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                           STOCK PURCHASE AGREEMENT


                                    AMONG


                          THE COLEMAN COMPANY, INC.,


                                  AS SELLER,


                                 SIEBE PLC, 


                                AS GUARANTOR,


                                     AND


                       RANCO INCORPORATED OF DELAWARE,


                                   AS BUYER


                        DATED AS OF FEBRUARY 18, 1998

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                              TABLE OF CONTENTS
                                       
<TABLE>
                                                                             PAGE
                         ARTICLE I PURCHASE AND SALE
<S>                <C>                                                         <C>
     Section 1.1   Purchase and Sale of Shares . . . . . . . . . . . . . . . .  2
     Section 1.2   Closing . . . . . . . . . . . . . . . . . . . . . . . . . .  2
     Section 1.3   Deliveries at Closing . . . . . . . . . . . . . . . . . . .  3
     Section 1.4   Purchase Price Adjustment . . . . . . . . . . . . . . . . .  4
     Section 1.5   Intercompany Accounts . . . . . . . . . . . . . . . . . . .  9
                                       
              ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER
     Section 2.1   Organization and Qualification. . . . . . . . . . . . . . .  9
     Section 2.2   Authority Relative to This Agreement. . . . . . . . . . . . 11
     Section 2.3   Capitalization; Title . . . . . . . . . . . . . . . . . . . 12
     Section 2.4   Consents and Approvals; No Violation. . . . . . . . . . . . 14
     Section 2.5   Financial Statements. . . . . . . . . . . . . . . . . . . . 16
     Section 2.6   Assets Necessary to Business. . . . . . . . . . . . . . . . 18
     Section 2.7   Title to Properties; Encumbrances . . . . . . . . . . . . . 18
     Section 2.8   Contracts and Commitments . . . . . . . . . . . . . . . . . 20
     Section 2.9   Absence of Certain Changes or Events. . . . . . . . . . . . 24
     Section 2.10  Absence of Litigation . . . . . . . . . . . . . . . . . . . 24
     Section 2.11  Intellectual Property . . . . . . . . . . . . . . . . . . . 25
     Section 2.12  ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . 27
     Section 2.13  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
     Section 2.14  Environmental Matters . . . . . . . . . . . . . . . . . . . 33
     Section 2.15  No Undisclosed Liabilities. . . . . . . . . . . . . . . . . 35
     Section 2.16  Transactions with Affiliates. . . . . . . . . . . . . . . . 36
     Section 2.17  Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 37
     Section 2.18  Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 37
     Section 2.19  Labor Difficulties. . . . . . . . . . . . . . . . . . . . . 37
     Section 2.20  Compliance with Laws. . . . . . . . . . . . . . . . . . . . 38
     Section 2.21  Customer Accounts Receivable; Inventories . . . . . . . . . 39
     Section 2.22  Information . . . . . . . . . . . . . . . . . . . . . . . . 40

        ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTOR

     Section 3.1   Organization and Qualification. . . . . . . . . . . . . . . 41
     Section 3.2   Authority Relative to This Agreement. . . . . . . . . . . . 41

                                      i
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     Section 3.3   Consents and Approvals; No Violation. . . . . . . . . . . . 42
     Section 3.4   Financing . . . . . . . . . . . . . . . . . . . . . . . . . 43
     Section 3.5   Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 44
     Section 3.6   No Representation Regarding Future Prospects. . . . . . . . 44
     Section 3.7   Investment. . . . . . . . . . . . . . . . . . . . . . . . . 45
     Section 3.8   Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . 45

                       ARTICLE IV COVENANTS OF THE PARTIES
     Section 4.1   Conduct of the Business . . . . . . . . . . . . . . . . . . 45
     Section 4.2   HSR Act Compliance. . . . . . . . . . . . . . . . . . . . . 49
     Section 4.3   Post-Closing Collections. . . . . . . . . . . . . . . . . . 49
     Section 4.4   Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 50
     Section 4.5   Severance Arrangements. . . . . . . . . . . . . . . . . . . 50
     Section 4.6   Public Announcements. . . . . . . . . . . . . . . . . . . . 51
     Section 4.7   Transaction Costs . . . . . . . . . . . . . . . . . . . . . 52
     Section 4.8   Further Assurances. . . . . . . . . . . . . . . . . . . . . 52
     Section 4.9   Product Liability . . . . . . . . . . . . . . . . . . . . . 52
     Section 4.10  Use of Name . . . . . . . . . . . . . . . . . . . . . . . . 54
     Section 4.11  Books and Records . . . . . . . . . . . . . . . . . . . . . 55
     Section 4.12  Transfer of Nominee Share . . . . . . . . . . . . . . . . . 57
                                       
                ARTICLE V CERTAIN EMPLOYEE AND BENEFIT MATTERS
     Section 5.1   Continued Employment; Service Credit. . . . . . . . . . . . 57
     Section 5.2   Continuation of Benefits. . . . . . . . . . . . . . . . . . 59
     Section 5.3   Severance Pay . . . . . . . . . . . . . . . . . . . . . . . 59
     Section 5.4   Indemnification of Buyer for Plans Not Assumed. . . . . . . 61
     Section 5.5   Company Defined Contribution Plan . . . . . . . . . . . . . 61

                                ARTICLE VI TAXES
     Section 6.1   Tax Indemnification . . . . . . . . . . . . . . . . . . . . 62
     Section 6.2   Procedures Relating to Indemnification of Tax Claims. . . . 65
     Section 6.3   Section 338(h)(10) Election . . . . . . . . . . . . . . . . 69
     Section 6.4   Survival of Tax Provisions. . . . . . . . . . . . . . . . . 73
     Section 6.5   Return Filings, Refunds and Credits . . . . . . . . . . . . 73
     Section 6.6   Transfer Taxes. . . . . . . . . . . . . . . . . . . . . . . 80
     Section 6.7   Termination of Tax Sharing Agreements . . . . . . . . . . . 80
     Section 6.8   Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . 80

                                       ii
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     Section 6.9   Determination and Characterization of Payments. . . . . . . 81

                         ARTICLE VII CONDITIONS TO CLOSING
     Section 7.1   Conditions to the Obligations of All Parties. . . . . . . . 82
     Section 7.2   Conditions to the Obligations of Seller . . . . . . . . . . 83
     Section 7.3   Conditions to the Obligations of Buyer. . . . . . . . . . . 84

                            ARTICLE VIII TERMINATION
     Section 8.1   Termination . . . . . . . . . . . . . . . . . . . . . . . . 84
     Section 8.2   Effect of Termination . . . . . . . . . . . . . . . . . . . 85

                          ARTICLE IX INDEMNIFICATION
     Section 9.1   Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 86
     Section 9.2   Indemnification by Seller . . . . . . . . . . . . . . . . . 87
     Section 9.3   Indemnification by Buyer. . . . . . . . . . . . . . . . . . 88
     Section 9.4   Limitations of Claims . . . . . . . . . . . . . . . . . . . 88
     Section 9.5   Procedures. . . . . . . . . . . . . . . . . . . . . . . . . 93
     Section 9.6   Exclusivity of Remedies . . . . . . . . . . . . . . . . . . 97

                      ARTICLE X MISCELLANEOUS PROVISIONS
     Section 10.1   Disclosure Schedules; Exhibits . . . . . . . . . . . . . . 98
     Section 10.2   Amendment and Modification . . . . . . . . . . . . . . . . 99
     Section 10.3   Waiver of Compliance . . . . . . . . . . . . . . . . . . . 99
     Section 10.4   Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 99
     Section 10.5   Parties in Interest; Assignment. . . . . . . . . . . . . .102
     Section 10.6   Counterparts . . . . . . . . . . . . . . . . . . . . . . .102
     Section 10.7   Construction; Interpretation . . . . . . . . . . . . . . .103
     Section 10.8   Entire Agreement . . . . . . . . . . . . . . . . . . . . .104
     Section 10.9   Severability . . . . . . . . . . . . . . . . . . . . . . .104
     Section 10.10  Governing Law. . . . . . . . . . . . . . . . . . . . . . .105
     Section 10.11  Guarantee. . . . . . . . . . . . . . . . . . . . . . . . .105

EXHIBIT A  License Agreement 

                                       iii
<PAGE>

                             Index of Defined Terms

DEFINED TERM                                                            WHERE DEFINED

Adjusted GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4(b)
Affected Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 5.1
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Allocations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.3(b)
appropriate Seller or Company personnel. . . . . . . . . . . . . . . .Section 10.7(b)
Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 10.7(c)
Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4(d)
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1.2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1.2
Closing Statement of Company Business Net Worth. . . . . . . . . . . . Section 1.4(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.12(a)
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Company Business Net Worth . . . . . . . . . . . . . . . . . . . . . . Section 1.4(a)
Company DC Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 5.5
Company Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . Section 2.12
Company ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12
Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . . . . . .Section 8.2
Confidential Memorandum. . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.6
December 31, 1996 Financial Statements . . . . . . . . . . . . . . . . Section 2.5(a)
December 31, 1997 Statement of Company Business Net Worth. . . . . . . Section 2.5(a)
December 31, 1997 Financial Statements . . . . . . . . . . . . . . . . Section 2.5(a)
Disclosure Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4(a)
Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 4.11(a)
Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1(a)
Employment Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 5.3
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.14
Environmental Permits. . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.14
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12
Estimated Net Worth. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4(a)
Executive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 4.5
Exhibit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 10.7(c)
Finder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4(b)
Governmental Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.4
Guarantor. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause

                                       iv
<PAGE>


HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.4
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.5(a)
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.5(a)
Indemnity Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.4(d)
Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11
Intercompany Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1.5
knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 10.7(b)
License Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.3(a)
Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.3
Limitations Period . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 9.1
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 9.2
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.1
Nominee Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3(c)
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.5(a)
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.7
Pre-Closing Tax Period . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1(a)
Predecessor Policies . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.9(c)
Private Placement Notes. . . . . . . . . . . . . . . . . . . . . . . . Section 2.3(a)
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 1.1
Retention Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 4.5
Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 10.7(c)
Section. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 10.7(c)
Section 338 Statement. . . . . . . . . . . . . . . . . . . . . . . . . Section 6.3(b)
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Seller Credit Agreement. . . . . . . . . . . . . . . . . . . . . . . . Section 2.3(a)
Seller DC Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 5.5
Seller Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.16
Separate Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.5(a)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introductory Clause
Straddle Period  . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1(c)
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.1
Tax Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.4(d)
Tax Claim  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.2(a)
Tax Indemnified Party  . . . . . . . . . . . . . . . . . . . . . . . . Section 6.2(a)
Tax Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . Section 6.2(a)
Tax Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.2(a)
Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.13(h)
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.13(h)
Taxing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.13(h)
Third Party Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.5(a)
Year 2000 Compliant. . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 3.8
</TABLE>
                                       v
<PAGE>

                               STOCK PURCHASE AGREEMENT


          STOCK PURCHASE AGREEMENT, dated as of February 18, 1998 (the 
"Agreement"), among The Coleman Company, Inc., a Delaware corporation 
("Seller"), Siebe plc, an English corporation ("Guarantor"), and Ranco 
Incorporated of Delaware, a Delaware corporation and a wholly-owned 
subsidiary of Guarantor ("Buyer").

          WHEREAS, Seller owns all of the issued and outstanding shares (the 
"Shares") of common stock, par value $1.00 per share (the "Common Stock"), of 
Coleman Safety & Security Products, Inc., a Delaware corporation (the 
"Company"), which, together with its subsidiaries, engages in designing, 
manufacturing, marketing and selling smoke alarms and carbon monoxide alarms 
which it markets to home builders and remodelers principally via the 
electrical wholesale distribution channel and to individual consumers via 
retail distribution channels and a broad range of other electronic products 
for residential homes and commercial buildings, including electronic 

<PAGE>

and mechanical thermostats and duct smoke detectors; and 

          WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer 
desires to purchase and accept from Seller, all of the Shares; 

          NOW, THEREFORE, in consideration of the foregoing and the agreements
set forth herein, the parties hereto agree as follows:


                                       ARTICLE I

                                  PURCHASE AND SALE

          Section 1.1  PURCHASE AND SALE OF SHARES.  Upon the terms and 
subject to the conditions set forth in this Agreement, at the Closing (as 
hereinafter defined) Seller shall sell, assign and transfer to Buyer, and 
Buyer shall purchase and accept from Seller, the Shares for an aggregate 
purchase price of $105,000,000 in immediately available funds, adjusted as 
provided in Sections 1.4(a) and (e) hereof (the "Purchase Price").

          Section 1.2  CLOSING.  Upon the terms and 


                                       2

<PAGE>

subject to the conditions of this Agreement, the closing with respect to the 
transactions provided for herein (the "Closing") shall take place at the 
offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New 
York, New York on the fifth business day following the satisfaction or waiver 
of all of the conditions to each party's obligations to close hereunder, 
other than those conditions which can only be satisfied at the Closing or 
such other date as the parties shall agree (the "Closing Date").

          Section 1.3  DELIVERIES AT CLOSING. (a) At the Closing, Seller shall
deliver to Buyer:

               (i) a certificate or certificates representing all of the 
Shares, endorsed in blank or accompanied by stock powers executed in blank 
and any other instruments necessary to transfer to Buyer good and marketable 
title to such Shares;

               (ii) the License Agreement (the "License Agreement") in the form
attached hereto as Exhibit A, duly executed by Seller and the Company;


                                       3

<PAGE>

               (iii) evidence of the release of the Shares and the Company as a
guarantor under the Seller Credit Agreement (as hereinafter defined) and the 
Private Placement Notes (as hereinafter defined); and

               (iv) the certificate required by Section 7.3(c) hereof.

          (b) At the Closing, Buyer shall deliver to Seller:

               (i) the Purchase Price as adjusted pursuant to Section 1.4(a) 
hereof, by wire transfer to an account or accounts identified by Seller not 
later than three business days prior to the Closing Date;

               (ii) the License Agreement, duly executed by Buyer; and

               (iii) the certificate required by Section 7.2(c) hereof.

          Section 1.4  PURCHASE PRICE ADJUSTMENT. (a) ADJUSTMENT AT CLOSING.  
Not later than three business days prior to the Closing, Seller shall deliver 
to Buyer a statement of the consolidated tangible net worth of the 


                                       4

<PAGE>

Company and its subsidiaries, adjusted by the accounting adjustments set 
forth in Section 1.4(a) of the disclosure schedule delivered by Seller to 
Buyer on or prior to the date hereof (the "Disclosure Schedule") (the 
"Company Business Net Worth") estimated as of the close of business on the 
Closing Date (the "Estimated Net Worth"), determined on a basis consistent 
with that used for the December 31, 1997 Statement of Company Business Net 
Worth (as hereinafter defined), accompanied by a certificate of the Chief 
Financial Officer of Seller to the effect that such estimate represents a 
good faith estimate of the Estimated Net Worth in accordance with this 
Agreement.  At the Closing, (i) if the Estimated Net Worth exceeds the 
Company Business Net Worth as of December 31, 1997, the Purchase Price shall 
be increased by the amount of such excess and (ii) if the Estimated Net Worth 
is less than the Company Business Net Worth as of December 31, 1997, the 
Purchase Price shall be decreased by the amount of such deficit; provided 
that the amount to be paid by Buyer at the Closing shall not exceed 
$105,000,000.


                                       5

<PAGE>

          (b) CLOSING STATEMENT OF COMPANY BUSINESS NET WORTH.  As promptly 
as practicable, but in any event not later than 60 days after the Closing, 
Seller shall cause to be prepared and delivered to Buyer an audited 
consolidated statement of Company Business Net Worth and the notes thereto as 
of the Closing Date (the "Closing Statement of Company Business Net Worth") 
determined in accordance with Adjusted GAAP (as hereinafter defined) applied 
on a basis consistent with the December 31, 1997 Statement of Company 
Business Net Worth.  The Closing Statement of Company Business Net Worth 
delivered pursuant to this Section 1.4(b) shall be accompanied by a 
special-purpose report of Ernst & Young LLP to the effect that such statement 
and any related notes thereto were prepared in accordance with Adjusted GAAP. 
 "Adjusted GAAP" shall mean United States generally accepted accounting 
principles in effect on the date hereof ("GAAP") applied on a basis 
consistent with the December 31, 1997 Statement of Company Business Net 
Worth, as adjusted by the accounting adjustments in Section 1.4(a) of the 
Disclo-


                                       6

<PAGE>

sure Schedule.   

          (c) COOPERATION BY BUYER.  Buyer shall make available to Seller and 
its representatives (at no cost to Seller) such books, records and employees 
of Buyer, the Company or any of the Company's subsidiaries as may be 
necessary for Seller's preparation of the Closing Statement of Company 
Business Net Worth.  Buyer and its representatives shall have the right to 
observe any inventory count and, after the delivery of the Closing Statement 
of Company Business Net Worth pursuant to Section 1.4(b) above, to review the 
work papers, schedules, memoranda and other documents and information 
prepared or reviewed by Seller and to communicate with the persons who 
conducted such preparation, review or count.

          (d) DISPUTE RESOLUTION.  Within 45 days after the delivery of the 
Closing Statement of Company Business Net Worth to Buyer, Buyer shall notify 
Seller of any objections to the Closing Statement of Company Business Net 
Worth, specifying in reasonable detail any such 


                                       7

<PAGE>

objections, and if Buyer fails to notify Seller of any objections within such 
period, Buyer shall be deemed to have agreed to the Closing Statement of 
Company Business Net Worth as prepared by Seller.  If Buyer has no objections 
or if Seller and Buyer agree on the resolution of all such objections, the 
Closing Statement of Company Business Net Worth (with any such changes as may 
be agreed) shall be final and binding.  Seller and Buyer shall each have the 
right, at any time, to unilaterally terminate, in writing, all discussions 
with respect to such objections or changes.  Not later than 10 business days 
after either Seller or Buyer shall have terminated such discussions, all such 
disputed items shall be submitted for resolution to a certified public 
accounting firm of national standing designated by Seller and Buyer (the 
"Auditor"), which Auditor must be independent of and have no ongoing business 
relationship with Seller, Buyer or their respective affiliates. Seller and 
Buyer shall use reasonable efforts to cause the report of the Auditor to be 
rendered within 30 days of its appointment, and the 


                                       8

<PAGE>

Auditor's determination as to the appropriateness and extent of changes (if 
any) to the Closing Statement of Company Business Net Worth shall be final 
and binding.

          (e) POST-CLOSING NET WORTH ADJUSTMENT. 

               (i) If the Company Business Net Worth as finally determined 
pursuant to subsection (d) of this Section 1.4 is less than the Estimated Net 
Worth, the Purchase Price shall be reduced by the amount of such deficit.  If 
the Company Business Net Worth as finally determined pursuant to subsection 
(d) of this Section 1.4 is greater than the Estimated Net Worth, the Purchase 
Price shall be increased by the amount of such excess. 

               (ii) If the Purchase Price, as adjusted pursuant to this 
subsection (e), is less than the amount paid by Buyer at the Closing, Seller 
shall pay to Buyer, in immediately available funds, the amount of such 
deficit with interest from the Closing Date through the date of payment at 
the rate of 6% per annum.  If the Purchase Price, as adjusted pursuant to 
this subsection (e), is greater than the amount paid by Buyer at the Closing, 


                                       9

<PAGE>

Buyer shall pay to Seller, in immediately available funds, the amount of such 
excess with interest from the Closing Date through the date of payment at the 
rate of 6% per annum.

               (iii) Any sums payable pursuant to this subsection (e) shall 
be paid within five business days after the final determination of Company 
Business Net Worth pursuant to subsection (d) hereof.

          (f) FEES OF AUDITOR.  The fees and expenses of the Auditor shall be 
shared equally by Seller and Buyer.

          Section 1.5  INTERCOMPANY ACCOUNTS.  On or prior to the Closing 
Date, all intercompany account balances between the Company and Seller or any 
of its subsidiaries (as defined below) ("Intercompany Accounts") shall be 
cancelled, effective immediately prior to the Closing Date.  No adjustment 
shall be made to the Purchase Price as a result of any such cancellation, 
except to the extent provided in Section 1.4 hereof.  


                                       10

<PAGE>

                                      ARTICLE II

                       REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller hereby represents and warrants to Buyer as follows:

          Section 2.1  ORGANIZATION AND QUALIFICATION.  Section 2.1 of the 
Disclosure Schedule contains a complete list of each of the subsidiaries of 
the Company and jurisdictions in which they and the Company are qualified (to 
the extent such concepts are applicable in such jurisdictions) to conduct 
their business.  Each of the Company and its subsidiaries is a corporation 
duly organized, validly existing and in good standing under the laws of the 
jurisdiction of its incorporation or organization (to the extent such 
concepts are applicable in such jurisdictions), has all requisite corporate 
power and corporate authority to own, lease and operate its properties and to 
carry on its business as now being conducted, and is duly qualified and in 
good standing to do business in each jurisdiction in which such concepts are 
applicable and the nature of the business conducted by it or the ownership, 
lease or operation of its proper-


                                      11

<PAGE>

ties makes such qualification necessary, other than where the failure to be 
so duly qualified and in good standing have not had, prior to the Closing, a 
Material Adverse Effect. (For purposes of this Agreement, "Material Adverse 
Effect" means any condition, event, circumstance, change or effect that, 
individually or in the aggregate, would result in a material adverse effect 
on the business, assets or results of operations of the Company and its 
subsidiaries, taken as a whole.  A "subsidiary" of any entity means any 
corporation, partnership, joint venture or other business entity of which the 
specified entity, directly or indirectly, beneficially owns, 50% or more of 
the equity interests, or holds the voting control of 50% or more of the 
equity interests).  Seller has heretofore delivered to Buyer a true and 
correct copy of the constituent documents of the Company and each subsidiary 
of the Company as in effect on the date hereof.

          Section 2.2  AUTHORITY RELATIVE TO THIS AGREEMENT.  Seller has full 
corporate power and authority to execute and deliver this Agreement and to 
consummate the 


                                      12

<PAGE>

transactions contemplated hereby.  The execution of this Agreement and the 
consummation of the transactions contemplated hereby have been duly and 
validly authorized by Seller and no other corporate proceedings on the part 
of Seller (or any other person) are necessary to authorize the execution of 
this Agreement by Seller or the consummation by Seller of the transactions 
contemplated hereby.  This Agreement has been duly and validly executed by 
Seller and (assuming the valid execution of this Agreement by Buyer) 
constitutes a valid and binding agreement of Seller, enforceable against 
Seller in accordance with its terms, except (a) that such enforcement may be 
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, 
moratorium and similar laws now or hereafter in effect relating to or 
affecting creditors' rights generally and (b) the remedy of specific 
performance and injunctive and other forms of equitable relief may be subject 
to equitable defenses and to the discretion of the court before which any 
proceeding therefor may be 


                                      13

<PAGE>

brought. 

          Section 2.3  CAPITALIZATION; TITLE. (a) The authorized capital 
stock of the Company consists of 1,000 shares of Common Stock all of which 
are issued and outstanding.  Each of the Shares has been duly authorized and 
validly issued, and is fully paid and non-assessable, and all of the Shares 
are owned by Seller, free and clear of any and all liens, encumbrances, 
security interests, mortgages, pledges, claims, options or restrictions of 
any kind whatsoever ("Liens").  Except as expressly contemplated by this 
Agreement and except for the obligations of the Company pursuant to (i) the 
Amended and Restated Credit Agreement, dated as of August 3, 1995, among 
Seller, certain subsidiaries of Seller named therein, the banks named 
therein, as Lenders, and Credit Suisse, as Agent (the "Seller Credit 
Agreement") and (ii) the Note Purchase Agreement, dated August 3, 1995, 
relating to the 7.26% Senior Notes due 2007, and the Note Purchase Agreement, 
dated May 1, 1996, relating to the 7.10% Senior Notes, Series A, due 2006 and 
7.25% Senior 


                                      14

<PAGE>

Notes, Series B, due 2008 (collectively, the "Private Placement Notes"), 
which obligations will terminate on or prior to the Closing Date without any 
continuing liability or obligation to the Company or any of its subsidiaries 
as a result thereof, there is no subscription, option, warrant, call, right, 
contract, agreement, commitment, understanding or arrangement of any kind, 
direct or indirect, relating to (x) the issuance, purchase, acquisition, 
sale, pledge, delivery or transfer of any shares of capital stock of the 
Company (including the Shares), including any right of direct or indirect 
conversion or exchange under any security or other instrument, or (y) the 
voting or control of any such capital stock, security or other instrument 
(including the Shares).  

          (b) Upon consummation of the transactions contemplated by this 
Agreement, Buyer will acquire good and marketable title to the Shares, free 
and clear of all Liens.  

          (c) All of the outstanding shares of capital stock, or other equity 
interests, of each of the Com-


                                      15

<PAGE>

pany's subsidiaries have been duly authorized and validly issued, are fully 
paid and non-assessable and are owned by either the Company or another of its 
subsidiaries (except for one share of Series A stock of Coleman Manufacturing 
de Mexico, S.A. de C.V., of which an employee of the Seller is the record 
owner as nominee of the Company's subsidiary Jasan Products Ltd. (the 
"Nominee Share")), free and clear of all Liens.  Except as expressly 
contemplated by this Agreement and except for the obligations of the Company 
with respect to its subsidiaries pursuant to (i) the Seller Credit Agreement 
and (ii) the Private Placement Notes, which obligations will terminate on or 
prior to the Closing Date without any continuing liability or obligation to 
the Company or any of its subsidiaries as a result thereof, there is no 
subscription, option, warrant, call, right, contract, agreement, commitment, 
understanding or arrangement of any kind, direct or indirect, relating to (x) 
the issuance, purchase, acquisition, sale, pledge, delivery or transfer of 
any shares of capital stock, or other equity


                                      16

<PAGE>

interests, of any of the Company's subsidiaries, including any right of 
direct or indirect conversion or exchange under any security or other 
instrument, or (y) the voting or control of any such capital stock, security 
or other instrument.  

          Section 2.4  CONSENTS AND APPROVALS; NO VIOLATION.  Neither the 
execution and delivery of this Agreement nor the consummation of the 
transactions contemplated hereby will (i) require Seller to file or register 
with, notify, or obtain any permit, authorization, consent, or approval of or 
from, any Governmental Entity (as defined below), with the exception of 
filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 
as amended, and the rules and regulations promulgated thereunder (together, 
the "HSR Act") and filings with the Mexican Comision Federal de Competencia 
(if any), (ii) conflict with or breach any provision of the certificate of 
incorporation or by-laws (or other similar charter documents) of Seller or 
any of its subsidiaries, including the Company and its subsidiaries, (iii) 
violate or 


                                      17

<PAGE>

breach any provision of, or constitute a default (or an event which, with 
notice or lapse of time or both, would constitute a default) under, or result 
in the creation of a Lien on the Shares or any asset of the Company or any of 
its subsidiaries pursuant to, any agreement or other obligation to which 
Seller or any of its subsidiaries, including the Company and its 
subsidiaries, is a party, or by which any of them may be bound, except for 
those listed in Section 2.4 of the Disclosure Schedule as to which Seller 
will use its best efforts to obtain requisite waivers or consents prior to 
the Closing, or (iv) violate any material order, writ, injunction, decree, 
judgment, statute, law or ruling of any Governmental Entity applicable to 
Seller or any of its subsidiaries, including the Company and its 
subsidiaries, excluding from the foregoing clauses (i) and (iii) such 
requirements, defaults, rights or violations which would not have a Material 
Adverse Effect or would not have a material adverse effect on the ability of 
Seller to consummate the transactions contemplated by this Agreement, or 


                                      18

<PAGE>

which become applicable as a result of any acts or omissions by Buyer (other 
than the execution and performance of this Agreement by Buyer) or the status 
of Buyer.  For purposes of this Agreement, "Governmental Entity" means any 
nation or government, any state or other political subdivision thereof, any 
entity, authority or body exercising executive, legislative, judicial, 
regulatory or administrative functions of or pertaining to government, 
including any governmental authority, agency, department, board, commission 
or instrumentality of the United States, any state of the United States or 
any political subdivision thereof, or any nation, or any court, or legally 
constituted tribunal or arbitrator.

          Section 2.5  FINANCIAL STATEMENTS. (a) Seller has previously 
delivered to Buyer the audited consolidated statement of Company Business Net 
Worth and consolidated statement of operations as of and for the year ended 
December 31, 1996 (collectively, the "December 31, 1996 Financial 
Statements") which were prepared in accordance with Adjusted GAAP and are 
included in Section 


                                      19

<PAGE>

2.5(a) of the Disclosure Schedule.  Seller has also delivered to Buyer an 
unaudited consolidated statement of Company Business Net Worth as of December 
31, 1997 with the review report of Ernst & Young LLP (the "December 31, 1997 
Statement of Company Business Net Worth") and an unaudited consolidated 
statement of operations for the year ended December 31, 1997 for the Company 
and its subsidiaries with the review report of Ernst & Young LLP (together 
with the December 31, 1997 Statement of Company Business Net Worth, the 
"December 31, 1997 Financial Statements"), which were prepared in accordance 
with Adjusted GAAP, applied on a basis consistent with the December 31, 1996 
Financial Statements (except for the accounting adjustments set forth in 
Section 2.5(a) of the Disclosure Schedule) and are included in Section 2.5(a) 
of the Disclosure Schedule. The December 31, 1996 Financial Statements and 
the December 31, 1997 Financial Statements fairly present, in all material 
respects, the Company Business Net Worth and the results of operations of the 
Company and its subsidiaries as of the respective 


                                      20

<PAGE>

dates and for the respective periods then ended on the basis described in the 
notes thereto.

          (b) The Closing Statement of Company Business Net Worth when 
delivered will have been prepared in accordance with Adjusted GAAP applied on 
a basis consistent with the December 31, 1997 Statement of Company Business 
Net Worth as adjusted by the accounting adjustments in Section 1.4(a) of the 
Disclosure Schedule and will fairly present, in all material respects, the 
Company Business Net Worth as of the Closing Date on the basis described in 
the notes thereto.

          Section 2.6  ASSETS NECESSARY TO BUSINESS.  Except for the 
"Coleman" trademark and tradename, the Company and its subsidiaries 
collectively have good and marketable title to or valid leasehold interest in 
all of the assets, properties and rights which are necessary to carry on the 
business of the Company and its subsidiaries as presently conducted.  From 
January 1, 1997 until the date hereof, neither the Company nor any of its 
subsidiaries have disposed of any assets, properties or rights 


                                      21

<PAGE>

of the business of the Company and its subsidiaries necessary for the conduct 
of the Company's business as conducted during such period, except in the 
ordinary course of business, including but not limited to dispositions and/or 
replacements of obsolete assets.

          Section 2.7  TITLE TO PROPERTIES; ENCUMBRANCES.  Section 2.7 of the 
Disclosure Schedule sets forth a complete list of all real property owned, 
leased or otherwise occupied by the Company or any of its subsidiaries.  
Except as otherwise contemplated by this Agreement (and, since December 31, 
1997, other than any of such properties or assets sold or otherwise disposed 
of in the ordinary course of business or with respect to which any lease 
relating thereto has terminated) at the Closing, the Company and its 
subsidiaries will have good and marketable title to, or a valid leasehold 
interest in, all of the properties and assets (real, personal and mixed, 
tangible and intangible, wherever located) reflected in the December 31, 1997 
Statement of Company Business Net Worth or acquired after the date thereof.


                                      22

<PAGE>

  All such properties and assets are owned or held under lease, in each case, 
free and clear of all Liens, except for Permitted Liens and, to the actual 
knowledge of the Senior Vice President of Operation of Seller, there are no 
material defects in the buildings, improvements and structures located on any 
of the owned property of the Company or its subsidiaries which would 
substantially impair the conduct of the business of the Company and its 
subsidiaries immediately following the Closing as compared with the conduct 
of the business of the Company and its subsidiaries immediately prior to the 
Closing.  For purposes of this Agreement, "Permitted Liens" means (i) 
mechanics', carriers', workmen's, repairmen's or other similar Liens arising 
or incurred in the ordinary course of business with respect to liabilities 
that are not yet due or delinquent, (ii) Liens for Taxes (as defined below), 
assessments and other governmental charges not yet due and payable or, if due 
and payable, for which adequate reserves have been made, and (iii) Liens that 
do not, individually or in the aggregate, materially impair 

                                       23
<PAGE>

the use, or materially detract from the value, of the property to which they 
relate.  Permitted Liens have been accrued to the extent required by GAAP.  

          Section 2.8  CONTRACTS AND COMMITMENTS.  (a) Section 2.8 of the 
Disclosure Schedule sets forth, with respect to the Company and its 
subsidiaries, a complete and accurate list of: (i) all contracts or 
agreements, whether oral or written (including, without limitation, 
mortgages, leases, indentures and loan agreements), except (x) such contracts 
and agreements which are required to be set forth in the Disclosure Schedule 
pursuant to clauses (ii) through (xiii) of this Section 2.8 or are listed on 
other Disclosure Schedules required by this Agreement, (y) contracts and 
agreements which involve, or which may reasonably be expected to involve, the 
payment by or to any one or more of the Company and its subsidiaries of less 
than $50,000 with respect to any one contract or agreement or $75,000 with 
respect to any related group of contracts or agreements and (z) contracts or 
agreements in the nature of purchase and sales 

                                      24
<PAGE>

orders entered into by the Company or any subsidiary in the ordinary course 
of business and containing normal terms and conditions, (ii) all sales 
agency, distribution or dealership contracts that are not cancellable on 
notice of not less than 90 days and without liability, penalty or premium for 
such cancellation under such contract; (iii) all employment and consulting 
agreements or other agreements with employees that contain any severance or 
termination pay liabilities or obligations that are not cancellable on notice 
of not less than 90 days without liability, penalty or premium for such 
cancellation under such contract; (iv) all collective bargaining or union 
contracts or agreements; (v) all non-competition or other agreements between 
the Company or any of its subsidiaries and any third party preventing or 
restricting the Company or any of its subsidiaries from carrying on their 
respective businesses anywhere in the world; (vi) all debt obligations, 
mortgages, notes or indentures for borrowed money, including guaranties of or 
agreements to acquire any such debt obligation of others 

                                       25
<PAGE>

(other than obligations to be extinguished at or before the Closing) 
including the amount of any credit line or commitment and the names of all 
persons authorized to borrow or to discount debt obligations or otherwise act 
on behalf of the Company or any subsidiary in any dealings with any bank or 
financial institution; (vii) the name of each bank or other financial 
institution in which the Company or any subsidiary has an account or safe 
deposit box, the numbers of such accounts or boxes and the names of all 
persons authorized to draw thereof or have access thereto; (viii) the names 
of the ten largest suppliers to, and the ten largest customers of, the 
Company and its subsidiaries as a whole for the year ended December 31, 1997 
together with the approximate dollar volume by supplier and customer and a 
general description of the goods or services provided by each supplier; (ix) 
all loans to, or guarantees of loans to, employees of the Company or any 
subsidiary made by the Company or any subsidiary; (x) all outstanding 
commitments by the Company or any subsidiary to make a capital 

                                      26
<PAGE>

expenditure, capital addition or capital improvement involving an amount in 
excess of $50,000, together with any Capital Expenditure Report by the 
Company or any subsidiary related to making or committing to make any capital 
expenditure, capital addition or capital improvement subsequent to the date 
hereof involving an amount in excess of $50,000; (xi) all contracts or 
agreements under which the Company or any subsidiary has granted, or is 
obligated to grant, rights to others to use, reproduce, market or exploit any 
United States or foreign patents, trademarks, trade names, service marks, 
service names, technology, copyrights, logos, brand names, designs, 
industrial designs, inventions, trade secrets, secret processes or know-how 
involving an amount in excess of $50,000; (xii) the names and current annual 
compensation rates of all employees of the Company or any subsidiary whose 
current annual rate of compensation (including bonuses) is $75,000 or more; 
and (xiii) the names of all retired employees of the Company or any 
subsidiary who are receiving or are entitled to receive any pension or 

                                       27
<PAGE>

other benefits under any unfunded plan not qualified under Section 401 of the 
Internal Revenue Code of 1954, as amended, their ages and their current 
annual unfunded pension rates.

          (b)  True and complete copies of all documents referred to in 
Section 2.8 of the Disclosure Schedule have been heretofore made available to 
the Buyer.  Neither the Company nor any of its subsidiaries is in default 
under any document listed or required to be listed on Section 2.8 of the 
Disclosure Schedule and, to the knowledge of Seller, after due inquiry, no 
other person is in breach thereof.

          (c)  All such contracts have been entered into lawfully and 
individually and collectively do not violate the provisions of any federal, 
state or local, statute, rule, regulation or ordinance, including without 
limitation, with respect to pricing, except for such violations which, 
individually or collectively, would not have a Material Adverse Effect.

          Section 2.9  ABSENCE OF CERTAIN CHANGES OR 

                                      28
<PAGE>

EVENTS.  Except as set forth in Section 2.9 of the Disclosure Schedule, since 
December 31, 1997 neither the Company nor any of its subsidiaries (a) has 
taken any of the actions set forth in Sections 4.1(a) through (j) hereof or 
entered into any transaction, or conducted its business or operations other 
than in the ordinary and usual course of business or (b) has suffered a 
material adverse change in its business or financial condition.

           Section 2.10  ABSENCE OF LITIGATION.  Except as set forth in 
Section 2.10 of the Disclosure Schedule, there is no action, suit or 
proceeding of any kind, at law or in equity (including actions or proceedings 
seeking injunctive relief), by or before any Governmental Entity pending or, 
to the knowledge of Seller after due inquiry of appropriate Seller or Company 
personnel, threatened against the Company or any of its subsidiaries.  None 
of such actions, suits or proceedings, if adversely determined, would have a 
Material Adverse Effect or would have a material adverse effect on Seller's 
ability to consummate the transactions contem-

                                      29
<PAGE>

plated hereby.

          Section 2.11  INTELLECTUAL PROPERTY.  For purposes hereof, 
"Intellectual Property" means (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 names and corporate names, including all goodwill associated 
therewith, and all applications, registrations and renewals in connection 
therewith, (c) all copyrights and all applications, registrations and 
renewals in connection therewith, (d) 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 

                                      30
<PAGE>

software (including data and related document) and (g) all other proprietary 
rights.  Section 2.11 of the Disclosure Schedule sets forth all patents, 
registered trademarks and registered copyrights (and applications for any of 
the foregoing) and material common law trademarks owned by the Company.  To 
the knowledge of Seller, after due inquiry of appropriate Seller or Company 
personnel, in addition to the items set forth in Section 2.11 of the 
Disclosure Schedule, the Company and its subsidiaries own, free and clear of 
all Liens, all right, title and interest in and to the Intellectual Property 
necessary to the conduct of the business of the Company and its subsidiaries 
as now being conducted, other than the "Coleman" trademark and tradename and 
other than such Intellectual Property which the Company has the right to use 
pursuant to a license, sublicense, agreement or permission, set forth, where 
applicable, in Section 2.8 of the Disclosure Schedule.  With respect to any 
such license, sublicense, agreement or permission, to the knowledge of 
Seller, (i) the underlying item of Intellec-

                                      31
<PAGE>

tual Property is not subject to any outstanding injunction, judgment, order, 
decree, ruling or charge, and (ii) no action, suit, proceeding, hearing, 
investigation, charge, complaint, claim or demand is pending or is threatened 
which challenges the legality, validity or enforceability of the underlying 
item of Intellectual Property.  Except for the matters set forth in Section 
2.11 of the Disclosure Schedule, there is no claim, action, proceeding, suit, 
complaint, or, to the knowledge of Seller, investigation pending or 
threatened that (i) the operations, products, Intellectual Property or 
manufacturing processes of the Company or any of its subsidiaries infringe 
upon or conflict with the intellectual property rights of any other person, 
or (ii) challenges the legality, validity, enforceability, use or ownership 
of the Intellectual Property owned by the Company.  To the knowledge of 
Seller, no third party has interfered with, infringed upon or misappropriated 
any Intellectual Property rights of the Company or its subsidiaries.

          Section 2.12  ERISA COMPLIANCE. (a) Section 

                                      32
<PAGE>

2.12 of the Disclosure Schedule sets forth a true and complete list of all 
employee benefit and compensation plans, programs or agreements maintained 
for the benefit of the current or former employees or directors of the 
Company or any of its subsidiaries, which employee benefit and compensation 
plans, programs or agreements are sponsored, maintained or contributed to by 
the Company or any affiliate of the Company, or with respect to which the 
Company or any affiliate of the Company has any liability, including any such 
plan that is an "employee benefit plan" as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974 ("ERISA") (collectively, the 
"Company Employee Benefit Plans").  Except as set forth in Section 2.12 of 
the Disclosure Schedule, all Company Employee Benefit Plans have been 
maintained in compliance with all applicable requirements of law, including 
but not limited to ERISA and the Internal Revenue Code of 1986, as amended 
(the "Code"), except to the extent where the failure to be so maintained 
would not have, individually or in the aggregate, a Material 

                                      33
<PAGE>

Adverse Effect.  

          (b)  None of the Company Employee Benefit Plans is a "defined 
benefit plan" (within the meaning of Section 3(35) of ERISA) or a 
"multiemployer plan" (within the meaning of Section 4001(a)(3) of ERISA), and 
neither the Company nor any of its subsidiaries has maintained, sponsored or 
contributed to any such plan within the previous six (6) years.

          (c)  Each Company Employee Benefit Plan that is intended to qualify 
under Section 401 of the Code, and each trust maintained pursuant thereto, 
has been determined to be exempt from federal income taxation under Section 
501 of the Code by the Internal Revenue Service, and, to the Seller's 
knowledge, nothing has occurred that would cause the loss of such 
qualification or exemption.  With respect to each Company Employee Benefit 
Plan, (i) no "prohibited transaction" (within the meaning of Section 406 of 
ERISA and Section 4975 of the Code) has occurred, and (ii) no audit or 
investigation has been commenced by the Internal Revenue Service or the 
Depart-

                                      34
<PAGE>

ment of Labor, and no such audit or investigation is pending or, to the 
Seller's knowledge, threatened.  No material liability under Title IV of 
ERISA has been or is reasonably expected to be incurred by the Company or any 
entity which is considered one employer with the Company under Section 
4001(a)(15) of ERISA or Section 414 of the Code (each, a "Company ERISA 
Affiliate").

          (d)  The Company does not maintain or contribute to any "employee 
benefit plan" as defined in Section 3(3) of ERISA which provides or has any 
liability to provide life insurance or medical or other employee welfare 
benefits to any employee or former employee upon retirement or termination of 
employment.

          (e) Except as set forth in Section 2.12 of the Disclosure Schedule, 
the execution of, and performance of the transactions contemplated by, this 
Agreement will not (either alone or in combination with another event) 
constitute an event under any Company Employee Benefit Plan that will or may 
result in any payment (whether of severance pay or otherwise), acceleration, 
forgiveness of 

                                      35
<PAGE>

indebtedness, vesting, distribution, increase in benefits or compensation or 
obligation to fund benefits or compensation with respect to any current or 
former employee or director.

          Section 2.13  TAXES.  Except as set forth in Section 2.13 of the 
Disclosure Schedule:

          (a) All Tax Returns required to be filed by or with respect to or 
which includes or included the Company and each of its subsidiaries have been 
filed in accordance with all applicable laws with the appropriate Taxing 
Authorities on or before the due date thereof (including extensions), other 
than those Tax Returns which the failure to file would not have a Material 
Adverse Effect.  All material Taxes of the Company and each of its 
subsidiaries due and payable by them (whether or not shown to be due on such 
Tax Returns) have been paid in full, other than Taxes being contested in good 
faith in appropriate proceedings and for which adequate provision has been 
made therefor.

          (b) There are no Liens for Taxes upon the 

                                      36
<PAGE>

assets of the Company or any of its subsidiaries except for statutory Liens 
for Taxes not yet due and payable.

          (c) There are no audits or proceedings pending, proposed or in 
progress with respect to liabilities for Taxes of the Company or any of its 
subsidiaries, and neither the Company nor any of its affiliates has received 
any written notice of a pending, proposed or asserted deficiency or 
assessment from any Taxing Authority with respect to liabilities for Taxes of 
the Company or any of its subsidiaries which has not been paid or finally 
settled or is not being contested in good faith in appropriate proceedings 
and for which adequate reserves have been made.  

          (d) Except with respect to the person identified on Section 4.5(ii) 
of the Disclosure Schedule, no payment (whether in cash, property or the 
vesting of property) made by the Company or the Buyer to an Affected 
Employee, in connection with the execution of, and performance of the 
transactions contemplated in, this Agreement (whether alone or upon the 
occurrence of any other 

                                      37
<PAGE>

event) could be characterized as an "excess parachute payment" within the 
meaning of Section 280G of the Code.

          (e) No extension of time within which to file any Tax Returns 
required to be filed by the Company or any of its subsidiaries (which Tax 
Returns shall not under any circumstances include Tax Returns that relate to 
an affiliated, consolidated, combined or unitary group which includes a 
company other than the Company and any of its subsidiaries) has been 
requested which Tax Return has not since been filed.

          (f) There are no waivers or extensions of any applicable statute of 
limitations for the assessment or collection of Taxes with respect to any Tax 
Returns required to be filed by the Company or any of its subsidiaries which 
waivers or extensions are pending or remain in effect.

          (g) The Company and its subsidiaries have withheld and paid all 
Taxes required to have been withheld and paid in connection with amounts paid 
or owing to any employee, independent contractor, creditor, stock-

                                      38
<PAGE>

holder or other third party.

          (h) For purposes of this Agreement:  (i) "Taxes" means all federal, 
state, local and foreign net income, gross income, sales, use, franchise, 
profits, service, withholding, payroll, employment, excise, gross receipts, 
capital stock, occupation, net worth, transfer, stamp, estimated, ad valorem, 
gains, property taxes, asset tax, value added tax, and other similar taxes, 
charges, duties, tariffs, levies, fees, or assessments together with any 
interest, penalties, and additions to tax or additional amounts thereon, 
imposed by any Taxing Authority, (ii) "Taxing Authority" means any federal, 
state, local or foreign governmental authority responsible for the imposition 
of any Taxes; and (iii) "Tax Returns" means any return, report, declaration, 
estimate or other information filed or required to be supplied to a Taxing 
Authority in connection with Taxes.

          Section 2.14  ENVIRONMENTAL MATTERS. (a) The Company and its 
subsidiaries hold, and are in material compliance with, all permits, licenses 
and other govern-

                                      39
<PAGE>

ment authorizations ("Environmental Permits") required for the Company and 
its subsidiaries to conduct their respective businesses under Environmental 
Laws.  (For purposes of this Agreement, "Environmental Laws" means all 
applicable foreign, federal, state and local, laws, statutes, ordinances, 
rules, regulations, orders, judgments and decrees relating to pollution or 
the protection of the environment.) The Company and its subsidiaries are in 
material compliance with all such Environmental Laws and have no liability 
under any indemnity agreement or other contractual obligations relating to 
pollution or the protection of the environment or human health or safety.

          (b) Except as set forth in Section 2.14 of the Disclosure Schedule, 
the Company has not received any written or, to the Company's knowledge, oral 
request for information, or been notified or the subject of any claim that it 
is or may be a potentially responsible party or otherwise is or may be 
responsible for the investigation or cleanup of hazardous substances, under 
the federal 

                                      40
<PAGE>

Comprehensive Environmental Response Compensation and Liability Act of 1980, 
as amended, or any other Environmental Law with respect to any on-site or 
off-site location, whether or not currently or previously owned, leased, used 
or occupied by the Company.

          (c) The Company is not subject to, nor has it received any notice 
that it may be subject to, any judgment, decree, order or other agreement 
relating to compliance with, or the cleanup of regulated substances under, 
any applicable Environmental Laws.

          (d) There has been no release or disposal as a result of the 
Company's or any of its subsidiaries' operations or, to the Company's 
knowledge, operations by others, at any time of any regulated substances at, 
on, under, from or affecting any real property currently or formerly owned, 
leased or operated by the Company or any of its subsidiaries or any of their 
predecessors-in-interest (other than pursuant to and in accordance with 
Environmental Permits held by the Company, its subsidiaries or any of their 
predecessors, or that will not give 

                                      41
<PAGE>

rise to liability under Environmental Laws).

          (e) To the knowledge of Seller, Seller has made available to Buyer 
true and complete copies of all environmental reports, studies, audits and 
assessments which are in the possession or control of the Company relating to 
any real property or facilities currently or formerly owned, leased or 
operated by the Company or any of its subsidiaries or any of their 
predecessors-in-interest.

          Section 2.15  NO UNDISCLOSED LIABILITIES.  Except as and to the 
extent set forth in the December 31, 1997 Statement of Company Business Net 
Worth, neither the Company nor any of its subsidiaries had, at December 31, 
1997, any undisclosed liabilities except for those liabilities which, 
separately or in the aggregate, are not expected to have a Material Adverse 
Effect.  Except as and to the extent set forth in Section 2.15 of the 
Disclosure Schedule, neither the Company nor any of its subsidiaries has 
incurred any liabilities (absolute, accrued, contingent or otherwise) which 
would be required 

                                      42
<PAGE>

by Adjusted GAAP to be included in a consolidated statement of the Company 
Business Net Worth dated as of the date hereof, except liabilities incurred 
since December 31, 1997 in the ordinary course of business and liabilities 
incurred in connection with this Agreement.

          To the knowledge of Seller, after due inquiry, there is no latent 
or overt design, manufacturing or other defect in any products of the Company 
or its subsidiaries which could reasonably be expected to result in a series 
of liability claims which would have a Material Adverse Effect.

          Section 2.16  TRANSACTIONS WITH AFFILIATES.  Except as set forth in 
Section 2.16 of the Disclosure Schedule, none of the Company or any of its 
subsidiaries has any outstanding contract, agreement or other arrangement 
with any member of the Seller Group (as defined below) which will continue in 
effect subsequent to the Closing.  "Seller Group" means Seller and its 
affiliates, other than the Company and its subsidiaries.

                                      43
<PAGE>

          Section 2.17  BROKERS.  No broker, finder or investment banker, 
including any director, officer, employee, affiliate or associate of Seller, 
is entitled to any brokerage, finder's or other fee or commission in 
connection with the transactions contemplated by this Agreement by reason of 
any action taken by Seller, except for BancAmerica ROBERTSON STEPHENS, the 
fees and expenses of which shall be paid by Seller.

          Section 2.18  INSURANCE.  Section 2.18 of the Disclosure Schedule 
contains an accurate and complete list as of the date hereof of all material 
policies, currently in force, of fire, liability, workmen's compensation, 
public and product liability, title and other forms of insurance owned, held 
by or applicable to the Company or any of its subsidiaries or their 
respective assets or businesses.  All such policies are in full force and 
effect.  Seller has heretofore delivered to Buyer an accurate summary 
description of all such policies.

          Section 2.19  LABOR DIFFICULTIES.  Except as 

                                      44
<PAGE>

set forth in Section 2.10 or Section 2.19 of the Disclosure Schedule, (a) 
there is no unfair labor practice complaint or charge of discrimination or 
other employee claim against the Company or any of its subsidiaries pending 
or, to the knowledge of Seller after due inquiry of appropriate Seller or 
Company personnel, threatened, (b) there is no labor strike, dispute, 
slowdown, stoppage or other labor difficulty actually pending or, to the 
knowledge of the Seller after due inquiry of appropriate Seller or Company 
personnel, threatened against or affecting the Company or any of its 
subsidiaries and (c) there are no pending union negotiations relating to 
employees of the Company or any of its subsidiaries.

          Section 2.20  COMPLIANCE WITH LAWS.  Except as set forth in Section 
2.20 of the Disclosure Schedule or as provided for in Sections 2.10, 2.12, 
2.13 and 2.14 hereof, the Company and its subsidiaries have operated their 
respective  businesses in compliance with all laws, ordinances, regulations 
and orders of all Governmental Entities except for violations of such laws, 
ordinances, 

                                      45
<PAGE>

regulations and orders which do not and are not expected to have a Material 
Adverse Effect.  The Company and its subsidiaries have all permits, 
certificates, licenses, approvals and other authorizations required in 
connection with the operation of their respective businesses, except those 
the absence of which does not and are not expected to have a Material Adverse 
Effect.  No notice has been received by, and, to the knowledge of the Seller 
after due inquiry of appropriate Seller or Company personnel, no 
investigation or review is pending or threatened by, any Governmental Entity 
with respect to (i) any alleged violation by the Company of any law, 
ordinance, regulation or order of any Governmental Entity which may have a 
Material Adverse Effect or (ii) any alleged failure to have all permits, 
certificates, licenses, approvals and other authorizations required in 
connection with the operation of the respective businesses of the Company and 
its subsidiaries which may have a Material Adverse Effect.

          Section 2.21  CUSTOMER ACCOUNTS RECEIVABLE; 

                                      46
<PAGE>

INVENTORIES.  (a) All customer accounts receivable of the Company and its 
subsidiaries, whether reflected on the December 31, 1997 Financial Statements 
or subsequently created, have arisen from bona fide transactions in the 
ordinary course of business.  Except as set forth in Section 2.21(a) of the 
Disclosure Schedule, to the knowledge of the Seller, after due inquiry, all 
such customer accounts receivable are, in the aggregate, good and collectible 
at the aggregate recorded amounts thereof, net of any applicable reserves for 
doubtful accounts returns or credits as the ordinary course of business 
reflected on the December 31, 1997 Financial Statements.

          (b)  Except as set forth in Section 2.21(b) of the Disclosure 
Schedule, to the knowledge of Seller, after due inquiry, the cost of 
inventories, net of any revenues, of the Company and its subsidiaries 
reflected on the December 31, 1997 Financial Statements or subsequently 
acquired prior to the Closing Date, represent inventory which are generally 
of a quality and quantity usable and salable in all material respects in 
accordance 

                                      47
<PAGE>

with past practice of the Company (except as otherwise noted in the December 
31, 1997 Financial Statements or the Closing Statement of Company Business 
Net Worth).  No representation is made under this Section with respect to the 
inventory relating to the DC carbon monoxide detectors existing on December 
31, 1997, the date hereof or the Closing Statement of Company Business Net 
Worth.  

          Section 2.22  INFORMATION.  To the knowledge of the Seller, after 
due inquiry and subject to the limitations contained in Section 3.6, none of 
the information provided by Seller to Buyer in connection with transactions 
contemplated by this Agreement contains any material misstatement of fact or 
omits to state any material fact necessary to be stated in order to make the 
statements therein not misleading.

                                       
                                  ARTICLE III

             REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTOR

          Buyer and Guarantor hereby jointly and severally represent and 
warrant to Seller as to the matters set 

                                      48
<PAGE>

forth in Sections 3.1, 3.2 and 3.3 hereof, and Buyer hereby represents and 
warrants to Seller as to the matters set forth in Sections 3.4, 3.5, 3.6, 3.7 
and 3.8 hereof, as follows:

          Section 3.1  ORGANIZATION AND QUALIFICATION. Each of Buyer and 
Guarantor is a corporation duly organized, validly existing and in good 
standing under the laws of the jurisdiction of its incorporation or 
organization.

          Section 3.2  AUTHORITY RELATIVE TO THIS AGREEMENT.  Each of Buyer 
and Guarantor has full corporate power and authority to execute and deliver 
this Agreement and to consummate the transactions contemplated hereby.  The 
execution of this Agreement and the consummation of the transactions 
contemplated hereby has been duly and validly authorized by each of Buyer and 
Guarantor and no other corporate proceedings on the part of each of Buyer and 
Guarantor (or any other person) are necessary to authorize the execution of 
this Agreement by each of Buyer 

                                      49
<PAGE>

and Guarantor or the consummation by each of Buyer and Guarantor of the 
transactions contemplated hereby.  This Agreement has been duly and validly 
executed by each of Buyer and Guarantor, and (assuming the valid execution of 
the Agreement by Seller) constitutes a valid and binding agreement of each of 
Buyer and Guarantor, enforceable against each of Buyer and Guarantor in 
accordance with its terms, except (a) that such enforcement may be limited by 
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and 
similar laws now or hereafter in effect relating to or affecting creditors' 
rights generally and (b) the remedy of specific performance and injunctive 
and other forms of equitable relief may be subject to equitable defenses and 
to the discretion of the court before which any proceeding therefor may be 
brought.

          Section 3.3  CONSENTS AND APPROVALS; NO VIOLATION.  Neither the 
execution and delivery of this Agreement nor the consummation of the 
transactions contemplated hereby will (i) require Buyer or Guarantor to file 
or register with, notify, or obtain any permit, authoriza-

                                      50
<PAGE>

tion, consent, or approval of or from, any Governmental Entity, with the 
exception of filings pursuant to the HSR Act and filings with the Mexican 
Comision Federal de Competencia (if any), (ii) conflict with or breach any 
provision of the Certificate of Incorporation, By-Laws or other 
organizational documents of Buyer or Guarantor, (iii) violate or breach any 
provision of, or constitute a default (or an event which, with notice or 
lapse of time or both, would constitute a default) under, any agreement or 
other obligation to which Buyer or Guarantor is a party, or by which it may 
be bound, or (iv) violate any order, writ, injunction, decree, judgment, 
statute, law or ruling of any Governmental Entity applicable to Buyer or 
Guarantor, excluding from the foregoing clauses (i), (iii) and (iv) such 
requirements, defaults, rights or violations which would not, individually or 
in the aggregate, have a material adverse effect on the ability of Buyer or 
Guarantor to consummate the transactions contemplated by this Agreement, or 
which become applicable as a result of any acts or omissions by, or the 
status of, 

                                      51
<PAGE>

Seller.

          Section 3.4  FINANCING.  Buyer has on the date of execution of this 
Agreement and will have at the Closing sufficient immediately available 
funds, in cash or pursuant to credit agreements in effect on the date of this 
Agreement, to pay the Purchase Price and any other amounts payable pursuant 
to this Agreement and to effect the transactions contemplated hereby. 

          Section 3.5  BROKERS.  No broker, finder or investment banker 
("Finder"), including any director, officer, employee, affiliate or associate 
of Buyer, is entitled to any brokerage, finder's or other fee or commission 
in connection with the transactions contemplated by this Agreement by reason 
of any action taken by Buyer. Buyer has not dealt with any Finder except 
BancAmerica ROBERTSON STEPHENS, whose fees are payable by Seller.

          Section 3.6  NO REPRESENTATION REGARDING FUTURE PROSPECTS.  Buyer 
acknowledges and agrees that neither the representations and warranties of 
Seller contained in 

                                      52
<PAGE>

Article II hereof nor any other information contained in the documents to be 
delivered at the Closing, the Confidential Offering Memorandum relating to 
the Company and its subsidiaries prepared by BancAmerica ROBERTSON STEPHENS 
and previously distributed to Buyer (the "Confidential Memorandum") or 
otherwise provided to Buyer, shall be construed as a representation or 
warranty with respect to any projections, estimates or budgets heretofore 
delivered to or made available to Buyer regarding future revenues, future 
expenses or expenditures, future results of operations, future cash flows, 
future financial condition, the future business and operations of the Company 
and its subsidiaries, or future relationships with customers or suppliers, 
including any such information as may have been set forth in the Confidential 
Memorandum. 

          Section 3.7  INVESTMENT.  Buyer is acquiring the Shares for its own 
account, for investment, and without a view to the public distribution 
thereof and will not sell or transfer the Shares in violation of the 

                                      53
<PAGE>

Securities Act of 1933, as amended, or the rules and regulations promulgated 
thereunder.

          Section 3.8  YEAR 2000.  Buyer acknowledges that Seller's software, 
hardware and other information technologies, whether owned or licensed by 
Seller, are not Year 2000 Compliant.  For purposes of this Agreement, "Year 
2000 Compliant" means that any applicable hardware, software or other 
information technologies can properly process dates after the date December 
31, 1999.

                                   ARTICLE IV

                            COVENANTS OF THE PARTIES

          Section 4.1  CONDUCT OF THE BUSINESS.  Seller agrees that, during 
the period from the date of this Agreement to the Closing, except as (i) 
otherwise contemplated by this Agreement, (ii) set forth in Section 4.1 of 
the Disclosure Schedule or (iii) consented to by Buyer in writing, Seller 
shall cause the business operations of the Company and its subsidiaries to be 
conducted in the ordinary course.  Without limitation to the generality of 

                                      54
<PAGE>

the foregoing, Seller shall not permit the Company, and, as applicable, the 
Company shall not permit any of its subsidiaries, to:

          (a) (i) amend their respective certificates of incorporation or 
by-laws (or other charter documents), (ii) split, combine or reclassify any 
shares of their respective outstanding capital stock, or (iii) directly or 
indirectly redeem or otherwise acquire any shares of its capital stock or 
shares of the capital stock of any of their respective subsidiaries;

          (b) authorize for issuance, issue or sell or agree to issue or sell 
any shares of, or rights to acquire any shares of, their respective capital 
stock (whether through the issuance or granting of options, warrants, 
commitments, subscriptions, rights to purchase or otherwise);

          (c) (i) merge, combine or consolidate with another entity, (ii) 
acquire or purchase an equity interest in or a substantial portion of the 
assets of another corporation, partnership or other business organization 

                                      55
<PAGE>

or otherwise acquire any assets outside the ordinary course of business or 
otherwise enter into any contract, commitment or transaction outside the 
ordinary course of business, or (iii) sell, lease, license, waive, release, 
transfer, encumber (except for Liens which will be removed prior to or at the 
Closing) or otherwise dispose of any of their respective assets outside the 
ordinary course of business;

          (d) (i) incur, assume or prepay any indebtedness or any other 
liabilities other than, in each case, in the ordinary course of business or 
indebtedness or liabilities which can be prepaid or repaid at any time 
without penalty, (ii) assume, guarantee, endorse or otherwise become liable or 
responsible (whether directly, contingently or otherwise) for the obligations 
of any other person, in each case, other than in the ordinary course of 
business or other than those which will be removed at or prior to the 
Closing, or (iii) make any loans, advances or capital contributions to, or 
investments in, any other person (other than between the Compa-

                                      56
<PAGE>

ny and its subsidiaries);

          (e) modify or amend, or waive any benefit of, any non-competition 
agreement to which the Company or any of its subsidiaries is a party;

          (f) authorize or make capital expenditures in excess of $100,000 
individually, or in excess of $300,000 in the aggregate;

          (g) cancel or terminate any insurance policy naming the Company or 
any of its subsidiaries as a beneficiary or a loss payee other than in the 
ordinary course of business;

          (h) (i) adopt, enter into, terminate or amend in any material 
respect (except as may be required by applicable law) any plan for the 
current or future benefit or welfare of any officer, director or employee of 
the Company or any of its subsidiaries, (ii) enter into amend, waive, modify 
or renew any employment or consulting agreement, (iii) increase in any manner 
the compensation or fringe benefits of, or pay any bonus to, any officer, 
director or employee (except for normal increas-

                                      57
<PAGE>

es in salaries, compensation and bonuses and payment of bonuses, in each case 
in the ordinary course of business or as required by contract), or (iv) take 
any action to fund or in any other way secure, or to accelerate or otherwise 
remove restrictions with respect to, the payment of compensation or benefits 
under any employee plan, agreement, contract, arrangement or plan other than 
in the ordinary course of business; 

          (i) make any material change in its accounting or Tax policies or 
procedures, except as required by law or to comply with mandatory principles 
of accounting; or

          (j) enter into any contract, agreement, commitment or arrangement 
with respect to any of the foregoing.

          Section 4.2  HSR ACT COMPLIANCE AND OTHER GOVERNMENTAL FILINGS.  
Each party hereto agrees to use its best efforts to file as expeditiously as 
possible (i) a completed notification report under the HSR Act in connection 
with the transactions contemplated by this Agreement and (ii) filings with or 
required by the Mexi-

                                      58
<PAGE>

can Comision Federal de Competencia (if any), and upon the request of the 
Mexican Comision Federal de Competencia, the Federal Trade Commission or the 
Department of Justice, as the case may be, to supply such entity with any 
additional requested information as expeditiously as possible.  Each party 
shall promptly inform the other of any such request and shall cooperate with 
the other in responding to such request.

          Section 4.3  POST-CLOSING COLLECTIONS.  Seller and its affiliates 
shall promptly pay over to Buyer all amounts received by Seller or its 
affiliates on or after the Closing Date in respect of the accounts receivable 
or other assets of the Company and its subsidiaries, and Buyer shall promptly 
pay over to Seller all amounts received by Buyer on or after the Closing Date 
that are not related to the accounts receivable or other assets of the 
Company and its subsidiaries.

          Section 4.4  EXPENSES.  Each of Seller and Buyer shall pay all of 
its own costs and expenses associated with the negotiation and conclusion of 
this Agree-

                                      59
<PAGE>

ment and the consummation of the transactions contemplated hereby.

          Section 4.5  SEVERANCE ARRANGEMENTS.  Buyer shall, or shall cause 
the Company to, honor and be solely responsible for payment of the amounts 
described in the section entitled "Severance Arrangements" in each of the 
letter agreements between the Company and certain of its officers (each, an 
"Executive") set forth in Section 4.5(i) of the Disclosure Schedule (the 
"Retention Agreements") in accordance with the terms and conditions regarding 
such payment set forth in such Retention Agreements, except to the extent 
modified or superseded by any separate agreement which may be entered into by 
the Executive and Buyer or any of its subsidiaries. Seller shall honor and be 
solely responsible for payment of the amounts described in the sections of 
such Retention Agreements entitled "Stay Bonus" and shall take any actions 
required to be taken by such Retention Agreements with respect to stock 
options granted by Seller in such Retention Agreements, subject to and in 
accordance with 

                                      60
<PAGE>

the terms and conditions regarding such payment or actions set forth in the 
Retention Agreements.  Seller shall be solely responsible for payment of any 
amounts which arise pursuant to the employment agreement referred to in 
Section 4.5(ii) of the Disclosure Schedule.

          Section 4.6  PUBLIC ANNOUNCEMENTS.  No party hereto shall make or 
issue, or cause to be made or issued, any announcement or written statement 
concerning this Agreement or the transactions contemplated hereby for 
dissemination to the media or the public without the prior written consent of 
the other party.  The preceding sentence shall not apply, however, to any 
announcement or written statement required to be made by applicable law or 
administrative or legal process or pursuant to any securities exchange rules, 
except that the party required to make the announcement shall, whenever 
practicable, consult with the other parties prior to the making of any such 
announcement concerning the timing and content thereof.

                                      61
<PAGE>


          Section 4.7  TRANSACTION COSTS.  Seller shall pay all sales, use, 
transfer, documentary stamp and other similar Taxes with respect to the sale 
and purchase of the Shares.

          Section 4.8  FURTHER ASSURANCES.  Each of Seller and Buyer shall 
use its best efforts to take all action and to do all things necessary to 
consummate and make effective the transactions contemplated by this 
Agreement; PROVIDED, HOWEVER, that neither Seller nor Buyer nor their 
respective affiliates shall be required to dispose of any part of its 
business or the assets pertaining thereto.  In the event that, at any time 
after the Closing, any further action is necessary or desirable to carry out 
the purposes of this Agreement, each party to this Agreement shall take, and 
shall cause its officers and directors, as the case may be, to take, all such 
necessary action including, without limitation, the execution and delivery of 
such further instruments and documents as may reasonably be requested by the 
parties hereto for such purposes or otherwise to complete the 


                                      62

<PAGE>

transactions contemplated hereby.

          Section 4.9  PRODUCT LIABILITY.  (a) Seller is and shall be solely 
responsible for any and all claims for injury (including, without limitation, 
death) or claims for damage, direct or consequential, resulting from or 
connected with goods manufactured or sold or products-related services 
provided by the Company or any of its subsidiaries on or before the Closing 
Date, to the extent that such claims are delivered to Seller on or before the 
first anniversary of the Closing Date.

          (b)  Buyer is and shall be solely responsible for any and all 
claims for injury (including, without limitation, death) or claims for 
damage, direct or consequential, resulting from or connected with goods 
manufactured or sold or products-related services provided by the Company on 
or prior to the Closing Date, to the extent that such claims are not 
delivered to Seller on or before the first anniversary of the Closing Date, 
and shall be solely responsible for all claims for all products manufactured 
after the Closing Date.  If the parties 


                                      63

<PAGE>

hereto cannot determine, in good faith, whether a product was manufactured on 
or before the Closing Date, then all claims with respect to that product 
shall be the responsibility of Buyer.

          (c)  Buyer acknowledges that prior to Seller's ownership of the 
Company certain insurance policies which included coverage for product 
liability were purchased by the Company's predecessor (the "Predecessor 
Policies").  Such Predecessor Policies are in the name of predecessor 
companies to the Company and are assets of the Company.  Buyer and the 
Company hereby grant Seller the authority to file claims with the insurers 
under the Predecessor Policies and pursue the benefits of such coverage to 
the extent that such Predecessor Policies provide coverage for product 
liability claims retained by Seller pursuant to Section 4.9(a) above.  Buyer 
assigns to Seller all benefits of the insurance under the Predecessor 
Policies to the extent such benefits are actually received for the product 
liability claims retained by Seller pursuant to Section 4.9(a) above and 
turned over to Buyer to the 


                                      64

<PAGE>

extent required by Section 4.9.  Buyer agrees to aid and support Seller in 
pursuit of the insurance under the Predecessor Policies which shall include, 
but not be limited to, supplying records, personnel, and, if necessary, 
filing lawsuits or claims against insurers to collect the insurance under the 
Predecessor Policies and Seller shall reimburse Buyer for its third party 
costs incurred in connection with such assistance to Seller.  Seller shall be 
entitled to control the proceedings for any such lawsuits or claims.

          Section 4.10  USE OF NAME.  Promptly after the Closing but in no 
event more than 30 days following the Closing Date, Buyer shall file an 
amendment to the certificate of incorporation or other charter documents of 
the Company and, to the extent applicable, its subsidiaries, and each 
qualification to do business in each jurisdiction in which the Company and 
its subsidiaries is so qualified changing the name of the Company and any 
applicable subsidiary to a name which does not include or resemble in any way 
"Coleman" or any other trade name or 


                                      65

<PAGE>

trademark owned or used by Seller or its affiliates.

          Section 4.11  BOOKS AND RECORDS. (a) Seller will deliver to Buyer 
as promptly as practicable on or after the Closing Date all books and records 
of the Company and its subsidiaries (collectively, the "Documents"), 
PROVIDED, HOWEVER, that Seller may retain copies of Documents and certain 
Documents related to Taxes, product liability claims, insurance or required 
by law to be kept by Seller.  Each party hereto agrees to make reasonably 
available to the other party, at the other party's expense (including, with 
respect to clause (i) below, the right to make copies) (i) any and all such 
Documents (other than Documents relating to liabilities for which Seller is 
indemnifying Buyer and its subsidiaries, including Taxes as set forth in 
Article VI hereof), and including, without limitation, those reasonably 
necessary to respond to inquiries regarding the Company or any of its 
subsidiaries from Governmental Entities or any customer or supplier of the 
Company or any of its subsidiaries or to defend claims or otherwise indemnify 


                                      66

<PAGE>

Seller or Buyer, as the case may be, under the terms of this Agreement and 
(ii) in connection with another party's review of any such Documents, any and 
all personnel as are reasonably requested by such other party, who will 
render all assistance as may reasonably be requested in that regard.

          (b)  Subject to (x) the provisions of Section 6.5(c) hereof, (y) 
the following four sentences and (z) damage or destruction beyond Buyer's or 
Seller's reasonable control, as applicable, Buyer shall maintain and keep all 
Documents delivered to Buyer pursuant to this Agreement.  In the event that 
Buyer determines that it does not wish to keep certain Documents, Buyer shall 
notify Seller of its intent to ship such Documents to Seller, and of the 
approximate amount of such Documents to be shipped, no later than 30 days 
before the date of shipment.  At the request of Seller made prior to the 
scheduled shipment date, Buyer shall permit Seller to inspect such Documents 
at Buyer's usual location for the same on a mutually convenient date and 
shall permit 


                                      67

<PAGE>

Seller to destroy any or all of such Documents at such site.  Any of such 
Documents not so destroyed (or all such Documents if no such request is 
timely made) shall be shipped to Seller at Seller's expense.  Seller has no 
obligation to retain any Document so shipped to it.

          Section 4.12  TRANSFER OF NOMINEE SHARE.  At or immediately prior 
to the Closing, Seller will cause the Nominee Share to be transferred to an 
employee of the Company.

                                   ARTICLE V

                     CERTAIN EMPLOYEE AND BENEFIT MATTERS

          Section 5.1  CONTINUED EMPLOYMENT; SERVICE CREDIT.  Buyer shall on 
the Closing Date continue the employment of all employees of the Company and 
its subsidiaries as of the Closing Date (the "Affected Employees").  The 
Affected Employees shall be given credit for all service with the Company or 
its subsidiaries (and service credited by the Company or such subsidiary), to 
the same extent as such service was credited for such 


                                      68

<PAGE>

purpose by the Company or such subsidiary, under (a) all employee benefit 
plans, programs and policies, and fringe benefits of Buyer in which they 
become participants for purposes of eligibility and vesting (but not for 
purposes of benefit accrual), and (b) severance plans for purposes of 
calculating the amount of each Affected Employee's severance benefits; 
PROVIDED, HOWEVER, that no Executive who is a party to a Retention Agreement 
that provides for Severance Arrangements shall be eligible to participate in 
any severance plan of the Buyer or any affiliate of the Buyer while such 
Retention Agreement remains in effect.  To the extent permissible under the 
terms thereof and required by applicable law, Buyer shall (i) waive all 
limitations as to preexisting conditions exclusions and waiting periods with 
respect to participation and coverage requirements applicable to the Affected 
Employees under any welfare benefit plans that such employees may be eligible 
to participate in after the Closing Date, other than limitations or waiting 
periods that are already in effect with respect to such employees and that 


                                      69

<PAGE>

have not been satisfied as of the Closing Date under any welfare benefit plan 
maintained for the Affected Employees immediately prior to the Closing Date, 
and (ii) provide each Affected Employee with credit for any co-payments and 
deductibles paid prior to the Closing Date in satisfying any applicable 
deductible or out-of-pocket requirements under any welfare plans that such 
employees are eligible to participate in after the Closing Date.  Nothing in 
this Section shall be deemed to require the employment of any Affected 
Employee to be continued for any particular period of time after the Closing 
Date.

          Section 5.2  CONTINUATION OF BENEFITS.  Buyer will maintain for a 
period of at least one year after the Closing Date, without interruption, 
such employee compensation and benefit plans (other than stock option plans), 
programs, policies and fringe benefits as will, in the aggregate, provide 
benefits to the Affected Employees that are no less favorable than those 
provided pursuant to such employee compensation and benefit plans, programs, 
policies and fringe benefits of the Company and 


                                      70

<PAGE>

its subsidiaries, as in effect on the Closing Date.

          Section 5.3  SEVERANCE PAY.  In addition to and notwithstanding the 
provisions of Section 4.5 hereof, Buyer will bear, and will indemnify, defend 
and hold harmless Seller from and against, all losses, damages, deficiencies, 
suits, claims, demands, judgments, costs, expenses or other liabilities, 
including without limitation reasonable expenses and fees of counsel, arising 
from or relating to claims made by or on behalf of any Affected Employee in 
respect of employment agreements and corporate policy pertaining to payroll, 
severance pay, accrued vacation and similar obligations ("Employment Losses") 
relating to the termination of any Affected Employee's employment with the 
Company or any of its subsidiaries as a result of actions by Buyer or the 
Company at or after the Closing; PROVIDED, HOWEVER, that nothing in this 
Section 5.3 shall (i) be construed to cause any person other than Seller to 
be responsible for payment of any amounts which arise pursuant to the 
employment agreement referred to in Section 4.5(ii) of the 


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Disclosure Schedule and (ii) affect Buyer's right in respect of Seller's 
representations, warranties and covenants.  Seller agrees that all Employment 
Losses with respect to employees (other than Affected Employees) terminated 
from employment with the Company or any of its subsidiaries arising before 
the Closing Date will be discharged in full to the extent required prior to 
the Closing Date; PROVIDED, HOWEVER, that Seller will indemnify Buyer from 
and against Employment Losses with respect to employees other than Affected 
Employees to the extent such Employment Losses are not either discharged 
prior to the Closing Date or accrued on the Closing Statement of Company 
Business Net Worth.  

          Section 5.4  INDEMNIFICATION OF BUYER FOR PLANS NOT ASSUMED.  
Seller shall indemnify and hold harmless Buyer, the Company and all of the 
Company's subsidiaries against any and all Losses (as defined in Section 9.2) 
arising under Title IV of ERISA, Section 302 of ERISA and Sections 412 and 
4971 of the Code which may be incurred by any of them arising out of or 
relating to any employee 


                                      72

<PAGE>

benefit plan sponsored by the Seller or any Company ERISA Affiliate, other 
than the Company Employee Benefit Plans, whether such Losses arise out of or 
relate to any event or state of facts occurring or existing before, on or 
after the Closing Date.

          Section 5.5  COMPANY DEFINED CONTRIBUTION PLAN.  Effective as of 
the Closing Date, Buyer shall make available (or cause one of its affiliates 
to make available) a defined contribution plan for the benefit of the 
Affected Employees (the "Company DC Plan").  As promptly as practicable after 
the Closing Date, the Seller shall cause the trustee of the Coleman Monthly 
Salaried Retirement Income Savings Plan and the Coleman Retirement Incentive 
Savings Plan (collectively, the "Seller DC Plans") to transfer to the trustee 
of the Company DC Plan the account balances of each Affected Employee with 
respect to whom the Seller DC Plans maintain an account as of the close of 
business on the Closing Date.  Such transfers shall be equal to the value of 
the transferred account balances as of the close of business on the day 
preceding 


                                      73

<PAGE>

the date of transfer and shall be in cash (or, in the case of participant 
loans granted prior to the Closing Date, if any, such loans and any 
promissory notes or other documents evidencing such loans).


                                  ARTICLE VI

                                    TAXES

          Section 6.1  TAX INDEMNIFICATION.  Independent, and without 
duplication of the indemnification provisions set forth in Article IX of this 
Agreement:

          (a)  Seller shall indemnify Buyer, the Company and the Company's 
subsidiaries and hold them harmless from and against, without duplication, 
(i) all liability for all Taxes (except as provided in paragraph (b) of this 
Section 6.1) of the Company and its subsidiaries for all taxable periods 
ending on or before the Closing Date and the portion ending on the Closing 
Date of any taxable period that includes (but does not end on) the Closing 
Date ("Pre-Closing Tax Period"), (ii) all liability for Taxes resulting from 
a valid, timely and effective elec-


                                      74

<PAGE>

tion under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the 
Treasury Regulations and any comparable election under state or local tax law 
with respect to the Company and the subsidiaries set forth in Section 6.1 of 
the Disclosure Schedule (collectively, the "Election"), as contemplated by 
Section 6.3 hereof, (iii) any and all liability for Taxes of any member of an 
affiliated, consolidated, combined or unitary group of which the Company or 
any of its subsidiaries (or any predecessor of any of the foregoing) is or 
was a member on or prior to the Closing Date, including by reason of the 
liability of the Company or any of its subsidiaries (or any predecessor of 
any of the foregoing) pursuant to Treasury Regulation Section 1.1502-6 or any 
analogous or similar state, local or foreign law or regulation, (iv) any 
payments required to be made after the Closing Date under any Tax sharing, 
Tax indemnity, Tax allocation or similar contracts (whether or not written) 
to which the Company was obligated, or was a party, on or prior to the 
Closing Date, and (v) all liability for Taxes of any person 


                                      75

<PAGE>

(other than the Company and its subsidiaries) imposed on the Company or any 
of its subsidiaries as a transferee or successor, by contract or pursuant to 
any law, rule or regulation, which Taxes relate to an event or transaction 
occurring before the Closing; PROVIDED, HOWEVER, that in the case of clauses 
(i), (ii), (iii), (iv) and (v) above, Seller shall be liable only to the 
extent that such Taxes are in excess of the amount, if any, reserved for such 
Taxes on the Closing Statement of Company Business Net Worth.  Subject to the 
specific allocation of expenses set forth in Article VI and any provision 
relating to expenses to be borne by Buyer set forth in this Article VI, 
Seller shall indemnify Buyer, the Company and the Company's subsidiaries for 
Losses (as defined in Section 9.2) incurred in defense of any Tax Claim that 
is initiated by any Taxing Authority against the Buyer, the Company or the 
Company's subsidiaries that relates to liabilities for Taxes described in 
clauses (i), (ii), (iii), (iv) and (v) above.

          (b)  Buyer shall, and shall cause the Company 


                                      76

<PAGE>

to, indemnify Seller and its affiliates and hold them harmless from and 
against all liability for Taxes of Company or any of its subsidiaries for any 
taxable period ending after the Closing Date (except to the extent such 
taxable period began before the Closing Date, in which case Buyer's indemnity 
will cover only that portion of any such Taxes that do not relate to the 
Pre-Closing Tax Period).

          (c)  In the case of any taxable period that includes (but does not 
end on) the Closing Date (a "Straddle Period"), the Taxes of the Company and 
its subsidiaries for the Pre-Closing Tax Period shall be determined based on 
an interim closing of the books as of the close of business on the Closing 
Date (and for such purpose, the taxable period of any partnership or other 
pass-through entity in which the Company or any subsidiary holds a beneficial 
interest shall be deemed to terminate at such time), except that the amount 
of any such Taxes that are imposed on a periodic basis and are not based on 
or measured by income or receipts shall be 


                                      77

<PAGE>

determined by reference to the relative number of days in the pre-Closing and 
post-Closing portions of such Straddle Period.  All determinations necessary 
to effect the foregoing allocations shall be made in a manner consistent with 
prior practice of the Company and its subsidiaries.

          Section 6.2  PROCEDURES RELATING TO INDEMNIFICATION OF TAX CLAIMS.  
(a) If a claim for Taxes shall be made by any Taxing Authority in writing, 
which, if successful, could reasonably result in an indemnity payment 
pursuant to Section 6.1 hereof, the party seeking indemnification (the "Tax 
Indemnified Party") shall upon receipt thereof promptly notify the other 
party (the "Tax Indemnifying Party") in writing of such claim (a "Tax 
Claim").  If the Tax Claim is delivered to the party that would be the Tax 
Indemnifying Party for such Tax Claim, the Tax Indemnifying Party shall 
promptly notify the Tax Indemnified Party, in writing, of the existence of 
such claim.  If notice of a Tax Claim ("Tax Notice") is not given to the Tax 
Indemnifying Party by the Tax Indemni-


                                      78

<PAGE>

fied Party within a reasonably sufficient period of time to allow the Tax 
Indemnifying Party effectively to contest such Tax Claim, or in reasonable 
detail to notify the Tax Indemnifying Party of the nature of the Tax Claim, 
taking into account the facts and circumstances with respect to such Tax 
Claim, the Tax Indemnifying Party shall not be liable to the Tax Indemnified 
Party or any of its affiliates to the extent that the Tax Indemnifying 
Party's position is actually prejudiced as a result thereof. 

          (b)  With respect to any Tax Claim which might result in Seller 
being obligated to make an indemnity payment to Buyer pursuant to Section 
6.1(a) hereof (other than a Tax Claim relating to Taxes of the Company or any 
of its subsidiaries for a Straddle Period) or any Tax Claim involving 
Seller's Tax gain pursuant to the Election, Seller shall at its sole expense 
control all proceedings in connection with such Tax Claim (including, without 
limitation, selection of counsel) and without limiting the foregoing, may in 
its sole discretion and at 


                                      79

<PAGE>

its sole expense pursue or forego any and all administrative appeals, 
proceedings, hearings and conferences with any Taxing Authority with respect 
thereto, and may, in its sole discretion, either pay the Tax claimed and sue 
for a refund where applicable law permits such refund suits or contest such 
Tax Claim in any permissible manner.  Buyer and the Company may participate 
in, but not control, all proceedings relating to such Tax Claim at their sole 
expense; PROVIDED, HOWEVER, that such participation shall not, under any 
circumstances, require the disclosure of any Tax Return relating to a 
Pre-Closing Tax Period of an affiliated, consolidated, combined or unitary 
group which includes a company other than the Company and any of its 
subsidiaries or any work papers relating thereto.  In no case shall Buyer or 
the Company settle or otherwise compromise any Tax Claim referred to in the 
preceding sentence without Seller's prior written consent, which consent will 
not be unreasonably withheld.  In no case shall Seller settle or otherwise 
compromise any Tax Claim referred to above which could have an 


                                      80

<PAGE>

adverse effect which is material to the Company and any of its subsidiaries 
with respect to Taxes owed for any taxable period beginning after the Closing 
Date or post-Closing portion of a Straddle Period, without Buyer's prior 
written consent, which consent will not be unreasonably withheld.  Buyer, the 
Company and their affiliates shall reasonably cooperate with Seller in 
contesting such Tax Claim, which cooperation shall include, without 
limitation, the reasonable retention and (upon Seller's request) the 
provision to Seller of copies of records and information which are reasonably 
relevant to such Tax Claim, and making employees reasonably available to 
provide additional information or explanation of any material provided 
hereunder or to testify at proceedings relating to such Tax Claim, all at 
Seller's expense.

               (c)  The contest of any Tax Claim that relates to Taxes of the 
Company or any of its subsidiaries for a Straddle Period shall be conducted 
and controlled jointly by Buyer and Seller, with either party having the 
option with the other party's consent of 


                                      81

<PAGE>

ceding the entire defense to the other, and each party shall reasonably 
cooperate (which cooperation shall not, under any circumstances, require the 
disclosure of any Tax Return relating to a Pre-Closing Tax Period of an 
affiliated, consolidated, combined or unitary group which includes a company 
other than the Company and its subsidiaries or any work papers relating 
thereto) and consult with the other party at its own expense and there shall 
be no settlement or closing or other agreement with respect thereto without 
the consent of the other party, which consent shall not be unreasonably 
withheld.  

          Section 6.3  SECTION 338(h)(10) ELECTION.  (a) Seller and Buyer 
shall jointly make the Election on a timely basis in accordance with all 
rules and regulations applicable to the Election.  As soon as practicable 
after the Closing, Seller and Buyer shall mutually prepare a Form 8023-A, 
with all attachments, and Seller shall sign such Form 8023-A.  Also, Buyer 
and Seller shall cooperate with each other to take all actions necessary and 
appropriate (including timely filing such additional forms, 


                                      82

<PAGE>

returns, elections, schedules and other documents on a joint or separate 
basis) as may be required to effect and preserve a timely Election in 
accordance with the provisions of Section 1.338(h)(10)-1 of the Treasury 
Regulations (or any comparable provisions of state or local tax law) or any 
successor provisions. Seller and Buyer shall report the purchase by Buyer of 
the Shares pursuant to this Agreement consistent with the Election and shall 
take no position inconsistent therewith in any Tax Return or any proceeding 
before any Taxing Authority.

          (b)  In connection with the Election, not later than 70 days after 
the Closing, Seller and Buyer shall, together and in good faith, determine 
and agree upon the "Modified Aggregate Deemed Sale Price" of the assets of 
the Company and the subsidiaries set forth in Section 6.1 of the Disclosure 
Schedule (within the meaning of, and in accordance with Section 
1.338(h)(10)-1(f) of the Treasury Regulations and any comparable provisions 
of state or local tax law).  Each of Seller and Buyer can terminate in 
writing at any time negotiations with respect to 


                                      83

<PAGE>

the "Modified Aggregate Deemed Sale Price" within 70 days after the Closing.  
In the event of such termination, Seller and Buyer shall, not later than 10 
days after such termination, submit all such disputed items for resolution to 
the Auditor which shall resolve the disputed items within 20 days thereafter. 
The parties' agreement on the amount of "Modified Aggregate Deemed Sales 
Price" and the Auditor's resolution of disputed items with respect thereto 
shall be final and binding on the parties.  In connection with the Election, 
not later than 60 days after the later of the parties' agreement as to the 
amount of the "Modified Aggregate Deemed Sales Price" or the Auditor's 
resolution of disputed items with respect thereto, Buyer shall reasonably 
determine the proper allocations (the "Allocations") of the "Modified 
Aggregate Deemed Sale Price" among the assets of the Company and such 
subsidiaries (in accordance with Section 338(b)(5) of the Code and the 
Treasury Regulations promulgated thereunder and comparable provisions of 
state or local tax law) and shall submit a statement (the "Section 


                                      84

<PAGE>

338 Statement") to Seller setting forth the foregoing.  Seller may dispute 
Buyer's determination of the Allocations within 40 days ("40 Day Review") of 
delivery of the Section 338 Statement to Seller if Seller reasonably believes 
that Buyer's determinations are unreasonable.  In the event of such a 
dispute, the parties shall commence negotiations (which either party may 
terminate at any time) and shall attempt in good faith to resolve any such 
dispute and any resolution of such dispute by them shall be final and binding 
on them.  If either party terminates such negotiations, or if the parties 
cannot resolve any such dispute within 40 days of such delivery by Buyer to 
Seller, the dispute shall be submitted no later than 10 days thereafter for 
resolution to the Auditor which shall make its determination within 20 days 
after submission to it of the dispute.  Buyer and Seller shall be bound by 
Buyer's determinations of the Allocations unless the Auditor determines that 
they are unreasonable.  The "Modified Aggregate Deemed Sales Price" and 
Allocations shall be adjusted as appropriate to reflect 


                                      85

<PAGE>

the final and binding Closing Statement of Company Net Worth.  In the event 
that the parties cannot resolve any disputes over such adjustments within 20 
days after the receipt of the final and binding Closing Statement of Company 
Net Worth, the disputes shall be submitted no later than 10 days thereafter 
for resolution to the Auditor which shall make its determination within 20 
days after submission to it of the dispute.  Seller and Buyer shall (i) be 
bound by the final determination of the "Modified Aggregate Deemed Sale 
Price" and such Allocations for purposes of determining any Taxes, unless 
otherwise required by law, (ii) prepare and file their Tax Returns on a basis 
consistent with such final determination of the "Modified Aggregate Deemed 
Sale Price" and such Allocations, subject to adjustment to reflect (x) 
Seller's selling expenses as a reduction of sales proceeds, and (y) Buyer's 
acquisition expenses as an adjustment to Purchase Price, and (iii) take no 
position inconsistent with such determination of the "Modified Aggregate 
Deemed Sales Price" and Allocations on any 


                                      86

<PAGE>

applicable Tax Return or in any proceeding before any Taxing Authority.  No 
Tax Returns reflecting the Allocations shall be filed prior to the later of 
(i) the last day of the 40 Day Review and (ii) if any items with respect to 
the Allocations are in dispute, the Auditor's resolution of such disputed 
items, except as otherwise required by law.  In the event that any of the 
Allocations is disputed by any Taxing Authority, the party receiving notice 
of the dispute shall promptly notify the other party hereto concerning 
resolution of the dispute.

          Section 6.4  SURVIVAL OF TAX PROVISIONS.  Any claim to be made 
pursuant to this Article VI hereof must be made within 15 days of the 
expiration (with valid extensions) of the applicable statutes of limitations 
relating to the Taxes at issue. Buyer shall notify Seller in writing in the 
event that Buyer extends the statute of limitations for any period that 
begins prior to the Closing Date; PROVIDED, HOWEVER, the failure of Buyer to 
provide such notification shall not affect the rights of Buyer, the Company 
or any subsidiaries of the 


                                      87

<PAGE>

Company to indemnification under Section 6.1(a).

          Section 6.5  RETURN FILINGS, REFUNDS AND CREDITS.  (a) Seller shall 
prepare or cause to be prepared and file or cause to be filed on a timely 
basis all Tax Returns with respect to the Company and its subsidiaries for 
taxable periods ending on or prior to the Closing Date.  Seller shall timely 
pay or cause to be paid all Taxes shown on all such Tax Returns and Buyer 
and/or the Company shall pay to Seller from the reserves, if any, on the 
Closing Statement of Company Business Net Worth for such Taxes an amount not 
in excess of the amount paid by the Seller in respect of such Taxes.  Such 
Tax Returns shall be prepared in a manner consistent with past practices and 
such Tax Returns which do not relate to or include a company other than the 
Company and any of its subsidiaries ("Separate Returns") shall be provided to 
Buyer to allow for Buyer's review prior to filing.  Seller and Buyer agree to 
consult and resolve in good faith any issue arising as a result of the review 
of such Separate Returns. In the event the parties are unable to 


                                      88

<PAGE>

resolve any dispute within ten days following the delivery of such Separate 
Returns, the parties shall jointly request the Auditor to resolve any issue 
at least five days before the due date of any such Separate Return, in order 
that such Separate Return may be timely filed. The Seller and Buyer shall 
each pay one-half of the Auditor's fees and expenses.

          (b)  Buyer shall prepare or cause to be prepared and shall file or 
cause to be filed on a timely basis all Tax Returns with respect to the 
business of the Company and its subsidiaries other than those set forth in 
clause (a) of this Section 6.5.  Buyer shall cause to be timely paid all 
Taxes shown on all such Tax Returns related to Straddle Periods, except that 
Seller shall be responsible for and shall pay any Taxes for which Seller has 
agreed to indemnify Buyer pursuant to Section 6.1 hereof.  Buyer shall 
provide Seller with copies of any such Tax Returns covering Taxes for which 
Seller has agreed to indemnify Buyer pursuant to Section 6.1 hereof at least 
20 days prior to the due date thereof (giving 


                                      89

<PAGE>

effect to any extensions thereto), accompanied by a statement calculating 
Seller's indemnification obligation pursuant to Section 6.1 hereof.  Seller 
shall pay to Buyer the amount of Seller's indemnification obligation within 
10 days of receiving copies of such Tax Returns unless Seller objects to the 
calculation of Seller's indemnification obligation in the statement provided 
by Buyer.  In the event of an objection, the parties will commence 
negotiations to resolve such disagreement (which negotiations either party 
may terminate at any time) and if necessary resolve any disputes in 
accordance with Section 6.8 hereof.

          (c)  Seller, Buyer and the Company shall reasonably cooperate, and 
shall cause their respective affiliates, officers, employees, agents, 
auditors and representatives reasonably to cooperate, in preparing and filing 
all Tax Returns (including amended returns and claims for refund), including 
maintaining and making reasonably available to each other all records 
necessary in connection with Taxes with respect to, and in resolv-


                                      90

<PAGE>

ing all disputes and audits relating to Taxes with respect to, all taxable 
periods ending on or prior to or which include the Closing Date; provided 
however, that cooperation as required by this clause (c) of Section 6.5 shall 
not, under any circumstances, require the disclosure of any Tax Return 
relating to a Pre-Closing Tax Period of an affiliated, consolidated, combined 
or unitary group which includes a company other than the Company and its 
subsidiaries or any work papers relating thereto.  Buyer and Seller recognize 
that Seller and its affiliates will need access, from time to time, after the 
Closing Date, to certain accounting and Tax records and information held by 
the Company or its subsidiaries to the extent such records and information 
pertain to events occurring prior to the Closing Date; therefore, Buyer 
agrees that (i) from and after the Closing Date until the seventh anniversary 
of the Closing Date, Buyer shall, and shall cause the Company to, (A) use all 
reasonable efforts to properly retain and maintain such records until such 
time as Seller agrees that such retention and main-


                                      91

<PAGE>

tenance is no longer necessary, and (B) allow Seller and its agents and 
representatives (and agents or representatives of any of its affiliates), to 
inspect, review and make copies of such records as Seller may reasonably deem 
necessary or appropriate from time to time, such activities to be conducted 
during normal business hours and at Seller's expense and (ii) from and after 
the seventh anniversary of the Closing Date, Buyer shall not, and shall cause 
the Company and its subsidiaries not to, dispose of any of such records 
without first providing Seller with an opportunity to take possession of such 
records or to make copies thereof, at Seller's expense, prior to such 
disposal.

          (d)  Any refunds or credits of Taxes of the Company or any of its 
subsidiaries for any taxable period ending on or before the Closing Date 
shall be for the account of Seller but only to the extent that the amount of 
any such refund or credit is in excess of the amount of such refund or credit 
reflected on the Closing Statement of Company Business Net Worth.  If such 
Tax refunds 


                                      92

<PAGE>

or credits are received or used by or on behalf of Buyer or any affiliate or 
successor thereto including the Company or any of its subsidiaries, then 
Buyer shall, within 10 days of such receipt, pay the amount of such Tax 
refund or credit to the Seller (reduced by any Taxes that the Buyer, the 
Company or any of the Company's subsidiaries shall be required to pay with 
respect thereto; PROVIDED, HOWEVER, that Buyer, the Company or any subsidiary 
shall use its reasonable best efforts to minimize such Taxes if and to the 
extent that any such efforts will not have an adverse effect which is 
material to the Company and any of its subsidiaries with respect to Taxes 
owed in any taxable period beginning after the Closing Date or the 
post-Closing portion of a Straddle Period). Any refunds or credits of Taxes 
of the Company or any of its subsidiaries for any taxable period beginning 
after the Closing Date shall be for the account of Buyer. If such Tax refunds 
or credits are received by or on behalf of Seller or any affiliate or 
successor thereto, then Seller shall within 10 days of such receipt, pay 


                                      93

<PAGE>

the amount of such Tax refund or credit to Buyer (reduced by any Taxes that 
the Seller shall be required to pay with respect thereto; PROVIDED, HOWEVER, 
that the amount of such Tax refund or credit shall be net of Taxes only if 
Seller uses its best efforts to minimize such Taxes).  Any refunds or credits 
of Taxes of the Company or any of its subsidiaries for any Straddle Period 
shall be apportioned between Seller and Buyer on the same basis on which such 
Taxes were apportioned under Section 6.1 hereof between Buyer and Seller.  
Buyer shall, if Seller so requests and at Seller's sole expense, cause the 
Company or any of its subsidiaries, as appropriate, to file for and use its 
reasonable best efforts to obtain any refunds or credits to which Seller is 
entitled under this Section 6.5 provided that the seeking of any such refund 
or credit shall not have any adverse effect which is material to the Company 
and any of its subsidiaries with respect to Taxes owed in any taxable period 
beginning after the Closing Date or the post-Closing portion of a Straddle 
Period. Buyer shall permit Seller to 


                                      94

<PAGE>

participate in, but not control, the prosecution of any such refund claim.  
Buyer shall cause the Company or such subsidiary to forward to Seller any 
such refund within 10 days after the refund is received (or reimburse Seller 
for any such credit within 10 days after the relevant Tax Return is filed in 
which the credit is actually applied against the Company or such subsidiary's 
liability for Taxes).

          Section 6.6  TRANSFER TAXES.  Notwithstanding any other provisions 
of this Agreement to the contrary, Seller shall prepare or cause to be 
prepared and timely file or cause to be timely filed with the appropriate 
Taxing Authority all Tax Returns with respect to all transfer, stamp, 
duties, recording, value added tax and similar taxes imposed in connection 
with Buyer's purchase of the Shares pursuant to this Agreement.  As provided 
in Section 4.7 hereof, Seller shall pay or cause to be paid all such Taxes.

          Section 6.7  TERMINATION OF TAX SHARING AGREEMENTS.  Seller hereby 
agrees and covenants that any Tax 


                                      95

<PAGE>

sharing, indemnity, allocation, or similar agreements to which the Company or 
any of its subsidiaries is a party will cease to apply to the Company or any 
of its subsidiaries as of the Closing Date and, after the Closing Date, the 
Buyer, the Company and its subsidiaries will not be bound by or have any 
liability thereunder. 

          Section 6.8  DISPUTES.  If the parties disagree as to (i) the 
calculation of any Tax or (ii) the amount of or liability for any Tax-related 
payment to be made under this Article VI or (iii) the definition of "adverse 
effect which is material to the Company and any of its subsidiaries" as used 
in Sections 6.2(b) and 6.5(d), the parties shall cooperate in good faith to 
resolve any such dispute, and any agreed-upon amount shall be paid to the 
appropriate party.  A party may, at any time, terminate, in writing, 
discussions with respect to such dispute.  Not later than 10 business days 
after either Seller or Buyer shall have terminated such discussion, all such 
disputed items set forth in clauses (i) and (ii) above shall be submitted for 
resolution to the Auditor.  The 


                                      96

<PAGE>

decision of such firm shall be final and binding. The fees and expenses 
incurred in connection with such decision shall be shared by Seller and Buyer 
in accordance with the final allocation of the Tax liability in dispute.  
Following the decision of the Auditor, the parties shall each take or cause 
to be taken any action that is necessary or appropriate to implement such 
decision, including, without limitation, the filing of amended Tax Returns 
and the prompt payment of underpayment or overpayment, with interest 
calculated on such underpayment or overpayment at the interest rate specified 
in Section 6621(a)(2) of the Code (or such successor provision) from the date 
such payment was due.

          Section 6.9  DETERMINATION AND CHARACTERIZATION OF PAYMENTS.  The 
payments made pursuant to this Article VI shall be treated as adjustments to 
the Purchase Price. 


                                      97

<PAGE>

                                     ARTICLE VII

                                CONDITIONS TO CLOSING

          Section 7.1  CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.  The 
obligations of Seller and Buyer to effect the transactions contemplated by 
this Agreement are subject to the satisfaction or waiver, on or before the 
Closing Date, of each of the following conditions:

          (a) no statute, rule or regulation shall have been enacted or 
promulgated and no injunction or other order shall have been entered, and not 
vacated, by a court or administrative agency of competent jurisdiction in any 
proceeding or action, which enjoins, restrains, makes illegal or prohibits 
consummation of the transactions contemplated hereby;

          (b) all waiting periods under any law, regulation, rule or order 
applicable to, or deemed to be applicable to, any of the transactions 
contemplated by this Agreement, including without limitation the HSR Act, 
shall have expired or been terminated, and all approvals required thereunder 
shall have been granted, including


                                      98

<PAGE>

but not limited to any approvals required from the Mexican Comision Federal 
de Competencia; if approval under any such law is subject to the satisfaction 
of any material conditions, then each such condition shall have been approved 
by the party affected by such condition, which approval shall not be 
unreasonably withheld; and

          (c) Seller shall have received (i) all necessary consents or 
waivers required under the Seller Credit Agreement and (ii) the release of 
the Company as a guarantor under the Private Placement Notes and the Seller 
Credit Agreement.

          Section 7.2  CONDITIONS TO THE OBLIGATIONS OF SELLER.  The 
obligations of Seller to effect the transactions contemplated by this 
Agreement are subject to the satisfaction or waiver by Seller, on or before 
the Closing Date, of the following conditions:

          (a) the representations and warranties of Buyer contained herein 
shall have been true and correct in all material respects when made and as of 
the Closing Date, as if made on the Closing Date;


                                      99

<PAGE>

          (b) Buyer shall have performed or complied in all material respects 
with all agreements, covenants and conditions required by this Agreement to 
be performed or complied with by it at or prior to the Closing; and

          (c) Seller shall have been furnished with a certificate of an 
executive officer of Buyer, dated the Closing Date, certifying to the 
foregoing.

          Section 7.3  CONDITIONS TO THE OBLIGATIONS OF BUYER.  The 
obligations of Buyer to effect the transactions contemplated by this 
Agreement are subject to the satisfaction or waiver by Buyer, on or before 
the Closing Date, of the following conditions:

          (a) the representations and warranties of Seller contained herein 
shall have been true and correct in all material respects when made and as of 
the Closing Date, as if made on the Closing Date;

          (b) Seller shall have performed or complied in all material 
respects with all agreements, covenants and conditions required by this 
Agreement to be performed or 


                                     100

<PAGE>

complied with by it at or prior to the Closing; and

          (c) Buyer shall have been furnished with a certificate of an executive
officer of Seller, dated the Closing Date, certifying to the foregoing.


                                   ARTICLE VIII

                                    TERMINATION

          Section 8.1  TERMINATION.  This Agreement may be terminated at any 
time prior to the Closing:

          (a) by mutual consent of Seller and Buyer; 

          (b) by Buyer after April 30, 1998 (which date shall be 
automatically extended to June 30, 1998 if the conditions set forth in 
Section 7.1(b) or (c) have not been satisfied or waived and are still capable 
of being satisfied) if any of the conditions provided for in Sections 7.1 or 
7.3 hereof shall not have been met or waived in writing by Buyer prior to or 
on such date; or

          (c) by Seller after April 30, 1998 (which date shall be 
automatically extended to June 30, 1998 if the conditions set forth in 
Section 7.1(b) or (c) have not 


                                     101

<PAGE>

been satisfied or waived and are still capable of being satisfied) if any of 
the conditions provided for in Sections 7.1 or 7.2 hereof shall not have been 
met or waived in writing by Seller prior to or on such date.

          If any party has caused a delay in closing the transactions 
contemplated hereby by its failure to perform any covenant hereunder, which 
failure has resulted in the failure of a condition contained in Article VII 
hereof, such party shall not be entitled to terminate this Agreement pursuant 
to subsections (b) or (c) of this Section, as the case may be, until the 
expiration of a period following the date specified in such subsection 
corresponding to the period of delay so caused.

          Section 8.2  EFFECT OF TERMINATION.  In the event of termination of 
this Agreement pursuant to this Article VIII, this Agreement shall 
immediately terminate and be of no further force and effect, and there shall 
be no liability on the part of Buyer or Seller (except for liabilities 
arising from willful breach of this Agreement prior to such termination); 
PROVIDED, HOWEVER, that


                                     102

<PAGE>

Sections 4.4, 4.5, 10.4, 10.8 and 10.10 hereof and this Article VIII shall 
survive the termination hereof; PROVIDED FURTHER, that all information 
received by Buyer with respect to the Company and its subsidiaries shall be 
treated in accordance with the Confidentiality Agreement dated November 17, 
1997 between Buyer and BancAmerica ROBERTSON STEPHENS (the "Confidentiality 
Agreement"), which shall remain in full force and effect notwithstanding the 
execution or termination of this Agreement.

                                      ARTICLE IX

                                   INDEMNIFICATION

          Section 9.1  SURVIVAL.  The representations and warranties:  (i) 
contained in this Agreement (except for those set forth in Sections 2.13 and 
2.14 hereof) shall survive the Closing and shall continue in full force and 
effect for a period of eighteen months (18) months thereafter; (ii) contained 
in Section 2.13 hereof shall not survive the Closing and (iii) contained in 
Section 2.14 hereof shall survive the Closing and shall continue in 


                                     103

<PAGE>

full force and effect for a period of three (3) years, after which such 
representations and warranties shall terminate and have no further force or 
effect.  The periods set forth in clauses (i), (ii) and (iii) above are 
collectively referred to herein as the "Limitations Period."  No action or 
proceeding may be brought with respect to any of the representations and 
warranties hereunder unless written notice thereof, setting forth in 
reasonable detail the claimed misrepresentation or breach of warranty, shall 
have been delivered prior to the expiration of the applicable Limitations 
Period to the party alleged to have breached such representation or warranty. 
The covenants and agreements contained herein to be performed or complied 
with after the Closing shall survive indefinitely or for such shorter term as 
is specified in such covenants and agreements.

          Section 9.2  INDEMNIFICATION BY SELLER.  Seller shall indemnify, 
defend and hold harmless Buyer and its affiliates against any and all losses, 
damages, deficiencies, suits, claims, demands, judgments, costs, expenses 


                                     104

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or other liabilities including, without limitation, reasonable attorneys' 
fees and related expenses ("Losses") resulting from, arising from, or 
relating to (i) any breach of a representation or warranty of Seller 
contained in Article II of this Agreement except those representations and 
warranties of Seller contained in Section 2.13 hereof, and (ii) any failure 
by Seller to perform or comply with any agreement or obligation contained in 
this Agreement.

          Section 9.3  INDEMNIFICATION BY BUYER.  Buyer shall indemnify, 
defend and hold harmless Seller against any and all Losses resulting, arising 
from, or relating to (i) any breach of a representation or warranty of Buyer 
contained in Article III of this Agreement, (ii) any failure by Buyer to 
perform or comply with any agreement or obligation contained in this 
Agreement, and (iii) all liabilities and obligations relating to the Company 
and its subsidiaries, except to the extent that Seller is required to 
indemnify Buyer in respect thereof (without regard to any deductible or cap 
on the dollar amount of 


                                     105

<PAGE>

indemnity). 

          Section 9.4  LIMITATIONS OF CLAIMS. (a) Indemnification pursuant to 
this Article IX with respect to a breach of the representations and 
warranties set forth in Article II or Article III hereof shall be available 
to any party only (i) if any such Loss or series of related Losses is greater 
than $10,000 and (ii) to the extent such party's aggregate Losses exceed the 
sum of $1,500,000; provided that, for purposes of computing Losses in respect 
of this Article IX, any reference to materiality or Material Adverse Effect 
in the representations and warranties shall be disregarded, and, provided, 
further, that indemnification with respect to a breach of the representations 
and warranties set forth in Section 2.14 hereof shall be available to Buyer 
and its affiliates to the extent Buyer's aggregate Losses exceed the sum of 
$500,000.

          (b) Anything to the contrary herein notwithstanding, the aggregate 
indemnification to be provided by any party pursuant to Article VI hereof or 
this Article 


                                     106

<PAGE>

IX shall not exceed the Purchase Price, as adjusted by any payments pursuant 
to Section 1.4 hereof.

          (c) The amount of any Loss for which indemnification is provided 
under this Article IX shall be net of (i) any amounts recovered by the 
Indemnified Party (as defined below) pursuant to any indemnification by or 
indemnification agreement with any third party and (ii) any insurance 
proceeds or other cash receipts or sources of reimbursement received as an 
offset against such Loss (and no right of subrogation shall accrue to any 
third party indemnitor, insurer or reimburser hereunder); provided that the 
Indemnified Party shall use its best efforts (at the sole cost and expense of 
the Indemnifying Party, which shall reimburse third party expenses as they 
are incurred) to receive the benefits of any such indemnification and 
insurance and, upon such receipt, to pay such funds over to the Indemnifying 
Party as reimbursement of any indemnification payment hereunder.  If the 
amount to be netted hereunder from any payment required under Sections 9.2 or 
9.3 above is determined after 


                                     107

<PAGE>

payment by the Indemnifying Party (as defined below) of any amount required 
to be paid to an Indemnified Party pursuant to this Article IX, the 
Indemnified Party shall repay to the Indemnifying Party, promptly after such 
determination, any amount that the Indemnifying Party would not have had to 
pay pursuant to this Article IX had such determination been made at the time 
of such payment.  Indemnification payments hereunder shall be treated as 
adjustments to the Purchase Price.

          (d) Anything to the contrary herein notwithstanding, if an amount 
with respect to which any claim is made under Article VI or Article IX (an 
"Indemnity Claim") gives rise to a current Tax deduction to the party (the 
"Indemnified Party") making the Indemnity Claim (as opposed to an increase in 
the Tax basis of the Indemnified Party's assets), then the amount of the 
related indemnity payment shall be (x) reduced by the amount of any Tax 
Benefit whenever utilized by the Indemnified Party as a result of such Tax 
deduction in respect of such Indemnity Claim, and (y) increased by the amount 


                                     108

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of any Tax Detriment whenever suffered by the Indemnified Party as a result 
of the receipt of such indemnity payment (including by reason of a reduction 
in the Tax basis of the Indemnified Party's assets).  For purposes of this 
Section 9.4, a "Tax Benefit" means an amount by which the Tax liability or 
Tax sharing liability of a party is reduced (including, without limitation, 
by deduction, reduction of income by virtue of increased Tax basis or 
otherwise, entitlement to refund, credit or otherwise) plus any related 
interest received from the relevant Taxing Authority, and a "Tax Detriment" 
means an amount by which the Tax liability or Tax sharing liability of a 
party is increased plus any related interest paid to the relevant Taxing 
Authority.  For purposes of determining Tax detriment, the "amount by which 
the Tax liability or Tax sharing liability of a party is increased" in the 
case where such increase is attributable to a reduction in the Tax basis of 
assets shall be the present value of the Amount amortized or depreciated over 
the Adjustment Period (properly weighted to take into account the rele-


                                     109

<PAGE>

vant amortization or depreciation method) using the Interest Rate.  The 
Amount shall mean the amount that Tax basis is reduced by reason of the 
receipt of an indemnity payment in respect of an Indemnity Claim.  The 
Adjustment Period shall mean the remaining life of the asset or assets whose 
Tax basis has been so reduced at the time of such reduction using the 
amortization or depreciation method applicable to such asset or assets at 
such time. The Interest Rate shall mean the prime rate as reported in the 
Wall Street Journal on the date which is three business days prior to the 
date such indemnity payment in respect of such Indemnity Claim is made.  
Where a party has other losses, deductions, credits or items available to it 
such that it would not have any Tax liability or Tax sharing liability for a 
Tax year, the determination of any Tax Benefit or Tax Detriment (as the case 
may be) of such party for such Tax year shall be calculated by comparing (A) 
the Tax liability or Tax sharing liability of such Party, computed without 
regard to any income, gains, losses, credits, deductions, or items relating 
to 


                                     110

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such Indemnity claim and such indemnity payment (as applicable), to (B) the 
Tax liability or Tax sharing liability of such party, computed after taking 
into account any income, gains, losses, deductions, credits or items relating 
to such Indemnity Claim and such indemnity payment (as applicable).  In the 
event that there shall be a determination disallowing all or any portion of a 
Tax Benefit or a Tax Detriment, the amount of the related indemnity payment 
shall be recalculated in accordance with the terms of this Section 9.4(d), 
taking into account such disallowance, and the Indemnifying Party shall be 
liable to pay to the Indemnified Party the amount of any resulting upward 
adjustment to the amount of the related indemnity payment, and the 
Indemnified Party shall be liable to pay to the Indemnifying Party the amount 
of any resulting downward adjustment to the amount of the related indemnity 
payment.

          (e)  Any claim made under or with respect to this Agreement or the 
subject matter hereof, including statutory and common law claims, shall be 
subject to the


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provisions set forth in this Section 9.4 or, with respect to Taxes, Article VI
hereof.

          Section 9.5  PROCEDURES. (a) A party seeking indemnification 
pursuant to Sections 9.2 or 9.3 above or Section 4.9 hereof (an "Indemnified 
Party") shall give prompt notice to the party from whom such indemnification 
is sought (the "Indemnifying Party") of the assertion of any claim or 
assessment, or the commencement of any action, suit, audit or proceeding, by 
a third party in respect of which indemnity may be sought hereunder (a "Third 
Party Claim") and will give the Indemnifying Party such information with 
respect thereto as the Indemnifying Party may reasonably request, but no 
failure to give such notice shall relieve the Indemnifying Party of any 
liability  hereunder (except to the extent the Indemnifying Party has 
suffered actual prejudice thereby).  Thereafter, the Indemnified Party shall 
deliver to the Indemnifying Party, within five business days after the 
Indemnified Party's receipt thereof, copies of all notices and documents 
(including court papers) received by the Indem-


                                     112

<PAGE>

nified Party relating to the Third Party Claim. The Indemnifying Party shall 
have the right, exercisable by written notice (the "Notice") to the 
Indemnified Party within 10 days of receipt of notice from the Indemnified 
Party of the commencement of or assertion of any Third Party Claim, to assume 
the defense of such Third Party Claim, using counsel selected by the 
Indemnifying Party and reasonably acceptable to the Indemnified Party.  
Should the Indemnifying Party so elect to assume the defense of a Third Party 
Claim, the Indemnifying Party will not be liable to the Indemnified Party for 
legal expenses subsequently incurred by the Indemnified Party in connection 
with the defense thereof.  If the Indemnifying Party shall fail to assume the 
defense of the Third Party Claim within such 10-day period, the Indemnified 
Party shall have the right to undertake the defense of such Third Party Claim 
on behalf of the Indemnifying Party. If the Indemnifying Party elects to 
assume the defense of any such Third Party Claim, the Indemnified Party shall 
not admit any liability with respect to, or 


                                     113

<PAGE>

settle, compromise or discharge, such Third Party Claim without the 
Indemnifying Party's prior written consent.  If the Indemnifying Party does 
not elect to assume the defense of any such Third Party Claim, the 
Indemnified Party shall not admit any liability with respect to, or settle, 
compromise or discharge, such Third Party Claim without the Indemnifying 
Party's prior written consent, which consent will not be unreasonably 
withheld; provided that, if the Indemnifying Party fails to reaffirm its 
obligations to provide indemnification in respect of such Third Party Claim 
if requested to do so by the Indemnified Party, the Indemnified Party may 
settle, compromise or discharge such Third Party Claim on commercially 
reasonable terms without the consent of the Indemnifying Party.

          (b) The Indemnifying Party or the Indemnified Party, as the case 
may be, shall in any event have the right to participate, at its own expense, 
in the defense of any Third Party Claim which the other is defending.

          (c) The Indemnifying Party, if it shall have 


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<PAGE>

assumed the defense of any Third Party Claim in accordance with the terms 
hereof, shall have the right, upon five days prior written notice to the 
Indemnified Party, to consent to the entry of judgment with respect to, or 
otherwise settle such Third Party Claim provided the Indemnifying Party 
agrees that as between the Indemnifying Party and the Indemnified Party, the 
Indemnifying Party shall be solely obligated to satisfy and discharge such 
judgment or settlement unless the Third Party Claim involves equitable or 
other non-monetary damages.  In the event such judgment or settlement 
involves equitable or non-monetary damages and in the reasonable judgment of 
the Indemnified Party such judgment or settlement would have a continuing 
material adverse effect on the Indemnified Party's business (including any 
material impairment of its relationships with customers and suppliers), the 
consent to the entry of such judgment or such settlement may only be made 
with the written consent of the Indemnified Party, which consent shall not be 
unreasonably withheld.


                                     115

<PAGE>

          (d) Whether or not the Indemnifying Party chooses to defend or 
prosecute any Third Party Claim, all the parties hereto shall cooperate in 
the defense or prosecution thereof and shall furnish such records, 
information and testimony, and attend such conferences, discovery 
proceedings, hearings, trials and appeals as may be reasonably requested in 
connection therewith.  Such cooperation shall include access during normal 
business hours afforded to the Indemnifying Party to, and reasonable 
retention by the Indemnified Party of, records and information which are 
reasonably relevant to such Third Party Claim, and making employees available 
on a mutually convenient basis to provide additional information and 
explanation of any material provided hereunder, and the Indemnifying Party 
shall reimburse the Indemnified Party for all its reasonable out-of-pocket 
expenses in connection therewith.

          Section 9.6  EXCLUSIVITY OF REMEDIES.  As between Seller, on the 
one hand, and Buyer, on the other hand, the remedies set forth in this 
Article IX and 


                                     116

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Article VI hereof shall be the exclusive remedies with respect to all claims 
for which indemnification may be sought, except for claims relating to fraud 
or deceit under common law.  As of the Closing, each party will release and 
forever discharge the other party's officers, directors, employees, agents 
and affiliates (other than Buyer's or Seller's subsidiaries), and such 
affiliates' officers, directors, employees and agents from any and all rights 
to seek reimbursement for or to make any claim against such other person in 
respect of any Losses incurred in connection with the execution, delivery and 
performance of this Agreement (including the accuracy of the representations 
and warranties contained herein) and the transactions contemplated hereby, 
provided that such release and discharge shall not apply to any other 
matters.  This Section 9.6 shall not restrict the rights of either party to 
seek and obtain injunctive relief to specifically enforce the other party's 
obligations hereunder or constitute a release or waiver of any person or 
entity for actions taken by such person or entity after 


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the Closing.

                                      ARTICLE X

                               MISCELLANEOUS PROVISIONS

          Section 10.1  DISCLOSURE SCHEDULES; EXHIBITS.  Matters reflected in 
the Schedules and Exhibits hereto are not necessarily limited to those 
matters that Seller believes are required by this Agreement to be disclosed 
herein or therein. Such additional matters are provided for informational 
purposes only, and such inclusion shall not be deemed to be an acknowledgment 
by Seller that such items would have a Material Adverse Effect, nor shall 
such inclusion be applied to affect or modify the definition of the term 
Material Adverse Effect for purposes of this Agreement.

          Section 10.2  AMENDMENT AND MODIFICATION.  This Agreement may be 
amended, modified or supplemented only by written agreement of the parties 
hereto.

          Section 10.3  WAIVER OF COMPLIANCE.  Any party hereto may waive 
compliance by the other party or parties 


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<PAGE>

with any of the agreements or conditions contained herein.  Any such waiver 
shall be valid only if set forth in a written instrument signed by the party 
or parties to be bound thereby.

          Section 10.4  NOTICES.  All notices and other communications given 
or made pursuant hereto shall be in writing and shall be deemed to have been 
duly given on the date delivered, if delivered personally, on the fifth 
business day after being mailed by registered or certified mail (postage 
prepaid, return receipt requested) or on the business day after being sent by 
reputable overnight courier (delivery prepaid), in each case, to the parties 
at the following addresses, or on the date sent and confirmed by electronic 
transmission to the facsimile number specified below (or at such other 
address or 


                                     119

<PAGE>

facsimile number for a party as shall be specified by notice given in 
accordance with this Section 11.4):

          (a)  if to Seller, to:

                    The Coleman Company, Inc.
                    625 Madison Avenue
                    New York, New York 10022
                    Attention: Chief Executive Officer

                    Tel: (212) 527-4000
                    Fax: (212) 527-4150

               with a copy to:

                    The Coleman Company, Inc.
                    3600 North Hydraulic
                    Wichita, Kansas 67219
                    Attention: Corporate Secretary
                    
                    Tel: (316) 832-2700
                    Fax: (316) 832-2634

                    and 

                    Skadden, Arps, Slate, Meagher
                      & Flom LLP
                    919 Third Avenue
                    New York, New York 10022
                    Attention:  Stephen M. Banker, Esq.

                    Tel: (212) 735-2760
                    Fax: (212) 735-2000



                                     120

<PAGE>

          (b)  if to Buyer, to:

                    Ranco Incorporated of Delaware
                    300 Delaware Avenue, Suite 1704
                    Wilmington, Delaware 19804-1612
                    Attention: President

                    Tel: (302) 427-5779
                    Fax: (302) 738-7210

               with a copy to:

                    Siebe plc
                    Saxon House
                    2-4 Victoria Street
                    Windsor, Berkshire SL4 1EN
                    Attention: Chief Legal Officer

                    Tel: 011-41-1753-839-296
                    Fax: 011-44-1753-622-030

               with a copy to:

                    Fried Frank Harris Shriver & Jacobson
                    One New York Plaza
                    New York, New York  10004
                    Attention: Sanford Krieger, Esq.

                    Tel: (212) 859-8230
                    Fax: (212) 859-4000

          (c)  if to Guarantor, to:

                    Siebe plc
                    Saxon House
                    2-4 Victoria Street
                    Windsor, Berkshire SL4 1EN
                    Attention: Chief Legal Officer


                                     121

<PAGE>

                    Tel: 011-44-1753-839-296
                    Fax: 011-44-1753-622-030

               with a copy to:

                    Fried Frank Harris Shriver & Jacobson
                    One New York Plaza
                    New York, New York  10004
                    Attention: Sanford Krieger, Esq.

                    Tel: (212) 859-8230
                    Fax: (212) 859-4000


          Section 10.5  PARTIES IN INTEREST; ASSIGNMENT.  This Agreement 
shall be binding upon and inure to the benefit of each party hereto and its 
respective successors and permitted assigns, and no provision of this 
Agreement, express or implied, is intended to or shall confer upon any other 
person any right, benefit or remedy of any nature whatsoever under or by 
reason of this Agreement, except as provided in Article IX hereof.  Neither 
this Agreement nor any of the rights, interests or obligations hereunder may 
be assigned, directly or indirectly, by any party hereto without the prior 
written consent of the other parties hereto. Notwithstanding the foregoing, 
Seller may assign any or all of its rights or


                                     122

<PAGE>

interests under this Agreement to a wholly-owned subsidiary; PROVIDED, 
HOWEVER, Seller may not so assign any of its obligations hereunder, and Buyer 
may assign its rights hereunder (but such assignment will not relieve it of 
any of its obligations) to any wholly-owned subsidiary of Guarantor.

          Section 10.6  COUNTERPARTS.  This Agreement may be executed in two 
or more counterparts, each of which when executed shall be deemed to be an 
original and all of which taken together shall constitute one and the same 
agreement.

          Section 10.7  CONSTRUCTION; INTERPRETATION.  (a) Any rule of law 
that would require interpretation of any claimed ambiguities in this 
Agreement against the party that drafted it shall have no application and is 
expressly waived.

          (b) For purposes of this Agreement, all references to the 
"appropriate Seller or Company personnel" shall refer solely to the 
appropriate corporate officer of Seller or the Company listed in Section 
10.7(b) of the 


                                     123

<PAGE>

Disclosure Schedule of whom due inquiry was made and "knowledge" of Seller 
shall be deemed to include only the actual current knowledge of such 
corporate officer of Seller or the Company.

          (c) References made to an "Exhibit" or a "Schedule," unless 
otherwise specified, refer to an Exhibit or Schedule, respectively, attached 
to this Agreement, and references made to an "Article" or a "Section," unless 
otherwise specified, refer to an Article or Section, respectively, of this 
Agreement or the Disclosure Schedule. The article and section headings 
contained in this Agreement are solely for the purpose of reference, are not 
part of the agreement of the parties and shall not in any way affect the 
meaning or interpretation of this Agreement.

          (d) As used herein, the plural form of any noun shall include the 
singular and the singular shall include the plural, unless the context 
requires otherwise. Each of the masculine, neuter and feminine forms of any 
pronoun shall include all such forms unless the 


                                     124

<PAGE>

context requires otherwise.

          Section 10.8  ENTIRE AGREEMENT.  Except for the Confidentiality 
Agreement, this Agreement (together with the Disclosure Schedule, Exhibits, 
and the further agreements expressly referred to herein) and the License 
Agreement constitute the entire agreement of the parties hereto with respect 
to the subject matter hereof and supersede all prior agreements and 
undertakings, both written and oral, between or among the parties, or any of 
them, with respect to the subject matter hereof.

          Section 10.9  SEVERABILITY.  If any term or other provision of this 
Agreement, or any portion thereof, is invalid, illegal or incapable of being 
enforced by any rule of law or public policy, all other terms and provisions 
of this Agreement, or the remaining portions thereof, shall nevertheless 
remain in full force and effect.  Upon such determination that any such term 
or other provision, or any portion thereof, is invalid, illegal or incapable 
of being enforced, the parties hereto shall negotiate in good faith to modify 
this 


                                     125

<PAGE>

Agreement so as to effect the original intent of the parties as closely as 
possible in an acceptable manner to the end that the transactions 
contemplated hereby are consummated to the fullest possible extent.

          Section 10.10  GOVERNING LAW.  This Agreement shall be governed by 
the laws of the State of New York as to all matters, without regard to the 
conflict of laws principles thereof.

          Section 10.11  GUARANTEE.  Guarantor hereby unconditionally and 
irrevocably guarantees all of the obligations and liabilities of Buyer under 
this Agreement, including but not limited to the full and prompt payment of 
all sums that now are or may hereafter become due and payable from Buyer to 
Seller under this Agreement and the full and prompt performance of all 
present and future obligations and liabilities of Buyer to Seller under this 
Agreement.  Guarantor further promises to pay all such sums due Seller under 
this guarantee promptly on demand, without deduction for any claim or set-off 
or counterclaim and regardless of whether recourse has first 


                                     126

<PAGE>

been sought against Buyer.  This is a guarantee of payment and not of 
collection.





















                                     127

<PAGE>

          IN WITNESS WHEREOF, Seller, Guarantor and Buyer have caused this 
Agreement to be signed by their respective duly authorized officers as of the 
date first above written.

                                       THE COLEMAN COMPANY, INC.



                                       By: Paul Shapiro
                                          ----------------------------------
                                          Name:  Paul Shapiro
                                          Title: Executive Vice President/
                                                  General Counsel


                                       SIEBE PLC



                                       By: JAMES F. MUELLER
                                          ----------------------------------
                                          Name: James F. Mueller
                                          Title: Director



                                       RANCO INCORPORATED OF DELAWARE



                                       By: TIMOTHY J. DOLAN
                                          ----------------------------------
                                          Name: Timothy J. Dolan
                                          Title: Vice President

<PAGE>

                                                                      EXHIBIT A
                                       
                               LICENSE AGREEMENT


          THIS AGREEMENT, made and entered into as of [___________], 1998 by 
and among THE COLEMAN COMPANY, INC., a Delaware corporation (hereinafter 
referred to as "Licensor"), SIEBE PLC, an English corporation (hereinafter 
referred to as "Guarantor"), and RANCO INCORPORATED OF DELAWARE, a Delaware 
corporation and a wholly-owned subsidiary of Guarantor (hereinafter referred 
to as "Licensee").

                                  WITNESSETH:

          WHEREAS Licensee desires to obtain a license to use the Licensed 
Mark (as defined below) in connection with the manufacture, merchandising, 
promotion, advertising, sale and distribution of the Merchandise (as defined 
below), and Licensor is willing to grant such license subject to all the 
terms of this Agreement:

          NOW, THEREFORE, in consideration of the premises and the mutual 
covenants hereinafter set forth, Licensor and Licensee agree as follows:

     I    DEFINITIONS

          The following definitions shall be applicable throughout this 
Agreement:

          1.1  The term "Licensed Mark" shall mean the trademark "COLEMAN," 
and the variations thereof and associated logos set forth in Schedule A.

          1.2  The term "Licensed Merchandise" shall mean Merchandise (as 
that term is defined in Section 1.C below) that is approved by Licensor in 
accordance with 

<PAGE>

Section 4 hereof and is sold or promoted by Licensee under the Licensed Mark.

          1.3  The term "Merchandise" shall mean smoke alarms, carbon 
monoxide detectors, heat detectors, flammable gas detectors and indoor air 
quality monitors.

          1.4  The term "Territory" shall mean the world.

          1.5  The term "Net Sales" shall mean the total invoiced price of 
the Licensed Merchandise shipped by Licensee to its customers, less federal, 
state and local sales, use and excise taxes, freight and insurance (if 
separately stated), and actual returns.  Net Sales in any quarter shall be 
reduced by returns made in such quarter, regardless of when the sales of such 
returned items were made.  For purposes of calculating Net Sales in the case 
of "direct ship", "first-cost" or F.O.B.  sales made by Licensee hereunder, 
any Licensed Merchandise shipped by Licensee's contract manufacturer directly 
to a customer of Licensee shall be valued at Licensee's customary wholesale 
price to its trade customers, regardless of the actual invoiced price to the 
customer.

          1.6  The term "Stock Purchase Agreement" shall mean the Stock 
Purchase Agreement between Licensor and Licensee dated February 18, 1998.
     
          1.7  The term ("Term") shall mean the duration of this Agreement, 
as set forth in Section 3, and shall include any renewal period(s) as 
described therein.

     II   LICENSE GRANT

          2.1  Licensor hereby grants to Licensee an exclusive license 
throughout the Territory during the Term to all of Licensor's right, title 
and interest in and to the Licensed Mark for use as a trademark and service 
mark, solely in conjunction with the term "Sheltra," for use solely in 
connection with the manufacture, advertising, merchandising, promotion, 
publicity, 

                                       2
<PAGE>

use, sale, distribution and servicing of Licensed Merchandise, subject to all 
the terms and conditions of this Agreement.  It is agreed that during the 
Term, Licensor shall not grant to any other entity, nor shall Licensor have, 
the right to use the word "Coleman" alone, or with other terms or symbols, in 
connection with Merchandise.  It is further agreed that should the Term last 
through, and end upon the conclusion of, a Second Renewal Term, then for one 
(1) year following the end of the Term, Licensor shall not use the word 
"Coleman" alone, or with other terms or symbols, in connection with the 
advertising, promotion, publicity, distribution or sale of Merchandise, nor  
license any other entity to so use the word or otherwise allow such use in 
return for compensation. 

          2.2  Licensee accepts said grant, and agrees to use its reasonable 
efforts to exploit the rights granted herein including, without limitation, 
maintaining a sales force or distribution network sufficient to provide 
effective distribution of the Licensed Merchandise, and assisting with 
Licensor's advertising program.  It is agreed that nothing herein shall 
require Licensee to sell Licensed Merchandise at a loss or shall interfere 
with Licensee's right to sell Merchandise which is not Licensed Merchandise.

          2.3  Licensee may use the Licensed Mark only in connection with the 
manufacture, advertising, merchandising, promotion, publicity, use, sale, 
distribution and servicing of Licensed Merchandise.  No license is granted 
hereunder for the use of the Licensed Mark for any purpose other than upon or 
in connection with the Licensed Merchandise. 

          2.4  Licensor makes no representation or warranty as to any rights 
to use the Licensed Mark outside of the United States and Canada.

                                       3
<PAGE>

          2.5  Licensee shall have no right to sublicense the Licensed Mark, 
except that Licensee may sublicense the Licensed Mark to any wholly-owned 
subsidiary of Guarantor, so long as such subsidiary remains a wholly-owned 
direct or indirect subsidiary of Guarantor.  In the event that Licensee shall 
grant a sublicense as permitted hereby, Licensee shall be jointly and 
severally liable along with any such authorized sublicensee to comply in all 
respects with all requirements of this Agreement.  In addition, Licensor 
shall have the direct right under any such sublicense agreement to exercise 
direct control over the quality of Licensed Merchandise and related materials 
to the same extent as it has under this Agreement.

     III  TERM

          3.1  This Agreement shall become effective as of the date first 
above written (the "Effective Date") and shall continue for a period of five 
(5) years, terminating on the fifth anniversary of the Effective Date (the 
"Initial Term"), unless terminated prior thereto in accordance with the terms 
and conditions hereof.

          3.2  Licensee shall have the option to renew this Agreement for two 
additional five (5) year periods (the "First Renewal Term" and "Second 
Renewal Term," respectively) by giving Licensor written notice at least one 
hundred and twenty (120) days prior to the end of the Initial Term or the 
First Renewal Term, respectively; PROVIDED that Licensee is in compliance in 
all material respects with all terms and conditions of this Agreement.  The 
First Renewal Term shall commence upon the date of expiration of the Initial 
Term and shall terminate on the fifth anniversary of such date; the Second 
Renewal Term shall commence upon the date of expiration of the First Renewal 
Term and shall terminate on the fifth anniversary of such date.

     IV   LICENSED MERCHANDISE AND QUALITY CONTROL

                                       4
<PAGE>

          4.1  Licensee agrees that Licensed Merchandise and its Packaging 
will be designed, manufactured, advertised, promoted, publicized, distributed 
and sold only in a manner which (i) is consistent with Licensor's standards 
for the Licensed Merchandise in the six (6) months prior to the date hereof, 
(ii) is consistent with the safety and quality standards of the industry 
standards for the Licensed Merchandise, and (iii) is commensurate with the 
prestige and reputation of the Licensed Mark.

          4.2  Licensee must obtain the prior written approval of Licensor 
for all material changes in designs, specifications, colors, materials and 
contract manufacturers of all Merchandise and components thereof intended to 
be sold as Licensed Merchandise, including any labels, instructions, 
packaging, containers and displays (said labels, instructions, packaging, 
containers and displays hereinafter collectively "Packaging") intended to be 
utilized in connection with the Licensed Merchandise, to the extent that any 
such changes affect the safety, performance or quality standards of such 
Licensed Merchandise and Packaging or the use of the Licensed Mark thereon. 
The designs, specifications, colors, materials and contract manufacturers for 
the Merchandise and Packaging sold by Licensor immediately prior to the date 
hereof shall be deemed pre-approved.

          4.3   From time to time during the Term, Licensee shall submit to 
Licensor design change proposals for any items or styles of Licensed 
Merchandise and Packaging proposed by Licensee, which materially differ from 
the Licensed Merchandise and Packaging sold by Licensor immediately prior to 
the date hereof, to the extent such design change proposals or Packaging 
affect the safety, performance or quality standards of the Licensed 
Merchandise or Packaging or the use of the Licensed Mark thereon.  Within  
ten (10) business days of Licensor's receipt of such design proposals of the 
Li-

                                       5
<PAGE>

censed Merchandise and Packaging, Licensor will review them and Licensee will 
provide its full assistance and cooperation to Licensor in such review, 
including making available a qualified person(s) appointed by Licensee to 
meet with Licensor and assist Licensor in its review.  Not later than the end 
of such ten (10) business day period, Licensor shall notify Licensee of which 
if any of the design proposals or Packaging Licensor has approved and of 
objections, if any, to any aspect of the design proposals or Packaging.  
Failure to notify Licensee of approval or objections within said ten (10) 
business day period shall be deemed an approval.

          4.4  The Licensed Merchandise and Packaging manufactured, sold, 
advertised or promoted by Licensee shall be identical to the Licensed 
Merchandise and Packaging approved by Licensor pursuant to Section 4.B with 
respect to the safety, performance or quality standards of such Licensed 
Merchandise and Packaging and the use of the Licensed Mark thereon.  
Immediately upon commencement of commercial production of any Licensed 
Merchandise and Packaging, Licensee shall notify Licensor and permit Licensor 
to inspect a production sample of each stock keeping unit (an "SKU") of the 
Licensed Merchandise and Packaging.  If, in Licensor's judgment, the 
production sample is "Nonconforming" (i.e., not substantially identical to 
the previously-approved Licensed Merchandise and Packaging in the 
above-mentioned respects), Licensor shall promptly notify Licensee and shall 
specify in which respects the sample is Nonconforming.  Upon receipt of such 
notice, Licensee shall immediately stop production and sale of the 
Nonconforming Licensed Merchandise and Packaging until a production sample is 
submitted and approved by Licensor.

          4.5  For purposes of monitoring quality, Licensee agrees to permit 
Licensor to inspect samples of each SKU of Licensed Merchandise and related 
Packaging 

                                       6
<PAGE>

from time to time, upon request throughout the Term.  In addition, upon 
request Licensee shall provide to Licensor, free of charge, at least one 
sample of each SKU (not including color variations) of Licensed Merchandise 
and related Packaging for presenting Licensor's licensing activities to 
corporate and business constituencies and for display purposes at Licensor's 
headquarters.

          4.6  Licensee will comply with all laws, rules, regulations and 
requirements of any governmental or administrative body (including, without 
limitation, the Federal Trade Commission and the Consumer Product Safety 
Commission), which may be applicable to the manufacture, advertising, 
merchandising, packaging, publicity, promotion, sale, distribution, shipment, 
import and export of the Licensed Merchandise, its Packaging and its 
componentry.

          4.7  Licensor and its duly authorized representatives shall have 
the right, during normal business hours and upon reasonable notice and the 
execution of a confidentiality agreement with Licensee substantially in the 
form attached hereto as Exhibit 1, once per quarter during the Term to 
inspect all manufacturing facilities utilized by Licensee (and its 
contractors and suppliers to the extent Licensee may use the same) and to 
examine all processes and records relating to the manufacturing, packaging, 
warehousing and distribution of the Licensed Merchandise and Packaging 
including, without limitation, the right to open and inspect shipping 
cartons, and make such other tests and inspections as it shall deem necessary 
to insure the quality of the Licensed Merchandise and Packaging.  Licensee 
shall take all necessary steps requested by Licensor to correct any 
deficiencies that might affect the quality of the Licensed Merchandise and 
Packaging.

          4.8  Licensee agrees to use its best efforts to safeguard the 
prestige of the Licensed Mark for the 

                                       7
<PAGE>

benefit of Licensor.  Licensee shall not market any of the Licensed 
Merchandise as close-outs or irregulars, in excess of 5% of total unit sales 
during any calendar year, except as approved in advance by Licensor in 
writing on a case-by-case basis.  In the event Licensor approves the sale of 
Licensed Merchandise as close-outs, Licensor shall have the absolute right to 
determine the appropriate close-out outlets.

          4.9  All Licensed Merchandise and/or Packaging will bear at least 
one label or display with the Licensed Mark in a form approved by Licensor in 
advance in accordance with Section 4.B hereof and will bear no label or 
display of the Licensed Mark unless previously approved by Licensor.

          4.10 The Licensed Merchandise shall be sold by Licensee only to (i) 
retail outlets  to which Licensor has sold Licensed Merchandise immediately 
prior to the date hereof in its ordinary course of business and not for 
closeout, or such other outlets as are specified on Schedule B hereto, (ii) 
such other retail outlets as may be expressly approved by Licensor in writing 
prior to any sale of Licensed Merchandise to such outlet, and (iii) such 
retail outlets as are established in the future that are of at least the same 
quality and reputation as those described in clauses (i) and (ii) above 
(collectively, the "Approved Retail Outlets").  Licensee shall not sell the 
Licensed Merchandise other than to Approved Retail Outlets, unless, and then 
only to the extent that, such sale has been previously approved in writing by 
Licensor.  Licensee shall upon notice immediately stop selling to any 
previously approved customer or other approved entity which becomes engaged 
in reselling Licensed Merchandise otherwise than to consumers at retail in 
the Territory.

                                       8
<PAGE>

     V    PUBLIC RELATIONS, ADVERTISING AND PROMOTION

          5.1  Licensee shall submit to Licensor for its prior written 
approval any and all public statements, press releases and responses to press 
inquiries relating in any way to this Agreement.

          5.2  Licensor shall have the right to approve in advance any and 
all advertising, marketing and promotions to be conducted by Licensee and all 
trade materials, business cards, invoices, stationery and other printed 
matter prepared by or for Licensee using or referring to the Licensed Mark.  
Licensee shall submit to Licensor for its prior approval copies of all of the 
foregoing.  Such approval shall not be unreasonably withheld and shall be 
deemed granted if Licensor does not respond within ten (10) business days of 
receipt of such submission.

          5.3  At least once each year, Licensee will submit for Licensor's 
information a presentation detailing Licensee's plans to market, promote and 
advertise the Licensed Merchandise.

     VI   ROYALTY PAYMENTS

          6.1  Licensee shall pay Licensor on a quarterly basis, for the 
duration of the Initial Term, and First Renewal Term and Second Renewal Term, 
if any, a royalty of five percent (5%) of Net Sales (the "Royalties").

          6.2  Royalties shall be paid within thirty (30) days of the close 
of each calendar quarter.  Each royalty payment shall be accompanied by a 
statement signed and certified by the Chief Financial Officer of Licensee 
that the accompanying remittance is the full amount due hereunder.  Each such 
accounting statement shall be in such form as Licensor may specify and shall 
show the Net Sales by customer made during the preceding quarter, and a 

                                       9
<PAGE>

computation of the amount of Royalties payable hereunder in respect of such 
Net Sales for such period (the "Royalty Report").  Such Royalty Report shall 
be furnished to Licensor whether or not any Royalty payments are payable for 
such period.  The first Royalty Report due under this Agreement shall be for 
the quarter ending March 31, 1998.  Upon request by Licensor, Licensee shall 
submit invoices, credit memoranda, factor statements and/or computer 
printouts substantiating the reported information, in addition to a summary 
by customer and product code and invoices and other supporting documentation. 
 Receipt or acceptance by Licensor of any Royalty Report furnished, or of any 
sums paid by Licensee, shall not preclude Licensor from questioning their 
correctness at any time.

          6.3  In the event Licensee exercises its option pursuant to Section 
13.B hereof to extend the license herein granted for purposes of liquidating 
its inventory of Licensed Merchandise, Licensee shall pay all Royalties with 
the accompanying Royalty Report quarterly within thirty (30) days following 
the close of each calendar quarter during the extension period following 
termination.

          6.4  As soon as practicable, but not later than ninety (90) days 
after the end of each year during the Term, and within ninety (90) days after 
the expiration or termination of the Term, Licensee shall submit to Licensor 
a statement signed and certified by the Chief Financial Officer of Licensee 
that the quarterly statements furnished by Licensee hereunder as well as 
Licensee's related books of account and other records and that such quarterly 
statements have been prepared in accordance with generally accepted 
accounting principles (except as provided in Section 6.H) applied on a basis 
consistent with Licensee's audited financial statements and that such 
statements and report are correct.  At the same time, Licensee shall also 
submit to Licensor a copy of the audited financial statements of Guarantor 
for its 

                                      10
<PAGE>

most recently completed fiscal year.

          6.5  All royalty payments and accounting statements are to be 
directed as provided in Section 16.A, below.

          6.6  In the event that payment of Royalties to Licensor hereunder 
gives rise to any taxes, duties and other governmental charges in the 
Territory, including, without limitation, any withholding taxes, stamp duties 
or documentary taxes, turnover, sales or use taxes, value added taxes, excise 
taxes, customs or exchange control duties or any charges, Licensee and 
Licensor shall each be responsible for one half of such taxes, duties or 
charges, except that Licensor shall be responsible for any tax imposed on 
Licensor's income by the jurisdictions in which it conducts business.

          6.7  All royalty payments shall accrue upon the sale of the 
Licensed Merchandise regardless of the time of collection by Licensee.  For 
purposes of this Agreement, Licensed Merchandise shall be considered "sold" 
upon the date of invoicing.

          6.8  Royalty payments shall be based on U.S. dollar calculations 
and paid by Licensee in U.S. dollars.  Local currency sales shall be 
converted to U.S. dollars on a monthly basis using the average exchange rates 
of New York banks as published in the WALL STREET JOURNAL during the month in 
which sales are made, in accordance with generally accepted accounting 
principles as the same may be amended from time to time.

          6.9  If any governmental entity restricts or prohibits, by exchange 
controls or otherwise, the payment to Licensee of any sums due it on sales of 
Licensed Merchandise hereunder,  Licensee shall, notwithstanding any such 
restriction, pay to Licensor in the United States any and all such sums due 
Licensor hereunder in 

                                      11
<PAGE>

U.S. dollars, as and when due in accordance with the terms hereof.

     VII  USE OF LICENSED MARK

          7.1  Licensee shall use and display the Licensed Mark only in such 
forms detailed in the standards and specifications guidelines provided by 
Licensor, as the same may be changed from time to time, or otherwise approved 
by Licensor in writing; provided, however, that Licensor shall provide thirty 
(30) days' advance notice of any such change to the guidelines, but Licensee 
may continue to use the Packaging, stationery and other items containing the 
previously approved forms of the Licensed Mark to the extent such items are 
held in inventory on the date of such notice, but in no event for more than 
nine (9) months following such notice. 

          7.2  Licensee will not use the Licensed Mark as a corporate name or 
as a trade name, in whole or in part, or in such a way as, in Licensor's sole 
judgment, may give the impression that the Licensed Mark is the property of 
Licensee.  No name or names shall be conjoined or used by Licensee in 
connection with the Licensed Mark in or on any advertising, publicity, trade 
or promotional material or Packaging utilized by Licensee in connection with 
the Licensed Merchandise except as required by Section 2.A or to the extent 
that such is specifically required by law to indicate the source of 
manufacture or distribution of the Licensed Merchandise.  Licensee shall not 
use any name which, in Licensor's judgment, may be confusingly similar to the 
Licensed Mark on Merchandise or otherwise, during the Term or thereafter.

          7.3  Licensee acknowledges that the Licensed Mark has acquired 
valuable goodwill with the public and that any products bearing the Licensed 
Mark have acquired a reputation of high quality.  Licensee acknowledges that 
Licensor is the owner of all right, title and interest in 

                                      12
<PAGE>

and to the Licensed Mark, and is also the owner of the goodwill attached to 
the Licensed Mark including that which arises from the sale of Licensed 
Merchandise hereunder.  All use by Licensee of the Licensed Mark shall be 
deemed to have been made by and for the benefit of Licensor for the purposes 
of securing and maintaining trademark rights, applications and/or 
registrations, and all uses of the Licensed Mark by Licensee, or by any 
sublicensee or assignee, and any goodwill arising therefrom, shall inure to 
the sole and exclusive benefit of Licensor.

          7.4  Licensee hereby assigns to Licensor any rights to the Licensed 
Mark which may, by operation of law or otherwise, vest in Licensee as a 
consequence of Licensee's activities under this Agreement, and any goodwill 
arising therefrom, which shall in any event inure to the sole and exclusive 
benefit of Licensor.  Licensee will not, at any time, do or suffer to be done 
any act or thing which will, in any way, impair or adversely affect the 
ownership or the rights of Licensor in or to the Licensed Mark or its 
reputation, and Licensee will make no applications nor seek any registration 
or ownership rights in or to the Licensed Mark in the Territory or elsewhere.

          7.5  Licensee acknowledges that only Licensor may file or prosecute 
trademark applications to register the Licensed Mark.  Licensee will 
cooperate with Licensor in connection with the filing and prosecution by 
Licensor of any such applications, and the maintenance or renewal of any 
trademark registration for the Licensed Mark, and will supply Licensor with 
Merchandise bearing the Licensed Mark, including samples, Packaging and other 
uses of the Licensed Mark, as may reasonably be requested by Licensor in 
connection herewith.  Licensee shall execute all documents, including, but 
not limited to, registered user agreements and any cancellations thereof, 
which Licensor may request in order to obtain or maintain a 

                                      13
<PAGE>

registration or to establish or to maintain Licensor's ownership of the 
Licensed Mark.  

          7.6  Licensor currently owns registrations and applications for 
registration of the Licensed Mark for Merchandise in the jurisdictions listed 
on Schedule A hereto.  Licensee will give Licensor reasonable advance notice 
prior to using any of the Licensed Marks in any jurisdiction not covered by a 
registration or application for registration licensed hereunder.  Licensor 
will (i) file and prosecute applications for registration of the Licensed 
Mark for use for Merchandise in such other jurisdictions as Licensee 
reasonably deems appropriate at Licensee's cost, and (ii) if Licensor elects 
not to maintain or renew any trademark registration of the Licensed Mark, 
Licensee may request that Licensor do so and Licensor will so renew or 
maintain such registration at Licensee's expense; provided that in either 
case, Licensee shall be entitled to deduct Licensee's costs and expenses from 
the Royalties payable to Licensor hereunder on account of sales of Licensed 
Merchandise in such jurisdiction. 

          7.7  Licensee agrees and undertakes to use the Licensed Mark in 
compliance with any and all applicable trademark and other laws and to use 
such legends, markings or notices in connection therewith as are required by 
law or otherwise reasonably required by Licensor to protect its rights.  Upon 
expiration or termination of this Agreement for any reason whatsoever, 
Licensee will execute and file any and all documents acknowledging that it no 
longer has rights in the Licensed Mark which Licensor shall require.  
Licensor shall bear all expenses reasonably incurred in preparing and 
recording any such documents.

          7.8  Licensee agrees not (i) to challenge the validity of or 
Licensor's ownership of the Licensed Mark when used separately or in 
composite form with other 

                                      14
<PAGE>

trademarks, logos, or designs, or any application for registration thereof, 
or any trademark registration thereof, in any jurisdiction, or (ii) to 
contest the fact that Licensee's rights under this Agreement terminate upon 
termination or expiration of this Agreement. The provisions of this Section 
7.H shall survive termination or expiration of this Agreement.

          7.9  Licensee shall promptly notify Licensor of any infringement, 
imitation or act inconsistent with Licensor's ownership of the Licensed Mark 
by third parties, or any act of unfair competition by third parties relating 
to the Licensed Mark, wherever and whenever such infringement or act shall 
come to the attention of the executive of Licensee responsible for licensing 
matters or the general manager of Licensee's business, and any successors 
thereto or replacements therefor.  After receipt of such notice from 
Licensee, Licensor shall in its sole discretion decide whether to take action 
with respect to such infringement or act, and Licensee shall fully cooperate 
with Licensor in such action and, if so requested by Licensor, shall join 
with Licensor as a party to any such action brought by Licensor.  Licensor 
shall bear all expenses in connection with the foregoing.  Any recovery as a 
result of such action shall belong solely to Licensor.  Licensee agrees that 
Licensor shall have the sole power to take legal or other action before any 
court or governmental authority with respect to the infringement and the 
protection of the Licensed Mark.  If Licensor decides not to take action with 
respect to such infringement or act, Licensee may request that Licensor so 
act and upon such request, Licensor shall take all reasonable steps to stop 
the infringement, imitation or act, provided that Licensee reimburse Licensor 
for all costs incurred by Licensor (net of amounts recovered by Licensor).

          7.10 Licensee shall not at any time use the Licensed Mark or the 
Licensed Merchandise, or any materi-

                                      15
<PAGE>

al utilizing or reproducing the Licensed Mark or Licensed Merchandise, in a 
manner that is reasonably likely to derogate the value, reputation or 
goodwill associated with the Licensed Mark.

     VIII BOOKS AND RECORDS

          Licensee shall maintain, at its main offices, true and accurate 
books and records, in accordance with generally accepted accounting 
principles, containing all particulars which may be necessary for the purpose 
of verifying compliance with the terms and conditions hereof and for 
determining all amounts payable to Licensor hereunder, which books and 
records shall be separate and distinct from those relating to Licensee's 
businesses other than the sale of Licensed Merchandise.  Licensee shall make 
such books and records available to Licensor and its designated 
representatives during regular business hours and upon reasonable notice once 
per quarter throughout the Term, including any renewal terms, and a period of 
twelve (12) months thereafter, for the purpose of auditing Licensee's 
reports, accounting statements and royalty payments hereunder.  Licensor 
shall be entitled to make copies, at its expense, of any such records.  
Without limitation of Licensor's rights under Section 12, if Licensor 
uncovers an error in Net Sales or royalty computation or in the computation 
of any other amounts due to Licensor or payable by Licensee, Licensee agrees 
to pay immediately all sums due (with interest at the prime rate from the 
date payment was due hereunder), and if such error exceeds 5% of the amount 
properly payable by Licensee, Licensee will at the same time reimburse 
Licensor for its reasonable costs of conducting such audit.

     IX   REPRESENTATIONS AND WARRANTIES OF LICENSEE AND GUARANTOR 

          9.1  ORGANIZATION.  Each of Licensee and Guar-

                                      16
<PAGE>

antor is a corporation duly organized, validly existing and in good standing 
under the laws of the jurisdiction of its incorporation or organization.

          9.2  AUTHORITY RELATIVE TO THIS AGREEMENT.  Each of Licensee and 
Guarantor has full corporate power and authority to execute, perform and 
deliver this Agreement.  The execution, delivery and performance of this 
Agreement has been duly and validly authorized by all necessary corporate 
action, and no other corporate proceedings on the part of Licensee or 
Guarantor are necessary to authorize this Agreement.  This Agreement has been 
duly and validly executed and delivered by each of Licensee and Guarantor and 
constitutes a valid and binding agreement of each of Licensee and Guarantor, 
enforceable in accordance with its terms, except that (i) such enforcement 
may be limited by bankruptcy, insolvency, reorganization, moratorium or other 
similar laws now or hereafter in effect relating to creditors' rights and 
(ii) the remedy of specific performance and injunctive and other forms of 
equitable relief may be subject to equitable defenses and to the discretion 
of the court before which any proceeding therefor may be brought.

          9.3  NO VIOLATION.  The execution, performance and delivery of this 
Agreement by each of Licensee and Guarantor will not (i) violate any 
provision of the Certificate of Incorporation, By-Laws or other 
organizational documents of Licensee or Guarantor, (ii) violate, or be in 
conflict with, or constitute a default or termination event (or an event 
which, with notice or lapse of time or both, would constitute a default or a 
termination event) under, any agreement or commitment to which Licensee or 
Guarantor is a party, or (iii) violate any applicable statute or law or any 
judgment, decree, order, regulation or rule of any court or governmental 
authority binding on Licensee or Guarantor.

          9.4  CONSENTS AND APPROVALS.  No consent, 

                                      17
<PAGE>

approval or authorization of, or declaration, filing or registration with, 
any governmental or regulatory authority is required in connection with the 
execution, delivery and performance of this Agreement by Licensee or 
Guarantor.  No consent of any person is necessary for the execution, 
performance or delivery of this Agreement by Licensee or Guarantor, 
including, without limitation, consents from parties to loans, contracts, 
leases or other agreements to which Licensee or Guarantor is a party.

     X    REPRESENTATION AND WARRANTIES OF LICENSOR

          10.1 ORGANIZATION.  Licensor is a corporation duly organized, 
validly existing and in good standing under the laws of the State of Delaware.

          10.2 AUTHORITY RELATIVE TO THIS AGREEMENT.  Licensor has full 
corporate power and authority to execute, perform and deliver this Agreement. 
The execution, delivery and performance of this Agreement has been duly and 
validly authorized by all necessary corporate action, and no other corporate 
proceedings on the part of Licensor are necessary to authorize this 
Agreement.  This Agreement has been duly and validly executed and delivered 
by Licensor and constitutes a valid and binding agreement of Licensor, 
enforceable in accordance with its terms, except that (i) such enforcement 
may be limited by bankruptcy, insolvency, reorganization, moratorium or other 
similar laws now or hereafter in effect relating to creditors' rights and 
(ii) the remedy of specific performance and injunctive and other forms of 
equitable relief may be subject to equitable defenses and to the discretion 
of the court before which any proceeding therefor may be brought.

          10.3 NO VIOLATION.  The execution, performance and delivery of this 
Agreement by Licensor will not (i) violate any provision of the Certificate 
of Incorporation 

                                      18
<PAGE>

or By Laws of Licensor, (ii) violate, or be in conflict with, or constitute a 
default or termination event (or an event which, with notice or lapse of time 
or both, would constitute a default or a termination event) under, any 
agreement or commitment to which Licensor is a party, or (iii) violate any 
applicable statute or law or any judgment, decree, order, regulation or rule 
of any court or governmental authority binding on Licensor.

          10.4 CONSENTS AND APPROVALS.  No consent, approval or authorization 
of, or declaration, filing or registration with, any governmental or 
regulatory authority is required in connection with the execution, delivery 
and performance of this Agreement by Licensor.  No consent of any person is 
necessary for the execution, performance or delivery of this Agreement by 
Licensor, including, without limitation, consents from parties to loans, 
contracts, leases or other agreements to which Licensor is a party.

          10.5 LICENSED MARK.  To the knowledge of Licensor after due inquiry 
of appropriate Licensor personnel, Licensor owns all right, title and 
interest in and to the Licensed Mark in the United States and Canada.  There 
is no claim, action, proceeding, suit, complaint or, to the knowledge of 
Licensor, investigation pending or, to the knowledge of Licensor, threatened 
that (i) the use of the Licensed Mark in connection with the Merchandise 
infringes upon or conflicts with the intellectual property rights of any 
other person, or (ii) challenges the legality, validity, enforceability, use 
or ownership of the Licensed Mark.  To the knowledge of Licensor, no third 
party has interfered with, infringed upon or misappropriated the Licensed 
Mark.

     XI   INDEMNIFICATION AND INSURANCE

          11.1 Licensor hereby agrees to indemnify and hold harmless 
Licensee, its affiliates and each of their 

                                      19
<PAGE>

respective shareholders, officers, directors, employees and agents against 
any and all liability, claims, causes of action, suits, damages and expenses 
(including reasonable attorneys' fees), for which they or any of them may 
become liable or may incur or be compelled to pay in any action or claim 
against them or any of them arising from infringement of statutory or common 
law trademark or trade name rights of others through the use of the Licensed 
Mark by Licensee in the United States, Canada or Mexico in compliance with 
all of the terms and conditions of this Agreement, provided that Licensee:  
(i) gives Licensor written notice of each such action or claim promptly 
following its receipt thereof, (ii) gives Licensor the opportunity to 
undertake and to control the defense and settlement of such claim through 
counsel of its own choosing, and (iii) fully cooperates with Licensor in the 
investigation, defense and settlement of any such claim.  Licensee shall have 
the right to participate in (but not to control) any such defense through 
counsel of its choice, but at Licensee's expense.  If Licensor fails or 
refuses to undertake the defense of any such claim within a reasonable period 
after notice from Licensor, Licensee shall be entitled to defend such claim 
through counsel of its choice, and Licensor shall be responsible for 
reimbursing Licensee for any expenses incurred by Licensee, including but not 
limited to reasonable attorneys', accountants', and other experts' fees and 
expenses in the investigation, defense and settlement of such claim and in 
enforcing its rights pursuant to this Section 11.A, in addition to any 
damages and penalties ultimately awarded against Licensee which are 
indemnifiable hereunder.

          11.2 Licensee agrees to indemnify and hold harmless Licensor, its 
affiliates and each of their respective shareholders, officers, directors, 
employees and agents against any and all liability, claims, causes of action, 
suits, damages and expenses for which they or any of them may become liable 
or may incur or be com-

                                      20
<PAGE>

pelled to pay in any action or claim against them or any of them by any 
persons other than Licensor for or by reason of (a) the infringement of  
design rights, patents, trade secret rights or rights to any intellectual 
property of third persons (other than trademark rights infringed by use of 
the Licensed Mark in accordance with all the terms hereof, or resulting from 
a breach by Licensee of its representations and warranties in the Stock 
Purchase Agreement) as a result of the manufacture, warehousing, marketing, 
promotion, publicity, advertising, sale or distribution of Licensed 
Merchandise by Licensee or any of its agents, representatives, contractors, 
sublicensees or assigns, (b) any acts, whether of omission or commission, 
that may be committed or suffered by Licensee or any of its agents, 
representatives, contractors, sublicensees or assigns in connection with this 
Agreement, (c) any liability (including, without limitation, any personal 
injury or property damage) arising out of the manufacture, warehousing, 
marketing, promotion, publicity, sale, advertising, or distribution of or the 
use by any professional or consumer of, Licensed Merchandise, or any 
violation of any warranty, representation or agreement made or deemed made by 
Licensee or any of its agents, representatives, contractors, sublicensees or 
assigns with respect to the Licensed Merchandise, or (d) the breach by 
Licensee of any of its representations, warranties or covenants in this 
Agreement. Licensor shall give Licensee written notice of any such claim 
promptly following its receipt thereof.  Licensee shall have the opportunity 
to undertake and to control the defense and settlement thereof through 
attorneys selected by Licensee after notice to and consultation with Licensor 
and good faith negotiations regarding alternative counsel if Licensor has 
reasonable objections to Licensee's choice of counsel. Notwithstanding the 
foregoing, Licensee shall not, without the consent of Licensor, settle or 
compromise any claim or consent to the entry of any judgment which includes a 
remedy other than the payment of money by Licensee.  Licensor will cooperate 

                                      21
<PAGE>

with Licensee in the investigation, defense and settlement of any such claim 
and shall have the right to participate in (but not to control) any such 
defense through counsel of its own choice, but at Licensor's own expense.  If 
Licensee elects not to undertake the defense of any such claim, it will be 
responsible for reimbursing Licensor for any expenses incurred by Licensor, 
including but not limited to reasonable attorneys', accountants', and other 
experts' fees and expenses in the investigation, defense and settlement of 
such claim and in enforcing its rights pursuant to this Section 11.B, in 
addition to any damages and penalties ultimately awarded against Licensor 
which are indemnifiable hereunder.

          11.3(i)   Without limiting the indemnification provided in Section 
11.B above and in addition to it, Guarantor agrees to carry and maintain, 
throughout the Term (including all renewal terms, if any) and for five years 
thereafter, with an insurance carrier authorized to do business in all 
jurisdictions in which Licensee is qualified to do business and having a 
rating of "A" Class "X" or better according to Best's Insurance Reports and a 
rating of classification "A" or better according to Standard and Poor's, the 
following insurance coverage:

          (1)  a broad form Comprehensive General Liability Insurance Policy 
          or, if such policy is not reasonably available, such other policy 
          as would provide substantially the same protection to Licensor and 
          Licensee or Guarantor written on occurrence basis covering 
          Licensee's activities with respect to the Licensed Merchandise 
          which includes but is not limited to coverage for contractual 
          liability, premises operations, products liability, personal injury 
          and advertising injury liability and broad form property damage 
          liability, which shall provide protection to Licensor of at least 
          Ten Mil-

                                      22
<PAGE>

          lion Dollars ($10,000,000) per occurrence and Ten Million Dollars
          ($10,000,000) in the annual aggregate;

          (2)  statutory workers' compensation and employers liability 
          insurance with a limit for Bodily Injury by Accident of not less 
          than One Million Dollars ($1,000,000) each accident and for Bodily 
          Injury by Disease of not less than One Million Dollars ($1,000,000) 
          policy limit and of not less than One Million Dollars ($1,000,000) 
          for each employee; and 

          (3)  automobile liability insurance covering all owned, non-owned, 
          and hired vehicles to be used in the performance of this Agreement 
          with minimum limits of Two Million Dollars ($2,000,000) combined 
          single limit.

          These stipulated limits of coverage shall not be construed as a 
limitation of any potential liability of Licensee or Guarantor.  Guarantor 
shall have Licensor, its parents, subsidiaries, affiliated companies and 
their respective officers, directors, employees, and agents named as 
additional insureds on such policies. Guarantor shall, within thirty (30) 
days after the date first above written, provide to Licensor a Certificate of 
Insurance and certified copies of endorsements to such policies from the 
insurance carrier which evidences each insurance coverage required, the 
limits of liability stated above, without any provision for deductibles or 
self-insured retentions, and further provides that the policies may not be 
materially changed or canceled without at least sixty (60) days prior written 
notice to Licensor.  Not less than thirty (30) days prior to any such 
cancellation or expiration of the policies, Guarantor shall provide Licensor 
with a Certificate of Insurance and certified copies of endorsements 
evidencing that a new insurance policy with the same coverage and terms 
described above will be in place prior to such termination.  Upon reason-

                                      23
<PAGE>

able request by Licensor during the Term, Guarantor shall deliver to Licensor 
evidence in form and substance reasonably satisfactory to Licensor, of the 
maintenance and renewal of the required insurance, including, without 
limitation, renewal certificates and copies of those portions of policies, 
riders and endorsements pertaining to this Agreement.  Any insurance policy 
purchased by or carried by Licensor or any of its affiliates shall not be 
required to contribute in case of any loss by any person, including Licensor 
or Licensee and their affiliates, relating to the Licensed Merchandise and 
either the Certificate of Insurance to be provided hereunder or an 
endorsement to such policy shall state the same, with a certified copy of 
such endorsement accompanying the Certificate of Insurance to be delivered to 
Licensor.  Guarantor's failure to deliver said insurance certificate or 
renewals thereof and/or Licensor's failure to request said insurance 
documentation shall not be construed as a waiver of Guarantor's obligation to 
provide the required insurance.

               (ii)  Each of Licensee and Guarantor hereby waives all rights 
to claim against Licensor with respect to any bodily injury, personal injury 
losses or damages to real or personal property, or any other loss arising 
from any claim however so caused covered by Licensee's indemnification 
obligation hereunder and agrees to obtain a waiver of subrogation from any 
insurance company insuring its interests in favor of Licensor, its parents, 
subsidiaries, affiliated companies, and their respective officers, directors, 
employees and agents.

               (iii) Guarantor shall require all subcontractors for whom 
Guarantor or Licensee does not furnish insurance to carry and maintain 
throughout their performance of services in connection with this Agreement 
the insurance coverage required under this Section 11.C with the appropriate 
endorsements as required hereunder.

                                      24
<PAGE>

               (iv) Should Guarantor fail to obtain the insurance coverage 
and provide the documentation required by this Section 11.C, Licensor shall 
have the right itself to obtain such coverage, at Guarantor's expense.

     XII  TERMINATION

          Notwithstanding the terms and conditions of Section 3 hereof, this 
Agreement may be terminated in accordance with the following provisions:

          12.1 Licensor may terminate this Agreement immediately by giving 
notice in writing to Licensee in the event Licensee fails to make payment of 
royalties and any other amounts due hereunder as and when due, and fails to 
cure such default (i) for the first or third calendar quarter, within thirty 
(30) working days, or (ii) for the second or fourth calendar quarter, within 
ten (10) working days, after delivery of written notice of such default by 
Licensor.

          12.2 Either party may terminate this Agreement immediately by 
giving notice in writing to the other party in the event the other party 
materially fails to perform its obligations hereunder (including, without 
limitation, the obligations to submit timely its quarterly reports; to obtain 
prior approvals as required hereby; to distribute only through approved 
distribution channels; to maintain adequate insurance and to use only as 
expressly permitted hereunder the Licensed Mark) or otherwise materially 
breaches any of its covenants, representations or warranties as set forth in 
this Agreement and such party fails to cure such default within thirty (30) 
days after delivery of written notice of such default from the other party.

          12.3 If Licensee or Guarantor shall make an assignment for the 
benefit of creditors, or shall generally not pay its debts as they become 
due, or shall file 

                                      25
<PAGE>

a petition commencing a voluntary case under the Bankruptcy Reform Act of 
1978, 11 U.S.C. Section 101 et seq., as amended or any successor thereto (the 
"Bankruptcy Code"), or shall be adjudicated an insolvent, or shall file any 
petition or answer seeking for itself any reorganization, arrangement, 
composition, readjustment, liquidation, dissolution, or similar relief under 
any present or future statute, law or regulations, or shall file any answer 
admitting or shall fail to deny the material allegations of such petition 
filed against it for such relief, or consent to the filing of any such 
petition or shall seek or consent to or acquiesce in the appointment of any 
agent, trustee, receiver, custodian, liquidator or similar officer for it or 
of all or any substantial part of its assets or properties, or its directors 
or majority stockholders shall take any action authorizing any of the 
foregoing or looking to its dissolution or liquidation, or it shall cease 
doing business as a going concern, or an order for relief shall be entered 
against it under any chapter of the Bankruptcy Code, or if, within sixty (60) 
days after the filing of any petition or the commencement of any proceeding 
against either party seeking any reorganization, arrangement, composition, 
readjustment, liquidation, dissolution or similar relief under the Bankruptcy 
Code or any other similar present or future statute, law or regulation, such 
proceeding shall not have been dismissed, or a decree or order of a court 
having competent jurisdiction shall have been entered approving as properly 
filed any such petition, or if, within sixty (60) days after the appointment, 
without the consent or acquiescence of such party, of any agent, trustee, 
receiver, custodian, liquidator or similar officer for it or of all or any 
substantial part of its properties, such appointment shall not have been 
vacated this Agreement shall automatically, without notice or any further act 
or deed of any party, terminate and be of no further force or effect, except 
that any and all liabilities and obligations of Licensee or Guarantor at the 
time outstanding under or in connec-

                                      26
<PAGE>

tion with this Agreement shall automatically, without notice or any 
creditor's act or deed of any party, become due and payable.

          12.4 In the event Licensee assigns or sublicenses any of its rights 
hereunder, or otherwise engages in a transfer prohibited by Section 16.C, 
without the prior written approval of Licensor, Licensor may, at its option, 
terminate this Agreement pursuant to Section 12.B.

          12.5  Notwithstanding anything to the contrary herein, in the event 
that Licensor terminates this Agreement pursuant to this Section 12, Licensor 
does not waive and shall have and reserves all rights and remedies provided 
under this Agreement and available at law and in equity, and in addition 
shall be entitled to accelerate payment to Licensor of all unpaid Royalties 
due up through the date of termination of the Agreement, which shall be 
payable to Licensor in full within thirty (30) days of the effective date of 
termination.

          12.6 If this Agreement shall be determined by a court, 
administrative or governmental body or authority to be in violation of any 
applicable law, or to require any material change to be in compliance with 
any judicial or administrative decision or ruling, the parties shall 
negotiate in good faith to revise the offending provision, and if either 
party in good faith determines that such offending provision cannot be 
revised without adversely affecting the material benefits to it of this 
Agreement, either party may elect to terminate this Agreement upon thirty 
(30) days' written notice to the other party.

                                      27
<PAGE>

     XIII EFFECT OF EXPIRATION OR TERMINATION

          13.1 Except to the extent provided in Section 13.B hereof, upon the 
expiration or termination of this Agreement for any reason, neither Licensee 
nor its receivers, representatives, agents, successors or assigns shall have 
any right to exploit or in any way use the Licensed Mark.  Except to the 
extent provided in Section 13.B hereof, upon such expiration or termination 
of this Agreement, Licensee shall forthwith discontinue all use of the 
Licensed Mark and shall not thereafter use the Licensed Mark or any variation 
or simulation thereof, and Licensee hereby irrevocably releases and disclaims 
any right or interest in or to the Licensed Mark. Within thirty (30) days of 
the expiration or termination of this Agreement, Licensee shall provide 
Licensor with an accurate schedule of all work in process and finished 
inventory of Licensed Merchandise to which the Licensed Mark is affixed, 
which is on hand as of the close of business on the date of such expiration 
or termination (hereinafter the "Inventory").

          13.2 If, upon the expiration or termination of this Agreement, 
Licensee shall have on hand any Inventory of the Licensed Merchandise and if 
Licensee is not otherwise in default under this Agreement, Licensee may 
continue to use the Licensed Mark solely in connection with the advertising, 
merchandising, promotion and sale of the Inventory of Licensed Merchandise 
for a period of up to nine (9) months following the expiration or termination 
of this Agreement.  During such nine (9) month period, Licensee shall be 
obligated to continue to pay Licensor the Royalties, if any, provided for in 
Section 6.A.  If Licensee elects to continue to use the Licensed Mark as 
provided under this paragraph, it shall notify Licensor of its election at 
least ninety (90) days prior to the expiration or termination of this 
Agreement.  Such notice shall include a complete and accurate schedule of 
Inventory of Licensed Merchandise which is projected to be on 

                                      28
<PAGE>

hand as of the close of business on the date of such expiration or 
termination and shall reflect Licensee's actual cost of each such item as set 
forth or reflected on the balance sheet contained in Licensee's latest 
quarterly report on Form 10-Q or annual report on Form 10-K.

          13.3 Upon the expiration or termination of this Agreement or, if 
applicable, upon the expiration of the period provided for in Section 13.B 
hereof, Licensee shall, at its own expense, remove all uses of or references 
to the Licensed Mark from all Inventory or destroy such Inventory, Packaging, 
advertising and promotional materials bearing the Licensed Mark or prepared 
for use in connection with the Licensed Merchandise.

     XIV  CONFIDENTIALITY

          14.1 In connection with the performance of this Agreement, Licensor 
and Licensee will have access to certain confidential and proprietary 
information of the other party, including, but not limited to, business 
plans, proposed advertising, designs, sales records, financial data and 
manufacturer's know-how, and also including the business terms of this 
Agreement.  Recognizing that such information represents valuable assets and 
property of the disclosing party, and the harm that may befall such party if 
any of such information is disclosed, the recipient agrees to hold all such 
information in strict confidence and not to use or otherwise disclose any 
such information to third parties without having received the prior written 
consent of the disclosing party and a written agreement from such third party 
to maintain such information in strict confidence.  The obligation of 
confidentiality created herein shall survive the expiration or termination of 
this Agreement.

          14.2 The obligations of confidentiality created herein shall cease 
to apply:

                                      29
<PAGE>

               (i)   to information which comes into the public domain, 
provided it did not come into the public domain through the unauthorized 
acts of the receiving party;

               (ii)  to information which was in the receiving party's 
possession prior to its disclosure, or was later disclosed to the receiving 
party by a third party who is lawfully in possession of such and, to the 
receiving party's knowledge, was under no obligation to keep such information 
confidential;

               (iii) to information which, in the opinion of the receiving 
party's counsel, is required to be disclosed by law, but only to the extent 
so required and only upon prior written notice to the other party hereto; and

               (iv)  to information of Licensee which Licensor may be 
required to disclose in order to enforce its rights under this Agreement.

     XV   BANKRUPTCY

          15.1 Notwithstanding the provisions of Section 12.C, in the event 
that it is determined by any court or bankruptcy trustee that this Agreement 
may be assumed or assigned in connection with a case commenced by or against 
either party under the Bankruptcy Code, Licensor and Licensee hereby 
acknowledge that adequate assurance of future performance under this 
Agreement (within the meaning of the Bankruptcy Code) shall include, INTER 
ALIA, adequate assurance:

               (i)  that any and all royalty payments and other consideration 
due from Licensee to Licensor under or pursuant to this Agreement shall be 
duly and timely paid;

                                      30
<PAGE>

               (ii)  that the assumption or assignment of this Agreement will 
not result in the breach by either party of any provision in any other 
license, contract, or agreement relating to the Licensed Mark or otherwise;

               (iii) that any person or entity that assumes this Agreement or 
to which this Agreement is assigned shall fully and faithfully assume, 
observe and comply with all of the covenants, requirements and restrictions 
provided for under this Agreement and that termination rights for breach of 
this Agreement shall continue to apply without change; and

               (iv)  that the value of the Licensed Mark to Licensor shall 
not be materially diminished by reason of the assumption or assignment of 
this Agreement.

Notwithstanding the foregoing, the parties recognize that circumstances may 
give rise to additional considerations, and nothing contained herein shall be 
construed to mean that considerations other than those set forth above shall 
not be deemed relevant to adequate assurance.
 
          15.2 Any person or entity to which this Agreement is assigned 
pursuant to the provisions of the Bankruptcy Code shall be deemed without 
further act or deed to have assumed all of the obligations arising under this 
Agreement on and after the date of such assignment.  Any such assignees shall 
upon demand execute and deliver to Licensor or Licensee, as the case may be, 
an instrument confirming such assumption.

     XVI  MISCELLANEOUS

          16.1 All notices required or permitted by this Agreement to be 
given to a party shall be in writing and shall be deemed to be duly given on 
the date delivered if delivered personally, on the fifth business day after 
being mailed by certified or registered mail (postage 

                                      31
<PAGE>

prepaid, return receipt requested) or on the next business day after being 
sent by reputable overnight courier (delivery prepaid), in each case, to the 
parties at the following addresses, or on the date sent and confirmed by 
electronic transmission to the facsimile number specified below (or at such 
other address or facsimile number for a party as shall be specified by notice 
given in accordance with this Section):

          If to Licensor:

               The Coleman Company, Inc.
               3600 North Hydraulic
               Wichita, KS 67219
               Attention:  Corporate Secretary
               Telephone:  (316) 832-2700
               Facsimile:  (316) 832-2634
               
          with a copy to:

               The Coleman Company, Inc.
               625 Madison Avenue
               New York, NY 10022
               Attention:  Chief Executive Officer
               Telephone:  (212) 527-4000
               Facsimile:  (212) 527-4150

               and:

               Skadden, Arps, Slate, Meagher & Flom LLP
               919 Third Avenue
               New York, NY 10022
               Attention:  Stephen M. Banker, Esq.
               Telephone:  (212) 735-2760
               Facsimile:  (212) 735-2000

          If to Licensee:

               Ranco Incorporated of Delaware

                                      32
<PAGE>

               300 Delaware Avenue, Suite 1704
               Wilmington, DE 19804-1612
               Attention:  President
               Telephone:  (302) 427-5779
               Facsimile:  (302) 738-7210

          with a copy to:

               Siebe plc
               Saxon House
               2-4 Victoria Street
               Windsor, Berkshire SL4 1EN
               Attention:  Chief Legal Officer
               Telephone:  011-44-1753-839-296
               Facsimile:  011-44-1753-622-030
  
          and:

               Fried, Frank, Harris, Shriver and Jacobson
               One New York Plaza
               New York, NY 10004
               Attention:  Sanford Krieger
               Telephone:  (212) 859-8230
               Facsimile:  (212) 859-4000


          Either party may change the address to which such notice and 
communications shall be sent by written notice to the other party, provided 
that any notice of change of address shall be effective only upon receipt.

          16.2 This Agreement (including Schedules) and the Stock Purchase 
Agreement set forth the entire agreement and understanding between the 
parties hereto relating in any way to the use of the Licensed Mark on the 
Licensed Merchandise, and to any other subject matter contained herein and 
merges all prior discussions between them. Neither party shall be bound by 
any definition, condition, warranty or representation other than as 

                                      33
<PAGE>

expressly stated in this Agreement, and this Agreement may not be amended or 
modified except by a written instrument signed by the party against whom such 
modification or amendment is to be enforced.

          16.3 The rights granted to Licensee hereunder are strictly personal 
to Licensee. Other than pursuant to Section 2.E, neither this Agreement nor 
any of the rights granted to Licensee hereunder may be assigned or 
sublicensed by Licensee or otherwise transferred (voluntarily or by operation 
of law), to any person, firm or corporation without the prior written 
approval of Licensor (which shall be in Licensor's sole discretion).
     
          16.4 In any review or consultation conducted by or on behalf of 
Licensor hereunder, Licensor is acting solely on its behalf and not as a 
consultant or advisor, and shall have no responsibility for the operation of 
Licensee's business or its manufacturing, distribution, sales or facilities 
used in connection therewith, whether upon the recommendation of Licensor or 
otherwise.  Nothing herein contained shall be construed to constitute the 
parties hereto as partners or as joint venturers, or either as an employee or 
agent of the other.

          16.5 This Agreement shall be deemed to be a contract made under the 
laws of the State of New York and shall be governed by and construed in 
accordance with the laws of such State, as if both parties were residents of 
such State.  The parties hereby consent to the exclusive jurisdiction of any 
court of competent jurisdiction sitting in the State of Delaware and hereby 
waive any objection to venue in such court.

          16.6 The headings in this Agreement are for the convenience of the 
parties only and shall not affect the meaning or interpretation of this 
Agreement or any provisions thereof.

                                      34
<PAGE>

          16.7  No waiver by either party, whether expressed or implied, of 
any provision of this Agreement, or of any breach or default, shall 
constitute a continuing waiver of such provision or a waiver of any other 
provision of this Agreement.  Acceptance of payments by Licensor shall not be 
deemed a waiver of any violation of, or default in, any of the provisions of 
this Agreement by Licensee.

          16.8  Except as otherwise provided herein, this Agreement shall be 
binding upon and inure to the benefit of the parties, their successors and 
permitted assigns.

          16.9  Guarantor hereby unconditionally and irrevocably guarantees 
all of the obligations and liabilities of Licensee under this Agreement, 
including but not limited to the full and prompt payment of all sums that now 
are or may hereafter become due and payable from Licensor to Licensee under 
this Agreement and the full and prompt performance of all present and future 
obligations and liabilities of Licensee to Licensor under this Agreement.  
Guarantor further promises to pay all such sums due Licensor under this 
guarantee promptly on demand, without deduction for any claim or set-off or 
counterclaim and regardless of whether recourse has first been sought against 
Licensee.  This is a guarantee of payment and not of collection.

          16.10 This Agreement may be executed in one or more counterparts, 
each of which shall be an original, but all of which, together, shall be 
deemed to constitute a single document.  

                                      35
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement 
as of the date and year first above written.


                         THE COLEMAN COMPANY, INC.


                         By:                           
                             ---------------------------------------------
                         Name:  PAUL SHAPIRO
                               -------------------------------------------
                         Title: EXECUTIVE VICE PRESIDENT/GENERAL COUNSEL
                                ------------------------------------------


                         RANCO INCORPORATED OF DELAWARE


                         By:                           
                             ---------------------------------------------
                         Name:                              
                               -------------------------------------------
                         Title:                             
                                ------------------------------------------


                         SIEBE PLC


                         By:                           
                             ---------------------------------------------
                         Name:                              
                               -------------------------------------------
                         Title:                             
                                ------------------------------------------