ASSET PURCHASE AGREEMENT









         THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of May 31,

1996 among KDI/TRIANGLE CORPORATION, a Michigan corporation (the "Purchaser"), a

wholly-owned subsidiary of MICROWAVE COMPONENTS ENTERPRISES, INC., a Michigan

corporation ("Enterprises"), KDI D/H CORPORATION, a Delaware corporation ("KDI

D/H"), and KDI/TRIANGLE ELECTRONICS, INC., a Delaware corporation and

wholly-owned subsidiary of KDI D/H (the "Seller").





                                    Recitals:



         A. The Seller is engaged in the business of designing, manufacturing

and marketing catalog and custom engineered RF and electronic microwave

frequency components and subassemblies, which components and subassemblies are

utilized in a wide variety of commercial applications and defense systems

relating to telecommunications, cellular telephone cell site equipment, radar,

navigation, military electronic countermeasures and medical and industrial

monitoring and tracking systems in air, ground, sea and space environments (the

"Seller's Business").



         B. The Purchaser desires to purchase and the Seller desires to sell the

assets of the Seller related to and used in the Seller's Business, upon the

terms and conditions set forth herein.



         C. The Seller, KDI D/H and Merchant Financial, Inc., a Michigan

corporation and an affiliate of the Purchaser ("MFI"), entered into a letter of

intent, dated January 22, 1996, relative to the transactions contemplated herein

(the "Letter of Intent").





                                   Agreement:



         NOW, THEREFORE, in consideration of these premises and subject to the

representations, warranties, covenants and other terms and conditions contained

herein and for the consideration provided herein, the parties agree as follows:





         I. DEFINITIONS.



            For purposes of this Agreement, the following capitalized terms

shall have the following meanings:



            "Account Balance Amount" has the meaning set forth in Section

9.15(b).





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<PAGE>   2



                  "Accounts Payable" has the meaning set forth in Section

3.1(b).



                  "Accounts Receivable" has the meaning set forth in Section

2.2(b).



                  "Accounts Receivable Adjustment" has the meaning set forth in

Section 4.2(a).



                  "Accruals" has the meaning set forth in Section 3.1(c).



                  "Assumed Environmental Liabilities" has the meaning set forth

in Section 3.1(f).



                  "Assumed Liabilities" has the meaning set forth in Section

3.1.



                  "Assumed Pension Liabilities" has the meaning set forth in

Section 9.15(c).



                  "Broker" has the meaning set forth in Section 5.5.



                  "Cash" has the meaning set forth in Section 2.2(a).



                  "CERCLA" means the Federal Comprehensive Environmental

Response, Compensation and Liability Act of 1980, as amended.



                  "Chemical Bank Credit Agreement" means that certain Amended &

Restated Credit Agreement, dated as of August 31, 1995, among KDI D/H, the

several lenders from time to time parties thereto and Chemical Bank, as Agent.



                  "Closing" has the meaning set forth in Section 12.1.



                  "Closing Date" has the meaning set forth in Section 12.1.



                  "Closing Date Net Working Capital Adjustment" has the meaning

set forth in Section 4.5(a).



                  "Closing Date Net Working Capital Base" has the meaning set

forth in Section 4.2(b)(ii).



                  "Closing Date Working Capital Balance Sheet" has the meaning

set forth in Section 4.5(a).



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



                  "Contracts" has the meaning set forth in Section 2.2(i).





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<PAGE>   3







                  "Contract Obligations" has the meaning set forth in Section

3.1(a).

                  "Customer and Supplier List" has the meaning set forth in

Section 2.2(h).



                  "Deed" has the meaning set forth in Section 8.1.



                  "Defined Benefit Plan" means the Defined Benefit Plan for

Former Employees of KDI Corporation-KDI/triangle Electronics, Inc.



                  "Employee Death Benefit Policy" means the policy of the Seller

which was terminated on May 31, 1993 pursuant to which the Seller distributed to

not more than 25 retirees a certificate which could be presented by a retiree's

estate upon the retiree's death in exchange for payment by the Seller of $2,500.



                  "Enterprises" means Microwave Components Enterprises, Inc., a

Michigan corporation and the Purchaser's parent corporation.



                  "Environmental Laws" shall include, without limitation, any

and all federal, state or local laws (including, statutes, regulations,

ordinances, codes, rules, policies, and other governmental restrictions and

requirements) relating to the Federal Solid Waste Disposal Act, the Federal

Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation

and Recovery Act of 1976, CERCLA, the Federal Toxic Substance Control Act, the

New Jersey Spill Compensation and Control Act, the New Jersey Industrial Site

Recovery Act, the New Jersey Air Pollution Control Act, the New Jersey Water

Pollution Control Act, the New Jersey Solid Waste Management Act, regulations,

ordinances, codes, rules, policies, guidelines and other governmental

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