8-K

                  SECURITIES AND EXCHANGE COMMISSION

                        Washington, D.C.  20549


                               FORM 8-K


                            CURRENT REPORT


                  Pursuant to Section 13 or 15(d) of
                  The Securities Exchange Act of 1934


 Date of Report (Date of earliest event reported):  December 23, 1997


                      Daedalus Enterprises, Inc.
        (Exact name of registrant as specified in its charter)


                               Delaware
            (State or other jurisdiction of incorporation)


             0-8193                             38-1973250
     (Commission File Number)         (IRS Employer Identification No.)

     300 Parkland Plaza (P.O. Box 1869), Ann Arbor, Michigan 48106
         (Address of principal executive offices)   (Zip Code)


  Registrant's telephone number, including area code:  (734) 769-5649

                            Not Applicable
     (Former name or former address, if changed since last report)


































ITEM 5.  OTHER EVENTS. 

       On December 23, 1997, Daedalus Enterprises, Inc. issued a press
release announcing that it had signed an Agreement and Plan of Merger with
S.T. Research Corporation.  The Agreement and Plan of Merger and the press
release are attached hereto as exhibits and are incorporated herein by
reference.

               
ITEM 7:  FINANCIAL STATEMENTS AND EXHIBITS

Exhibit 2.1    Agreement and Plan of Merger, dated as of December 23, 1997,
               by and among Daedalus Enterprises, Inc., DEI Merger Sub,
               Inc. and S.T. Research Corporation

Exhibit 99     Press Release, dated December 23, 1997.


                              SIGNATURES

       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.


December 23, 1997                     DAEDALUS ENTERPRISES, INC.


                                      /s/ Thomas R. Ory
                                      -------------------------------------
                                      By: Thomas R. Ory
                                      President and Chief Executive Officer

EX-2.1

   


                     AGREEMENT AND PLAN OF MERGER

       This Agreement and Plan of Merger (the "Agreement") is made as of
December 23, 1997, by and among Daedalus Enterprises, Inc., a Delaware
corporation ("DEI"), DEI Merger Sub, Inc., a Virginia corporation and wholly
owned subsidiary of DEI ("Merger Sub"), and S. T.  Research Corporation, a
Virginia corporation ("STR").  DEI, Merger Sub and STR may be referred to
individually as a "Party" or collectively as the "Parties".

                          W I T N E S S E T H

       WHEREAS, STR, Merger Sub and DEI desire that Merger Sub merge with
and into STR (the "Merger"), with STR being the surviving corporation of the
Merger;

       WHEREAS, DEI, Merger Sub and STR desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger; and 

       WHEREAS, the Merger is intended to constitute a tax-free
reorganization as described in Section 368 of the Code.

       NOW, THEREFORE, subject to the terms and conditions of this
Agreement and the Articles of Merger to be filed in the Commonwealth of
Virginia in order to effectuate the Merger, and in consideration of the
premises and the mutual covenants and agreements hereinafter set forth, the
Parties hereby agree as follows:

1.     DEFINITIONS.  For purposes of this Agreement, the following
capitalized terms will have the following meanings:

       "Acquisition Proposal" has the meaning set forth in Section 5.7.

       "Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act.

       "Agreement" has the meaning set forth in the Preamble to this
Agreement.

       "Articles of Merger" means the Articles of Merger to be filed with
the Virginia State Corporation Commission setting forth the terms of the
Merger.

       "Balance Sheet" has the meaning set forth in Section 4.1(h).

       "Certificate" has the meaning set forth in Section 3.1(a).

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

       "Closing Date" has the meaning set forth in Section 8.1.

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

       "Constituent Corporations" has the meaning set forth in Section
2.1(b).

       "DEI" has the meaning set forth in the Preamble to this Agreement.

       "DEI Amended Certificate" means the Amended and Restated Certificate
of Incorporation of DEI in the form attached as Exhibit 5.2.

       "DEI Balance Sheet" has the meaning set forth in Section 4.2(o).

       "DEI Common Stock" means the common stock, $.01 par value, of DEI.

       "DEI License Agreement" has the meaning set forth in Section 4.2(l).

       "DEI SEC Documents" has the meaning set forth in Section 4.2(d).

       "DEI Share" means any share of DEI Common Stock.

       "DEI Subsidiaries" has the meaning set forth in Section 4.2(b).

       "DGCL" means the Delaware General Corporation Law.

       "Dissenters' Shares" has the meaning set forth in Section 3.1(e).

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

       "Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan, (c) qualified defined
benefit retirement plan or arrangement which is an Employee Pension Benefit
Plan (including any Multiemployer Plan), (d) Employee Welfare Benefit Plan,
including medical, dental, disability and other welfare benefits plan, and
material fringe benefit plan or program, (e) employee, severance and
termination agreements and arrangements, and (f) all plans, programs and
arrangements with respect to stock options, restricted stock, phantom stock
and other stock-based or stock-related compensation.

       "Employee Pension Benefit Plan" has the meaning set forth in Section
3(2) of ERISA.

       "Employee Welfare Benefit Plan" has the meaning set forth in Section
3(1) of ERISA.

       "Employment Agreement" means an employment agreement in the form
attached hereto as Exhibit 8.2(a)(iii).

       "Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and
Health Act of 1970, each as amended, together with all other laws (including
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof) concerning pollution or protection of
the environment, public health and safety, or employee health and safety,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or
wastes.

       "ERISA" means the Employee Retirement Income Security Act of 1974
(including any amendments thereof, and the regulations and published
interpretations thereunder).

       "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

       "Exchange Agent" means American Stock Transfer and Trust Company.

       "Financial Statements" has the meaning set forth in Section 4.1(f).

       "GAAP" means United States generally accepted accounting principles,
as in effect from time to time.

       "Higher Offer" has the meaning set forth in Section 5.7.

       "Intellectual Property Rights" means all of the right, title and
interest of the party in and to (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations,
and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all
trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
and business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all other proprietary
rights, and (h) all copies and tangible embodiments thereof (in whatever
form or medium).

       "Knowledge" means present actual knowledge, without independent
investigation.

       "Liability" means any liability (whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any
liability for Taxes.

       "License Agreement" has the meaning set forth in Section 4.1(l).

       "Merger" has the meaning set forth in the first recital to this
Agreement.

       "Merger Consideration" has the meaning set forth in Section 3.1(a).

       "Merger Sub" has the meaning set forth in the Preamble to this
Agreement.

       "Multiemployer Plan" has the meaning set forth in Section 3(37) of
ERISA.

       "Ordinary Course of Business" means the ordinary course of business
consistent with current and past custom and practice (including with respect
to quantity and frequency).

       "Party" and "Parties" have the meaning set forth in the Preamble of
this Agreement.

       "Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization or association, or a governmental entity (or any
department, agency, or political subdivision thereof).

       "SEC" means the U.S. Securities and Exchange Commission.

       "Securities Act" means the Securities Act of 1933, as amended.

       "Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes
that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments
under capital lease arrangements, and (d) other liens arising in the
Ordinary Course of Business and not incurred in connection with the
borrowing of money.

       "STR" has the meaning set forth in the Preamble to this Agreement.

       "STR Share" means any share of STR common stock, $.10 par value.

       "Subject Company" has the meaning set forth in Section 5.11.

       "Surviving Corporation" has the meaning set forth in Section 2.1(a).

       "Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.

       "VSCA" means the Virginia Stock Corporation Act.

2.     MERGER.

       2.1     The Merger.

               (a)    Subject to the terms and conditions of this
Agreement, the Articles of Merger, the DGCL and the VSCA, at the Effective
Time (as defined in Section 2.2(a) below) (i) Merger Sub will be merged with
and into STR and (ii) the separate corporate existence of Merger Sub will
cease and STR will continue as the "Surviving Corporation".

               (b)    At the Effective Time (i) the Surviving Corporation
will continue its corporate existence under the laws of the Commonwealth of
Virginia and will possess all of the rights, privileges, immunities, powers,
franchises and purposes of STR and Merger Sub immediately prior to the
Merger (STR and Merger Sub will sometimes be referred to in this Agreement
as the "Constituent Corporations"), (ii) all property of the Constituent
Corporations will be the property of the Surviving Corporation and (iii) the
Surviving Corporation will, by operation of law, assume all of the
liabilities and obligations of the Constituent Corporations.

               (c)    The Articles of Incorporation of STR in effect at
and as of the Effective Time will remain the Articles of Incorporation of
the Surviving Corporation without any modification or amendment in the
Merger.

                (d)   The Bylaws of STR in effect at and as of the
Effective Time will remain the Bylaws of the Surviving Corporation without
any modification or amendment in the Merger.

               (e)    The existing directors and officers of STR in
office immediately prior to the Effective Time will remain the directors and
officers of the Surviving Corporation until their successors shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
Articles of Incorporation, bylaws and applicable law.
  
       2.2     Effectiveness of the Merger.

               (a)    The Articles of Merger will be filed with the
Virginia State Corporation Commission on the day of the Closing or as soon
thereafter as is practicable. The Merger will become effective at the time
at which the Articles of Merger are filed with the Virginia State
Corporation Commission, or at such later time as is agreed upon by the
Parties and specified in the Articles of Merger (the "Effective Time").

               (b)    If, at any time after the Effective Time, the
Surviving Corporation will consider or be advised that any further deeds,
assignments or other things are necessary or desirable to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation, the title to
any property or rights of the Constituent Corporations acquired or to be
acquired by reason or as a result of, the Merger, the Constituent
Corporations and their officers and directors, on behalf of the Constituent
Corporations, to the extent permitted by law, will execute and deliver all
such deeds and assignments and do all things necessary or desirable to vest,
perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purpose of this Agreement, and
the officers and directors of the Surviving Corporation are fully authorized
in the name of the Constituent Corporations or otherwise to take any and all
such actions.




3.     MERGER CONSIDERATION. 

       3.1     Merger Consideration and Conversion of Shares.  At the
Effective Time, by virtue of the Merger and without any action on the part
of any holder thereof:

               (a)    Each STR Share issued and outstanding at the
Effective Time, other than Dissenters' Shares (as defined in Section
3.1(e)), shall be converted into the right to receive 2.58 DEI Shares in
accordance with Section 3.2 (the "Merger Consideration").  At the Effective
Time, each STR Share shall cease to be outstanding, shall automatically be
canceled and retired and shall cease to exist. Each holder of a stock
certificate which immediately prior to the Effective Time represented
outstanding STR Shares (a "Certificate") shall cease to have any rights with
respect thereto except the right to receive, without interest, the Merger
Consideration upon the surrender of such Certificate in accordance with
Section 3.2.  No transfers of the STR Shares shall be made on the stock
transfer books of STR at or after the Effective Time.
   
               (b)    Each STR Share issued and held by STR immediately
prior to the Effective Time, if any, shall cease to be outstanding, shall
automatically be canceled and retired without payment of any consideration
therefor and shall cease to exist.

               (c)    DEI Shares issued and outstanding immediately prior
to the Effective Time shall remain outstanding and shall be unaffected by
the Merger.  Outstanding certificates representing DEI Shares will continue
to represent the number of shares of common stock of DEI following the
Effective Time and need not be exchanged for new certificates of DEI by any
holders thereof.

               (d)    Each share of common Stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
the same number of shares of common stock of the Surviving Corporation.

               (e)    Notwithstanding anything in this Agreement to the
contrary, the STR Shares which are issued and outstanding immediately prior
to the Effective Time and which are held by shareholders who do not vote in
favor of the approval and adoption of this Agreement and who comply with all
of the relevant provisions of Sections 13.1-729 through 13.1-741 of the VSCA
(the "Dissenters' Shares") shall not be converted into or be exchangeable
for the right to receive the Merger Consideration.  Dissenters' Shares
shall, from and after the Effective Time, no longer be outstanding and shall
be canceled and retired and shall cease to exist, and each holder of
Dissenters' Shares shall thereafter cease to have any rights with respect to
such Shares except the right, if any, to receive payment pursuant to the
relevant provisions of Sections 13.1-729 through 13.1-741 of the VSCA.  If
any holder of STR Shares shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the STR Shares held thereby shall
thereupon be treated as though converted into the Merger Consideration
pursuant to Section 3.1(a) and such shares shall be deemed not to be
Dissenters' Shares.  Any Merger Consideration otherwise to have been paid to
holders of Dissenters' Shares shall be retained by DEI.

               (f)    Any option outstanding at the Effective Time to
purchase DEI Shares shall be unaffected by the Merger unless the terms of
the agreement evidencing such option provide otherwise.  Each and every
option outstanding at the Effective Time to purchase STR Shares shall
automatically, at the Effective Time, become an option to purchase a number
of DEI Shares equal to the product of (i) the number of STR Shares for which
the option is exercisable, multiplied by (ii) the Merger Consideration to be
exchanged for each STR Share in the Merger.  The terms of options to
purchase STR Shares shall not otherwise be affected or modified as a result
of the Merger.

       3.2     Exchange of Certificates; Transmittal Letter.  (a)  Promptly
after the Effective Time, DEI shall mail or cause to be mailed to each
holder of record (other than STR and holders of Dissenters' Shares) of a
Certificate or Certificates (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent) and (ii) instructions for use in effecting the surrender
of the Certificates for payment therefor.  Upon surrender of Certificates
for cancellation to the Exchange Agent, together with such letter of
transmittal duly executed and any other required documents, the holder of
such Certificates shall be entitled to receive for each of the Shares
represented by such Certificates the Merger Consideration and the
Certificates so surrendered shall forthwith be canceled.  Until so
surrendered, such Certificates shall represent solely the right to receive
the Merger Consideration as contemplated by Section 3.1(a) with respect to
each of the STR Shares represented thereby.  

               (b)    No dividends or other distributions that are
declared after the Effective Time on DEI Shares and payable to the holders
of record thereof after the Effective Time will be paid to persons entitled
by reason of the Merger to receive DEI Shares until such persons surrender
their Certificates.  Upon such surrender, there shall be paid to the person
in whose name the DEI Shares are issued any dividends or other distributions
having a record date after the Effective Time and payable with respect to
such DEI Shares between the Effective Time and the time of such surrender. 
After such surrender there shall be paid to the person in whose name the DEI
Shares are issued any dividends or other distributions on such DEI Shares
which shall have a record date after the Effective Time and prior to such
surrender and a payment date after such surrender and such payment shall be
made on such payment date.  In no event shall the persons entitled to
receive such dividends or other distributions be entitled to receive
interest on such dividends or other distributions. Notwithstanding the
foregoing, neither the Exchange Agent nor any Party hereto shall be liable
to any holder of STR Shares for any DEI Shares or dividends thereon
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.  The Exchange Agent shall not be entitled
to vote or exercise any rights of ownership with respect to the DEI Shares
held by it from time to time hereunder, except that it shall receive and
hold all dividends or other distributions paid or distributed with respect
to such DEI Shares for the account of the persons entitled thereto.

               (c)    If any certificate representing DEI Shares is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of such exchange
that the Certificate so surrendered shall be properly endorsed and otherwise
in proper form for transfer and that the person requesting such exchange
shall pay to the Exchange Agent any transfer or other taxes required by
reason of the issuance of certificates for such DEI Shares in a name other
than that of the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. 

               (d)    If a Certificate is lost or destroyed, the
registered owner thereof shall be entitled to receive the Merger
Consideration to which such registered owner would otherwise be entitled on
the surrender of such Certificate by presenting an affidavit to DEI or the
Exchange Agent attesting to the loss or destruction of such Certificate. 
DEI or the Exchange Agent may require such registered owner, as a condition
precedent to receiving the Merger Consideration, to furnish DEI or the
Exchange Agent  with a bond or agreement of indemnity, in such form and
amount and with such sureties, or without sureties, as DEI or the Exchange
Agent may direct or approve.

               (e)    No certificates or scrip representing a fraction of
a DEI Share shall be issued upon the surrender of Certificates for exchange
pursuant to this Section.  In lieu of any such fractional shares, each
holder of STR Shares shall be entitled to receive a cash payment in an
amount equal to the product of (i) the fractional interest of a DEI Share to
which such holder would have been entitled (computed based upon the
aggregate number of STR Shares owned by such holder and the aggregate number
of DEI Shares to which such holder is entitled) and (ii) the average of the
published bid and asked prices per DEI Share for the trading day immediately
prior to the Effective Time.

4.     REPRESENTATIONS AND WARRANTIES.

       4.1     Representations and Warranties of STR.  STR represents and
warrants to DEI and Merger Sub as follows:

               (a)    Authorization of Transaction.  STR has full
corporate power and authority to execute and deliver this Agreement and,
subject to obtaining the necessary approval of its shareholders, to
consummate the transactions contemplated hereby and thereby and perform its
obligations hereunder and thereunder.  This Agreement constitutes the valid
and legally binding obligation of STR enforceable in accordance with its
terms and conditions.  Except for the filing of the Articles of Merger with
the Virginia State Corporation Commission, STR is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.

               (b)    Organization and Qualification. (i) STR is a
corporation duly organized, validly existing, and in good standing under the
laws of the Commonwealth of Virginia.  STR is duly authorized to conduct its
business and is in good standing as a foreign corporation under the laws of
each jurisdiction where the failure to be so authorized and in good
standing, in the aggregate for all such failures, could reasonably be
expected to have a material adverse effect on STR.  Such jurisdictions are
listed on Schedule 4.1(b)(i).  STR has all licenses, permits, and
authorizations necessary to carry on the business in which it is engaged and
to own and use the properties owned and used by it.  Schedule 4.1(b)(i) also
lists the directors and officers of STR.  STR has delivered to DEI correct
and complete copies of the Articles of Incorporation and Bylaws of STR (as
amended to the date hereof).  STR is not in violation of any provision of
its Articles of Incorporation  or Bylaws.

                      (ii)    Except as set forth in Schedule 4.1(b)(ii),
STR does not own and has never owned, directly or indirectly, a 50% or
greater interest in the outstanding voting securities of any Person.

               (c)    Noncontravention.  Neither the execution and the
delivery of this Agreement nor the consummation of the transactions
contemplated hereby or thereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
STR is subject or any provision of its Articles of Incorporation or Bylaws,
(ii) except as set forth in Schedule 4.1(c), result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which STR is a party or by which it is bound or to which any
of its assets is subject or (iii) result in the imposition of any Security
Interest upon any of STR's assets.

               (d)    Capitalization. The entire authorized capital stock
of STR consists of  3,000,000 shares of STR Common Stock, of which 723,786
shares are issued and outstanding, and 140 shares of STR's preferred stock,
none of which are issued and outstanding.  Each of the holders of STR Shares
owns the STR Shares free and clear of any restrictions on transfer (other
than any restrictions under the Securities Act and state securities laws). 
All of the issued and outstanding STR Shares have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of record by the
shareholders and in the amounts listed in Schedule 4.1(d) to this Agreement. 
Except as set forth on Schedule 4.1(d), STR has no outstanding
subscriptions, warrants, options, rights, convertible securities or other
agreements or commitments obligating STR to issue any additional shares. 
STR holds 418 of its authorized shares in treasury.

               (e)    Equity Interests. Except as set forth in Schedule
4.1(e), STR does not control, directly or indirectly, or have any direct or
indirect equity participation in any corporation, partnership, trust, or
other business association.

               (f)    Financial Statements.  Attached as Schedule 4.1(f)
are the following financial statements of STR (collectively the "Financial
Statements"):  (i) an audited balance sheet as of September 30, 1997 and
1996 and related statements of operations, stockholders' equity and cash
flows for the fiscal years ended September 30, 1997, 1996 and 1995 for STR. 
The Financial Statements have been prepared in accordance with GAAP and
present fairly the financial condition of STR as of such dates and the
results of operations of STR for such periods.  The Financial Statements are
correct and complete, to the extent required by GAAP, and are consistent
with the books and records of STR (which books and records are correct and
complete).

               (g)    Subsequent Events.  Except as set forth in Schedule
4.1(g), since September 30, 1997, STR has not:

                      (i)     issued, sold, purchased or redeemed any
shares of its capital stock; granted any stock options or made any other
commitment to issue or sell shares of its capital stock; amended its
Articles of Incorporation or Bylaws; or declared, set aside or made any
payment or distribution upon its capital stock;

                      (ii)    incurred any liability or obligation under
agreements or otherwise, except current liabilities entered into or incurred
in the Ordinary Course of Business; issued any notes or other corporate debt
securities; or waived any of its rights;

                      (iii)   mortgaged, pledged or subjected to any lien
any asset or, except in the Ordinary Course of Business, entered into any
lease of real property, machinery, equipment or buildings, or sold or
transferred any intangible asset;

                      (iv)    effected any increases in salary, wage or
other compensation of any kind, whether current or deferred, to any officer,
employee, agent, broker or consultant, other than routine increases in the
Ordinary Course of Business; entered into any salary, wage or other
compensation agreement with a term of one year or longer with any employee
or made any contribution to any trust or plan for the benefit of employees
except as required by the terms thereof as now in effect;

                      (v)     entered into any material transaction other
than in the Ordinary Course of Business;

                      (vi)    suffered any damage, destruction or loss to
any of its properties or assets (whether or not covered by insurance);

                      (vii)   suffered any adverse changes which in the
aggregate have had or are reasonably likely to have a material adverse
effect on the business, financial condition or prospects of STR; or 

                      (viii)  become (A) subject to any outstanding
injunction, judgment, order, decree, ruling or charge or (B) a party or, to
the Knowledge of STR, is threatened to be made a party, to any action, suit,
proceeding, hearing, or investigation of, in or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction of before any arbitrator.

               (h)    Undisclosed Liabilities. STR does not have any
Liability, except for (i) Liabilities set forth on the audited balance sheet
of STR as of September 30, 1997 (the "Balance Sheet") and (ii) Liabilities
which have arisen after September 30, 1997 in the Ordinary Course of
Business (none of which liabilities resulted from, arose out of, relate to,
is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, violation of law or provisions in the Articles
of Incorporation or bylaws of STR providing for indemnification of
directors, officers or employees).

               (i)    Legal Compliance; Licenses and Authorizations.

                      (i)     STR has complied in all material respects
with all applicable laws, statutes, rules, regulations and orders of
federal, state, local, and foreign governments (and all agencies thereof),
including, without limitation, all Environmental, Health and Safety Laws,
and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against it alleging any
failure so to comply.

                      (ii)  STR holds all licenses and other permits and
authorizations necessary for the operation of the business of STR as
presently conducted and such licenses, permits and authorizations will be in
full force and effect for the entire duration of their respective unexpired
license terms, unimpaired by any acts or omissions of STR, except for such
licenses, permits and authorizations with respect to which the failure of
STR to hold such licenses, permits and authorizations would not have a
material adverse effect on STR.  There is not now pending or, to the
Knowledge of STR, threatened any action by the grantor of any such license,
permit or authorization to revoke, cancel or refuse to renew any such
license, permit or authorization.

               (j)    Tax Returns and Taxes.  (i) STR has filed all
federal, state, local and other Tax returns and reports which are required
to be filed; (ii) STR has paid all Taxes, interest, penalties, assessments
and deficiencies due or assessed pursuant to such returns; (iii) STR has not
received any notice of assessment of additional Taxes or executed or filed
with any taxing authority any agreement extending the period of assessment
of any Taxes; (iv)  there are no claims, examinations, proceedings or
proposed deficiencies for Taxes pending or, to the Knowledge of STR,
threatened against STR; (v) STR is current in the payment of all withholding
and other employee taxes which are due and payable; (vi) there are no Tax
liens on any of the assets or properties of STR; (vii) the accruals for
Taxes contained in the Balance Sheet are adequate to cover all liabilities
for Taxes of STR for all periods ending on or before the date of such
statement; (viii) all Taxes for periods beginning after the date of such
statement up to the Closing have been paid or are adequately reserved
against on the books of STR; (ix) STR has not been audited by the Internal
Revenue Service, has not received any notice of an audit and has not been
threatened with an audit.

               (k)    Litigation.  None of STR or any director or officer
of STR is (i) subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (ii) a party or, to the Knowledge of STR,
threatened to be made a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator.  No director or officer of STR has any reason to
believe that any such action, suit, proceeding, hearing, or investigation
may be brought or threatened against STR.

               (l)    Intellectual Property. Except as set forth in
Schedule 4.1(l), STR does not hold, own or use any domestic or foreign
patents and registered trademarks, tradenames and service marks, or patent,
trademark, tradename and service mark applications filed in connection with
the business of STR.  Set forth on Schedule 4.1(l) is a correct and complete
list of all license and other agreements allowing STR to use intellectual
property rights of third parties in the United States or foreign countries
entered into by STR or affecting the business of STR (the "License
Agreements").  Except as set forth on Schedule 4.1(l), (y) STR has and owns
all right, title and interest in and to all of the Intellectual Property
Rights (including the exclusive right to use, sell, license or dispose of
such rights and to bring actions for infringement thereof) which are
required or necessary for STR to conduct its business in the normal course
in accordance with past practice,  free and clear of any claims, liens,
licenses or encumbrances and (z) no Person has a right to receive a royalty
or similar payment in respect of any of the Intellectual Property Rights. 
STR has no Knowledge of and has not received any notice of any infringements
of, or claims or assertions of infringement of, any of the Intellectual
Property Rights, and STR has not taken or omitted to take any action which
would have the effect of waiving any of its rights relating to any of the
Intellectual Property Rights.  There have been no claims and, to the
Knowledge of STR, there is no basis for any claim challenging the scope,
validity or enforceability of any of the Intellectual Property Rights which
are material to the conduct of STR's business.  The manufacture, sale or use
of any products now or heretofore manufactured or sold by STR did not and
does not infringe (nor has any claim been made that any such action
infringes) the intellectual property rights of others.  Each of the License
Agreements is in full force and effect and there has occurred no default
which is continuing in respect of any License Agreement.

               (m)    Tangible Assets.  STR owns or leases all buildings,
machinery, equipment, and other tangible assets used in the conduct of its
business as presently conducted, free and clear of all liens and
encumbrances except as set forth on Schedule 4.1(m).  Each such tangible
asset is in good operating condition and repair (subject to normal wear and
tear) and is suitable for the purposes for which it presently is used.

               (n)    Contracts.  Except as set forth on Schedule 4.1(n),
STR is not a party to any outstanding:

                      (i)     written contract (or collective bargaining
agreement) with any labor union or representative of employees;

                      (ii)    written or oral commitment, contract, or
agreement involving an obligation or liability on the part of STR of more
than $10,000 (excluding orders for the purchase of standard products and
services from STR accepted in the Ordinary Course of Business and providing
for prevailing prices and customary conditions of sale);

                      (iii)   written or oral lease of real property or
personal property;

                      (iv)    written or oral agreement, contract or
commitment containing any covenant limiting the freedom of STR to engage in
any line of business or compete with any Person; 

                      (v)     written or oral employment, consulting,
sales representative, agency or distributor agreement that is not cancelable
by STR pursuant to its stated terms on notice of not longer than three
months and without liability, penalty or premium;

                      (vi)    any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance or other plan
or arrangement for the benefit of its current or former directors, officers
and employees;

                      (vii)   written or oral agreement or contract
relating to any indebtedness or the mortgaging, pledging or the placing of a
lien on any of the properties or assets of STR which is not reflected in the
Financial Statements;

                      (viii)  guaranty of any obligation;

                      (ix)    loans to or from officers, directors or
affiliates;

                      (x)     any agreement with any shareholder of STR
or any of its affiliates; or

                      (xi)    any other written or oral agreement which
is material to the operations or business prospects of STR.

STR has delivered to DEI a correct and complete copy of each written
agreement listed in Schedule 4.1(n) (as amended to date) and a written
summary setting forth the terms and conditions of each oral agreement
referred to in Schedule 4.1(n). With respect to each such agreement: (A) the
agreement is legal, valid, binding, enforceable, and in full force and
effect, (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated by this Agreement; (C) no
party is in breach or default, and no event has occurred which with notice
or lapse of time could constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement and (D) no
party has repudiated any provision of the agreement.  Except as set forth in
Schedule 4.1(n), no contract or agreement described in Schedule 4.1(n)
requires the consent of any party to the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement.

               (o)    Notes and Accounts Receivable.   Except as set
forth in Schedule 4.1(o), all notes and accounts receivable of STR are
reflected properly on its books and records, are subject to no known setoffs
or counterclaims, are current and collectible, subject only to the reserve
for bad debts set forth on the face of the Balance Sheet (rather than in any
notes thereto) as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of STR.


               (p)    Inventories.    (i) All inventory of STR,
including, without limitation, raw materials, work in process, finished
goods, returned products, goods in transit and all other materials used or
consumed in their business and reflected on the Balance Sheet: (A) was
acquired and has been maintained in the Ordinary Course of Business; (B) is
of good and merchantable quality; (C) consists substantially of a quality,
quantity and condition usable, leasable or saleable in the Ordinary Course
of Business; (D) is valued at reasonable amounts based on the Ordinary
Course of Business during the past six months; and (E) is not subject to any
write-down or write-off.  (ii) STR is not under any Liability or obligation
with respect to the return of inventory in the possession of wholesalers,
retailers or other customers.  (iii) All inventory has been valued on the
Balance Sheet and on STR's records and books of account at the lower of cost
(determined on a first in, first out basis) or market value on a basis
consistent with that reflected in the Financial Statements.  (iv) Obsolete
inventory and inventory of below-standard quality has been written down to
amounts not in excess of realizable market value. (v) All of the work-in-
process, raw materials and supplies inventory can be used or consumed in the
Ordinary Course of Business and are not in amounts in excess of normal
requirements.  (vi) Since the date of the Balance Sheet, there has been no
change in the amount of inventory except changes as a result of the purchase
and sale of, or adjustment to, inventory in the Ordinary Course of Business,
including, but not limited to, established seasonal patterns.

               (q)    Insurance.  Set forth on Schedule 4.1(q) is a
complete and correct list of all policies of insurance of STR, indicating
for each policy the carrier, risks insured against, coverage limits,
deductible amounts, premium rate, expiration date, all outstanding claims
thereunder and whether the terms of such policy provide for retrospective
premium adjustments.  All such policies are outstanding and in full force
and effect.

               (r)    [reserved]

               (s)    Payments. STR has not directly or indirectly, nor
has any agent, representative or employee of STR, directly or indirectly,
paid or delivered any fee, commission or other sum of money or item or
property, however characterized, to any finder, agent, government official
or other party, in the United States or any other country, which is in any
manner related to the operations of STR and which is, or may be with the
passage of time or discovery, illegal under any federal, state or local law
(including, without limitation, the U.S. Foreign Corrupt Practices Act) or
any other country having jurisdiction.  STR has not participated, directly
or indirectly, in any boycotts or other similar practices affecting any of
its actual or potential customers and STR has at all times done business in
an open and ethical manner.

               (t)    Employee Benefits.

                      (i)     Schedule 4.1(t) to this Agreement lists
each Employee Benefit Plan that STR maintains or to which it contributes.

                              (A)     Each such Employee Benefit Plan
(and each related trust, insurance contract, or fund) complies in form and
in operation in all material respects with its underlying documents, the
applicable requirements of ERISA, the Code, and other applicable laws.

                              (B)     All applicable disclosure and
filing requirements have been timely satisfied in all material respects with
respect to each such Employee Benefit Plan.  The requirements of Part 6 of
Subtitle B of Title I of ERISA and of Code Section 4980B have been met with
respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.

                              (C)     All premiums or other payments for
all periods ending on or before the Closing Date have been paid with respect
to each such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.

                              (D)     With respect to each such Employee
Benefit Plan, STR has delivered to DEI correct and complete copies of the
plan documents and summary plan descriptions, the most recent Form 5500
Annual Report, if applicable, and all related insurance contracts, or trust
or other funding agreements which, if applicable, implement each such
Employee Benefit Plan.

                      (ii)    STR does not contribute to, has never
contributed to, nor has ever been required to contribute to any
Multiemployer Plan, and has no Liability (including withdrawal Liability)
under any Multiemployer Plan.

                      (iii)   STR does not maintain, has never
maintained, does not contribute, has never contributed, nor has ever been
required to contribute to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).

                      (iv)    There is no litigation, disputed claim
(other than routine claims for benefits), governmental proceeding, audit,
inquiry or investigation pending or, to the Knowledge of STR, threatened
with respect to any such Employee Benefit Plan, its related assets or
trusts, or any fiduciary, administrator or sponsor of such Employee Benefit
Plan.

                      (v)     Except as disclosed in Schedule 4.1(t),
with respect to each Employee Pension Benefit Plan:

                              (A)     each such plan which is intended to
qualify as a tax-qualified retirement plan under Code Section 401(a) has
received a favorable determination letter(s) from the Internal Revenue
Service (copies of which have been delivered to DEI) as to qualification of
such plan covering the period from its adoption through the Closing Date;
all amendments required to maintain such qualification have been timely
adopted; nothing has occurred, whether by action or failure to act, which
has resulted in or could cause the loss of such qualification (whether or
not eligible for review under the Internal Revenue Service's Closing
Agreement Program, Voluntary Compliance Resolution program or any similar
governmental agency program); and each trust thereunder is exempt from tax
pursuant to Code Section 501(a);

                              (B)     no event has occurred and no
condition exists relating to any such plan that would subject STR or DEI to
any tax under Code Sections 4972 or 4979, or to any Liability under ERISA
Section 502; and

                              (C)     neither any such plan nor any other
Person has engaged in a "prohibited transaction" (as defined in ERISA
Section 406 or Code Section 4975) with respect to such Plan, for which no
individual or class exemption exists.

               (u)    Insider Interests.  Except as set forth on Schedule
4.1(u), (i) no officer or director of STR, nor any shareholder of STR, has
any interest in any property, real or personal, tangible or intangible, used
in or pertaining to the business of STR, and (ii) no such person has any
business relationship with STR, except as an officer, employee, director or
shareholder thereof.

               (v)    Brokers' Fees. STR has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement.

               (w)    Form S-4 Registration Statement.   None of the
information supplied or to be supplied by STR for inclusion or incorporation
by reference in the Form S-4 registration statement (including the joint
proxy statement contained therein) to be filed with the SEC pursuant to
Section 5.10 hereof will, on the date the joint proxy statement (including
any amendment or supplement thereto) is first mailed to stockholders and at
the time of the meeting of STR's stockholders and the time of the meeting of
DEI's stockholders to approve this Agreement, or, in the case of the Form S-
4 registration statement, at the time it becomes effective under the
Securities Act and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.

               (x)    Anti-Takeover Statutes.  No "fair price",
"moratorium", "control share acquisition", "business combination", or other
similar anti-takeover statute or regulation is applicable to the Merger or
the transactions contemplated thereby.

               4.2    Representations and Warranties of DEI.  DEI and
Merger Sub represent and warrant to STR as follows:

               (a)    Authorization of Transaction. DEI has full
corporate power and authority to execute and deliver this Agreement and each
Employment Agreement being executed and delivered by DEI and, subject to
obtaining the approval of its stockholders, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder.  This Agreement and each Employment Agreement to which DEI is a
party constitutes the valid and legally binding obligation of DEI
enforceable in accordance with its terms and conditions.   Except for the
filing of the Articles of Merger with the Virginia State Corporation
Commission, DEI is not required to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
this Agreement.

               (b)    Organization and Qualification.  (i)  DEI is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.  DEI is duly authorized to conduct its
business and is in good standing as a foreign corporation under the laws of
each jurisdiction where the failure to be so authorized and in good
standing, in the aggregate for all such failures, could reasonably be
expected to have a material adverse effect on the business of DEI and the
DEI Subsidiaries, taken as a whole. Such jurisdictions are listed on
Schedule 4.2(b)(i). DEI has all licenses, permits, and authorizations
necessary to carry on the business in which it is engaged and to own and use
the properties owned and used by it.  DEI has delivered to STR correct and
complete copies of the Certificate of Incorporation and Bylaws of DEI (as
amended to the date hereof).  DEI is not in violation of any provision of
its Certificate of Incorporation  or Bylaws.

                      (ii)    The DEI SEC Documents set forth the name
and jurisdiction of incorporation of each Person in which DEI directly or
indirectly owns a 50% or greater interest in the outstanding voting
securities thereof (the "DEI Subsidiaries").  DEI owns all of the issued and
outstanding securities of each DEI Subsidiary free and clear of all liens,
charges, encumbrances and other rights of third parties, and all such
securities have been duly and validly issued and are fully paid and non-
assessable.  Each DEI Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its respective state or
jurisdiction of incorporation, each has the corporate power to own or lease
its properties and to carry on its business as presently conducted, and each
is duly authorized to do business as a foreign corporation and is in good
standing in all jurisdictions where the failure to so qualify would have a
material adverse effect on the business of DEI and the DEI Subsidiaries,
taken as a whole.  None of the DEI Subsidiaries is in violation of any
provision of its charter or bylaws.  Merger Sub was formed solely for the
purpose of the Merger and  to engage in the transactions contemplated
thereby, is 100% owned by DEI and has not done any business, incurred any
liabilities or obligations or entered into any contracts other than this
Agreement.

               (c)    Noncontravention. Neither the execution and the
delivery of this Agreement or the Employment Agreements to which it will be
a party, nor the consummation of the transactions contemplated hereby or
thereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which DEI is subject or any
provision of its Certificate of Incorporation or bylaws, (ii) result in a
breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which DEI is a party or by which it is
bound or to which any of its assets is subject or (iii) result in the
imposition of any Security Interest upon DEI's assets.

               (d)    DEI SEC Documents; Options and Warrants.  DEI has
delivered to STR true and complete copies of its Form 10-K for the year
ended July 31, 1997 and all other documents that DEI has filed with the SEC
since such date pursuant to the Exchange Act (the "DEI SEC Documents"). 
Such reports are complete and correct in all material respects.  The
financial statements included in such Form 10-K have been prepared in
accordance with GAAP and present fairly the consolidated financial condition
of DEI and the DEI Subsidiaries as of such dates and the consolidated
results of operations of DEI and the DEI Subsidiaries for such periods.  The
Financial Statements are correct and complete, to the extent required by
GAAP, and are consistent with the books and records of DEI and the DEI
Subsidiaries (which books and records are correct and complete). Except as
set forth on Schedule 4.2(d), DEI has no outstanding subscriptions,
warrants, options, rights, convertible securities or other agreements or
commitments obligating DEI to issue any additional shares.     

               (e)    Merger Consideration.  The shares of DEI Common
Stock to be issued and delivered pursuant to this Agreement and the Merger
are duly authorized and, when issued and delivered as contemplated herein,
will be duly and validly issued, fully paid and non-assessable.

               (f)    Equity Interests. Except for the DEI Subsidiaries,
DEI does not control, directly or indirectly, or have any direct or indirect
equity participation in any corporation, partnership, trust, or other
business association.
       
               (g)    Subsequent Events.  Except as set forth in the DEI
SEC Documents or Schedule 4.2(g), or as otherwise contemplated by this
Agreement, since July 31, 1997,  neither DEI nor any DEI Subsidiary has:

                      (i)     issued, sold, purchased or redeemed any
shares of its capital stock; granted any stock options or made any other
commitment to issue or sell shares of its capital stock; amended its
Certificate of Incorporation or Bylaws; or declared, set aside or made any
payment or distribution upon its capital stock;

                      (ii)    incurred any liability or obligation under
agreements or otherwise, except current liabilities entered into or incurred
in the Ordinary Course of Business; issued any notes or other corporate debt
securities; or waived any of its rights;

                      (iii)   mortgaged, pledged or subjected to any lien
any asset or, except in the Ordinary Course of Business, entered into any
lease of real property, machinery, equipment or buildings, or sold or
transferred any intangible asset;

                      (iv)    effected any increases in salary, wage or
other compensation of any kind, whether current or deferred, to any officer,
employee, agent, broker or consultant, other than routine increases in the
Ordinary Course of Business; entered into any salary, wage or other
compensation agreement with a term of one year or longer with any employee
or made any contribution to any trust or plan for the benefit of employees
except as required by the terms thereof as now in effect;

                      (v)     entered into any material transaction other
than in the Ordinary Course of Business;

                      (vi)    suffered any damage, destruction or loss to
any of its properties or assets (whether or not covered by insurance); 

                      (vii)   suffered any adverse changes which in the
aggregate have had or are reasonably likely to have a material adverse
effect on the business, financial condition or prospects of DEI and the DEI
Subsidiaries, taken as a whole; or    

                      (viii)  become (A) subject to any outstanding
injunction, judgment, order, decree, ruling or charge or (B) a party or, to
the Knowledge of DEI, is threatened to be made a party, to any action, suit,
proceeding, hearing, or investigation of, in or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction of before any arbitrator, which, with respect to (A) or (B),
would be required to be disclosed in a report filed by DEI under the
Exchange Act.

               (h)    Undisclosed Liabilities. Neither DEI nor any DEI
Subsidiary has any Liability, except for (i) Liabilities set forth in the
DEI SEC Documents and (ii) Liabilities which have arisen after the date of
the current period balance sheet contained in the most recent DEI SEC
Document in the Ordinary Course of Business (none of which liabilities
resulted from, arose out of, relate to, is in the nature of, or was caused
by any breach of contract, breach of warranty, tort, infringement, violation
of law or provisions in the Certificate of Incorporation or bylaws of DEI or
a DEI Subsidiary providing for indemnification of directors, officers or
employees).

               (i)    Legal Compliance; Licenses and Authorizations.

                      (i)     DEI and the DEI Subsidiaries have complied
in all material respects with all applicable laws, statutes, rules,
regulations and orders of federal, state, local, and foreign governments
(and all agencies thereof), including, without limitation, all
Environmental, Health and Safety Laws, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply.

                      (ii)  DEI and the DEI Subsidiaries hold all
licenses and other permits and authorizations necessary for the operation of
the business of DEI and the DEI Subsidiaries as presently conducted and such
licenses, permits and authorizations will be in full force and effect for
the entire duration of their respective unexpired license terms, unimpaired
by any acts or omissions of DEI or a DEI Subsidiary, except for such
licenses, permits and authorizations with respect to which the failure of
DEI or a DEI Subsidiary to hold such licenses, permits and authorizations
would not have a material adverse effect on DEI and the DEI Subsidiaries,
taken as a whole.  There is not now pending or, to the Knowledge of DEI,
threatened any action by the grantor of any such license, permit or
authorization to revoke, cancel or refuse to renew any such license, permit
or authorization.

               (j)    Tax Returns and Taxes. Except as set forth in
Schedule 4.2(j), (i) DEI and the DEI Subsidiaries have filed all federal,
state, local and other Tax returns and reports which are required to be
filed; (ii) DEI and the DEI Subsidiaries have paid all Taxes, interest,
penalties, assessments and deficiencies due or assessed pursuant to such
returns; (iii) DEI and the DEI Subsidiaries have not received any notice of
assessment of additional Taxes or executed or filed with any taxing
authority any agreement extending the period of assessment of any Taxes;
(iv)  there are no claims, examinations, proceedings or proposed
deficiencies for Taxes pending or, to the Knowledge of DEI, threatened
against DEI or a DEI Subsidiary; (v) DEI and the DEI Subsidiaries are
current in the payment of all withholding and other employee taxes which are
due and payable; (vi) there are no Tax liens on any of the assets or
properties of DEI or a DEI Subsidiary; (vii) the accruals for Taxes set
forth in the current period balance sheet contained in the most recent DEI
SEC Document are adequate to cover all liabilities for Taxes of DEI and the
DEI Subsidiaries for all periods ending on or before the date of such
statement; (viii) all Taxes for periods beginning after the date of such
statement up to the date hereof and the Closing have been paid or are
adequately reserved against on the books of DEI and the DEI Subsidiaries;
(ix) DEI and the DEI Subsidiaries have not been audited by the Internal
Revenue Service since the fiscal 1989 Tax return, have not received any
notice of an audit and have not been threatened with an audit.

               (k)    Litigation.  Except as set forth in Schedule
4.2(k), none of DEI, the DEI Subsidiaries or any director or officer of DEI
or the DEI Subsidiaries is (i) subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) a party or, to the
Knowledge of DEI, threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.  No director or officer of DEI or the
DEI Subsidiaries has any reason to believe that any such action, suit,
proceeding, hearing, or investigation may be brought or threatened against
DEI or the DEI Subsidiaries.

               (l)    Intellectual Property. Except as set forth in
Schedule 4.2(l), DEI and the DEI Subsidiaries do not hold, own or use any
domestic or foreign patents and registered trademarks, tradenames and
service marks, or patent, trademark, tradename and service mark applications
filed in connection with the business of DEI and the DEI Subsidiaries.  Set
forth on Schedule 4.2(l) is a correct and complete list of all license and
other agreements allowing DEI and the DEI Subsidiaries to use intellectual
property rights of third parties in the United States or foreign countries
entered into by DEI and the DEI Subsidiaries or affecting the business of
DEI and the DEI Subsidiaries (the "DEI License Agreements").  Except as set
forth on Schedule 4.2(l), (y) DEI and the DEI Subsidiaries have and own all
right, title and interest in and to all of the Intellectual Property Rights
(including the exclusive right to use, sell, license or dispose of such
rights and to bring actions for infringement thereof) which are required or
necessary for DEI and the DEI Subsidiaries to conduct their business in the
normal course in accordance with past practice,  free and clear of any
claims, liens, licenses or encumbrances and (z) no Person has a right to
receive a royalty or similar payment in respect of any of the Intellectual
Property Rights.  Except as set forth on Schedule 4.2(l), DEI and the DEI
Subsidiaries have no Knowledge of and have not received any notice of any
infringements of, or claims or assertions of infringement of, any of the
Intellectual Property Rights, and DEI and the DEI Subsidiaries have not
taken or omitted to take any action which would have the effect of waiving
any of its rights relating to any of the Intellectual Property Rights. 
There have been no claims and, to the Knowledge of DEI, there is no basis
for any claim challenging the scope, validity or enforceability of any of
the Intellectual Property Rights which are material to the conduct of the
business of DEI and the DEI Subsidiaries.  The manufacture, sale or use of
any products now or heretofore manufactured or sold by DEI and the DEI
Subsidiaries did not and does not infringe (nor has any claim been made that
any such action infringes) the intellectual property rights of others.  Each
of the DEI License Agreements is in full force and effect and there has
occurred no default which is continuing in respect of any DEI License
Agreement.

               (m)    Tangible Assets.  DEI and the DEI Subsidiaries own
or lease all buildings, machinery, equipment, and other tangible assets used
in the conduct of their business as presently conducted, free and clear of
all liens and encumbrances except as set forth on Schedule 4.2(m).  Each
such tangible asset is in good operating condition and repair (subject to
normal wear and tear) and is suitable for the purposes for which it
presently is used.

               (n)    Contracts. All material contracts which are
required to be attached to or incorporated by reference in the DEI SEC
Documents have been so attached or incorporated. With respect to each such
contract filed with or incorporated by reference into a DEI SEC Document:
(A) the contract is legal, valid, binding and enforceable; (B) the contract
will continue to be legal, valid, binding and enforceable on identical terms
following the consummation of the transactions contemplated by this
Agreement; (C) no party is in breach or default, and no event has occurred
which with notice or lapse of time could constitute a breach or default, or
permit termination, modification, or acceleration, under the contract and
(D) no party has repudiated any provision of the contract.  Except as set
forth in Schedule 4.2(n), none of such contracts requires the consent of any
party to the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement.

               (o)    Notes and Accounts Receivable.   All notes and
accounts receivable of DEI and the DEI Subsidiaries are reflected properly
on its books and records, are subject to no known setoffs or counterclaims,
are current and collectible, subject only to the reserve for bad debts set
forth on the face of the audited balance sheet (rather than in any notes
thereto) filed as part of the DEI SEC Documents (the "DEI Balance Sheet") as
adjusted for the passage of time through the Closing Date in accordance with
the past custom and practice of DEI and the DEI Subsidiaries.

               (p)    Inventories.  (i) All inventory of DEI and the DEI
Subsidiaries, including, without limitation, raw materials, work in process,
finished goods, returned products, goods in transit and all other materials
used or consumed in their business and reflected on the DEI Balance Sheet:
(A) was acquired and has been maintained in the Ordinary Course of Business;
(B) is of good and merchantable quality; (C) consists substantially of a
quality, quantity and condition usable, leasable or saleable in the Ordinary
Course of Business; (D) is valued (after taking into account the reserve set
forth on the DEI  Balance Sheet) at reasonable amounts based on the Ordinary
Course of Business during the past six months; and (E) is not subject to any
write-down or write-off in excess of the reserve set forth on DEI Balance
Sheet.  (ii) DEI and the DEI Subsidiaries are not under any Liability or
obligation with respect to the return of inventory in the possession of
wholesalers, retailers or other customers.  (iii) All inventory has been
valued on the DEI Balance Sheet and on DEI's records and books of account at
the lower of cost (determined on a first in, first out basis) or market
value (after taking into account the reserve set forth on the DEI  Balance
Sheet).  (iv) Obsolete inventory and inventory of below-standard quality has
been written down to amounts not in excess of realizable market value (after
taking into account the reserve set forth on the DEI  Balance Sheet). (v)
All of the work-in-process, raw materials and supplies inventory can be used
or consumed in the Ordinary Course of Business and are not in amounts in
excess of normal requirements.  (vi) Since the date of the DEI Balance
Sheet, there has been no change in the amount of inventory except changes as
a result of the purchase and sale of, or adjustment to, inventory in the
Ordinary Course of Business, including, but not limited to, established
seasonal patterns.

               (q)    Insurance.  Set forth on Schedule 4.2(q) is a
complete and correct list of all policies of insurance of DEI and the DEI
Subsidiaries, indicating for each policy the carrier, risks insured against,
coverage limits, deductible amounts, premium rate, expiration date, all
outstanding claims thereunder and whether the terms of such policy provide
for retrospective premium adjustments.  All such policies are outstanding
and in full force and effect.

               (r)    [reserved]

               (s)    Payments. Neither DEI nor any DEI Subsidiary has
directly or indirectly, nor has any agent, representative or employee of any
of them, directly or indirectly, paid or delivered any fee, commission or
other sum of money or item or property, however characterized, to any
finder, agent, government official or other party, in the United States or
any other country, which is in any manner related to the operations of DEI
and the DEI Subsidiaries and which is, or may be with the passage of time or
discovery, illegal under any federal, state or local law (including, without
limitation, the U.S. Foreign Corrupt Practices Act) or any other country
having jurisdiction.  Neither DEI nor any DEI Subsidiary has participated,
directly or indirectly, in any boycotts or other similar practices affecting
any of its actual or potential customers and DEI and the DEI Subsidiaries
have at all times done business in an open and ethical manner.

               (t)    Employee Benefits.

                      (i)     Schedule 4.2(t) to this Agreement lists
each Employee Benefit Plan that DEI or a DEI Subsidiary maintains or to
which it contributes.

                              (A)     Each such Employee Benefit Plan
(and each related trust, insurance contract, or fund) complies in form and
in operation in all material respects with its underlying documents, the
applicable requirements of ERISA, the Code, and other applicable laws.

                              (B)     All applicable disclosure and
filing requirements have been timely satisfied in all material respects with
respect to each such Employee Benefit Plan.  The requirements of Part 6 of
Subtitle B of Title I of ERISA and of Code Section 4980B have been met with
respect to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.

                              (C)     All premiums or other payments for
all periods ending on or before the Closing Date have been paid with respect
to each such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.

                              (D)     With respect to each such Employee
Benefit Plan, DEI has delivered to STR correct and complete copies of the
plan documents and summary plan descriptions, the most recent Form 5500
Annual Report, if applicable, and all related insurance contracts, or trust
or other funding agreements which, if applicable, implement each such
Employee Benefit Plan.

                      (ii)    DEI and the DEI Subsidiaries do not
contribute to, have never contributed to, nor have ever been required to
contribute to any Multiemployer Plan, and have no Liability (including
withdrawal Liability) under any Multiemployer Plan.

                      (iii)   DEI and the DEI Subsidiaries do not
maintain, have never maintained, do not contribute, have never contributed,
nor have ever been required to contribute to any Employee Welfare Benefit
Plan providing medical, health, or life insurance or other welfare-type
benefits for current or future retired or terminated employees, their
spouses, or their dependents (other than in accordance with Code Section
4980B).

                      (iv)    There is no litigation, disputed claim
(other than routine claims for benefits), governmental proceeding, audit,
inquiry or investigation pending or, to the Knowledge of DEI, threatened
with respect to any such Employee Benefit Plan, its related assets or
trusts, or any fiduciary, administrator or sponsor of such Employee Benefit
Plan.

                      (v)     Except as disclosed in Schedule 4.2(t),
with respect to each Employee Pension Benefit Plan:

                              (A)     each such plan which is intended to
qualify as a tax-qualified retirement plan under Code Section 401(a) has
received a favorable determination letter(s) from the Internal Revenue
Service (copies of which have been delivered to STR) as to qualification of
such plan covering the period from its adoption through the Closing Date;
all amendments required to maintain such qualification have been timely
adopted; nothing has occurred, whether by action or failure to act, which
has resulted in or could cause the loss of such qualification (whether or
not eligible for review under the Internal Revenue Service's Closing
Agreement Program, Voluntary Compliance Resolution program or any similar
governmental agency program); and each trust thereunder is exempt from tax
pursuant to Code Section 501(a);

                              (B)     no event has occurred and no
condition exists relating to any such plan that would subject STR or DEI to
any tax under Code Sections 4972 or 4979, or to any Liability under ERISA
Section 502; and

                              (C)     neither any such plan nor any other
Person has engaged in a "prohibited transaction" (as defined in ERISA
Section 406 or Code Section 4975) with respect to such Plan, for which no
individual or class exemption exists.

               (u)    Insider Interests.  No officer or director of DEI
or any DEI Subsidiary, nor any shareholder of DEI, has any interest in any
property, real or personal, tangible or intangible, used in or pertaining to
the business of DEI and the DEI Subsidiaries, and no such person has any
business relationship with DEI or any DEI Subsidiary, except as an officer,
employee, director or shareholder thereof.

               (v)    Brokers' Fees. Except as set forth in Schedule
4.2(v), DEI and the DEI Subsidiaries have no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

               (w)    Form S-4 Registration Statement.  None of the
information supplied or to be supplied by DEI for inclusion or incorporation
by reference in the Form S-4 registration statement (including the joint
proxy statement contained therein) to be filed with the SEC pursuant to
Section 5.10 hereof will, on the date the joint proxy statement (including
any amendment or supplement thereto) is first mailed to stockholders and at
the time of the meeting of STR's stockholders and the time of the meeting of
DEI's stockholders to approve this Agreement, or, in the case of the Form S-
4 registration statement, at the time it becomes effective under the
Securities Act and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.

               (x)    Anti-Takeover Statutes.  No "fair price",
"moratorium", "control share acquisition", "business combination", or other
similar anti-takeover statute or regulation is applicable to the Merger or
the transactions contemplated thereby.

5.     PRE-CLOSING COVENANTS.  The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.

       5.1     General.  Each of the Parties will use its best efforts to
take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 7 below).

       5.2     Stockholder Meetings.  As soon as practicable following the
date hereof, each of DEI and STR, acting through its Board of Directors,
will take all action necessary in accordance with its Certificate of
Incorporation and Bylaws and applicable law to duly call, give notice of,
convene and hold a special meeting of its stockholders for the purpose of
voting, in the case of STR, upon the approval of this Agreement and the
transactions contemplated hereby and, in the case of DEI, upon  the approval
of the DEI Amended Certificate (in the form attached hereto as Exhibit 5.2,
which increases the number of authorized DEI Shares to 5,000,000 and changes
DEI's name to "Sensys Technologies Inc.") and an amendment to the DEI Long-
Term Incentive Plan increasing the number of shares available thereunder to
400,000.  Subject to the fiduciary duties of DEI's Board of Directors and
STR's Board of Directors under applicable law (as determined following
consultation with counsel) and the next succeeding sentence, the Board of
Directors of each of DEI and STR shall recommend and declare advisable such
approval and use its best efforts to solicit votes in favor of the matters
set forth above.  The Board of Directors of each of DEI or STR, as the case
may be, may at any time prior to the Effective Time withdraw, modify, or
change any recommendation and declaration regarding this Agreement and the
Merger (in the case of STR) or the approval of the DEI Amended Certificate
and the amendment to the DEI Long-Term Incentive Plan (in the case of DEI),
or recommend and declare advisable any other offer or proposal, if (i) such
Board of Directors determines that the failure to so withdraw, modify, or
change its recommendation and declaration would cause the Board of Directors
to breach its fiduciary duties to DEI's or STR's stockholders, as the case
may be, under applicable law as advised in writing by counsel, or (ii)
another Person or group makes a Higher Offer that the Board of Directors
reasonably believes, in the good faith exercise of its business judgment, is
likely to lead to consummation of an agreement to acquire all of the stock
of DEI or STR, as the case may be, and, notwithstanding anything contained
in this Agreement to the contrary, any such withdrawal, modification, or
change of recommendation shall not constitute a breach of this Agreement by
DEI or STR, as the case may be; provided that neither Board of Directors may
withdraw, modify or change its recommendation or declaration with respect to
this Agreement or the Merger because of the trading price of DEI Shares
between the date hereof and the date of the applicable stockholder meeting. 

       5.3     Notices and Consents.  DEI and STR will give any notices to
third parties, and use their best efforts to obtain any third-party
authorizations, consents, or approvals required in order to consummate the
transactions contemplated by this Agreement.

       5.4     Operation of Business.  From the date of this Agreement
until the Effective Time, STR and DEI will each operate its business in the
Ordinary Course of Business.  STR and DEI will each use its best efforts to
preserve intact its present business organization, maintain in effect all
material licenses, permits and approvals of governmental authorities
necessary for the conduct of its present business and maintain its present
operations, physical facilities, working conditions and relationships with
lessors, suppliers, customers, clients and employees. Each of STR and DEI
agree not to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business without the prior
written consent of DEI (in the case of STR) or STR (in the case of DEI). 
Without limiting the generality of the foregoing and except as otherwise
specifically provided in this Agreement, from the date of this Agreement
until the Effective Time, each of STR and DEI will not, without the prior
written consent of the other Party:

               (a)    amend its Articles of Incorporation or Certificate
of Incorporation, as the case may be, or its Bylaws;

               (b)    pay or declare any cash dividend, or other dividend
or distribution with respect to its capital stock;

               (c)    issue, transfer, sell or deliver, or commit to
issue, transfer, sell or deliver, any shares of its capital stock (or any
options, warrants or any rights thereto including, without limitation, any
securities convertible into or exchangeable, with or without additional
consideration, for such capital stock) except pursuant to the exercise of
stock options or warrants existing on the date of this Agreement or under
the conditions set forth in Schedule 5.4(c);

               (d)    increase or reduce the number of shares of its
capital stock by split-up, reverse split, reclassification or distribution
of stock dividends;

               (e)    purchase or otherwise acquire for any consideration
any outstanding shares of its capital stock or securities carrying the right
to acquire, or convertible into or exchangeable for such stock, with or
without additional consideration;

               (f)    acquire by merger or consolidation with, or merge
or consolidate with, or purchase substantially all of the assets of, or
otherwise acquire any business of any corporation, partnership, association
or other business organization or division thereof, or make any investment
of a capital nature either by purchase of stock or securities, contributions
to capital, property transfer or otherwise, or by the purchase of any
property or assets of any other individual, partnership, firm or
corporation;

               (g)    incur additional indebtedness for borrowed money
except pursuant to existing lines of credit;

               (h)    adopt or materially modify any bonus, pension,
profit-sharing or other compensation plan or enter into any contract of
employment with any employee which is not terminable at will without cost or
other liability;

               (i)    adopt, enter into or amend in any material respect
any collective bargaining, employment, severance or termination agreement or
arrangement with any person or make any change in its key management
structure, including, but not limited to, the hiring of additional employees
or the termination of existing employees;

               (j)    discharge or satisfy any lien or encumbrance or pay
any obligation or liability (whether accrued, absolute, contingent or
otherwise), except current liabilities incurred in the Ordinary Course of
Business;

               (k)    mortgage, pledge or subject to lien, charge,
security interest or any other encumbrance any of its assets or property;

               (l)    transfer or lease any of its assets or property
except in the Ordinary Course of Business except as set forth in Schedule
5.4(l);

               (m)    cancel or compromise any debt or claim other than
in the Ordinary Course of Business in an aggregate amount in excess of
$10,000;

               (n)    waive or release any rights, or settle any claim,
in an aggregate amount which is in excess of $10,000;

               (o)    transfer or grant any rights under any leases,
licenses or other agreements, other than in the Ordinary Course of Business;

               (p)    make or grant any general or individual wage or
salary increase to any of its officers;

               (q)    fail to pay or discharge its accounts payable,
debts or liabilities when due;

               (r)    suffer any material adverse change in its financial
condition, properties or business;

               (s)    except in the Ordinary Course of Business, make or
enter into any contract, commitment or transaction which involves an
expenditure in excess of $10,000, or renew, extend, amend or modify any
contract, commitment or transaction involving in excess of $10,000;

               (t)    enter into or amend any contract, agreement or
other transaction with any of its officers, directors or shareholders, or
any affiliate of such an officer, director or shareholder, on terms that are
less favorable than could be obtained from an unrelated third party on an
arm's length basis.

       5.5     Full Access to and Provision of Information.  Each of STR
and DEI will permit the other Party and its designees to have access to all
premises, properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to it and will deliver such other
documentation and information which is reasonably requested in accordance
with that certain Non-Disclosure Agreement, dated as of October 28, 1996,
between DEI and STR.  

       5.6     Notice of Developments.  Upon becoming aware of such facts
or circumstances, each Party will give prompt written notice to the other
Party of (a) the occurrence or failure to occur of any event the effect of
which is that any representation and warranty made by such Party herein is
untrue and (b) the receipt of any notice or other communication from any
third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement. 
To the extent such facts or circumstances would cause a Schedule to this
Agreement to become incorrect or incomplete, such Schedule shall be amended
and delivered promptly to the other Party (and, in any event, prior to the
Closing).  No disclosure by any Party pursuant to this Section 5.6, however,
will be deemed to amend or supplement this Agreement or the Schedules
(except to increase the number of STR Shares outstanding as stated in
Section 4.1(d) and to disclose the sale of STR Shares in Schedule 4.1(g), in
each case to the extent STR Shares are sold under the conditions set forth
in Schedule 5.4(c)), or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant, unless such misrepresentation or breach is
waived in accordance with Section 11.10; provided, however, that if the
Effective Time occurs notwithstanding such disclosure, the representations
and warranties contained in this Agreement shall be deemed amended to
include such disclosure and such misrepresentation or breach shall be deemed
waived.

       5.7     Exclusivity.  (a)  Neither DEI nor any of the DEI
Subsidiaries nor any of their respective officers and directors shall, and
DEI and the DEI Subsidiaries will use their best efforts to cause their
employees, agents, and representatives (including, without limitation, any
investment banker, attorney or accountant retained by DEI) not to, initiate,
solicit, encourage or take any other action to facilitate, directly or
indirectly, any inquiries or the making of any proposal with respect to a
merger, consolidation, share exchange or similar transaction or series of
transactions involving DEI or any of DEI Subsidiary, or any purchase of all
or any significant portion of the assets of DEI (other than DEI's real
estate) or any equity interest in DEI other than the transactions
contemplated hereby (an "Acquisition Proposal"), or engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition
Proposal; provided, however, that the Board of Directors on behalf of DEI
may furnish or cause to be furnished information and may participate in such
discussions and negotiations through its representatives with persons who
have sought the same if (i) the failure to provide such information or
participate in such negotiations and discussions would cause the members of
the Board of Directors to breach its fiduciary duties to DEI's stockholders
under applicable law as advised in writing by counsel or (ii) another Person
or group makes a bona fide offer or proposal with respect to all DEI Shares
which, based upon the identity of the Person making it and the terms
thereof, the Board of Directors believes, in the good faith exercise of its
business judgment, could reasonably be expected to lead to a transaction
involving all DEI Shares more favorable to DEI's stockholders from a
financial point of view than the transaction contemplated hereby; provided,
however, that such Person must have required, as a condition to his or its
highest offer or proposal (or to the making thereof), that DEI terminate
this Agreement (in either case, a "Higher Offer").  DEI will notify STR
immediately, orally and in writing, if any such inquiries or proposals are
received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with DEI
and will keep STR informed, on a current basis, of the status and terms of
any such proposals and status of any such negotiations or discussions.  The
provisions of this Section 5.7(a) shall not prohibit DEI from taking any
position with respect to an Acquisition Proposal pursuant to Rules 14d-9 and
14e-2 under the Exchange Act.

               (b)  Neither STR nor any of its officers and directors
shall, and STR will use its best efforts to cause its employees, agents, and
representatives (including, without limitation, any investment banker,
attorney or accountant retained by STR) not to, initiate, solicit, encourage
or take any other action to facilitate, directly or indirectly, any
inquiries or the making of any Acquisition Proposal, or engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition
Proposal; provided, however, that the Board of Directors on behalf of STR
may furnish or cause to be furnished information and may participate in such
discussions and negotiations through its representatives with persons who
have sought the same if (i) the failure to provide such information or
participate in such negotiations and discussions would cause the members of
the Board of Directors to breach its fiduciary duties to STR's stockholders
under applicable law as advised in writing by counsel or (ii) another Person
or group makes a bona fide offer or proposal with respect to all STR Shares
which, based upon the identity of the Person making it and the terms
thereof, the Board of Directors believes, in the good faith exercise of its
business judgment, could reasonably be expected to lead to a transaction
involving all STR Shares more favorable to STR's stockholders from a
financial point of view than the transaction contemplated hereby; provided,
however, that such Person must have required, as a condition to his or its
Highest Offer (or to the making thereof), that STR terminate this Agreement. 
STR will notify DEI immediately, orally and in writing, if any such
inquiries or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with STR and will keep DEI informed, on a current basis, of the
status and terms of any such proposals and status of any such negotiations
or discussions.

       5.8     WARN Act.  STR agrees that, if requested by DEI, it shall,
on behalf of DEI, issue such notices as are required under the Worker
Adjustment and Retraining Notification Act of 1988 or any similarly
applicable state or local law.  No such notices shall be given without the
prior approval of DEI.

       5.9     Press Releases and Public Announcements.  Neither DEI nor
STR will issue any press release or make any public announcement relating to
the subject matter of this Agreement or any Employment Agreement without the
prior written approval of the other party, which approval shall not be
unreasonably withheld. 

       5.10    Registration Statement.  DEI and STR will, as promptly as
practicable, prepare and DEI will file with the SEC a Form S-4 registration
statement containing a joint proxy statement/prospectus and forms of proxy
in connection with the vote of DEI's and STR's stockholders with respect to
the Merger and the issuance of the DEI Shares pursuant to the Merger.  DEI
and STR will, and will cause their accountants and lawyers to, use their
best efforts to have or cause the Form S-4 registration statement to be
declared effective as promptly as practicable, including, without
limitation, causing their accountants to deliver necessary or required
instruments such as opinions and certificates, and will take any other
action required or necessary to be taken under federal or state securities
laws or otherwise in connection with the registration process.  DEI and STR
will use their respective best efforts to cause the joint proxy statement
included as part of the Form S-4 registration statement to be mailed or
delivered to stockholders of DEI and STR at the earliest practicable date
and will coordinate and cooperate with respect to the timing of such
meetings and shall use their best efforts to hold such meetings as soon as
practicable after the date hereof.

       5.11  Affiliates of the Company and Parent.  Prior to the Effective
Time, DEI and STR (each of which is referred to in this Section as a
"Subject Company") shall deliver to each other a list identifying all
persons who, at the time this Agreement is submitted for approval to the
stockholders of the Subject Company, may be deemed to be Affiliates of the
Subject Company.  STR shall use its best efforts to cause each person who is
identified as an Affiliate in the list furnished pursuant to this Section
5.11 to deliver to DEI, on or prior to the Effective Time, a written
agreement, in the form to be approved by the parties hereto, that such
Affiliate will not sell, pledge, transfer or otherwise dispose of any DEI
Shares issued to such Affiliate pursuant to the Merger, except pursuant to
an effective registration statement or in compliance with Rule 145 or an
exemption from the registration requirements of the Securities Act. 

       5.12.   Representations and Warranties.  Except as otherwise
expressly provided by this Agreement, neither STR nor DEI or Merger Sub will
take any action that would cause any of the representations and warranties
set forth in Sections 4.1 or 4.2, as the case may be, not to be true and
correct in all material respects at and as of the Effective Time; provided,
that STR shall not be prohibited from selling STR Shares under the
conditions set forth in Schedule 5.4(c).

       5.13    Board of Directors of DEI.  Effective at the Effective Time
and conditional upon the consummation of the Merger, William Panschar and
Charles Stanich shall have submitted their resignations as DEI Directors to
the DEI Board of Directors, DEI's Board of Directors shall have resolved to
increase the number of directors on the DEI Board of Directors to seven and
DEI's Board of Directors shall have appointed S. R. Perrino, S. K. Rockwell,
James Busey and Dr. Chuck Bernard to fill the resulting vacancies.

       5.14    Amended and Restated Certificate of Incorporation of DEI. 
If duly approved by DEI's stockholders as contemplated by Section 5.2, DEI
shall, immediately prior to the Effective Time, execute and file the DEI
Amended Certificate with the Delaware Secretary of State.

6.     POST-CLOSING COVENANTS.  The Parties agree as follows with respect
to the period following the Closing:

       6.1     General.  In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement
or any Employment Agreement, each of the Parties will, to the extent
permitted by law, take such further action (including the execution and
delivery of such further instruments and documents and obtaining such
further consents) as any other Party may request, all at the sole cost and
expense of the requesting Party.  STR acknowledges and agrees that from and
after the Closing, DEI will be entitled to possession of all documents,
books, records (including Tax records), agreements and financial data in
STR's possession of any sort relating to STR.

       6.2     Employee Benefit Plans.  DEI shall maintain or cause to be
maintained after the Closing all of the Employee Benefit Plans of STR and
DEI until such time as it has determined that termination of any such
Employee Benefit Plan is in DEI's best interest.

7.     CONDITIONS TO OBLIGATIONS TO CLOSE THE MERGER.

       7.1     Conditions to Obligation of DEI and Merger Sub.  The
obligation of DEI and Merger Sub to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction
or waiver of the following conditions prior to the Effective Time:

               (a)    The representations and warranties set forth in
Section 4.1 shall be true and correct at and as of the Closing Date.


               (b)    STR shall have performed and complied with all of
its covenants under this Agreement in all material respects through the
Closing.

               (c)    This Agreement and the Merger shall have been duly
approved by the holders of the requisite number of the STR Shares in
accordance with applicable law and STR's Articles of Incorporation and
Bylaws, and the DEI Amended Certificate shall have been duly approved by the
holders of the requisite number of the DEI Shares in accordance with
applicable law and DEI's Certificate of Incorporation and Bylaws.

               (d)    There shall be no more than 35,000 Dissenters'
Shares for which written demand for payment has been made in accordance with
the VSCA.

               (e)    STR and DEI shall each have procured all of the
third party consents required in order for it to consummate the transactions
contemplated by this Agreement.

               (f)    All required governmental and regulatory approvals
for the Merger, including any approvals required under federal or state
securities laws, shall have been received.

               (g)    No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions as set
forth in this Agreement to be rescinded following consummation,  (iii)
affect adversely the right of STR to own its assets and to operate its
business as it currently operates, or (iv) if determined adversely to STR or
any director, officer, employee or agent of STR, have a material adverse
effect on the business, financial condition or prospects of STR and no such
injunction, judgment, order, decree, ruling, or charge described in (i),
(ii), (iii) or (iv) shall be in effect.

               (h)    All actions to be taken by STR in connection with
the consummation of the Merger and all certificates, opinions, instruments,
and other documents delivered at the Closing or required to effect the
Merger shall be satisfactory in form and substance to DEI and its counsel.

               (i)    STR shall have made, or caused to be made, all of
the deliveries required by Section 8.2(b).

               (j)    There shall not have occurred since the date hereof
any event which has had or with the passage of time, is reasonably likely to
have a material adverse effect on the condition (financial or otherwise),
assets, liabilities, results of operations or prospects of STR.

               (k)    The Form S-4 registration statement containing the
joint proxy statement to be used at the DEI and STR stockholder meetings at
which approval of the Merger is considered shall have become effective, no
stop order suspending the effectiveness of the Form S-4 registration
statement shall have been issued and no proceedings for such purpose shall
have been initiated and be continuing or threatened by the SEC.  DEI shall
have received all state securities laws or "blue sky" permits and
authorizations necessary to issue DEI Shares pursuant to the Merger as
contemplated by this Agreement.

               (l)    Each Affiliate of STR shall have executed and
delivered to DEI the letters contemplated by Section 5.11, together with
such other documents and instruments as DEI may reasonably request related
to compliance with the Securities Act.

       7.2     Conditions to Obligation of STR to Close the Merger.  The
obligation of STR to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction or waiver of the
following conditions:

               (a)    The representations and warranties set forth in
Section 4.2 shall be true and correct at and as of the Closing Date.

               (b)    DEI and Merger Sub shall have performed and
complied with all of their covenants under this Agreement in all material
respects through the Closing.

               (c)    No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (i) prevent consummation of any of the transactions
contemplated by this Agreement, or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, and
no such injunction, judgment, order, decree, ruling, or charge described in
(i) and (ii) shall be in effect.

               (d)    DEI and Merger Sub shall have made, or caused to be
made, all of the deliveries required by Section 8.2(a).

               (e)    This Agreement and the Merger shall have been duly
approved by the holders of the requisite number of the STR Shares in
accordance with applicable law and STR's Articles of Incorporation and
Bylaws, and the DEI Amended Certificate shall have been duly approved by the
holders of the requisite number of the DEI Shares in accordance with
applicable law and DEI's Certificate of Incorporation and Bylaws.

               (f)    All required governmental and regulatory approvals
for the Merger, including any approvals required under federal or state
securities laws, shall have been received.

               (g)    All actions to be taken by DEI and Merger Sub in
connection with the consummation of the Merger and all certificates,
opinions, instruments, and other documents delivered at the Closing or
required to effect the Merger shall be satisfactory in form and substance to
STR and its counsel.

               (h)    There shall not have occurred since the date hereof
any event which has had or with the passage of time, is reasonably likely to
have a material adverse effect on the condition (financial or otherwise),
assets, liabilities, results of operations or prospects of DEI and the DEI
Subsidiaries, taken as a whole.

               (i)    The Form S-4 registration statement containing the
joint proxy statement to be used at the DEI and STR stockholder meetings at
which approval of the Merger is considered shall have become effective, no
stop order suspending the effectiveness of the Form S-4 registration
statement shall have been issued and no proceedings for such purpose shall
have been initiated and be continuing or threatened by the SEC.  DEI shall
have received all state securities laws or "blue sky" permits and
authorizations necessary to issue DEI Shares pursuant to the Merger as
contemplated by this Agreement.

8.     CLOSING.

       8.1     Time and Place.  Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by this Agreement
(the "Closing") will take place at such location, on such date and at such
time as the Parties mutually agree at the earliest practicable time after
the satisfaction or waiver of all conditions to the Merger set forth in
Article 7 hereof (the "Closing Date").

       8.2     Deliveries at the Closing.

               (a)    At the Closing, DEI will deliver or cause to be
delivered to STR the following:

                      (i)     A certificate of DEI, dated the Closing
Date, signed by the President and the Treasurer of DEI, to the effect that
the conditions of Section 7.2 have been fulfilled;

                      (ii)    The written opinion of Dykema Gossett PLLC,
counsel to DEI, dated the Closing Date, in the form attached as Exhibit
8.2(a)(ii);

                      (iii)   Employment Agreements executed by DEI, Mr.
Thomas Ory and Mr. Charles Stanich; and

                      (iv)    The Articles of Merger executed by Merger
Sub. 

               (b)    At the Closing, STR will deliver or cause to be
delivered to DEI the following:

                      (i)     A certificate of STR, dated the Closing
Date, signed by the President and the Treasurer of STR, to the effect that
the conditions of Section 7.1 have been fulfilled;

                      (ii)    The opinion of Michaels, Wishner & Bonner,
P.C., counsel to STR, dated the Closing Date, in the form attached as
Exhibit 8.2(b)(ii);

                      (iii)   The Articles of Merger executed by STR; and

                      (iv)    Such other information, documents or
instruments from STR as DEI may reasonably request for the purpose of
effectuating the transactions contemplated by the Agreement.

9.     TERMINATION.

       9.1     Termination.  Notwithstanding the adoption of this Agreement
by DEI, Merger Sub and STR, this Agreement may be terminated, and the Merger
abandoned, at any time before the Effective Time in any of the following
ways:

               (a)    by the mutual written agreement of the Parties;

               (b)    by DEI if (i) any of the conditions set forth in
Section 7.1 have not been satisfied at Closing and have not been waived by
DEI, (ii) STR shall have failed to comply in any material respect with any
of the covenants, conditions or agreements contained in this Agreement to be
complied with or performed by STR at or prior to such date of termination
and which failure to comply has not been cured within five business days
following receipt by STR of written notice of such failure to comply, (iii)
any representation or warranty of STR contained in this Agreement shall not
be true in all material respects when made or on and as of the Effective
Time as if made on and as of the Effective Time, (iv) the STR Board of
Directors withdraws, modifies or changes its recommendation of this
Agreement or the Merger in a manner adverse to DEI or shall have resolved to
do any of the foregoing, (v) the STR Board of Directors shall have
recommended to the stockholders of STR any Acquisition Proposal or resolved
to do so, or (vi) DEI enters into a definitive agreement accepting a Higher
Offer; 

               (c)    by STR if (i) any of the conditions set forth in
Section 7.2 have not been satisfied at Closing and have not been waived by
STR, (ii) DEI shall have failed to comply in any material respect with any
of the covenants, conditions or agreements contained in this Agreement to be
complied with or performed by DEI at or prior to such date of termination
and which failure to comply has not been cured within five business days
following receipt by DEI of written notice of such failure to comply, (iii)
any representation or warranty of DEI contained in this Agreement shall not
be true in all material respects when made or on and as of the Effective
Time as if made on and as of the Effective Time, (iv) the DEI Board of
Directors withdraws, modifies or changes its recommendation of this
Agreement or the Merger in a manner adverse to STR or shall have resolved to
do any of the foregoing, (v) the DEI Board of Directors shall have
recommended to the stockholders of DEI any Acquisition Proposal or resolved
to do so, or (vi) STR enters into a definitive agreement accepting a Higher
Offer; or

               (d)    by STR or DEI if the Closing Date does not occur on
or before May 31, 1998; provided, that the right to terminate this Agreement
under this paragraph (d) shall not be available to any Party whose failure
to fulfill any obligations under this Agreement has been the cause of or
resulted in the failure of the consummation of the Merger to occur on or
before such date.

A Party desiring to terminate this Agreement must give written notice of
such termination to the other Parties, specifying the paragraph of this
Section 9.1 pursuant to which such termination is made and the reason(s)
therefor.

       9.2     Effect of Termination.  In the event this Agreement is
terminated and the Merger abandoned (a) pursuant to Section 9.1(b)(v) or
Section 9.1(c)(vi), or (b) as a result of the failure of STR's stockholders
to approve the Merger, DEI shall be entitled to receive from STR all costs
and out-of-pocket expenses (including reasonable attorneys', accountants and
investment banking fees and expenses related to the Merger and any related
financing) which DEI may have incurred in connection with the negotiation
and preparation of this Agreement and related documentation, due diligence
investigations undertaken with respect to STR and DEI, and the preparation,
filing, printing and mailing of the Form S-4 registration statement and the
joint proxy statement included therein and the response to SEC comments
thereon. In the event this Agreement is terminated and the Merger abandoned
(x) pursuant to Section 9.1(c)(v) or Section 9.1(b)(vi), or (y) as a result
of the failure of DEI's stockholders to approve the Merger, STR shall be
entitled to receive from DEI all costs and out-of-pocket expenses (including
reasonable attorneys', accountants and investment banking fees and expenses
related to the Merger and any related financing) which STR may have incurred
in connection with the negotiation and preparation of this Agreement and
related documentation, due diligence investigations undertaken with respect
to STR and DEI, and the preparation, filing, printing and mailing of the
Form S-4 registration statement and the joint proxy statement included
therein and the response to SEC comments thereon. Upon termination of this
Agreement (and the Merger) pursuant to Section 9.1 for any other reason,
each Party will be responsible for its out-of-pocket expenses (including
professional fees and expenses) and the cost of printing the Form S-4
Registration Statement and the related joint proxy statement shall be borne
equally by DEI and STR.

10.    SURVIVAL OF REPRESENTATIONS.

       10.1    No Survival of Representations and Warranties.  The
representations and warranties contained in this Agreement and in any
certificate furnished or to be furnished pursuant hereto shall not survive
the Closing Date. 

11.    MISCELLANEOUS.

       11.1    Complete Agreement; Amendment. This Agreement and the
Employment Agreements, including the Exhibits, the Schedules and other
writings referred to in or delivered pursuant to or simultaneously with this
Agreement, contain the entire understanding of the Parties with respect to
the transactions contemplated by this Agreement.  No representation,
inducement, agreement, promise or understanding altering, modifying, taking
from or adding to the terms and conditions hereof will have any force and
effect unless the same is in writing and validly executed by the Parties
hereto.

       11.2    Notices.  All notices or other communications required or
permitted hereunder will be in writing and will be deemed to have been duly
given if sent by registered or certified mail, postage prepaid and return
receipt requested, addressed as follows:

               (a)    if to DEI or Merger Sub, to:

                      Mr. Thomas R. Ory, President
                      Daedalus Enterprises, Inc.
                      300 Parkland Plaza
                      Ann Arbor, Michigan  48106

               with a copy to:

                      Mark A. Metz, Esq.
                      Dykema Gossett PLLC
                      400 Renaissance Center
                      Detroit, Michigan  48243


               (b)    If to STR, to:

                      S. R. Perrino, President
                      S. T. Research Corporation
                      8419 Terminal Road
                      Newington, Virginia 22122

               with a copy to:

                      Mark Wishner, Esq.
                      Michaels, Wishner & Bonner, P.C.
                      Suite 900
                      1140 Connecticut Avenue
                      Washington, D.C. 20036
                              
or to such other address as will be furnished in writing by any Party, and
any such notice or communication will be deemed to have been given as of the
date so mailed.  Any Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
will be deemed to have been duly given unless and until it actually is
received by the intended recipient.  Any Party may change the address to
which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Party notice in the manner herein
set forth.

       11.3    Expenses.  Accept as otherwise provided in this Agreement,
each Party will be responsible for the payment of the fees and expenses
which he or it incurs for counsel, accountants, brokers and otherwise in
connection with this Agreement.

       11.4    Assignment.  This Agreement will be binding upon and inure
to the benefit of, and be enforceable by, the Parties hereto and their
respective successors and assigns, provided that neither this Agreement nor
any of the rights, interests or obligations under this Agreement will be
assigned by STR without the prior written consent of DEI; and further
provided, that DEI may assign, in its sole discretion, any or all of its
rights, interests and obligations under this Agreement to any direct or
indirect wholly owned subsidiary of DEI.

       11.5    Counterparts.  This Agreement may be executed in
counterparts, all of which together will be deemed an original of this
Agreement.

       11.6    Governing Law.  This Agreement will be governed by the laws
of the State of Delaware without regard to its rules regarding choice of
law.

       11.7    Interpretation.  The titles of the Sections have been
inserted as a matter of convenience and reference only and will not control
or affect the meaning or construction of this Agreement.  References to
Sections refer to Sections of this Agreement unless otherwise stated.  Words
such as "herein", "hereof", "hereby" and "hereunder", and words of similar
import, unless the context requires otherwise, refer to this Agreement.  As
used in this Agreement, the masculine, feminine and neuter genders shall be
deemed to include the others if the context requires.

       11.8    Incorporation of Exhibits and Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.  References to this Agreement herein shall be
construed as references to the Agreement with all Exhibits and Schedules.

       11.9    Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the Parties and no presumption or burden
of proof will arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement.


       11.10   Waivers.  No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.  Any waiver of any obligation contained in this Agreement
is freely, knowingly and voluntarily given by each Party, without any duress
or coercion, after each Party has had opportunity to consult with its
counsel and has carefully and completely read all of the terms and
provisions of this Agreement.  No Party will be deemed to have made any
waiver unless it has been made in writing and signed by the Party to be
charged with having made such waiver.

       IN WITNESS WHEREOF, the duly authorized officers of DEI and STR have
hereunto set their hands and delivered this Agreement as of the date and
year first above written.


DAEDALUS ENTERPRISES, INC.               S. T. RESEARCH CORPORATION


By:  /s/ Thomas R. Ory                   By: /s/ S. R. Perrino         
     Thomas R. Ory                           S. R. Perrino
Its: President                           Its:  President


DEI MERGER SUB, INC.

By:  /s/ Thomas R. Ory
     Thomas R. Ory
Its:  President


Schedules to the Agreement:           

       4.1(b)(i)      Organization, qualification and corporation power
       4.1(b)(ii)     Subsidiaries and former subsidiaries
       4.1(d)         Capitalization
       4.1(e)         Equity interests
       4.1(f)         STR Financial Statements
       4.1(g)         Subsequent Events
       4.1(k)         Litigation
       4.1(l)         Intellectual property
       4.1(m)         Exceptions to tangible assets owned
       4.1(n)         Contracts
       4.1(o)         Setoffs and Counterclaims
       4.1(q)         Insurance
       4.1(t)         Employee benefits
       4.1(u)         Insider interests

       4.2(b)(i)      List of jurisdictions in which DEI is qualified as
                      a foreign corporation
       4.2(d)         Options and Warrants
       4.2(g)         Subsequent Events
       4.2(j)         Taxes
       4.2(k)         Litigation
       4.2(l)         Intellectual property
       4.2(m)         Exceptions to tangible assets owned
       4.2(n)         Contracts
       4.2(q)         Insurance
       4.2(t)         Employee benefits
       4.2(v)         Broker fees

       5.4(c)         Sales
       5.4(l)         Asset transfer

Exhibits to the Agreement:                   

       5.2            Form of DEI Amended Certificate
       8.2(a)(ii)     Form of Opinion of Dykema Gossett PLLC
       8.2(a)(iii)    Form of Employment Agreement
       8.2(b)(ii)     Form of Opinion of Michaels, Wishner & Bonner, P.C.
               

EX-99

                                                                             
                                                   Exhibit 99

FOR IMMEDIATE RELEASE

       DAEDALUS ENTERPRISES, INC. AND S. T. RESEARCH CORPORATION
            ANNOUNCE SIGNING OF DEFINITIVE MERGER AGREEMENT


December 23, 1997

Daedalus Enterprises, Inc. of Ann Arbor, MI (OTC:DDEI) and S. T. Research
Corporation of Newington, VA announced today that they have entered into a
definitive merger agreement.  A copy of the merger agreement is being filed by
Daedalus with the Securities and Exchange Commission on Form 8-K.

Under the agreement, S. T. Research will become a wholly owned subsidiary of
Daedalus, whose board of directors will be expanded to seven members, including
five current S. T. Research directors.  S. R. Perrino, currently CEO of S. T.
Research, will become the Chairman and CEO of the merged company, while Thomas
R. Ory, the current President and CEO of Daedalus, will remain President of the
Daedalus division, responsible for Daedalus' operations in Ann Arbor.

Shareholders of S. T. Research will receive 2.58 shares of Daedalus stock in
exchange for each share of S. T. Research stock they hold of record on the
effective date of the merger.  As of December 23, 1997, S. T. Research had
approximately 724,000 shares outstanding and is permitted to issue up to
582,000 additional shares prior to January 31, 1998.

In connection with the merger, Daedalus has agreed to change its name to
"Sensys Technologies, Inc." and to increase the number of shares of common
stock authorized in its charter.

The merger is expected to close in April or May of 1998 and is subject to the
satisfaction of various conditions, including the approval of the S. T.
Research stockholders of the merger and the approval of the Daedalus
stockholders of the amendment of the Daedalus charter to change the company's
name and increase the number of authorized shares.  The Daedalus stockholders
will be asked to vote on the merger-related matters at their annual meeting,
which is expected to be held in April or May of 1998.

Daedalus is a leading international supplier of airborne remote sensing systems
and services for environmental measurement and mapping applications.  The
Daedalus customer base includes foreign and domestic government agencies as
well as commercial companies performing environmental monitoring and
assessments.  Daedalus also provides sensor systems and services for digital
mapping and asset location and inventory management information for the utility
and transportation industries.

S. T. Research is a supplier of technology-driven solutions for communications
and radar intercept equipment to the U.S. Government.  The company has been
growing at an internal compound rate in excess of 20% for the past three years
owing to government acceptance of its state-of-the-art systems.  S. T. Research
is a major supplier of threat warning systems to the surface and subsurface
community.


FOR MORE INFORMATION, CONTACT:
T. R. Ory, President and CEO, Daedalus Enterprises, Inc. at (734) 769-5649
S. R. Perrino, Chairman and CEO, S. T. Research Corporation at (703) 550-7000