April of 2003, the company completed a recapitalization transaction
         of $301,450. The transaction was funded through a new term loan B of
         $190,000, the issuance of $70,000 of new senior subordinated notes, the
         issuance of $30,000 of preferred stock, and $11,450 of cash. The
         proceeds from this transaction were used to repurchase 53.8933% of
         Class A and Class D stock of $120,770, repay $160,050 of term loan B
         borrowings, repay $11,000 of term loan A borrowings, repurchase options
         from management and employees of $762, and pay fees and expenses
         related to the transaction of $8,868.

         Redeemable Preferred Stock

         The Company issued 127,029.6432 shares of $.01 par value participating
         convertible preferred stock with a face value of $30,000. The Company
         received proceeds of $30,000 net of approximately $983 of issuance
         costs. The shares are convertible into conversion (common equivalent)
         shares at the holder's option at defined conversion rates. The shares
         are entitled to a minimum liquidation preference of the greater of (a)
         $236.17 per share plus an annual accretion of 10%, or (b) the amount
         per share the holders would receive based on an as-converted common
         stock valuation. At September 30, 2003 the estimated minimum
         liquidation preference was approximately $42,000. These shares may
         receive dividends upon the approval of the Board of Directors in the
         amount equal to any dividends declared per share of common stock. There
         are no mandatory dividends related to these shares. This issuance is
         redeemable upon the consummation of any sale of the company in which
         there is a change in ownership of greater than 20%, as well as
         recapitalization of the company. Shares are redeemable for a price
         equal to 101% of the minimum liquidation preference plus any declared
         and unpaid dividends at redemption date.

                                       6

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

         New Senior Subordinated Notes

         In connection with the recapitalization the company sold $70,000 of
         senior notes to DLJIP II Holdings, L.P., DLJ Investment Partners, L.P.,
         DLJ Investment Partners II, L.P., 964536 Ontario Limited, York Street
         Mezzanine Partners, L.P., and Metropolitan Life Insurance Company.
         These notes have a maturity date of October 1, 2010 and bear an
         interest rate of 14%, payable on April 1 and October 1 until the
         maturity date. Payment of interest in excess of 12% may be paid by the
         issuance of additional securities pursuant to the provisions of the
         indenture. The Company incurred $2,692 of issuance costs related to
         these notes.

         New Term B Debt

         In connection with the recapitalization, the Company entered into a
         term loan agreement with UBS AG. The agreement calls for up to $190,000
         of borrowings with a maturity date of March 31, 2010. Borrowings under
         the term loan bear interest at LIBOR + 4.25%. At September 30, 2003 the
         new term B debt has an interest rate of 5.58%. The company also has a
         revolving credit facility of $30,000, of which none was drawn on this
         facility at September 30, 2003, other than the support for letters of
         credit with a value of $7,318. The Company incurred approximately
         $5,193 of issuance costs related to this agreement.

3.       CRITICAL ACCOUNTING POLICIES

         The remainder of the company's critical accounting policies can be
         reviewed in detail in Note 2 of the Company's financial statements for
         the year ended December 31, 2002.

         Stock Based Compensation

         The Company accounts for its stock-based compensation plans under
         Accounting Principles Board Opinion No. 25, Accounting for Stock Issued
         to Employees ("APB No. 25").

         The Black-Scholes option valuation model was developed for use in
         estimating the fair value of traded options that have no vesting
         restrictions and are fully transferable. In addition, option valuation
         models require the input of highly subjective assumptions including the
         expected stock price volatility. Because the Company's employee stock
         options have characteristics significantly different from those of
         traded options, and because changes in the subjective input assumptions
         can materially affect the fair value estimate, in management's opinion,
         the existing models do not necessarily provide a reliable single
         measure of the fair value of its employee stock options. For SFAS No.
         123 purposes, the fair value of each option grant and stock based award
         has been estimated as of the date of grant using the Black-Scholes
         option pricing model with the following weighted-average assumptions:

                                        SEPTEMBER 30,
                                   ---------------------
                                   2003             2002
                                   ----             ----
                                              
Expected life (years)                 5                6
Risk-free interest rate               3%            4.25%
Dividend yield                     None             None
Expected volatility                   0%               0%

                                       7

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

         The estimated fair value of the options granted during 2003 and 2002 is
         $31.30 and $30.88, respectively. The Company issued 1,000 stock options
         during 2003 and 5,000 in 2002. Had compensation cost been determined
         consistent with SFAS No. 123, utilizing the assumptions detailed above,
         the Company's pro forma net income (loss) and pro forma basic and
         diluted earnings (loss) per share would have decreased to the following
         amounts (in thousands, except share data):

                                                          NINE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                     --------------------------
                                                       2003               2002
                                                     -------             ------
                                                                   
Net income (loss):
As reported                                          $(1,792)            $8,847
  Deduct: Total stock-based employee
    compensation expense determined
    under fair value based method for all
    awards, net of related tax effects                   127                172
                                                     -------             ------
        Pro forma - for SFAS No. 123                  (1,919)             8,675
                                                     =======             ======

4.       INVENTORIES

                                                 SEPTEMBER 30,      DECEMBER 31,
                                                     2003               2002
                                                 -------------      ------------
                                                              
         Finished goods                            $ 4,042            $ 1,476
         Work-in process                             4,412              4,683
         Raw materials                               6,177              5,464
                                                   -------            -------
                                                   $14,631            $11,623
                                                   =======            =======

5.       GOODWILL AND INTANGIBLE ASSETS

         The following present an evolution of the goodwill and intangible
         assets balance since December 31, 2002:

                                                                   
         Goodwill
         Balance at December 31, 2002                                 $  74,013
         Earnout provision related to DB Microware Acquisition              225
         Currency Translation Adjustment                                  2,993
                                                                      ---------
         Balance at September 30, 2003                                $  77,231
                                                                      =========

         Intangible Assets
         Balance at December 31, 2002                                 $ 190,867
         Amortization Expense                                           (10,223)
                                                                      ---------
         Balance at September 30, 2003                                $ 180,644
                                                                      =========

                                       8

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

6.       LONG-TERM DEBT

                                                 SEPTEMBER 30,       DECEMBER 31,
                                                     2003                2002
                                                 -------------       ------------
                                                               
Revolving Credit Facility                          $     --            $     --
New Term Loan B (see note 2)                        185,000                  --
Term Loan A (see note 2)                                 --              11,000
Term Loan B (see note 2)                                 --             160,050
Senior Subordinated Debt (see note 2)                70,698                  --
Senior Subordinated Notes                            28,457              26,466
Notes payable to seller of DB Microware               3,149               3,013
                                                   --------            --------
                                                    287,304             200,529

Less Current Portion                                 10,000                  --
                                                   --------            --------
                                                   $277,304            $200,529
                                                   ========            ========

         The aggregate principal amounts due under the Company's debt
         agreements and a note payable to a seller are as follows:

                                          
         2004                                $ 10,000
         2005                                  10,000
         2006                                  12,500
         2007                                  18,149
         2008                                  15,000
         2009 and thereafter                  221,655
                                             --------
                                             $287,304
                                             ========

7.       INCOME TAXES

         Pretax income subject to US and foreign income taxes for each of the
         periods presented was as follows:

                                                          NINE MONTHS ENDED
                                                            SEPTEMBER 30,
                                                    ----------------------------
                                                      2003                 2002
                                                    --------             -------
                                                                   
United States of America                            $ (7,280)            $11,114
Foreign                                                6,756               4,327
                                                    --------             -------
                                                    $   (524)            $15,441
                                                    ========             =======

         The effective tax rate for the nine months ended September 30, 2003 is
         not meaningful due to foreign tax expense and certain state taxes more
         than offsetting United States Federal tax benefits. The effective tax
         rate for the nine months ended September 30, 2002 reflects the effects
         of state taxes.

8.       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
         "Consolidation of Variable Interest Entities." The primary objectives
         of FIN 46 are to provide guidance on the identification of entities for
         which control is achieved through means other than voting rights
         (variable interest entities or VIEs) and how to determine when and
         which business enterprises should consolidate the VIE (the primary
         beneficiary). This new model for consolidation applies to an entity
         which either (i) the equity investors (if any) do not have a
         controlling financial interest or (ii) the equity investment at risk is
         insufficient to finance support from other parties. In addition, FIN 46
         requires that both the primary and all other enterprises with a
         significant variable interest in a VIE make additional disclosures. FIN
         46 has an effective date of December 31, 2003 for VIEs, which were in
         existence prior to February 1, 2003. The Company does not believe it is
         a primary beneficiary on a

                                       9

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

         VIE or holds any significant interests or involvement in a VIE and does
         not expect there to be an impact on the Company's consolidated
         financial statements.

         In May of 2003 the FASB issued SFAS 150 - "Accounting for Financial
         Instruments with Characteristics of Liabilities, Equity, or Both" that
         clarifies liability or equity classification for different financial
         instruments including mandatorily redeemable shares, put options and
         forward purchase contracts, and obligations that can be settled with
         shares. This standard will be effective for the first fiscal period
         beginning after December 15, 2003. The Company's current classification
         of redeemable preferred stock will not be affected by the adoption of
         SFAS 150 since its redemption is not at specified or determinable
         dates.

9.       COMMITMENTS AND CONTINGENCIES

         LADWP SETTLEMENT AGREEMENT

         In 1998 the Environmental Law Foundation (ELF) filed suit against
         Schlumberger under California's False Claims Act (FCA). The ELF
         complaint alleged that Schlumberger sold water meters to the Los
         Angeles Department of Water and Power ("LADWP") from 1990 to 1998 that
         were constructed from an alloy that allowed up to 8% lead content,
         whereas the LADWP contract specifications for water meters limited lead
         content to 6%. The meters sold by Schlumberger to LADWP were the
         national standard for water meters containing an average of 7% lead.
         The ELF and LADWP claims were settled in January 2001. The terms of the
         settlement are that the Company would provide LADWP 120,000 free
         non-lead water meters of specified sizes over a period of 24 months, at
         the rate of 5,000 meters per month. An accrual of $5,800 was recorded
         in 1998. In May 2001, cash settlements of $620 and $750 were paid to
         LADWP and to the Environmental Law Foundation, respectively. The
         balance of $4,430 would be used to provide the delivery of 120,000
         meters to LADWP over a 24-month period. The shipments of 5,000 meters
         per month began in May 2001 and were completed by April 2003. At
         December 31, 2002, the liability for this settlement was $638. Since
         all of the shipments were completed by April 2003, there is no
         remaining liability for this settlement at September 30, 2003. The
         company has fully complied with all of the terms of the settlement.

         RUEDA LITIGATION

         Rueda is a consolidated lawsuit brought in Los Angeles Superior Court
         as a class action by the customers of LADWP with allegedly
         "out-of-specification" water meters installed by LADWP at their
         properties. When it was filed in August 2000, Rueda alleged causes of
         action for: (i) violations of the California Business and Professions
         Code, (ii) negligence per se, (iii) negligence, (iv) nuisance and (v)
         violations of the California Consumer Legal Remedies Act. In May 2002,
         the Court granted summary adjudication in favor of the Company with
         regard to all of Plaintiffs' claims except those under the California
         Business and Professions Code and held that the plaintiffs had offered
         no evidence of property damage giving rise to a triable issue of
         material fact. In January 2003, the Court granted class certification
         with regard to Plaintiffs' remaining claims under the Business and
         Professions Code.

         As a result of a mediation with a retired federal judge, the Company
         and Plaintiffs reached a settlement in principal of Rueda in June,
         2003. A class action settlement agreement was executed in October 2003
         and preliminarily approved by the Los Angeles Superior Court on October
         14, 2003. The settlement requires that the Company pay a total of
         $3,900 and respond to specified future bid requests from LADWP over the
         next 60 months in such a manner that LADWP, if it

                                       10

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2003
(amounts in thousands except share and per share data)
- --------------------------------------------------------------------------------

         chooses to accept those bids, is provided certain additional in
         savings as compared to the best direct purchase price for the same
         products obtained by another public water system customer of the
         Company in the six months prior to LADWP bid.

         The final approval hearing for the class action settlement is scheduled
         for January 23, 2004. Notice of the settlement was published on October
         24, 2003. Any objections to the settlement or requests for exclusion
         from the settlement must be filed with the Los Angeles Superior Court
         by December 15, 2003.

         At September 30, 2003 the Company has fully reserved the $3,900
         necessary for the Rueda settlement. Payment will be required after
         final approval by the Court of all settlement terms.

10.      SUBSEQUENT EVENTS

         On October 21, 2003 Roper Industries, Inc. announced that it has signed
         a definitive agreement to acquire Neptune Technology Group Holdings Inc
         from Investcorp for total consideration of approximately $475 million,
         net of cash acquired and including debt assumed. The acquisition
         includes Neptune Technology Group Inc, DAP Technologies and DB
         Microware and is expected to close in early 2004, subject to customary
         closing conditions including antitrust review and clearance.

                                       11

NEPTUNE TECHNOLOGY GROUP
HOLDINGS INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONTENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

                                                                                                              PAGE(S)
                                                                                                           
REPORT OF INDEPENDENT ACCOUNTANTS...............................................................................1-2

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets....................................................................................................3

Statements of Operations..........................................................................................4

Statements of Changes in Stockholders' Equity and Comprehensive Income............................................5

Statements of Cash Flows..........................................................................................6

Notes to Consolidated Financial Statements.....................................................................7-32

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the board of directors and shareholders of
Neptune Technology Group Holdings Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in stockholders' equity and
comprehensive income, and cash flows present fairly, in all material respects,
the financial position of Neptune Technology Group Holdings Inc. and its
subsidiaries (the "Company") at December 31, 2002 and 2001, and the results of
their operations and their cash flows for the year ended December 31, 2002, and
for the period from November 1, 2001 to December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, on November 1,
2002, Neptune Technology Group Holdings, Inc. adopted Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets."

/s/ PricewaterhouseCoopers, LLP
- -------------------------------
PricewaterhouseCoopers, LLP
Atlanta, Georgia
January 31, 2003

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the board of directors and shareholders of
Schlumberger Ltd.

In our opinion, the accompanying combined statements of operations, changes in
stockholders' equity and comprehensive income, and cash flows for the period
from January 1, 2001 to October 31, 2001 and for the year ended December 31,
2000 present fairly, in all material respects, the results of operations and
cash flows of Water Management (the "Company") for the period from January 1,
2001 to October 31, 2001 and for the year ended December 31, 2000 in conformity
with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

/s/  PricewaterhouseCoopers, LLP
- --------------------------------
PricewaterhouseCoopers, LLP
Atlanta, Georgia
January 31, 2003

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------
(AMOUNTS IN THOUSANDS)

                                                                                               SUCCESSOR
                                                                                               DECEMBER 31,
                                                                                          2002                2001
                                                                                       ---------           ---------
                                                                                                     
ASSETS
Current assets:
 Cash                                                                                  $  17,046           $   5,850
 Receivables, less allowance for doubtful accounts of $150 and $519                       29,289              24,891
 Inventories (Note 4)                                                                     11,623               9,427
 Deferred taxes on income (Note 12)                                                        2,185               3,487
 Other current assets (Note 5)                                                             5,024               1,881
                                                                                       ---------           ---------
     Total current assets                                                                 65,167              45,536

Property, plant and equipment, net (Note 6)                                               25,993              24,569
Investment in unconsolidated affiliate                                                        --               5,696
Other assets (Note 7)                                                                      12,650              15,168
Deferred taxes on income (Note 12)                                                            --                 401
Intangible assets (Note 8)                                                               190,867             195,116
Goodwill (Note 8)                                                                         74,013              60,256
                                                                                       ---------           ---------
     Total assets                                                                      $ 368,690           $ 346,742
                                                                                       =========           =========
LIABILITIES
Current liabilities:
 Accounts payable                                                                      $   9,108           $   6,025
 Accrued liabilities (Note 10)                                                            15,869               8,523
 Current portion of long-term debt (Note 11)                                                  --               4,400
 Income taxes payable                                                                      1,294                  74
                                                                                       ---------           ---------
     Total current liabilities                                                            26,271              19,022

Postretirement benefits (Note 13)                                                          2,603               2,229
Other liabilities                                                                             --                 733
Notes payable (Note 3)                                                                     3,013                  --
Deferred taxes on income (Note 12)                                                         5,700                  --
Long term debt (Note 11)                                                                 171,050             155,600
Senior subordinated notes (Note 11)                                                       26,466              50,833
                                                                                       ---------           ---------
                                                                                         235,103             228,417
                                                                                       ---------           ---------
Minority interest in equity of consolidated affiliates (Note 3)                            3,130                  --

Commitments and contingencies (Note 16)

Stockholders' equity
Preferred stock $0.01 par value, authorized 500,000 shares,
 none outstanding as of December 31, 2002 and 2001                                            --                  --
Class A common stock, $0.01 par value, 997,500 shares authorized,
 issued and outstanding as of December 31, 2002 and 2001                                       9                   9
Class D common stock, $0.01 par value, 2,500 shares authorized,
 issued and outstanding as of December 31, 2002 and 2001                                       1                   1
Common stock, $0.01 par value, authorized 1,500,000 shares,
 none outstanding as of December 31, 2002 and 2001                                            --                  --
 Additional paid-in-capital                                                               119,990             119,990
 Note Receivable from issuance of common stock                                               (482)             (1,034)
 Accumulated other comprehensive loss                                                        (282)                (35)
 Accumulated equity (deficit)                                                              11,221                (606)
                                                                                       ---------           ---------
Total stockholders' equity                                                               130,457             118,325
                                                                                       ---------           ---------
Total liabilities and equity                                                           $ 368,690           $ 346,742
                                                                                       =========           =========

   The accompanying notes are an integral part of these financial statements.

                                       3

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
(AMOUNTS IN THOUSANDS)

                                                                SUCCESSOR                           PREDECESSOR
                                                        -------------------------------     ------------------------------
                                                                           PERIOD FROM      PERIOD FROM
                                                                           NOVEMBER 1,       JANUARY 1,
                                                        YEAR ENDED          2001 TO           2001 TO         YEAR ENDED
                                                        DECEMBER 31,      DECEMBER 31,       OCTOBER 31,      DECEMBER 31,
                                                            2002              2001              2001             2000
                                                        ------------      -------------     ------------     ------------
                                                                                                 
Revenues                                                  $ 189,544         $  27,498         $ 130,951        $ 147,607
Cost of goods sold (Note 4)                                 109,211            20,024            78,196           82,235
                                                          ---------         ---------         ---------        ---------

   Gross profit                                              80,333             7,474            52,755           65,372

Selling, general and administrative                          25,791             3,184            21,102           18,862
Research and engineering                                      4,857               649             3,817            4,094
Amortization expense                                         15,145             2,368             2,546            2,897
                                                          ---------         ---------         ---------        ---------
   Operating income                                          34,540             1,273            25,290           39,519

Interest expense                                             12,880             2,394             1,154              760
Loss on extinguishment of debt                                1,353                --                --               --
Other (income) expense, net                                    (928)             (134)              342              461
                                                          ---------         ---------         ---------        ---------
   Income (loss) before income taxes and
     minority interest in consolidated
     subsidiary                                              21,235              (987)           23,794           38,298

Income taxes (benefit) (Note 12)                              7,833              (381)           10,597           16,806
                                                          ---------         ---------         ---------        ---------
   Income (loss) before minority interest                    13,402              (606)           13,197           21,492

Minority interest in consolidated
  subsidiary (Note 3)                                        (1,575)               --                --               --
                                                          ---------         ---------         ---------        ---------
   Net income (loss)                                      $  11,827         $    (606)        $  13,197        $  21,492
                                                          =========         =========         =========        =========

   The accompanying notes are an integral part of these financial statements.

                                       4

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND
COMPREHENSIVE INCOME
(AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

                                                                                                                 EQUITY
                                                                                                               ---------
                                                                                                            
PREDECESSOR:
  Balance at December 31, 1999                                                                                 $  61,251
  Net income                                                                                                      21,492
  Foreign currency translation adjustment                                                                           (767)
  Net distributions to Schlumberger                                                                              (27,040)
                                                                                                               ---------
Balance at December 31, 2000                                                                                      54,936
  Net income                                                                                                      13,197
  Foreign currency translation adjustment                                                                           (322)
  Transfer of investment from Schlumberger                                                                         2,273
  Net distributions to Schlumberger                                                                              (13,757)
                                                                                                               ---------
Balance at October 31, 2001                                                                                    $  56,327
                                                                                                               =========

                                                                                NOTE
                                                                             RECEIVABLE   ACCUMULATED                   TOTAL
                                              COMMON STOCK     ADDITIONAL  FROM ISSUANCE     OTHER                     STOCK-
                                            -----------------   PAID-IN-     OF COMMON   COMPREHENSIVE  ACCUMULATED    HOLDERS'
                                            CLASS A   CLASS D    CAPITAL       STOCK     INCOME (LOSS)    DEFICIT       EQUITY
                                            -------   -------  ----------  ------------- -------------  -----------    --------
                                                                                                  
SUCCESSOR:
Balance at November 1, 2001
 (reflects issuance of common
 stock in connection with
 the Acquisition)                             $ 9      $ 1      $ 118,956      $     --      $   --      $     --        118,966
 Net loss                                                                                                    (606)          (606)

 Foreign currency translation
  adjustment                                                                                    (35)                         (35)
                                                                                                                       ---------
  Comprehensive loss                                                                                                        (641)

 Notes receivable from issuance
  of common stock                                                   1,034        (1,034)                                      --
                                              ---      ---      ---------      --------      ------      --------      ---------

Balance at December 31, 2001                    9        1        119,990        (1,034)        (35)         (606)       118,325

 Net income                                                                                                11,827         11,827

 Foreign currency translation
  adjustment                                                                                   (247)                        (247)
                                                                                                                       ---------

  Comprehensive income                                                                                                    11,580

  Repayment of notes receivable
   from issuance of common stock                                                    552                                      552
                                              ---      ---      ---------      --------      ------      --------      ---------

 Balance at December 31, 2002                 $ 9      $ 1      $ 119,990       $  (482)     $ (282)     $ 11,221      $ 130,457
                                              ===      ===      =========      ========      ======      ========      =========

   The accompanying notes are an integral part of these financial statements.

                                       5

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

                                                                         SUCCESSOR                        PREDECESSOR
                                                               ------------------------------     -----------------------------
                                                                                 PERIOD FROM      PERIOD FROM
                                                                                  NOVEMBER 1,      JANUARY 1,
                                                                YEAR ENDED         2001 TO           2001 TO        YEAR ENDED
                                                               DECEMBER 31,      DECEMBER 31,      OCTOBER 31,     DECEMBER 31,
                                                                   2002              2001             2001             2000
                                                               ------------      ------------     ------------     ------------
                                                                                                        
Cash flows from operating activities
 Net income (loss)                                              $  11,827        $     (606)       $  13,197        $  21,492
 Adjustments to reconcile net loss to net
  cash provided by operating activities:
   Depreciation                                                     5,294               774            4,172            5,185
   Minority interest in consolidated subsidiary                     1,582                --               --               --
   Amortization of goodwill                                            --                --            2,546            2,897
   Amortization of intangibles                                     11,852             1,874               --               --
   Amortization of debt issuance cost, other fees                   3,293               493               --               --
   Loss on extinguishment of debt                                   1,353                --               --               --
   Deferred taxes on earnings                                       4,763              (381)            (173)           1,259
   Non-cash paid-in kind interest                                   3,318               833               --               --
   Changes in operating assets and liabilities:
     Accounts receivable                                           (1,390)           (4,024)          (1,385)           1,242
     Inventory                                                        743             2,848            2,040           (2,513)
     Accounts payable and accrued liabilities                       6,674             6,551              194              887
     Payables to related parties                                       --              (758)            (908)           1,842
     Income tax payable                                               924                74            1,190              521
     Other assets and liabilities, net                             (2,478)            1,459           (1,647)              43
                                                                ---------        ----------        ---------        ---------
       Net cash provided by operating activities                   47,755             9,137           19,226           32,855
                                                                ---------        ----------        ---------        ---------
Cash flows from investing activities
 Payments to acquire company, net of cash acquired                 (7,399)         (314,161)              --               --
 Payments to acquire 33.3% of DAP, net of cash acquired            (5,171)           (5,880)              --               --
 Capital expenditures                                              (5,852)             (555)          (3,325)          (4,964)
 Other                                                               (166)           (1,031)           2,296             (684)
                                                                ---------        ----------        ---------        ---------
       Net cash used in investing activities                      (18,588)         (321,627)          (1,029)          (5,648)
                                                                ---------        ----------        ---------        ---------
Cash flows from financing activities
 Proceeds from credit facilities                                   25,000           161,000               --               --
 Proceeds from Investcorp capital contributions                        --           120,000               --               --
 Proceeds from senior subordinated notes                               --            50,000               --               --
 Proceeds from short term management loan                             552                --               --               --
 Payment on credit facilities                                     (13,950)               --               --               --
 Payment on senior subordinated notes                             (27,685)               --               --               --
 Payment of early redemption penalty                               (1,353)
 Payments on revolver                                                  --            (1,000)              --               --
 Payments of financing fees                                          (782)          (11,660)              --               --
 Distributions to Schlumberger                                         --                --          (17,136)         (26,873)
                                                                ---------        ----------        ---------        ---------
       Net cash provided by (used in)
        financing activities                                      (18,218)          318,340          (17,136)         (26,873)
 Effect of exchange rates on cash and cash equivalents                247                --               --               --
                                                                ---------        ----------        ---------        ---------
       Net increase in cash                                        11,196             5,850            1,061              334
Cash, beginning of period                                           5,850                --              345               11
                                                                ---------        ----------        ---------        ---------
Cash, end of period                                             $  17,046        $    5,850        $   1,406        $     345
                                                                =========        ==========        =========        =========
Supplemental information:
 Cash paid for income taxes                                     $     354        $       --        $   9,799        $  17,226
                                                                ---------        ----------        ---------        ---------
 Cash paid for interest                                         $   9,646        $      960        $      --        $      --
                                                                ---------        ----------        ---------        ---------
 Note payable issued on acquisition                             $   3,000        $       --        $      --        $      --
                                                                ---------        ----------        ---------        ---------

   The accompanying notes are an integral part of these financial statements.

                                       6

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

1.       ORGANIZATION

         ACQUISITION

         The financial statements include the accounts of Neptune Technology
         Group Holdings Inc. ("Neptune" or the "Company"). The Company is a
         holding company whose primary asset consists of a 100% investment in
         Neptune Technology Group Inc. ("Neptune TG"). On November 1, 2001, the
         Company acquired, through an Asset Purchase Agreement between
         Schlumberger Resource Management Services, Inc. ("Schlumberger"), a
         division of Schlumberger Limited, and Neptune Acquisition I Corp., a
         newly formed entity created by affiliates of Investcorp S.A.
         ("Investcorp"), representing the water meter and meter reading systems
         business of Schlumberger. Immediately following the completion of this
         acquisition, Neptune Acquisition I Corp. merged into Neptune TG. The
         Company was capitalized with $120,000 of common equity contributed by
         affiliates of Investcorp and Neptune management and $50,000 in
         principal amount of subordinated indebtedness (the "Senior Subordinated
         Notes") purchased by Cromwell Finance Limited ("Cromwell Finance"), an
         affiliate of Investcorp.

         The aggregate purchase price for the Acquisition was $331,701 inclusive
         of $25,821 of direct costs related to the Acquisition. $15,000 of the
         direct costs represented amounts paid to a related party (see note 15).
         The following table summarizes the estimated fair values of the assets
         acquired and liabilities assumed at November 1, 2001:

                                                                       
         Current assets                                                   $  36,365
         Property, plant and equipment                                       24,787
         Investment in DAP                                                    5,880
         Other assets                                                        19,091
         Intangible assets                                                  196,990
         Goodwill                                                            60,256
                                                                          ---------
                  Total assets acquired                                     343,369
         Current liabilities                                                 (8,756)
         Other liabilities                                                   (2,912)
                                                                          ---------
                  Net assets acquired                                     $ 331,701
                                                                          =========

         Of the $196,990 of acquired intangible assets, $33,670 was assigned to
         registered trademarks that are considered to be intangible assets with
         indefinite useful lives and are not subject to amortization. The
         remaining $163,320 of acquired intangible assets has a weighted average
         useful life of approximately 21 years. The intangible assets that make
         up that amount include customer relationships of $128,000 (24 year
         weighted-average useful life), technology of $24,390 (15 year
         weighted-average useful life), software of $2,200 (3 year
         weighted-average useful life) and contractual arrangements of $8,730 (5
         year weighted-average useful life). Contractual agreements represent
         contacts for the company to supply product to its utility customers as
         well as an agreement to purchase production components from a former
         related party.

         The $60,256 of goodwill and $196,990 of intangible assets are
         deductible for income tax purposes.

                                       7

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         The Company financed the Acquisition by the issuance of the $120,000 in
         common equity and $50,000 in principal amount of Senior Subordinated
         Notes, which were used to capitalize Neptune TG in exchange for
         Neptune's common stock. The remaining financing was provided by
         $161,000 of borrowings by Neptune TG under the $190,000 senior secured
         Credit Facility (see Note 11).

         CAPITALIZATION

         The Company is authorized to issue up to 3,000,000 shares of stock
         among the following classes.

         Preferred Stock. The Company's Board of Directors (Board) may issue up
         to 500,000 shares of $0.01 par value preferred stock, with such voting
         powers, preferences and other rights or restrictions as determined by
         the Board. As of December 31, 2002 the Company had not issued any
         preferred shares.

         Class A Common Stock. In connection with the Acquisition, the Company
         authorized and issued 997,500 shares of par value, $0.01 Class A Common
         Stock.

         Class D Common Stock. In connection with the Acquisition, the Company
         authorized and issued 2,500 shares of par value, $0.01 Class D Common
         Stock.

         Common Stock. The Company is authorized to issue up to 1,500,000 shares
         of $0.01 par value Common Stock. As of December 31, 2002, the Company
         had not issued any shares of Common Stock.

         Voting rights are limited to Class D Common and Common shareholders,
         except for any rights to vote that may be afforded Class A Common
         shareholders under applicable law. All of the shares of stock are
         subject to certain limitations on transfer. Class A Common shareholders
         have certain "Tag-Along Rights" to participate in any sale of Class D
         Common shares outside permitted transfers as defined.

         NATURE OF BUSINESS

         The Company provides engineering, manufacturing, marketing, sale,
         maintenance and repair and installation of water meters and metering
         systems. The Company's primary markets are the United States, Canada,
         and Mexico.

         PRESENTATION AND PREDECESSOR INFORMATION

         Neptune Technology Group Holdings Inc. is referred to as the
         "Successor" for the period November 1, 2001 to December 31, 2001 and
         thereafter, and the "Company" for all periods presented.

         For the period from January 1, 2001 to October 31, 2001 and the year
         2000 ("fiscal 2000") (the "predecessor periods"), the accompanying
         financial statements include the manufacturing, sales and distribution
         operations in the United States of America and the sales and
         distribution centers in Canada and Mexico of Water Management, the
         water metering and management businesses of Schlumberger. Although the
         Company was not a separate company, the accompanying financial
         statements are presented as if the Company had existed as an entity
         separate from its parent, Schlumberger. The financial statements
         include the historical assets, liabilities, revenues, and expenses that
         were directly related to the Company's businesses of Schlumberger
         during the predecessor periods presented and have been prepared using
         Schlumberger's historical bases in the assets and liabilities and the
         historical results of operations of the Company.

                                       8

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         Certain amounts of Schlumberger's corporate assets, liabilities and
         expenses, including centralized research and engineering, legal,
         accounting, employee benefits, real estate, insurance services,
         information technology services, treasury and other corporate and
         infrastructure costs, although not directly attributable to the
         Company's operations, have been allocated to the Company on a basis
         that the Company and Schlumberger considered to be a reasonable
         reflection of the utilization of services provided or the benefit
         received by the Company (see Note 15). However, the financial
         information included herein may not reflect the financial position,
         operating results, changes in equity and cash flows of the Company had
         the Company been a separate, stand-alone entity during the predecessor
         periods presented. All significant intercompany accounts and
         transactions within the Company have been eliminated.

         Because the Company was not operated as a separate, stand-alone entity
         during the predecessor periods presented, and in many cases the
         Company's results were included in the consolidated financial
         statements of Schlumberger on a divisional basis, there are no separate
         meaningful historical equity accounts for the Company. Changes in
         stockholders' equity represent Schlumberger's contribution of its net
         investment in the Company after giving effect to the net earnings of
         the Company plus net cash transfers to and from Schlumberger and other
         transfers from Schlumberger.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         The consolidated financial statements of the Company have been prepared
         in accordance with accounting principles generally accepted in the
         United States of America.

         PRINCIPLES OF CONSOLIDATION

         The accompanying financial statements present the consolidated
         financial position of the Company and its subsidiaries as of December
         31, 2002 and 2001, respectively and their consolidated results of
         operations and cash flows for the successor and predecessor periods
         presented. All significant intercompany balances and transactions have
         been eliminated.

         REVENUE RECOGNITION

         Revenue from product sales is recognized when title and risk of loss
         pass to the customer, which is generally upon delivery.

                                       9

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         Revenue from software sales is primarily licensing software, providing
         software support and maintenance and providing professional services to
         our customers. Software revenue is recorded in accordance with the
         guidance provided by Statement of Position (SOP) 97-2, "Software
         Revenue Recognition, with Respect to Certain Transactions," and SOP
         81-1, "Accounting for Performance of Construction-Type and Certain
         Product-Type Contracts." Revenues attributed to the sale of software
         are as follows:

                                                                      
         Year ended 2000                                                 $ 400
         10 month period ended October 31, 2001                            184
         2 month period ended December 31, 2001                             78
         Year ended 2002                                                   857

         Shipping and Handling costs are included in cost of goods sold.

         RECLASSIFICATIONS

         Certain reclassifications of prior year information have been made to
         conform to current year reporting.

         ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK

         The Company grants credit to its customers and distributors, who are
         primarily in the water and utility business, in the normal course of
         business.

         Financial instruments which potentially subject the Company to
         concentration of risk consist primarily of accounts receivable. The
         Company performs ongoing credit evaluations of its customers' financial
         condition and maintains an allowance for uncollectible accounts
         receivable based on expected collectibility. The Company's customers
         are not concentrated in a specific geographic region.

         CASH AND CASH EQUIVALENTS

         The Company considers all highly liquid investments with an original
         maturity of three months or less, when purchased, to be cash
         equivalents.

         INVENTORY

         Inventories are stated at lower of average cost, or market. Included
         in inventory are $33 of absorbed administrative costs at December 31,
         2002 and 2001. For both the 12 months ended December 31, 2002 and
         2001, $367 of administrative costs related to inventory were included
         in cost of goods sold.

         PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

         Property, plant and equipment is stated at cost less accumulated
         depreciation. Depreciation is recorded on a straight-line basis over
         the estimated useful lives of the assets. Expenditures for replacements
         and improvements are capitalized. Maintenance and repairs are charged
         to operating expenses as incurred. Upon sale or other disposition, the
         applicable amounts of asset cost and accumulated depreciation are
         removed from the accounts and the net amount, less proceeds from
         disposal, is charged or credited to income.

                                       10

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         Estimated useful lives are as follows:

                                                           
               Buildings and improvements                       15 years
               Machinery and equipment                        5-10 years
               Furniture and fixtures                            5 years
               Computer equipment                                3 years

         IMPAIRMENT OF LONG-LIVED ASSETS

         The Company reviews the appropriateness of the carrying value of its
         long-lived assets, including property, plant and equipment and
         intangible assets with finite lives, whenever events or changes in
         circumstances indicate that the historical cost carrying value of an
         asset may no longer be appropriate. For assets held for use, if the
         total of the expected future undiscounted cash flows is less than the
         carrying amount of the asset, a loss is recognized for the difference
         in the fair value and carrying value of the assets. For assets held for
         sale, a loss is recognized for the difference between the estimated
         fair value, net of costs to sell, and the carrying value of the assets.

         GOODWILL

         Goodwill for the predecessor periods presented was amortized on a
         straight-line basis over 25 years. Goodwill related to the Acquisition
         and the 2002 business combinations (Note 3) is not amortized in
         accordance with Statements of Financial Accounting Standards No. 142
         "Goodwill and Other Intangible Assets". Amortization of goodwill for
         the predecessor periods January 1, 2001 to October 31, 2001 and the
         year ended December 31, 2000 was $2,546 and $2,897, respectively.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair value of cash, accounts receivable and trade accounts payable
         and accrued expenses are not materially different than their carrying
         amounts as reported at December 31, 2002 and 2001 due to the short-term
         nature of these accounts. The December 31, 2002 debt balances under the
         credit facility approximate the fair value on the basis of the variable
         interest related to such debt. The fair value of the senior
         subordinated debt is estimated using a discounted cash flow analysis
         based upon the interest rates of United States Treasury notes.

         TAXES ON INCOME

         Taxes on income are computed in accordance with the tax rules and
         regulations of the taxing authorities where the income is earned.
         Taxable income may differ from pre-tax income for financial accounting
         purposes. Deferred tax assets and liabilities are recognized for the
         expected tax consequences of temporary differences between the tax
         bases of assets and liabilities and their reported amounts in the
         financial statements using enacted tax rates during the period such
         differences are expected to reverse.

         Deferred tax assets are reduced by a valuation allowance when, in the
         opinion of management, it is more likely than not that some portion or
         all of the deferred tax assets will not be realized.

         The Company's operating results for the predecessor periods have been
         included in Schlumberger's consolidated US and state income tax returns
         and in tax returns of Schlumberger's foreign subsidiaries. The
         provision for income taxes reflected in the Company's financial
         statements for the predecessor periods has been determined on a
         separate return basis.

                                       11

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         RESEARCH AND DEVELOPMENT

         Research and development costs include salaries and benefits, contract
         services, supplies, and other costs related to various products under
         development. Research and development costs are expensed in the period
         incurred and totaled $4.9 million, $4.5 million, and $4.1 million for
         the years ended December 31, 2002, 2001, and 2000, respectively.

         DEFERRED FINANCING COSTS

         Deferred financing costs are amortized over a period of 5 to 7 years,
         the terms of the relating debt instruments, utilizing the effective
         interest method. Amortization of deferred financing costs for the year
         ended December 31, 2002 and for the period November 1, 2001 to December
         31, 2002 was $2,293 and $327, respectively.

         STOCK COMPENSATION

         As permitted by SFAS No. 123 "Accounting for Stock-Based Compensation,"
         the Company continues to apply intrinsic value accounting for its stock
         options plans. The Company has adopted the disclosure-only provisions
         of SFAS No. 123 and SFAS No. 148, "Accounting for Stock-Based
         Compensation - Transition and Disclosure - an Amendment of FASB
         Statement No. 123." The Company's pro forma net income (loss) based
         upon the fair value at the grant dates for awards under the plans are
         disclosed below.

         The Company applies intrinsic value accounting for its stock option
         plans. If the Company had elected to recognize compensation expense
         based upon the fair value at the grant dates for awards under the plan,
         the Company's net income (loss) would have been reduced as follows:

                                                                                                     2002                  2001
                                                                                                   --------              ------
                                                                                                                   
         Net income (loss)                                                                         $ 11,827              $ (606)
         Deduct
            Total additional stock-based employee compensation
              cost, net of tax, that would have been included in net
              income (loss) under fair value method                                                    197                   32
                                                                                                   --------              ------
         Pro forma net income (loss)                                                               $ 11,630              $ (638)
                                                                                                   ========              ======

         The weighted average fair value of options granted using the
         Black-Scholes pricing model was $30.88 and $31.80 for the period ended
         December 31, 2002 and 2001, respectively.

         The fair value was determined using a Black-Scholes option pricing
         model with the following weighted average assumptions:

                                                                                   2002              2001
                                                                                  ------            ------
                                                                                             
         Dividend yield                                                             None              None
         Volatility                                                                    0%                0%
         Risk-free interest rate                                                    4.25%              4.4%
         Expected life                                                           6 years           7 years

                                       12

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         TRANSLATION OF NON-US CURRENCIES

         For foreign subsidiaries, the local currency is the functional
         currency. Assets and liabilities are translated into U.S. dollars at
         the rate of exchange existing at year-end. Income statement amounts are
         translated at the weighted average exchange rate for the period with
         resulting translation adjustments being charged or credited to other
         comprehensive income. Transaction gains and losses are included in the
         statement of income.

         DEFERRED REVENUE

         Deferred revenues arise primarily as a result of performance
         obligations related to sales of hand-held unit maintenance contracts as
         well as meter reading and route optimization software. These sales do
         not meet the criteria for recognition under SOP 97-2 and SOP 81-1 as of
         the balance sheet date.

         OTHER COMPREHENSIVE INCOME

         Comprehensive income equals net income plus other comprehensive income.
         Other comprehensive income refers to revenues, expenses, gains and
         losses that are reflected in stockholders' equity but excluded from net
         income. The principal component comprising other comprehensive income
         is foreign currency translation adjustment. Other comprehensive income
         and the effects on earnings are detailed in the Company's accompanying
         Consolidated Statements of Changes in Stockholders' Equity and
         Comprehensive Income.

         USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and the disclosure of contingent
         assets and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from these estimates.

         CONCENTRATIONS OF RISK

         None of the Company's customers represented more than 10% of sales
         during the periods presented. No one vendor accounted for more than 10%
         of total costs of products sold for the periods presented. The Company
         has readily available alternate vendors for the majority of its raw
         materials.

         NEW ACCOUNTING PRONOUNCEMENTS

         In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
         Retirement Obligations" which addresses financial accounting and
         reporting for obligations associated with the retirement of tangible
         long-lived assets and the associated asset retirement costs. SFAS No.
         143 applies to legal obligations associated with the retirement of
         long-lived assets that result from the acquisition, construction,
         development, and (or) normal use of the asset.

         The Company is required and plans to adopt the provisions of SFAS No.
         143 on January 1, 2003. Upon initial application, entities are required
         to recognize a liability for any existing asset retirement obligations
         adjusted for cumulative accretion to the date of adoption of this
         Statement. An asset retirement cost would be capitalized as an increase
         to the carrying amount of the associated long-lived asset, and would be
         subject to depreciation. The cumulative effect, if any, of

                                       13

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         initially applying this Statement will be recognized as a change in
         accounting principle. The Company does not believe there are any
         obligations meeting the criteria of the standard.

         In December of 2002, the Company elected early adoption of SFAS No. 145
         "Rescission of FASB Statement No. 4, 44 and 64, Amendment to FASB
         Statement No. 13, and Technical Corrections of April 2002." Under the
         new accounting standard, gains and losses incurred upon the
         extinguishment of debt may no longer qualify for extraordinary
         treatment and are now included as a component of income or loss before
         taxes. The Company has adopted SFAS No. 145 in the financial statements
         and accordingly has included in income before income taxes a loss of
         $1,353 for the year ended December 31, 2002 related to the
         extinguishment of debt.

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Exit or
         Disposal Activities." SFAS No. 146 addresses the recognition,
         measurement, and reporting of costs that are associated with exit and
         disposal activities, including costs related to terminating a contract
         that is not a capital lease and termination benefits that employees who
         are involuntarily terminated receive under the terms of a one-time
         benefit arrangement that is not an ongoing benefit arrangement or an
         individual deferred-compensation contract. SFAS No. 146 supercedes
         Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
         Certain Employee Termination Benefits and Other Costs to Exit an
         Activity (including Certain Costs Incurred in a Restructuring)" and
         requires liabilities associated with exit and disposal activities to be
         expensed as incurred. SFAS No. 146 will be effective for exit or
         disposal activities of the Company that are initiated after December
         31, 2002. As the company does not currently have any restructuring
         programs in process, management does not expect the adoption of this
         statement to have a material impact on the Company's financial position
         or results of operations.

         In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
         "Guarantor's Accounting and Disclosure Requirements for Guarantees,
         Including Indirect Guarantees of Indebtedness of Others." This
         interpretation elaborates on the disclosures to be made by a guarantor
         in its interim and annual financial statements about its obligations
         under certain guarantees that it has issued. It also clarifies that a
         guarantor is required to recognize, at the inception of a guarantee, a
         liability for the fair value of the obligation undertaken in issuing
         the guarantee. This interpretation does not prescribe a specific
         approach for subsequently measuring the guarantor's recognized
         liability over the term of the related guarantee. This interpretation
         also incorporates, without change, the guidance in FASB Interpretation
         No. 34, Disclosure of Indirect Guarantees of Indebtedness of Others,
         which is being superceded. As of December 31, 2002 the company has
         adopted the disclosure provisions of this interpretation and there was
         no impact from this adoption.

         In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
         "Consolidation of Variable Interest Entities." The primary objectives
         of FIN 46 are to provide guidance on the identification of entities for
         which control is achieved through means other than voting rights
         (variable interest entities or VIEs) and how to determine when and
         which business enterprises should consolidate the VIE (the primary
         beneficiary). This new model for consolidation applies to an entity
         which either (i) the equity investors (if any) do not have a
         controlling financial interest or (ii) the equity investment at risk is
         insufficient to finance support from other parties. In addition, FIN 46
         requires that both the primary and all other enterprises with a
         significant variable interest in a VIE make additional disclosures. FIN
         46 has an effective date of December 31, 2003. The Company does not

                                       14

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- -------------------------------------------------------------------------------

         believe it is a primary beneficiary on a VIE or holds any significant
         interests or involvement in a VIE and does not expect there to be an
         impact on the Company's consolidated financial statements.

3.       BUSINESS COMBINATIONS

         DB Microware, Inc.

         On December 6, 2002, the Company acquired 100% of the outstanding stock
         of DB Microware, Inc ("DB") for $7,000 in cash, $3,000 in a note
         payable due December 31, 2007, and $504 in direct costs related to the
         acquisition. Additionally, in conjunction with the acquisition, there
         is a contingent payment of up to $14,000 over a period of five years
         based on attaining certain earnings objectives. As these contingencies
         are realized, the excess purchase price over the fair value of the net
         tangible assets will be increased accordingly. Results of operations
         for DB subsequent to December 6, 2002 are included in the consolidated
         statement of operations for the year ended December 31, 2002.

         The acquisition of DB Microware, Inc. further enhances Neptune's
         systems capabilities and strengthens Neptune's position in the growing
         Automatic Meter Reading market. DB Microware, Inc. provides a suite of
         field management tools including meter reading, service work orders,
         and route optimization software to many of the largest utility
         companies in the United States.

         The following table summarizes the estimated fair values of the assets
         acquired and liabilities assumed at December 6, 2002:

                                                                   
Cash                                                                  $     105
Other current assets                                                      1,386
Property, plant and equipment                                                52
Other assets                                                                760
Intangible assets                                                         6,518
Goodwill                                                                  6,197
                                                                      ---------
   Total assets acquired                                                 15,018
Current liabilities                                                      (1,231)
Other liabilities                                                        (3,283)
                                                                      ---------
   Net assets acquired                                                $  10,504
                                                                      =========

         Of the $6,518 of acquired intangible assets, $4,518 was assigned to its
         computer software products, which is being amortized over its estimated
         useful life of 4 years. The remaining $2,000 of acquired intangible
         assets was assigned to customer contracts and is being amortized over a
         useful life of 2 years.

         Goodwill acquired in this transaction is not tax deductible.

                                       15

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         DAP Technologies, Inc.

         In conjunction with the Acquisition on November 1, 2001, Neptune
         Acquisition I Corp. entered into a Stock Purchase Agreement with
         Schlumberger Canada Limited to purchase a 33.3% interest in DAP
         Technologies, Ltd. ("DAP") for cash consideration of $5,880. On January
         31, 2002, the Company exercised its option to purchase an additional
         33.3% of DAP Technologies, Inc. stock for cash consideration of $6,067,
         including $168 in other direct costs, bringing Neptune's total
         investment to $11,819. The additional equity purchase resulted in
         Neptune owning 66.6% of DAP and accordingly, DAP is reported as a
         consolidated subsidiary effective January 31, 2002. The excess of the
         total purchase price over the Company's proportionate interest in the
         net assets of DAP was assigned to goodwill.

         The acquisition of the controlling interest in DAP Technologies, Inc.
         further strengthens Neptune's position in the meter reading systems
         market. DAP is a leading designer and manufacturer of fully rugged
         mobile computers for use in applications such as utility meter reading
         as well as a variety of industrial field related uses.

         The following table summarizes the estimated fair values of the
         proportionate interest of assets acquired and liabilities assumed at
         January 31, 2002:

                                               
Cash                                              $    896
Other current assets                                 5,060
Property, Plant and Equipment                          872
Intangible Assets                                    1,077
Goodwill                                             7,285
                                                  --------
Total assets acquired                               15,190

Current liabilities                                 (1,520)
Other liabilities (including minority interest)     (1,851)
                                                  --------
Net assets acquired                               $ 11,819
                                                  ========

         Of the $1,077 of acquired intangible assets, $543 was assigned to its
         technology products, which is being amortized over its estimated useful
         life of 5 years. The remaining, $534 was assigned to customer
         contracts, and is being amortized over an estimated useful life of 1.5
         years.

         Goodwill acquired in this transaction is 75% deductible for Canadian
         tax purposes.

                                       16

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC. CONTENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         The following pro forma information presents certain financial
         statement data as if the acquisitions occurred as of the beginning of
         fiscal year 2002 and 2001:

                                             2002                   2001
                                           ---------             ---------
                                                           
REVENUES                                   $ 189,544             $ 158,449
  Acquisitions
    DAP Technologies                           1,320                11,961
    DB Microware                                 864                 1,288
                                           ---------             ---------
TOTAL                                      $ 191,728             $ 171,698
                                           =========             =========

Net Income                                    11,827                12,591
  Acquisitions
    DAP Technologies                              69                 1,840
    DB Microware                                (695)                 (118)
                                           ---------             ---------
    TOTAL                                  $  11,201             $  14,313
                                           =========             =========

4.       INVENTORIES

         Inventories at December 31, 2002 and 2001 consist of the following:

                                 DECEMBER 31,
                            2002               2001
                           -------            ------
                                        
Finished goods             $ 1,476            $1,295
Work-in process              4,683             4,147
Raw materials                5,464             3,985
                           -------            ------
                           $11,623            $9,427
                           =======            ======

         In connection with the Acquisition on November 1, 2001, in accordance
         with the purchase method of accounting, inventory balances were
         increased to reflect estimated fair value by $3,287. As of December 31,
         2001, $3,215 had been expensed through cost of goods sold, as a
         non-cash charge, based upon inventory turnover. The remainder was
         expensed through cost of goods sold during 2002.

         Additionally, during 2002, the Company increased inventory balances by
         $361 to reflect estimated fair value related to the purchase of the
         additional equity interest in DAP Technologies, Inc. The total amount
         was expensed through cost of goods sold, as a non-cash charge, during
         fiscal year 2002.

                                       17

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

5.       OTHER CURRENT ASSETS

         Other current assets at December 31, 2002 and 2001 consist of the
         following:

                                         DECEMBER 31,
                                    2002              2001
                                   ------            ------
                                               
Prepaid management fees            $1,000            $1,000
Prepaid insurance                     814               657
Prepaid taxes                       1,607                57
Other                               1,603               167
                                   ------            ------
                                   $5,024            $1,881
                                   ======            ======

         Prepaid management fees represent fees paid to Investcorp
         International, Inc. an affiliate of Investcorp. Through its officers,
         employees, and affiliates, Investcorp International, Inc. provides
         management advisory services, strategic planning services, and
         consulting services. These services consist of advice concerning
         management, finance, marketing, strategic planning, and such other
         services as shall be requested from time to time by the Board of
         Directors of Neptune. Five years of management fees at $1.0 million per
         year for a total of $5.0 million were paid by Neptune to Investcorp at
         the closing on November 1, 2001 (see note 7).

6.       PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment at December 31, 2002 and 2001 consist of
         the following:

                                                            DECEMBER 31,
                                                     2002                 2001
                                                   --------             --------
                                                                  
Land                                               $    642             $    605
Building and improvements                             6,287                5,899
Machinery and equipment                              25,097               18,839
                                                   --------             --------
     Total cost                                      32,026               25,343
Less accumulated depreciation                        (6,033)                (774)
                                                   --------             --------
     Property, plant and equipment, net            $ 25,993             $ 24,569
                                                   ========             ========

         Depreciation expense aggregated $5,294 for the year ended December 31,
         2002, $774 for the period November 1, 2001 to December 31, 2001, $4,172
         for the period from January 1, 2001 to October 31, 2001 and $5,185 for
         fiscal 2000.

         Property, plant and equipment was increased by $8,117 to reflect
         estimated fair value at November 1, 2001, the date of the Acquisition.

                                       18

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

7.       OTHER ASSETS

         Other assets at December 31, 2002 and 2001 consist of the following:

                                           DECEMBER 31,
                                     2002                2001
                                    -------            -------
                                                 
Prepaid management fees             $ 2,834            $ 3,834
Deferred financing costs              9,816             11,334
                                    -------            -------
                                    $12,650            $15,168
                                    =======            =======

         In connection with the Acquisition, the Company prepaid a management
         fee of $5,000 to Investcorp International, Inc., (of which $4,000 was
         classified as a long term Other Asset). This amount is being amortized
         on a straight-line basis over a five-year period, the term of the
         related agreement. The total amount amortized for the year ended
         December 31, 2002 and the period November 1, 2001 to December 31, 2001
         was $1,000 and $166, respectively.

8.       GOODWILL AND INTANGIBLE ASSETS

         Intangible assets, net of accumulated amortization, at December 31,
         2002 and 2001 consist of the following:

                                                            2002                2001
                                                          --------            --------
                                                                        
Goodwill                                                  $ 74,013            $ 60,256
                                                          ========            ========

Intangible assets not subject to amortization:
  Tradenames                                              $ 33,670            $ 33,670
Intangible assets subject to amortization:
  Customer relationships                                   121,690             127,098
  Technology                                                27,129              24,086
  Contractual agreements                                     7,032               8,184
  Software                                                   1,346               2,078
                                                          --------            --------
       Total intangibles assets, net                      $190,867            $195,116
                                                          ========            ========

         The results for the year ended December 31, 2002 and the two-month
         period ended December 31, 2001 include the effect of adopting SFAS No.
         141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
         Intangible Assets" in conjunction with the Acquisition. SFAS No. 141
         provides that all business combinations initiated after June 30, 2001
         shall be accounted for using the purchase method. In addition, it
         provides that the cost of an acquired entity must be allocated to the
         assets acquired, including identifiable intangible assets, and
         liabilities assumed based on their estimated fair values at the
         acquisition date. Under SFAS No. 142, goodwill and intangible assets
         that are deemed to have indefinite lives are not amortized, but are
         subject to impairment testing. Impairment testing is required to be
         performed at adoption and at least annually thereafter. On an ongoing
         basis (absent any impairment indicators), the Company plans to perform
         impairment testing as of December 31 of each year. Effective November
         1, 2001, the Company ceased all amortization of goodwill. Upon adoption
         of SFAS No. 142, the Company also tested goodwill for impairment by
         comparing the fair value of each reporting unit with its carrying
         value. The fair

                                       19

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         value was determined using an earnings multiple approach. The Company's
         transitional impairment test did not result in impairment of goodwill.
         Additionally, no impairment charge was recorded as a result of the
         annual impairment test. Amounts assigned to indefinite-life intangible
         assets, primarily trade names, have a carrying value of $33,670. There
         was no impairment charge recorded related to the trade names.

         Accumulated amortization equaled $13,724 and $1,874 at December 31,
         2002 and 2001, respectively.

         The following table represents a rollforward of goodwill balances:

                                                         
Neptune Acquisition Goodwill at November 1, 2001            $ 60,256
                                                            --------
Goodwill at December 31, 2001                                 60,256
                                                            --------
2002 Acquisitions:
  DB Microware                                                 6,702
  DAP Technologies, Inc.                                       7,285
  Currency Translation Adjustment                               (230)
                                                            --------
Ending balance                                              $ 74,013
                                                            ========

         The following table reflects consolidated results adjusted as though
         the adoption of SFAS No. 142 occurred as of January 1, 2000:

                                                SUCCESSOR                   PREDECESSOR
                                               ------------      -------------------------------
                                               PERIOD FROM       PERIOD FROM
                                                NOVEMBER 1        JANUARY 1
                                                 2001 TO           2001 TO           YEAR ENDED
                                               DECEMBER 31,      OCTOBER 31,        DECEMBER 31,
                                                  2001              2001                2000
                                               ------------      -----------        ------------
                                                                           
Net income:
  As reported:                                   $(606)            $13,197            $21,492
    Goodwill amortization, net of tax               --               1,412              1,626
                                                 -----             -------            -------
         As adjusted                             $(606)            $14,609            $23,118
                                                 =====             =======            =======

         Amortization expense for the year ended December 31, 2002 was $11,852.
         Estimated annual amortization expense for each of the five succeeding
         fiscal years is as follows:

FISCAL YEAR
  ENDING
- -----------
                          
   2003                      $13,685
   2004                       12,772
   2005                        8,744
   2006                        8,650
   2007                        7,515
                             $51,366

                                       20

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

9.       ACCOUNTS PAYABLE

         Accounts payable at December 31, 2002 and 2001 consist of the
         following:

                                        DECEMBER 31,
                                   2002              2001
                                  ------            ------
                                              
Supplier payable                  $7,111            $5,423
Interest payable                   1,997               602
                                  ------            ------
Total accounts payable            $9,108            $6,025
                                  ======            ======

10.      ACCRUED LIABILITIES

         Accrued liabilities at December 31, 2002 and 2001 consist of the
         following:

                                                          DECEMBER 31,
                                                     2002              2001
                                                   -------            ------
                                                                
Payroll, vacation and employee benefits            $ 4,195            $2,663
Pension and defined contribution                     1,993               337
Warranty                                             1,285             1,062
Legal settlement                                       638             2,164
Taxes payable                                        1,256                --
Deferred revenue                                     1,924                --
Other                                                4,578             2,297
                                                   -------            ------
                                                   $15,869            $8,523
                                                   =======            ======

         The following represents an evaluation of the Company's warranty
         liability as shown above:

                                          2002               2001
                                         ------            -------
                                                     
Beginning balance - January 1            $1,062            $ 1,094
Accruals                                    103                 60
Payments made                                --                (90)
Adjustments                                 120                 (2)
                                         ------            -------
Ending Balance - December 31             $1,285            $ 1,062
                                         ======            =======

         Adjustments of $120 in 2002 relate to the acquisition of DAP
         Technologies

                                       21

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

11.      DEBT

         Credit Facility

                                       DECEMBER 31,        DECEMBER 31,
                                          2002                2001
                                       ------------        ------------
                                                     
Current facility
   Revolving credit facility            $     --            $     --
   Term Loan A                            11,000              20,000
   Term Loan B                           160,050             140,000
                                        --------            --------
                                         171,050             160,000
Less current portion                          --               4,400
                                        --------            --------
Total long-term portion                 $171,050            $155,600
                                        ========            ========

         In connection with the Acquisition, on November 1, 2001, Neptune TG
         entered into a senior secured credit facility (the "Credit Facility").
         The Credit Facility provides for a $30,000 Revolving Credit Facility,
         with a maturity date of November 1, 2006 and a $160,000 term loan
         facility (the "terms loans"), which is divided into two tranches, Term
         Loan A and Term Loan B, with maturity dates of November 1, 2006 and
         2008, respectively. The term loans were fully drawn as a part of the
         Acquisition with principal balances of $20,000 and $140,000 for Term
         Loan A and Term Loan B, respectively. During 2002, the Company made
         payments of $9,000 on Term Loan A and $4,950 on Term Loan B, a portion
         of which related to amounts due in 2003 and 2004. Additionally, the
         Company amended its Credit Facility to borrow an additional $25,000
         under Term Loan B. The additional borrowings were used to paydown a
         portion of the senior subordinated notes.

         Borrowings under the Revolving Credit Facility bear interest at LIBOR
         plus 3.00% (plus applicable margins determined by Neptune TG's leverage
         ratio). In addition, a commitment fee of 0.50% is charged on all unused
         amounts. At December 31, 2002, the interest rate for the Revolving
         Credit Facility was 4.92%.

         Term Loans A and B bear interest at LIBOR plus 3.00% (plus applicable
         margins determined by Neptune TG's leverage ratio) and LIBOR plus
         3.50%, respectively. At December 31, 2002, Term Loans A and B had
         interest rates of 4.92% and 5.42%, respectively. The weighted average
         borrowing rate for the term loans for the years ended December 31, 2002
         as well as the Predecessor period from November 1, 2001 through
         December 31, 2001 are as follows:

                                  PREDECESSOR
                    2002            PERIOD
                    ----          -----------
                            
Term A              5.11%            5.96%
Term B              5.51%            5.67%

         The Company has provided full, unconditional, joint and several
         guarantees of the Credit Facility. In addition, the Credit Facility is
         collateralized by a first-priority lien on substantially all of the
         domestic tangible and intangible assets of the Company and a 65% pledge
         of the stock of the foreign subsidiaries of the Company.

                                       22

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         The Credit Facility contains certain covenants and restrictions on
         actions by Neptune TG, including limitations on capital expenditures
         and payment of dividends. In addition, the Credit Facility requires
         that Neptune TG comply quarterly, beginning March 31, 2002, with
         specified financial ratios, including a maximum leverage ratio and a
         minimum interest coverage ratio.

         As of December 31, 2002 and 2001 the Company had $1,275 and $6, 205,
         respectively, of letters of credit outstanding. There were no drawings
         on these letters. These letters of credit represent requirements
         related to the company's insurance and workers compensation
         arrangements and for one raw material supplier.

         The Company recognized interest expense of $9,562 and $1,561 for the
         year ended December 31, 2002 and the period November 1, 2001 to
         December 31, 2001 relating to the Credit Facility.

         Senior Subordinated Notes

         On November 1, 2001, the Company sold senior notes to Cromwell Finance
         pursuant to a Senior Note Indenture. The senior note agreements, in the
         aggregate, provide for $50,000 in borrowings, with a maturity date of
         November 1, 2011. The senior notes bear an interest rate of 10% and are
         paid-in-kind each May 15 and November 15 commencing May 15, 2002, until
         the maturity date. Interest shall be payable at a rate of 12% per annum
         on any overdue principal or interest. The estimated fair value of the
         senior subordinated notes at December 31, 2002 was $27,400.

         In conjunction with the amendment to the Credit Facility, the Company
         repaid $27,685, including $1,388 of paid-in-kind interest, of the
         senior subordinated notes prior to maturity resulting in a charge of
         $1,353 due to the payment of an early redemption premium. The senior
         note agreements include certain restrictions, which, among other
         things, limit indebtedness and payment of dividends. The Company
         recognized interest expense of $3,318 and $833 for the year ended
         December 31, 2002 and for the period November 1, 2001 to December 31,
         2001 relating to the senior notes.

         The aggregate principal amounts due under the credit facility, the
         senior subordinated notes, and the note payable to the seller as
         described in Note 3, are as follows:

                                 
2003                                $     --
2004                                      --
2005                                   7,150
2006                                   7,150
2007                                   4,663
2008 and thereafter                  181,566
                                    --------
Total                               $200,529
                                    ========

                                       23

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

12.      TAXES ON INCOME

         Pretax income subject to US and foreign income taxes for each of the
         periods presented was as follows:

                                              SUCCESSOR                            PREDECESSOR
                                  -------------------------------       -------------------------------
                                                      PERIOD FROM       PERIOD FROM
                                                      NOVEMBER 1,       JANUARY 1,
                                   YEAR ENDED          2001 TO            2001 TO           YEAR ENDED
                                  DECEMBER 31,       DECEMBER 31,       OCTOBER 31,        DECEMBER 31,
                                      2002               2001               2001                2000
                                  ------------       ------------       ------------       ------------
                                                                               
United States of America            $13,616            $(1,252)            $23,716            $ 38,425
Foreign                               7,619                265                  78                (127)
                                    -------            -------             -------            --------
Pretax (loss)  income               $21,235            $  (987)            $23,794            $ 38,298
                                    =======            =======             =======            ========

         The following table shows the components of current and deferred income
         tax expense by taxing jurisdiction, both domestic and foreign:

                                              SUCCESSOR                            PREDECESSOR
                                  -------------------------------       -------------------------------
                                                      PERIOD FROM       PERIOD FROM
                                                      NOVEMBER 1,       JANUARY 1,
                                   YEAR ENDED          2001 TO            2001 TO           YEAR ENDED
                                  DECEMBER 31,       DECEMBER 31,       OCTOBER 31,        DECEMBER 31,
                                      2002               2001               2001                2000
                                  ------------       ------------       ------------       ------------
                                                                               
Current
  United States - federal            $ 2,519           $     --           $  8,725            $13,530
  United States - state                  549                 --              1,864              2,907
  Foreign                                  2                 --                181                186
                                     -------           --------           --------            -------
                                       3,070                 --             10,770             16,623
Deferred
  United States - federal              1,983               (398)               (38)               112
  United States - state                  308                (59)                (8)                28
  Foreign                              2,472                 76               (127)                43
                                     -------           --------           --------            -------
                                       4,763               (381)              (173)               183
                                     -------           --------           --------            -------
Total income tax expense
  (benefit)                          $ 7,833           $   (381)          $ 10,597            $16,806
                                     =======           ========           ========            =======

                                       24

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         The principal components of net deferred tax assets and liabilities are
         as follows:

                                                                  DECEMBER 31,
                                                            2002                2001
                                                          -------             -------
Current
                                                                        
   Inventory                                              $    94             $   234
   Accruals not yet deductible for tax returns              1,286               1,989
   Pension                                                     --                  67
   Loss carryforwards                                          --                 890
   Other                                                      805                 307
                                                          -------             -------
                                                          $ 2,185             $ 3,487
                                                          =======             =======

Noncurrent
   Intangible assets                                      $(3,503)            $  (456)
   Property, plant and equipment                             (304)                  4
   Post-retirement benefits                                   971                 853
   Accruals not yet deductible for tax returns             (2,097)                 --
   Other                                                     (767)                 --
                                                          -------             -------
                                                          $(5,700)            $   401
                                                          =======             =======

         Reconciliation between the US federal income tax rate and the effective
         tax rate is:

                                                               SUCCESSOR                            PREDECESSOR
                                                   -------------------------------       -------------------------------
                                                                       PERIOD FROM       PERIOD FROM
                                                                       NOVEMBER 1,       JANUARY 1,
                                                   YEAR ENDED          2001 TO            2001 TO           YEAR ENDED
                                                   DECEMBER 31,       DECEMBER 31,       OCTOBER 31,        DECEMBER 31,
                                                       2002               2001               2001                2000
                                                   ------------       ------------       ------------       ------------
                                                                                                
Statutory tax rate                                    34.00%             (35.00)%           35.00%            35.00%
State income taxes, net of federal benefit             3.30              (3.25)              4.55              4.55
Non-deductible goodwill                                  --                 --               4.01              3.03
Other                                                  (.39)              (.35)               .98              1.30
                                                      -----              ------             -----             -----
                                                      36.91%             (38.60)%           44.54%            43.88%
                                                      =====              ======             =====             =====

13.      PENSION AND OTHER BENEFIT PLANS

         DEFINED BENEFIT PENSION PLANS

         For the predecessor periods presented, Schlumberger and its US
         subsidiary sponsored several defined benefit pension plans that covered
         substantially all employees. The benefits were based on years of
         service and compensation on a career-average pay basis. These plans are
         fully funded with a trustee with respect to past and current service.
         Charges to expense are based upon costs computed by independent
         actuaries. The funding policy is to annually contribute amounts that
         are deductible for federal income tax purposes. These contributions are
         intended to provide for benefits earned to date and those expected to
         be earned in the future. For the predecessor periods presented

                                       25

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         the pension assets related to the Company's pension expense and accrued
         liabilities have been allocated by Schlumberger based on the proportion
         of the Company's pension liability compared to total plan liability for
         the Schlumberger Plans. Allocated pension expense for the 2001 and 2000
         predecessor periods was $0 and $1,524 respectively. No allocation was
         necessary for the 2001 predecessor period due to the funded status of
         the plan.

         In connection with the Acquisition, on November 1, 2001, Schlumberger
         retained the related pension assets and liabilities. Benefits vested by
         Neptune employees under the Schlumberger defined benefit plan will be
         administered by Schlumberger.

         DEFINED CONTRIBUTION PLAN

         For the predecessor periods presented, Schlumberger sponsored a 401(k)
         defined contribution plan covering substantially all employees. Each
         year, participants could contribute up to 15% of pretax compensation
         subject to certain limitations. Schlumberger matched a minimum 50% of
         the employee pretax contributions up to 6% plus discretionary
         contributions. Contributions for Company employees totaled
         approximately $1,113 for the year ended December 31, 2000.

         In connection with the Acquisition, Schlumberger approved a payment of
         $572 into the Schlumberger 401(k) plan representing Schlumberger's
         match of 75% of the first 6% on Neptune employee contributions during
         the period January 1, 2001 to October 31, 2001. Once the funding was
         completed, Neptune employees, upon authorization, rolled the vested
         balances into the Neptune 401(k) plan.

         The Neptune 401(k) plan was established on November 1, 2001 and covers
         substantially all employees. Each year participants can contribute up
         to 15% of pretax compensation and the Company can match a minimum 50%
         of these contributions up to the first 6%. The Company has the option
         to make higher discretionary matches in profitable years. Matching
         Company contributions vest ratably over five years. The Company funded
         a matching contribution of $107 and $829 for the years 2001 and 2002,
         respectively.

         In addition, under the terms of the Neptune 401(k) plan, a special
         contribution and a transition contribution were granted to certain
         qualifying Neptune employees. The purpose of the special contribution
         and transition contribution was to compensate Neptune employees for the
         discontinuance of the Schlumberger defined benefit plan as Neptune did
         not adopt such a plan on November 1, 2001. The special contribution
         grants additional Company matching of employees' pretax compensation
         based on a formula of age plus years of service for the term of
         employment. The transition contribution also grants additional Company
         matching for a maximum period of five years to those employees whose
         age plus years of service equaled 55 or higher as of November 1, 2001.
         For 2001, the Company funded a special contribution and transition
         contribution of $145 and $46, respectively. For 2002, the Company
         funded a special contribution and transition contribution of $845 and
         $252, respectively.

                                       26

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

         In connection with the Acquisition, on November 1, 2001, Neptune
         established a new retiree healthcare plan for all employees not
         eligible for benefits under Schlumberger's postretirement plan. Under
         the terms of the Asset Purchase Agreement, all Neptune employees who
         satisfied the retirement eligibility requirements as of the November 1,
         2001 Acquisition date will be covered by Schlumberger's postretirement
         plan.

         The principal actuarial assumptions used to measure costs for the year
         ended December 31, 2002 and the period November 1, 2001 to December 31,
         2001 was a discount rate of 6.5% and 7.0%, respectively, and an overall
         medical cost trend rate of 9.5% graded to 5.0% over the next six years
         and thereafter.

         Net periodic postretirement benefit cost for the year ended December
         31, 2002 and the period November 1, 2001 to December 31, 2001 included
         the following components:

                                                                                          PERIOD
                                                                                        NOVEMBER 1,
                                                                                         2001 TO
                                                                       DECEMBER 31,    DECEMBER 31,
                                                                           2002            2001
                                                                       ------------    -------------
                                                                                 
               Service cost - benefits earned during the period            $148            $25
               Interest cost on accumulated postretirement
                 benefit obligation                                         156             25
                                                                           ----            ---
               Postretirement benefit cost                                 $304            $50
                                                                           ====            ===

         The change in accumulated postretirement benefit obligation for the
         year ended December 31, 2002 and the period from November 1, 2001 to
         December 31, 2001 was as follows:

                                                                                          PERIOD
                                                                                        NOVEMBER 1,
                                                                                         2001 TO
                                                                       DECEMBER 31,    DECEMBER 31,
                                                                           2002            2001
                                                                       ------------    -------------
                                                                                 
Accumulated postretirement benefit obligation                            $2,229           $2,179
Service cost                                                                148               25
Interest cost                                                               156               25
Net actuarial loss                                                          228               --
Acquisition                                                                  70               --
                                                                         ------           ------
Accumulated postretirement benefit obligation                            $2,831           $2,229
                                                                         ======           ======

                                       27

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         The components of the accumulated postretirement benefit obligation on
         December 31, 2002 and 2001 were as follows:

                                   2002              2001
                                  ------            ------
                                              
Retirees                          $   --            $   --
Fully eligible                       787                --
Actives (not eligible)             2,044             2,229
                                  ------            ------
                                  $2,831            $2,229
                                  ======            ======

         There are no plan assets associated with the postretirement benefit
         obligation at December 31, 2002 and 2001. The following is the
         reconciliation of the funded status:

                                                               2002                2001
                                                              -------             ------
                                                                            
     Accumulated postretirement benefit obligation
       in excess of plan assets                               $ 2,831             $2,229
     Unrecognized net actuarial loss                             (228)                --
                                                              -------             ------
     Accrued benefit liability                                $ 2,603             $2,229
                                                              =======             ======

14.      STOCK COMPENSATION PLANS

         In connection with the Acquisition, the Company adopted the Management
         Stock Incentive Plan (the "Plan"). The Plan is administered by a
         committee of the Board of Directors (the "Compensation Committee"),
         which has broad authority to administer and interpret the Plan. Options
         to purchase common stock granted to an employee pursuant to an
         individual Stock Option Agreement may include a provision terminating
         the option upon termination of employment under certain circumstances
         or accelerating the receipt of benefits upon the occurrence of
         specified events, including, at the discretion of the Compensation
         Committee, any change of control of Neptune, as defined by the Plan.

         Options granted under the Plan vest over a period of seven years and
         expire 30 days thereafter. Vesting may be accelerated in the event of
         an initial public offering or the sale of the Company. Vesting may be
         deferred based on failing to meet or exceed performance targets, which
         are based on the Company's earnings before interest, taxes,
         depreciation and amortization, as defined in each grantee's individual
         Stock Option Agreement.

         Upon the termination of an optionee's employment, the Company has
         certain rights to repurchase the common stock purchased by the optionee
         as a result of the exercise of option(s).

                                       28

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         Class A Common Stock option transactions during fiscal year 2002 and
         the period November 1, 2001 to December 31, 2001 are summarized as
         follows (share amounts in thousands):

                                     SHARES
                                  RESERVED FOR
                                    ISSUANCE                        SHARES                          WEIGHTED-
                                    UNDER THE        SHARES      AVAILABLE FOR                       AVERAGE
                                      PLAN          GRANTED         GRANT            PRICE            PRICE
                                  -------------     -------      -------------       -----          ---------
                                                                                     
Balance at November 1, 2001             --             --              --             $ --            $ --
   Options granted                      75             64              11              120             120
   Options exercised                    --             --              --               --              --
   Options forfeited                    --             --              --               --              --
                                      ----           ----            ----             ----            ----
Balance at December 31, 2001            75             64              11              120             120
   Options granted                      --              5              (5)             120             120
   Options exercised                    --             --              --               --              --
   Options forfeited                    --             (1)              1              120             120
                                      ----           ----            ----             ----            ----
Balance at December 31, 2002            75             68               7             $120            $120
                                      ====           ====            ====             ====            ====

         In accordance with the stock purchase plan, the purchase price of the
         shares of common stock, subject to options under the Plan, must be no
         less than the fair market value of the common stock at the date of
         grant.

         For options outstanding and exercisable at December 31, 2002, the
         exercise price ranges and average remaining lives were:

                                        OPTIONS OUTSTANDING                        OPTIONS EXERCISABLE
                          ---------------------------------------------       ----------------------------
                                              WEIGHTED
                              SHARES           AVERAGE                           SHARES
                          OUTSTANDING AT      REMAINING        AVERAGE        OUTSTANDING AT     AVERAGE
                           DECEMBER 31,      CONTRACTUAL       EXERCISE        DECEMBER 31,      EXERCISE
  EXERCISE PRICE               2002             LIFE            PRICE             2002            PRICE
  --------------          --------------     -----------       --------       --------------     ---------
                                                                                  
      $120                      68                7              $120               9              $120

         PREDECESSOR STOCK COMPENSATION PLANS

         During the predecessor periods presented, key employees of the Company
         were granted stock options under the Schlumberger stock option plans.
         On November 1, 2001, in connection with the Acquisition, employees who
         maintained vested stock options under such plans had 180 days to either
         exercise or forfeit the options. In addition, Schlumberger maintained a
         Discounted Stock Purchase Plan. Under the terms of this plan, employees
         could choose each year to have up to 10% of their annual earnings
         withheld to purchase Schlumberger common stock. On June 30, 2001,
         employees purchased Schlumberger stock for the amount of their
         withholding balance on that date. Withholdings for the purchase of
         Schlumberger stock for the period July 1, 2001 to November 1, 2001, the
         date of the Acquisition, were refunded to Neptune employees.

                                       29

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         Schlumberger applied APB 25 and related Interpretations in accounting
         for its stock options plans. No compensation cost was recognized for
         its stock option plans and its employee stock purchase plan.

15.      RELATED PARTY TRANSACTIONS

         At December 31, 2001, the Company had recorded notes receivable (as a
         reduction of additional paid-in-capital), of $1,034 representing loans
         to certain executives of the Company for purchases of common stock in
         conjunction with the Acquisition on November 1, 2001. Of this amount,
         $552 was repaid by the executives in the first quarter of 2002. At
         December 31, 2002, the amount remaining of $482 is due to the Company
         within 180 days following (i) an initial public offering by the Company
         or (ii) the consummation of certain transactions resulting in a 50% or
         greater change in economic beneficial ownership of the Company. The
         notes bear an annual interest rate of 3.93%.

         In 2001 The Company paid $15,000 of direct acquisition costs to
         Investcorp International Inc, an affiliate of Investcorp. $5,000
         represented prepaid management fees, as described in note 7, $5,700 was
         paid for loan financing advisory agreement fees, and $4,300 was paid
         for asset acquisition advisory agreement fees.

         In connection with the Acquisition, on November 1, 2001, the Company
         paid $11,660 of financing costs related to the Credit Facility. Of this
         amount, $5,700 was paid to Investcorp as described above.

         For the predecessor periods presented, the financial statements include
         allocations of certain corporate expenses, including centralized
         research and engineering, legal, accounting, employee benefits, real
         estate, insurance services, information technology services, treasury
         and other corporate and infrastructure costs. These allocations have
         been determined on a basis that Schlumberger and the Company considered
         to be a reasonable reflection of the utilization of services provided
         or the benefit received by the Company. The allocation methods include
         relative sales, headcount, square footage, transaction processing
         costs, adjusted operating expenses and others. These allocations
         resulted in charges of $8,316 and $7,133 being recorded in the
         Company's results of operations for the period January 1, 2001 to
         October 31, 2001 and the year 2000, respectively.

         Prior to November 1, 2001, the Company participated in Schlumberger's
         centralized treasury and cash processes. Cash was managed either
         through zero balance accounts or an interest-bearing offsetting
         mechanism.

         In certain countries, for the predecessor periods presented, there were
         formal tax sharing arrangements between the Company and the respective
         entity of Schlumberger. In certain countries, for the predecessor
         periods presented, the Company was a division of the Schlumberger legal
         entity that is the ultimate taxpayer in that jurisdiction.

                                       30

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

16.      COMMITMENTS AND CONTINGENCIES

         LEASES AND LEASE COMMITMENTS The Company leases office space and
         automobiles under lease agreements with varying expirations dates
         ranging from one to five years. Total rental expense was $504 for
         fiscal year 2002, $53 for the period November 1, 2001 to December 31,
         2001, $421 for the period January 1, 2001 to October 31, 2001, and
         $1,299 for fiscal year 2000. Future minimum rental commitments under
         non-cancelable leases are as follows:

               
2003              $282
2004               149
2005                45
2006                 6
                  ----
                  $482
                  ====

         WATER METER LITIGATION

         The Company has been involved in litigation with environmental groups
         in California and with the Los Angeles District of Water and Power
         (LADWP) over the constitution and specifications of its water meters.
         The following is a summary of this activity:

         PROPOSITION 65 SETTLEMENT AGREEMENT

         In May 1997, two citizens groups sued six water meter manufacturers
         under California's Proposition 65 and the California Unfair Competition
         Law. The complaint alleged that manufacturers of standard brass water
         meters, including Schlumberger, violated Proposition 65 by selling
         their standard brass meters in California because the meters
         "discharged or released" lead into a "source of drinking water" at
         levels prohibited by Proposition 65. The case was settled by
         Schlumberger in May of 2000.

         Under the settlement the Company is required to stop selling
         traditional brass water meters in California by May of 2004. A reserve
         of $1,200 was recorded in 1997. Payments on this settlement, totaling
         $1,205, were completed by May 2000.

         LADWP SETTLEMENT AGREEMENT

         In 1998, as a direct result of the above litigation, the Environmental
         Law Foundation (ELF) filed suit against Schlumberger under California's
         False Claims Act (FCA). The ELF complaint alleged that Schlumberger
         sold water meters to the Los Angeles Department of Water and Power
         ("LADWP") from 1990 to 1998 that were constructed from an alloy that
         allowed up to 8% lead content, whereas the LADWP contract specification
         for water meters limited lead content to 6%. The meters sold by
         Schlumberger to LADWP were the national standard for water meters
         containing an average of 7% lead.

         The ELF and LADWP claims were settled in January 2001. The terms of the
         settlement are that the Company will provide LADWP 120,000 free
         non-lead water meters of specified sizes over a period of 24 months, at
         the rate of 5,000 meters per month. A reserve of $5,800 was recorded in
         1998. In May 2001, cash settlements of $620 and $750 were paid to LADWP
         and to the Environmental Law Foundation, respectively. The balance of
         $4,430 is being used to provide the delivery of 120,000 meters to LADWP
         over a 24 month period. The shipments of 5,000 meters per month began
         in

                                       31

NEPTUNE TECHNOLOGY GROUP HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
(DOLLAR AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------

         May 2001 with 25,000 meters remaining to be delivered as of December
         31, 2002. At December 31, 2002 and 2001, the remaining liability
         recorded for this settlement is $638 and $2,897, respectively.

         RUEDA LITIGATION

         Rueda is an amalgamated lawsuit based on alleged property damage
         suffered by customers of LADWP whose property is serviced by the water
         meters sold to LADWP from 1990 through 1998. The lawsuit relates only
         to the meters, which are the subject of the above LADWP litigation and
         settlement. The allegations included in the lawsuit are (i) violation
         of the California Business and Professional Code; (ii) negligence per
         se; and (iii) negligence and public nuisance. The Plaintiffs allege
         that their property value have been diminished because the Company sold
         LADWP meters that did not meet specifications due to their lead
         content. To prove their claims, the plaintiffs will have to demonstrate
         that lead leaches from the meters supplied by the Company in greater
         quantities than it would have leached from the meters specified by
         LADWP and that any such increased leaching has impacted their property
         values. Based on motions for judgment filed by the Company, the Court
         granted the motion for summary adjudication on the negligence per se
         and negligence and public nuisance causes of action. On January 24,
         2003, the Court granted class-action status for the remaining cause of
         action relating to the violation of the California Business and
         Professional Code. The Company is currently evaluating the potential
         impact of the class certification order and cannot determine the
         amount, if any, of potential exposure at this time.

                                       32

                                                                    EXHIBIT 99.2

             PRO FORMA UNAUDITED CONDENSED FINANCIAL INFORMATION OF
       ROPER INDUSTRIES, INC. AND NEPTUNE TECHNOLOGY GROUP HOLDINGS, INC.

We derived the following unaudited pro forma consolidated financial data set
forth below by the application of pro forma adjustments to the historical
financial statements of Roper Industries, Inc. (as incorporated by reference)
and Neptune Technology Group Holdings Inc. ("Neptune") appearing elsewhere in
this Current Report on Form 8-K.

The pro forma condensed financial information for Roper Industries, Inc. and
subsidiaries reflects the impact of the Neptune acquisition ("Neptune
Acquisition") and DAP Technologies Ltd minority interest acquisition ("DAP
Acquisition") collectively the "Transactions", on our income statements from
continuing operations for the fiscal year ended October 31, 2002 and the
nine-month period ended September 30, 2003, had the Transactions been
consummated immediately prior to these periods. For the purpose of presenting a
combined income statement for the year ended October 31, 2002, the audited
income statements of Neptune for the year ended December 31, 2002 have been
utilized. Additionally, this information also presents the impact of Neptune on
our balance sheet as of September 30, 2003, had the Transactions been
consummated immediately prior to that date.

The unaudited pro forma consolidated financial data has been prepared giving
effect to the Neptune Acquisition and the DAP Acquisition, which have been
accounted for in accordance with SFAS No. 141, "Business Combinations." The
total purchase price will be allocated to the net assets of Neptune based upon
estimates of fair value. The pro forma adjustments are based on a preliminary
assessment of the value of Neptune's tangible and intangible assets by
management. The final purchase price allocation will be based on a formal
valuation analysis by an outside appraisal firm and may include an adjustment to
the amounts recorded for the value of property and equipment, identifiable
intangible assets and goodwill, as well as changes in cash consideration based
on changes in cash, indebtedness and working capital on the closing date. A
final valuation is in process and should be obtained shortly after the
completion of the acquisition.

The adjustments to the unaudited pro forma consolidated statement of operations
are based upon available information and certain assumptions that we believe are
reasonable and exclude certain non-recurring charges that will be incurred in
connection with: (1) amortization of estimated inventory fair value step-up of
approximately $4 million from the acquisition expected to impact 2004 cost of
sales; and (2) the write-off of approximately $15.6 million of debt
extinguishment costs, net of tax, related to the pay off to Roper's current
senior notes and related deferred financing costs. The pro forma condensed
financial information should be read in conjunction with the historical
financial statements of Roper and Neptune and the related notes thereto. The pro
forma financial information is presented for informational purposes only and is
not necessarily indicative of the results of operations that would have resulted
had the acquisition described above been consummated at the date indicated, nor
is it necessarily indicative of the results of operations of future periods.

                     Roper Industries, Inc. and Subsidiaries
                Pro Forma Consolidated Balance Sheet (unaudited)
                               September 30, 2003
                                 (in thousands)

                                                                           Pro Forma
                                              Roper         Neptune         entries            Pro Forma
                                             --------       --------       ---------          ----------
                                                                                  
Cash and cash equivalents                    $ 14,510       $ 24,159       ($24,159)(2)       $   14,510
Accounts receivable, net                      120,344         25,677              0              146,021
Inventories                                    95,233         14,631          4,000(2)           113,864
Other current assets                            5,238          9,373         (1,000)(2)           13,611
                                             --------       --------       --------           ----------
   Total current assets                       235,325         73,840        (21,159)             288,006

Property, plant and equipment, net             51,908         26,085              0               77,993
Goodwill                                      482,465         77,231        169,369(2)           729,065
Other intangible assets, net                   36,852        180,644         61,356(2)           278,852
Other noncurrent assets                        29,127         10,442         13,400(5)            43,571
                                                                             (9,398)(2)
                                             --------       --------       --------           ----------
   Total assets                              $835,677       $368,242       $213,568           $1,417,487
                                             ========       ========       ========           ==========

Accounts payable                             $ 33,791       $ 10,360       $      0           $   44,151
Accrued liabilities                            54,722         16,604         13,750(2)            85,076
Income taxes payable                            3,093              0         (8,400)(3)           (5,307)
Current portion of long-term debt               1,027         10,000         12,500(1)            23,527
                                             --------       --------       --------           ----------
   Total current liabilities                   92,633         36,964         17,850              147,447

Long-term debt                                287,470        277,304         40,696(1)           605,470
Other noncurrent liabilities                   13,846         10,405         21,475(2)            45,726
                                             --------       --------       --------           ----------
Total liabilities                             393,949        324,673         80,021              798,643

Minority interest                                   0          4,512         (4,512)(4)                0
Redeemable preferred stock                          0         29,017        (29,017)(4)                0

Total equity                                  441,728         10,040        (15,600)(3)          618,844
                                                                            192,716(1)
                                                                            (10,040)(4)
                                             --------       --------       --------           ----------

   Total liabilities and equity              $835,677       $368,242       $213,568           $1,417,487
                                             ========       ========       ========           ==========

  See accompanying notes to the unaudited pro forma consolidated balance sheet

                    Roper Industries, Inc. and Subsidiaries
            Notes to Unaudited Pro Forma Consolidated Balance Sheet
                                (in thousands)

(1)      The pro forma consolidated balance sheet gives effect to the following
         pro forma adjustments and reflects incurrence of debts, payment of
         acquisition consideration to the sellers of Neptune and the DAP
         minority interest, repayment of existing Roper and Neptune debt and
         fees and expenses incurred in connection with the Transactions.

                                                                        
         Sources of funds
            New revolving credit facility                                  $ 27,970
            Five-year term loan facility                                    450,000
            Senior Subordinated Convertible Notes                           150,000
            Issuance of common stock                                        192,716
                                                                           --------
              Total sources of funds                                       $820,686
                                                                           ========

         Uses of funds
            Net cash consideration for Neptune acquisition                 $475,000
            Cash and stock consideration in connection with
              the DAP acquisition                                             9,216
            Estimated fees and expenses                                      25,000
            Extinguish existing Roper long-term debt                        287,470
            Debt extinguishment costs                                        24,000
                                                                           --------
                                                                           $820,686
                                                                           ========

(2)      The Neptune and DAP acquisitions will be accounted for as a purchase in
         accordance with SFAS No. 141, "Business Combinations." Under purchase
         accounting, the estimated acquisition consideration will be allocated
         to Neptune's assets and liabilities based on their relative fair
         values. The consideration remaining will be allocated to identifiable
         intangibles with a finite life and amortized over that life, as well as
         to goodwill and identifiable intangibles with an infinite life, which
         will be evaluated on an annual basis to determine impairment and
         adjusted accordingly. The pro forma adjustments were based upon a
         preliminary assessment of value by management of Neptune's tangible and
         intangible assets. The final purchase price allocation is in process
         and may include an adjustment of the total consideration payable at
         closing, as well as in the amount recorded for any changes in value of
         property and equipment, identifiable intangible assets, and goodwill
         determined by an outside appraisal shortly after completion of the
         Transactions.

                                                                                 
         Total acquisition consideration allocation:
         Net cash paid for Neptune acquisition                                      $ 475,000
         Cash and stock consideration paid for the DAP acquisition                      9,216
         Estimated acquisition expenses                                                11,600
                                                                                    ---------
         Total acquisition consideration                                              495,816
         Less: Net book value of assets acquired                                     (296,315)
                                                                                    ---------
         Excess purchase price to be allocated                                      $ 199,501
                                                                                    =========

         Preliminary allocations:

         Inventory step-up                                                          $   4,000
         Deferred tax liability                                                       (21,475)
         Restructuring and other incremental liabilities                              (13,750)
         Incremental identifiable intangible assets                                    61,356
         Incremental goodwill                                                         169,369
                                                                                    ---------
                                                                                    $ 199,501
                                                                                    =========

         Amortization of intangible assets, if applicable, will occur over their
         estimated useful lives, which we estimate will range from two to
         twenty-five years. The major categories of Neptune intangible assets
         are estimated as follows:

                                                                      
         Assets subject to amortization:
             Customer relationships                                      $ 147,000
             Technology                                                     32,000
             Software                                                        8,000
             Contracts                                                      19,000

         Assets not subject to amortization:
             Trade names                                                    36,000
                                                                         ---------
                                                                         $ 242,000
                                                                         =========

(3)      Represents the estimated costs associated with extinguishing Roper's
         current senior notes and the write-off of deferred financing costs
         associated with those notes and Roper's existing revolving credit
         facility which will also be extinguished in conjunction with this
         transaction. The extraordinary expense associated with early
         extinguishment of Roper's current senior notes is tax deductible and a
         tax benefit of $8,400 has been recognized at the federal statutory
         rate.

(4)      Reflects the elimination of Neptune's historical share capital,
         retained earnings, minority interest and other equity accounts pursuant
         to the application of purchase accounting in accordance with SFAS No.
         141, "Business Combinations."

(5)      Debt issuance costs of $13,400 are being amortized over the weighted
         average life of the associated financings.

                     Roper Industries, Inc. and Subsidiaries
           Pro Forma Consolidated Statement of Operations (unaudited)
                           Year Ended October 31, 2002
                                 (in thousands)

                                                                           Pro Forma
                                               Roper         Neptune         entries           Pro Forma
                                              --------       --------      ---------           ---------
                                                (2)            (2)

Net sales                                     $617,462       $189,544       $      0           $807,006
Cost of good sold                              283,707        109,211              0            392,918
                                              --------       --------       --------           --------
Gross profit                                   333,755         80,333              0            414,088

Selling, general and administrative
expenses                                       218,210         45,793          1,900(4)         265,903
                                              --------       --------       --------           --------
Operating profit                               115,545         34,540         (1,900)           148,185

Interest expense                                18,506         12,880         (4,886)(5)         26,500
Euro debt currency loss                          4,093              0              0              4,093
Loss on extinguishment of debt                       0          1,353              0(3)           1,353
Other income                                     3,381            928              0              4,309
                                              --------       --------       --------           --------
Earnings from continuing
operations before income taxes                  96,327         21,235          2,986            120,548

Income taxes                                    29,889          7,833          1,045(6)          38,767
                                              --------       --------       --------           --------
Net earnings from continuing
operations                                    $ 66,438       $ 13,402       $  1,941           $ 81,781
                                              ========       ========       ========           ========

Net earnings per share from
continuing operations
     Basic                                    $   2.13                                         $   2.32
     Diluted                                      2.09                                             2.28

Average shares outstanding
     Basic                                      31,210                         3,998(7)          35,208
     Diluted                                    31,815                         3,998(7)          35,813

                See accompanying notes to the unaudited Pro Forma
                      Consolidated Statement of Operations

                     Roper Industries, Inc. and Subsidiaries
           Pro Forma Consolidated Statement of Operations (unaudited)
                      Nine-Months Ended September 30, 2003
                                 (in thousands)

                                                                              Pro forma
                                                Roper          Neptune         entries           Pro Forma
                                              --------        --------        ---------          ---------

Net sales                                     $487,562        $147,473        $      0           $635,035
Cost of good sold                              230,504          83,773               0            314,277
                                              --------        --------        --------           --------
Gross profit                                   257,058          63,700               0            320,758

Selling, general and
administrative expenses                        178,262          37,472             600(4)         216,334
                                              --------        --------        --------           --------
Operating profit                                78,796          26,228            (600)           104,424

Interest expense                                12,653          14,867          (7,920)(5)         19,600
Loss on Extinguishment of debt                       0           9,329               0 (3)          9,329
Other expense                                     (195)         (2,556)              0             (2,751)
                                              --------        --------        --------           --------
Earnings from continuing
operations before income taxes                  65,948            (524)          7,320             72,744

Income taxes                                    19,784             451           2,562 (6)         22,797

Net earnings from continuing                  --------        --------        --------           --------
operations                                    $ 46,164        $   (975)       $  4,758           $ 49,947
                                              ========        ========        ========           ========
Net earnings per share from
continuing operations
     Basic                                    $   1.47                                           $   1.41
     Diluted                                      1.45                                               1.39

Average shares outstanding
     Basic                                      31,482                           3,998(7)          35,480
     Diluted                                    31,844                           3,998(7)          35,842

                See accompanying notes to the unaudited Pro Forma
                      Consolidated Statement of Operations

                     Roper Industries, Inc. and Subsidiaries
        Notes to Unaudited Pro Forma Consolidated Statement of Operations

(1)      The unaudited pro forma consolidated financial statements have been
         prepared to reflect the application of purchase accounting under SFAS
         No. 141, "Business Combinations" for the Neptune and DAP Acquisitions.
(2)      Because of differing fiscal 2002 year-ends for Roper and Neptune, the
         pro-forma consolidated Statement of Operations for fiscal year ended
         October 31, 2002 utilizes the audited income statement of Neptune for
         the calendar year ended December 31, 2002. For fiscal 2003, both
         Neptune and Roper report on a calendar year basis and common reporting
         periods are used for the Consolidated Statement of Operations for the
         nine-months ended September 30, 2003.
(3)      During the year ended October 31, 2002, and the nine-months ended
         September 30, 2003, Neptune recorded losses on early extinguishment of
         debt of $1,353,000 and $9,329,000, respectively. These losses were
         associated with financing arrangements typical of private equity group
         ownership. These losses are required to be presented in the proformas
         under Article 11 of Regulation S-X. These amounts will not recur for
         Roper. The table below reflects the proforma earnings from continuing
         operations before income taxes adjusted to exclude these losses (in
         thousands):

                                               Year Ended      Nine-Months Ended
                                              Oct. 31, 2002     Sept. 30, 2003
                                              -------------    -----------------
                                                         
         Proforma earnings from continuing
            operations before income taxes       $120,548            $72,744

         Loss on extinguishment of debt             1,353              9,329
                                              -------------    -----------------
         Adjusted earnings from continuing
            operations before income taxes       $121,901            $82,073
                                              =============    =================

(4)      Reflects the net adjustment to the historical amortization expense of
         Neptune from the elimination of certain non-recurring management fees
         and financing expenses, partially offset by additional intangibles
         amortization from management's estimate of the effects of applying SFAS
         No. 141 to identifiable finite-lived intangible assets.
(5)      Reflects the net change in interest expense to give effect to (i)
         borrowings under Roper's proposed new senior revolving credit facility,
         (ii) the issuance of $450 million of a five year term-note facility,
         (iii) a 4.5% coupon on $150 million of senior subordinated convertible
         notes, (iv) the amortization of $13.4 million of debt issuance costs
         over an average of 4 years and (v) the elimination of both Roper and
         Neptune's interest expense under their current financing structures.
         For every 1/8% change in the interest rates on the debt, the effect on
         interest expense of the combined entities is approximately $800
         thousand.
(6)      Tax effects of the pro forma adjustments have been calculated based on
         the applicable statutory rate of 35%.
(7)      Reflects the issuance of common stock to finance the Neptune
         Acquisition and the use of treasury stock in the DAP Acquisition. The
         total issuance is assumed to be 3,998,000 shares of Roper's common
         stock with a market value of $201.7 million based on a market price of
         $50.46 per share. The price per share reflects the average closing
         price of Roper Industries, Inc. stock for the two days prior to filing
         the S-3 registration. For every $1 movement in the price of Roper
         Industries, inc. stock, there is an approximately 80,000 share
         differential in the number of shares required for the equity funding
         portion of these transactions.