<PAGE>   1
                                                                   EXHIBIT 10(i)




                          PURCHASE AND SALE AGREEMENT



                                    BETWEEN



                            COOPER INDUSTRIES, INC.



                                      AND



                           FEDERAL-MOGUL CORPORATION



                                     DATED



                                AUGUST 17, 1998
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>      <C>                                                                                                           <C>
1.       CERTAIN DEFINITIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
2.       PURCHASE AND SALE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.1.      Purchase and Sale  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.2.      Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.3.      Closing Statement of Net Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.4.      Seller's Review of Preliminary Closing Statement of Net Assets . . . . . . . . . . . . . . . . .    __
         2.5.      Buyer's Response to Seller's Letter  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.6.      Meeting to Resolve Proposed Adjustments  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.7.      Resolution by Accounting Arbitrator  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.8.      Notices Relating to the Closing Statement of Net Assets  . . . . . . . . . . . . . . . . . . . .    __
         2.9.      Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         2.10.     Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
3.       REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.1.      Organization of Seller and the Champion Companies  . . . . . . . . . . . . . . . . . . . . . . .    __
         3.2.      Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.3.      Authorization of Transaction and Validity of Agreement . . . . . . . . . . . . . . . . . . . . .    __
         3.4.      Consents, Approvals and Filings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.5.      Non-Contravention  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.6.      Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.7.      Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.8.      Undisclosed Liabilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.9.      Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.10.     Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.11.     Environmental Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.12.     Material Contracts; No Defaults  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.13.     Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.14.     Real Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.15.     Intellectual Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.16.     Labor Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.17.     Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.18.     Sufficiency of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.19.     Brokers, Finders, etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         3.20.     Product Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         3.21.     Product Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      __  
         3.22.     Disclosure Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
4.       REPRESENTATIONS AND WARRANTIES OF BUYER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         4.1.      Organization of Buyer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         4.2.      Authorization of Transaction and Validity of Agreement . . . . . . . . . . . . . . . . . . . . .    __
         4.3.      Consents, Approvals and Filings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         4.4.      Non-Contravention  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         4.5.      Brokers, Finders, etc  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         4.6.      Availability of Funds  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
</TABLE>





                                     - i -
<PAGE>   3
                         TABLE OF CONTENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>      <C>                                                                                                           <C>
         4.7.      Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  __
5.       COVENANTS OF SELLER AND BUYER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.1.      Business Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.2.      Access to Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.3.      Consents; Filings; Fulfill Conditions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.4.      Fees and Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.5.      Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.6.      Use of the Cooper Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.7.      Company Books and Records  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.8.      Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.9.      Transfer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.10.     Disclosure Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.11.     WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.12.     Assumption of Certain Seller Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.13.     Inter- and Intra-Company Accounts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.14.     Patent and Trademark Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.15.     Performance Obligation Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.16.     Foreign Exchange Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.17.     Standard Motor Products Purchase Price Adjustment and Consigned Inventory  . . . . . . . . . . .    __
         5.18.     Further Assurances/Consents and Approvals  . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.19.     Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         5.20.     Buyer Investigation; No Representations or Warranties  . . . . . . . . . . . . . . . . . . . . .    __  
         5.21.     Indemnification for AlliedSignal Lawsuit and Bosch Infringement Claim  . . . . . . . . . . . . .    __
         5.22.     Third Party Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.23.     Assignment of Bonds to Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.24.     Transition Services Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.25.     Asbestos Claims  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.26.     Environmental Insurance Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         5.27.     Friable Asbestos Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
6.       EMPLOYEE MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         6.1.      Certain Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         6.2.      Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         6.3.      Representations Regarding Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . .    __
         6.4.      Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         6.5.      Cooper Employee Stock Purchase Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
7.       TAX MATTERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         7.1.      Representations and Warranties Regarding Tax Matters . . . . . . . . . . . . . . . . . . . . . .    __
         7.2.      Tax Indemnity  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         7.3.      Section 338 Elections  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         7.4.      Tax Return Filings for Pre-Closing Periods . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         7.5.      Tax Refunds  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
</TABLE>





                                     - ii -
<PAGE>   4
                         TABLE OF CONTENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>     <C>                                                                                                            <C>
         7.6.      Wage Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         7.7.      Cooperation and Exchange of Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
8.       CONDITIONS TO OBLIGATION TO CLOSE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         8.1.      Conditions to Obligation of Buyer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         8.2.      Conditions to Obligation of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         8.3.      Waiver; Right to Proceed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
9.       SURVIVAL; INDEMNIFICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         9.1.      In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         9.2.      Survival of Representations, Warranties and Covenants  . . . . . . . . . . . . . . . . . . . . .    __
         9.3.      Limits on Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         9.4.      Indemnification by Seller  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         9.5.      Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         9.6.      Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
10.      TERMINATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         10.1.     Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         10.2.     Effect of Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
11.      MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.1.     No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.2.     Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.3.     Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.4.     Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.5.     Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.6.     Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.7.     Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.8.     Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.9.     Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.10.    Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.11.    Incorporation of Exhibits and Schedules  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.12.    Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.13.    Deceptive Trade Practices Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __
         11.14.    Specific Performance
12.      DISPUTE RESOLUTION
         12.1.     Meeting of Senior Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  
         12.2.     Binding Arbitration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    __  

</TABLE>


<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C>  <C>
I    -   Certain Definitions
II   -   List of Champion Subsidiaries
III  -   List of Related Companies
IV   -   Peg Statement of Net Assets
V    -   Historical Financial Statements
</TABLE>





                                    - iii -
<PAGE>   5
                         TABLE OF CONTENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>                                                                                                                 <C>
VI   -   Other Agreements
         (a)   Canadian Asset Transfer Agreement
VII -    Allocation of Purchase Price [to be agreed by the parties]
VIII -   Seller's Knowledge
IX -     Confidentiality Agreement
X -      Working Layer Policies

DISCLOSURE SCHEDULES

</TABLE>





                                     - iv -
<PAGE>   6
                          PURCHASE AND SALE AGREEMENT

         THIS PURCHASE AND SALE AGREEMENT (the "AGREEMENT") dated as of August
17, 1998, is by and between Cooper Industries, Inc., a corporation organized
under the laws of Ohio ("SELLER"), and Federal-Mogul Corporation, a corporation
organized under the laws of Michigan; Federal-Mogul Comercio Internacional,
S.A. a Brazilian corporation; Federal-Mogul Pty. Ltd., an Australian limited
company; and Federal-Mogul Global Growth Ltd., a limited company incorporated
under the laws of England and Wales (collectively "BUYER").

         WHEREAS, Seller owns all of the issued and outstanding shares of
common stock (the "CHAMPION COMMON STOCK") of Champion Spark Plug Company, a
Delaware corporation ("CHAMPION");

         WHEREAS, Seller and its Affiliates also own shares of the Related
Companies as set forth on Disclosure Schedule 3.2;

         WHEREAS, certain individuals who are employees of Seller or the
Champion Companies own Nominal Shares of the Champion Subsidiaries; and

         WHEREAS, Seller desires to sell and Buyer desires to purchase (i) the
Champion Common Stock, (ii) the shares of the Related Companies which are owned
by Seller or its Affiliates as set forth in Disclosure Schedule 3.2, (iii) the
Nominal Shares of the  Champion Subsidiaries, and (iv) certain assets and
liabilities of the Canadian Division.

         NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:
<PAGE>   7
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



1.       CERTAIN DEFINITIONS.

         Unless otherwise defined in this Agreement, capitalized terms shall
have the meaning ascribed to such terms in Exhibit I attached hereto.  All
references in Exhibit I to the Agreement, Sections and Disclosure Schedules are
references to this Agreement and its sections and disclosure schedules unless
otherwise specified.

2.       PURCHASE AND SALE.

         2.1.      PURCHASE AND SALE.  Upon the terms and subject to the
conditions of this Agreement, at the Closing, (i) Seller shall sell, assign,
and otherwise transfer to Buyer, and Buyer shall purchase, acquire and accept
all of the Champion Common Stock, free and clear of all Encumbrances; (ii)
Seller shall (and shall cause its Affiliates to) sell, assign and otherwise
transfer to Buyer (or to Buyer's designated Affiliate) and Buyer (or its
designated Affiliate) shall purchase, acquire and accept the shares of the
Related Companies, which are owned by Seller and its Affiliates as set forth in
Disclosure Schedule 3.2, free and clear of all Encumbrances; and (iii) Seller
shall cause the individuals who own the Nominal Shares of the Champion
Subsidiaries to sell, assign and otherwise transfer to Buyer (or its designee)
and Buyer (or its designee) shall purchase (at no additional cost to Buyer),
acquire and accept the Nominal Shares, free and clear of all Encumbrances.  At
the Closing, Seller shall also cause its Affiliate, Cooper Industries (Canada)
Inc., to transfer to Buyer or its designated Affiliate certain assets and
liabilities of the Canadian Division pursuant to the Canadian Asset Transfer
Agreement, free and clear of all Encumbrances other than Permitted
Encumbrances.

         2.2.      PURCHASE PRICE.  In consideration for the sale, assignment,
and transfer of the Champion Common Stock, the shares of the Related Companies
and such assets and liabilities of the Canadian Division, Buyer shall pay to
Seller the closing payment as provided in Section 2.2(a), plus or minus as the
case may be, the Purchase Price Adjustment as provided in Section 2.2(b).

                   (a)          CLOSING PAYMENT.  At Closing, Buyer will pay
Seller $1,900,000,000.   If Buyer provides Seller a federal reference number no
later than 11 a.m., Central Standard Time,





                                     - 2 -
<PAGE>   8
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



on the Closing Date then no interest shall be due from Buyer to Seller on the
closing payment.  If Buyer does not provide Seller a federal reference number
until after 11 a.m., Central Standard Time, on the Closing Date then Buyer
shall pay to Seller interest on the closing payment at an annual rate equal to
6% per annum from and including the Closing Date to but not including the next
business day following the Closing Date.

                   (b)          PURCHASE PRICE ADJUSTMENT.  Within five (5)
business days following the date on which the Final Closing Statement of Net
Assets is determined, either Buyer will pay Seller the Positive Purchase Price
Adjustment or Seller will pay Buyer the Negative Purchase Price Adjustment, in
either case, together with interest thereon at the rate of 6% per annum from
and including the Closing Date until but not including the date paid (the
"PURCHASE PRICE ADJUSTMENT").  A "POSITIVE PURCHASE PRICE ADJUSTMENT" means the
amount by which the combined net assets for the Champion Companies shown on the
Final Closing Statement of Net Assets is more than the combined net assets
amount shown on the Peg Statement of Net Assets.  A "NEGATIVE PURCHASE PRICE
ADJUSTMENT" means the amount by which the combined net assets for the Champion
Companies shown on the Final Closing Statement of Net Assets is less than the
combined net assets amount shown on the Peg Statement of Net Assets.

                   (c)          METHOD OF PAYMENT.  All payments pursuant to
this Section 2.2 shall be in U.S. Dollars and be made in immediately available
funds by wire transfer pursuant to instructions provided in writing by the
recipient of the funds.

         2.3.      CLOSING STATEMENT OF NET ASSETS.  Within 75 days following
the Closing Date, Buyer shall prepare and deliver to Seller a combined
statement of net assets of the Champion Companies as of the close of business
on the Closing Date (the "PRELIMINARY CLOSING STATEMENT OF NET ASSETS").  The
Preliminary Closing Statement of Net Assets and the final statement of net
assets as of Closing as determined in accordance with Sections 2.3, 2.4, 2.5,
2.6 and 2.7 (the "FINAL CLOSING





                                     - 3 -
<PAGE>   9
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



STATEMENT OF NET ASSETS") shall be prepared using the same principles,
practices and procedures that were used in preparing the statement of net
assets dated March 31, 1998, which is attached hereto as Exhibit IV (the "PEG
STATEMENT OF NET ASSETS").  Any change in accounting principles, practices and
procedures after March 31, 1998 (including any changes required by GAAP) will
not apply in  determining the Preliminary and Final Closing Statements of Net
Assets.  Notwithstanding the foregoing, the following paragraphs (a) through
(n) shall take precedence over such principles, practices and procedures in the
preparation of the Preliminary and Final Closing Statements of Net Assets:

                   (a)          The asset and liability amounts included in the
Preliminary and Final Closing Statements of Net Assets will be the same as
those included in the Peg Statement of Net Assets except as necessary to
reflect those changes in the asset and liability amounts that result from new
transactions and actual changes in facts and circumstances occurring during the
period after (but not including) March 31, 1998, (the "PEG DATE") through and
including the Closing Date (the "CHANGE PERIOD"), subject to paragraphs (b)
through (n) below which shall take precedence.  For example, any liability
which is not accrued or is under-accrued or over-accrued as of the Peg Date,
absent a change in facts and circumstances during the Change Period, will be
recorded so that it is  under-accrued or over-accrued in an equal dollar amount
as of the Closing Date.

                   (b)          The quantities of inventory used to determine
the inventory amount to be included in the Preliminary and Final Closing
Statements of Net Assets will be based on the results of a physical inventory
of the Champion Companies to be taken as of the close of business on the
Closing Date in accordance with the normal procedures of the Champion Companies.
The physical inventory will be taken by Buyer (or its representatives) and
observed by Seller (or its representatives). Each party shall bear its own
expenses with respect to the physical inventory. The physical inventory
quantities will be priced utilizing the same standard costs on a full absorption
basis which were used to determine the inventory amount reflected in the Peg
Statement of Net Assets and, in the case of items which were not on hand as of
the Peg Date, in accordance with the normal





                                     - 4 -
<PAGE>   10
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



procedures of the Champion Companies.  The Peg Statement of Net Assets does
not, and the Preliminary and Final Closing Statements of Net Assets will not,
include any reserve or accrual for inventory shrinkage or deferred variances.
The Peg Statement of Net Assets does, and the Preliminary and Final Closing
Statements of Net Assets will, include an aggregate inventory allowance of
$56,447,327 for all other inventory valuation matters including excess,
obsolete and slow moving inventory and deferred revaluation.

                   (c)          The Peg Statement of Net Assets does not, and
the Preliminary and Final Closing Statements of Net Assets will not, include
(i) the inventory consigned to Standard Motor Products pursuant to Section 7.20
of the Asset Exchange Agreement dated as of March 28, 1998 among Standard Motor
Products and certain Champion Companies, (ii) any receivable for the purchase
price adjustment that may be due from Standard Motor Products pursuant to
Section 7.20(e) of such Asset Exchange Agreement; and (iii) any payable for the
purchase price adjustment that may be due to Standard Motor Products pursuant
to Section 2.9(b) of such Asset Exchange Agreement.

                   (d)          The Peg Statement of Net Assets and the
Preliminary and Final Closing Statements of Net Assets will include reserves or
accruals for uncollectible accounts receivable in the amount of $18,110,111.

                   (e)          No amortization expense shall be recorded for
the Change Period and no depreciation expense shall be recorded for the period
from March 31, 1998 through September 30, 1998.  As a result, the accumulated
depreciation and amortization balances reflected in the Preliminary and Final
Closing Statements of Net Assets will be the same as the amounts included in
the Peg Statement of Net Assets adjusted only for any depreciation expense for
the period after September 30, 1998 and for asset sales or other dispositions
in the ordinary course of business and for translation.





                                     - 5 -
<PAGE>   11
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (f)          The Peg Statement of Net Assets does, and the
Preliminary and Final Closing Statements of Net Assets will, include payables
and receivables for state, provincial or local income or franchise taxes for
those jurisdictions where a Champion Company files a separate Tax Return (as
opposed to a Tax Return filed on a consolidated or combined basis with Seller
or its Affiliates) and include payables and receivables for foreign income and
franchise taxes (excluding the refund to be received by Champion Zundkerzen
Deutschland Niederlassung Deutschland der Champion Spark Plug Company).  The
Peg Statement of Net Assets does not, and the Preliminary and Final Closing
Statements of Net Assets will not, include payables or receivables for (i) U.S.
federal income taxes and state, provincial or local income or franchise taxes
for those jurisdictions where a Champion Company files a Tax Return on a
consolidated or combined basis with Seller or its Affiliates or (ii) any
deferred tax balances.

                   (g)          The Peg Statement of Net Assets does not
include any cash; however, the Preliminary and Final Closing Statements of Net
Assets will include any cash in the accounts of the Champion Companies as of
the effective time of Closing.

                   (h)          Subject to paragraph (i) below, the Peg
Statement of Net Assets does not, and the Preliminary and Final Closing
Statements of Net Assets will not, include any inter- and intra-company
payables or receivables between (i) the Champion Companies on the one hand, and
(ii) Seller or its Affiliates on the other hand; provided, however, the Peg
Statement of Net Assets does, and the Preliminary and Final Closing Statements
of Net Assets will, include receivables and liabilities on the books of the
Champion Companies that are paid by Seller or its Affiliates but not yet booked
as inter- and intra-company payables or receivables for items shown on
Disclosure Schedule 2.3(h) or for items which provide a direct and measurable
benefit to the company on whose behalf the liability was paid.


                   (i)          The Peg Statement of Net Assets does not, but
the Preliminary and Final Closing Statements of Net Assets will, include: (i) a
receivable for the amount due, if any, as of the





                                     - 6 -
<PAGE>   12
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Closing Date from Cooper Italia S.p.A. to Champion Automotive S.p.A. relating
to the Italian law spinoff (which shall hereafter be referred to as the
"scissione") of Cooper Italia S.p.A. from Champion Automotive S.p.A. (formerly
known as Cooper Industries Italia S.p.A.) and representing the increase from
January 1, 1998 until the effective date of the scissione in the net assets of
the non-automotive business transferred to Cooper Italia S.p.A. based on the
statutory books, or (ii) a payable for the amount due, if any, as of the
Closing Date from Champion Automotive S.p.A. to Cooper Italia S.p.A. relating
to the scissione and representing the decrease from January 1, 1998 until the
effective date of the scissione of the net assets of the non-automotive
business transferred to Cooper Italia S.p.A. based on the statutory books.

                   (j)          Subject to paragraph (k) below, the Peg
Statement of Net Assets does not, and the Preliminary and Final Closing
Statements of Net Assets will not, include any assets or liabilities with
respect to the qualified employee defined benefit plans and qualified employee
defined contribution plans listed on Disclosure Schedule 6.3(a).  The Peg
Statement of Net Assets does, and the Preliminary and Final Closing Statements
of Net Assets will, include accruals for retiree medical and other benefits
under employee welfare benefit plans and accruals for tax withholding and
employer matching contributions under the Cooper Industries, Inc. Savings and
Stock Ownership Plan.

                   (k)          The Peg Statement of Net Assets includes an
accrual of $2,589,068 for, and the Preliminary and Final Closing Statements of
Net Assets will include an accrual for, the total cash withholdings collected
by the Champion Companies from ESPP Participants pursuant to the 1997 ESPP plus
related accrued interest.

                   (l)          The Peg Statement of Net Assets does not, and
the Preliminary and Final Closing Statements of Net Assets will not, include
any reserve or accrual for the AlliedSignal Lawsuit or any reserves, accruals
or other amounts relating to items that Seller is obligated to indemnify or
reimburse Buyer pursuant to Section 5.21.





                                     - 7 -
<PAGE>   13
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (m)          Subject to paragraph (n) below, the Peg
Statement of Net Assets does not; however, the Preliminary and Final Closing
Statements of Net Assets will, include any third party debt of the Champion
Companies including the third party debt set forth in Disclosure Schedule
2.3(m).

                   (n)          The Peg Statement does not, and the Preliminary
and Final Closing Statements of Net Assets will not, include the third party
debt of the Champion Companies relating to the industrial development revenue
bonds described in Section 5.23 of this Agreement.

         2.4.      SELLER'S REVIEW OF PRELIMINARY CLOSING STATEMENT OF NET
ASSETS.  Seller shall have 60 days following receipt of the Preliminary Closing
Statement of Net Assets to review such statement.  If Seller determines that it
has not been prepared in accordance with the provisions of Section 2.3, then
within the 60-day period allowed for Seller's review, Seller shall send a
letter to Buyer ("Seller's Letter") setting forth in reasonable detail the
adjustments that Seller determines are appropriate.  During such 60-day period,
Buyer shall grant Seller and its representatives reasonable access during
normal business hours to the books and records of the Champion Companies
including any working papers or other documents prepared by Buyer or its
accountants or auditors with respect to the Preliminary Closing Statement of
Net Assets.  If Seller does not prepare and furnish Seller's Letter to Buyer
within the 60 days allowed, then the Preliminary Closing Statement of Net
Assets as prepared by Buyer will become the Final Closing Statement of Net
Assets.

         2.5.      BUYER RESPONSE TO SELLER'S LETTER.  Buyer will have 30 days
following receipt of Seller's Letter, if any, to review such letter and prepare
a written response ("BUYER'S LETTER") setting forth Buyer's position with
respect to each adjustment proposed by Seller in Seller's Letter.  If Buyer
does not prepare and furnish Buyer's Letter to Seller within the 30 days
allowed, then all of the adjustments set forth in Seller's Letter shall be
deemed to have been accepted by Buyer, and the Final Closing Statement of Net
Assets shall be determined by adjusting the Preliminary Closing Statement of
Net Assets for all of the adjustments set forth in Seller's Letter.





                                     - 8 -
<PAGE>   14
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         2.6.      CONFERENCE TO RESOLVE PROPOSED ADJUSTMENTS.  As soon as
practicable, but not later than 30 days following the receipt by Seller of
Buyer's Letter, if any, the parties shall confer, whether by telephone or in
person, and endeavor to mutually resolve any of Seller's adjustments not agreed
to in Buyer's Letter.  If the parties reach agreement on these adjustments, if
any, then the Final Closing Statement of Net Assets shall be determined by
adjusting the Preliminary Closing Statement of Net Assets for the adjustments
agreed to in Buyer's Letter and those mutually resolved by the parties.

         2.7.      RESOLUTION BY ACCOUNTING ARBITRATOR.  If the parties do not
meet within the 30 day period set forth in Section 2.6, or they fail to agree
to meet at some later date, or they meet but are unable to resolve to their
mutual satisfaction all of the adjustments set forth in Seller's Letter, then
the parties shall jointly engage the Atlanta office of the firm of
Pricewaterhouse Coopers (the "ACCOUNTING ARBITRATOR") to resolve any of
Seller's adjustments which remain unresolved.  The parties shall furnish the
Accounting Arbitrator with a copy of the Agreement, the Peg Statement of Net
Assets, the Preliminary Closing Statement of Net Assets, Seller's Letter,
Buyer's Letter and any other relevant correspondence between the parties.  The
Accounting Arbitrator shall, within 45 days from the date such documents are
furnished, complete its review and render a written report setting forth its
conclusion with respect to each of Seller's adjustments which were unresolved
between the parties.  The Accounting Arbitrator shall be granted access to the
books and records of the Champion Companies as well as the working papers or
other documents which either party or its accountants or auditors may have that
relate to the Preliminary Closing Statement of Net Assets and any other
documents or information which the Accounting Arbitrator may deem appropriate.
The Accounting Arbitrator's review shall be limited to the purpose of
determining whether, in respect of each of those items and amounts as to which
Buyer and Seller do not agree, Seller's proposed adjustment or Buyer's position
with respect to Seller's proposed adjustment is more nearly in accordance with
the terms of this Agreement.  The parties shall have the right to submit
written materials to the Accounting Arbitrator in accordance with procedures to
be set forth in the engagement letter between the parties and the Accounting
Arbitrator.  In arriving at its determination the Accounting Arbitrator must
select





                                     - 9 -
<PAGE>   15
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



for each adjustment either Seller's proposed adjustment or Buyer's position
with respect to Seller's proposed adjustment.  The decision by the Accounting
Arbitrator shall be in writing (including an explanation of the reasons for the
determination) and shall be delivered to both Buyer and Seller.  The Accounting
Arbitrator's decision shall be conclusive and binding upon the parties and may
be entered and enforced in any court of competent jurisdiction.  The parties
agree to submit to the jurisdiction of any such court solely for the
enforcement of such award or decision.  The party that proposes a total
adjustment that differs more from the Accounting Arbitrator's award shall pay
the fees and expenses of the Accounting Arbitrator, so that if in arbitration,
the first party has argued for a total adjustment of $100,000, the second party
for a total adjustment of $30,000 and the Accounting Arbitrator awards a
$50,000 adjustment, the first party shall pay such fees and expenses.  If the
Accounting Arbitrator is engaged, the Final Closing Statement of Net Assets
will be determined by adjusting the Preliminary Closing Statement of Net Assets
for those of Seller's adjustments accepted by Buyer's Letter, those mutually
agreed to by the parties and those determined by the Accounting Arbitrator.

         2.8.      NOTICES RELATING TO THE CLOSING STATEMENT OF NET ASSETS.
Notwithstanding Section 11.6, all notices and other communications under
Sections 2.4, 2.5, 2.6 and 2.7 shall be delivered to the individuals listed
below and shall be sufficiently given for all purposes hereunder if in writing
and delivered personally, sent by documented overnight delivery services, or
certified mail return receipt requested:

         If to Seller:          Cooper Industries, Inc.
                                600 Travis
                                Suite 5800
                                Houston, Texas   77002
                                Attn:  Terry A. Klebe,
                                Vice President and Controller

         If to Buyer:           Federal-Mogul Corporation
                                26555 Northwestern Highway
                                Southfield, Michigan  48034
                                Attn: Charles B. Grant,
                                Vice President, Corporate Development





                                     - 10 -
<PAGE>   16
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         All such notices shall be deemed given upon date of delivery to the
recipient.

         2.9.      CLOSING.

                   (a)          TIME AND PLACE OF CLOSING.  The closing of the
contemplated transactions (the "CLOSING") shall take place at the offices of
Seller at 600 Travis, Suite 5800, Houston, Texas at 9:00 a.m. local time on the
fifth business day following the satisfaction or waiver of all conditions to
the obligations of the parties to consummate the transactions contemplated by
this Agreement (other than conditions with respect to actions the respective
parties will take at the Closing itself) or such other place, date and time as
the parties may mutually determine (the "CLOSING DATE").  Closing shall be
effective as of the close of business on the Closing Date.

                   (b)          DELIVERIES BY SELLER.  At the Closing, Seller
shall deliver to Buyer: (i) stock certificates representing the Champion Common
Stock endorsed in blank or accompanied by duly executed assignment documents;
(ii) stock certificates representing the shares of the Related Companies, that
are owned by Seller or its Affiliates as set forth in Disclosure Schedule 3.2,
endorsed in blank or accompanied by duly executed assignment documents; (iii)
stock certificates representing the shares of Cooper Automotive France, S.A.
that are owned by Diane K. Schumacher (and Joel Campbell, Philippe Charton and
Roland Blackburn if Buyer requests their resignation as a director of Cooper
Automotive France, S.A.) endorsed in blank or accompanied by duly executed
assignment documents; (iv) stock certificates representing the shares of Cooper
Automotive, Taiwan, Inc. that are owned by Diane K. Schumacher, Alan J.  Hill,
David A. White, Jr. and Gordon A. Ulsh endorsed in blank or accompanied by duly
executed assignment documents; (v) the resignations of those officers and
members of the Boards of Directors of Champion, the Champion Subsidiaries and
the Related Companies as requested by Buyer at least 5 business days prior to
Closing; (vi) the stock





                                     - 11 -
<PAGE>   17
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



books, stock ledgers, minute books and corporate seals of  Champion, the
Champion Subsidiaries and the Related Companies (including stock certificates
representing the shares of the Champion Subsidiaries and subsidiaries of the
Related Companies); provided that any of the foregoing items shall be deemed to
have been delivered to Buyer if delivered to or otherwise located at the
offices of Champion, the Champion Subsidiaries or the Related Companies or at
the offices of their foreign legal counsel and Seller provides Buyer with an
affidavit setting forth the location of such items (provided that at Buyer's
reasonable request, Seller will provide any of the foregoing items at Closing
except for those items relating to joint venture companies in which the
Champion Companies have an equity interest); (vii) the various certificates,
agreements, instruments and documents referred to in Section 8.1; (viii) the
Other Agreements duly executed by Seller or its appropriate Affiliate; and (ix)
all other instruments, agreements and documents required to be delivered by
Seller or its Affiliates at or before the Closing pursuant to this Agreement or
the Other Agreements.

                   (c)          DELIVERIES BY BUYER.  At the Closing, Buyer
will deliver to Seller: (i) the closing payment pursuant to Section 2.2(a);
(ii) the various certificates, agreements, instruments and other documents
referred to in Section 8.2; (iii) the Other Agreements duly executed by Buyer
or its appropriate Affiliate, and (iv) such other instruments, agreements and
documents required to be delivered by Buyer or its Affiliates at or before the
Closing pursuant to this Agreement or the Other Agreements.

         2.10.     ALLOCATION OF PURCHASE PRICE.  The parties shall allocate
the aggregate purchase price described in Section 2.3 among the Champion Common
Stock, the common stock of Moog Automotive Products, Inc. (the "MOOG COMMON
STOCK"), the stock of the Related Companies (other than the Moog Common Stock),
and the assets of the Canadian Division in accordance with the relative fair
market values of such stock and such assets.  For purposes of this allocation,
the relative fair market values of the stock and the assets described in the
immediately preceding sentence shall be determined by reference to an appraisal
(the "APPRAISAL") prepared by a nationally recognized accounting firm,
investment bank, or other valuation professional (the "APPRAISER"), which
Appraiser





                                     - 12 -
<PAGE>   18
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



shall be selected by Buyer subject to the approval of Seller, which approval
shall not be unreasonably withheld.  The cost of the Appraiser shall be borne
equally by Seller and Buyer.  The parties agree that the Appraisal shall be
obtained as promptly as possible and, in any event, within 60 days after the
Final Closing Statement of Net Assets is determined.

3.       REPRESENTATIONS AND WARRANTIES OF SELLER.

         Seller represents and warrants to Buyer that the statements contained
in this Section 3 are true and correct as of the date of this Agreement and
will be true and correct in all respects on the Closing Date.  Nothing in the
Disclosure Schedules shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure Schedule
identifies the exception with reasonable particularity.  Without limiting the
generality of the foregoing, the mere listing of a document or other item shall
not be deemed adequate to disclose an exception to a representation or warranty
made herein (unless the representation or warranty has to do with the existence
of the document or other item itself).

         3.1.      ORGANIZATION OF SELLER AND THE CHAMPION COMPANIES.  Each of
Seller, Champion, the Champion Subsidiaries and the Related Companies is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.  Each of  Champion, the Champion
Subsidiaries and the Related Companies: (i) has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted; and (ii) is duly qualified and in good
standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except in such jurisdictions where the failure to
be so duly qualified and in good standing would not have a Material Adverse
Effect and except for Qingdao Precision Universal Joint Company Limited which
no longer holds a valid business license as described in Disclosure Schedule
3.2.  Seller has heretofore delivered to Buyer complete copies of the
certificate of incorporation and by-laws (or similar organizational documents),
as currently in effect, of the





                                     - 13 -
<PAGE>   19
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Champion Companies.  The Champion Companies do not own, directly or indirectly,
any capital stock or other equity securities of any corporation or have any
direct or indirect equity ownership in any business other than the Champion
Subsidiaries, the subsidiaries of the Related Companies as set forth in
Disclosure Schedule 3.2 and 9,600 Class A Preferred Shares of General Parts,
Inc. which are owned by Moog Automotive Company.

         3.2.      CAPITALIZATION.  The authorized capital stock of Champion
consists of 1,000 shares of Champion Common Stock, 1,000 shares of which are
issued and outstanding as of the date hereof, and 1,000 shares of preferred
stock, none of which are issued and outstanding as of the date hereof.  Seller
owns all of the shares of Champion Common Stock.  Disclosure Schedule 3.2 sets
forth for each of the Champion Subsidiaries and the Related Companies: (i) its
name and jurisdiction of incorporation, (ii) the number of shares of each class
of its authorized capital stock, and (iii) the number of issued and outstanding
shares of each class of its capital stock, the names of the holders thereof,
and the number of shares held by each such holder.  All of the issued and
outstanding shares of the Champion Companies  are validly issued, fully paid
and nonassessable, except for the shares of Cooper Automotive do Brasil, Ltda.
as described in Disclosure Schedule 3.2.  Except pursuant to this Agreement,
there are no outstanding subscriptions, options, warrants, conversion rights,
exchange rights, or other agreements or commitments obligating Seller or the
Champion Companies to issue, transfer, sell or otherwise cause to become
outstanding, any capital stock or other equity interests of the Champion
Companies.  Seller has good title to all of the shares of Champion Common
Stock, and Seller and its Affiliates (including the Champion Companies) which
hold the shares of the Champion Subsidiaries and Related Companies as set forth
in Disclosure Schedule 3.2  have good title to such shares, free and clear





                                     - 14 -
<PAGE>   20
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



of all Encumbrances.  At Closing, (i) Seller shall transfer to Buyer good title
to the shares of Champion Common Stock, free and clear of all Encumbrances;
(ii) Seller shall or shall cause its Affiliates to transfer to Buyer or its
designated Affiliate good title to all the shares of the Related Companies
which are owned by Seller or its Affiliates, free and clear of all
Encumbrances; and (iii) Seller shall cause the individuals who own the Nominal
Shares of the Champion Subsidiaries to transfer to Buyer (or its designee) good
title to such shares free and clear of all Encumbrances.  Except as set forth
in Disclosure Schedule 3.2, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any capital stock of
any of the Champion Companies.  Certain transfers of the shares of or equity
interests in Crucetas Mexicanas, S.A. de C.V., Frenos Hidraulicos Automotrices,
S.A. de C.V., Qingdao Precision Universal Joint Company Limited and Guangzhou
Champion Spark Plug Co. Ltd. are subject to rights of first refusal and the
prior approval of the boards of directors of such companies.

         3.3.      AUTHORIZATION OF TRANSACTION AND VALIDITY OF AGREEMENT.
Seller has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.  The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the respective boards of directors of
Seller, Cooper Industries (Canada) Inc., and those Affiliates of Seller which
are transferring shares of the Related Companies to Buyer or its designated
Affiliates and no other corporate proceedings on the part of Seller or its
Affiliates are necessary to authorize this Agreement and to consummate the
transactions so contemplated.  This Agreement has been duly and validly
executed and delivered by Seller and (assuming it is duly and validly executed
by Buyer) constitutes a valid and binding agreement of Seller, enforceable
against Seller in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by general equitable
principles.

         3.4.      CONSENTS, APPROVALS AND FILINGS.  Seller and its Affiliates
are not required to give any notice to, make any filing with, or obtain any
material consent, authorization or approval from any Governmental Authority in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby except: (i) those set
out on Disclosure Schedule 3.4; and (ii) the filings required under the Hart-
Scott-Rodino Act and similar laws of foreign jurisdictions.





                                     - 15 -
<PAGE>   21
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         3.5.      NON-CONTRAVENTION.  Neither the execution and the delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will: (i) conflict with or breach any provision of the certificate of
incorporation or by-laws (or similar organizational documents) of Seller, its
Affiliates, or the Champion Companies; (ii) to Seller's Knowledge, violate any
statute, regulation, rule, injunction, judgment, order or decree of any
Governmental Authority applicable to Seller, its Affiliates or the Champion
Companies or any of their respective assets; and (iii) except as set forth in
Disclosure Schedule 3.5, result in a breach of, constitute a default under, or
give rise to any right of termination or acceleration under, any provision of
any material agreement, contract, lease, license, or instrument by which the
Champion Companies are bound or by which any of their assets is subject.

         3.6.      FINANCIAL STATEMENTS.  The following financial statements of
the Business are attached hereto as Exhibit V (collectively, the "FINANCIAL
STATEMENTS"): (i) the audited combined balance sheets as of December 31, 1996
and 1997 and the audited combined income statements and statements of cash
flows for the years ended December 31, 1995, 1996 and 1997; and (ii) the
unaudited combined balance sheet, income statement and statement of cash flows
for the interim period ended March 31, 1998.  Except as set forth in Disclosure
Schedule 3.6, the Financial Statements have been prepared in accordance with
GAAP applied on a consistent basis.  The Financial Statements present fairly in
all material respects the financial condition and the results of operations of
the Champion Companies as of the respective dates and for the respective
periods for which they have been prepared.

         3.7.      ABSENCE OF CERTAIN CHANGES.  Except as set forth in
Disclosure Schedule 3.7, since March 31, 1998, the Champion Companies have
conducted their respective businesses only in the ordinary course consistent
with past practices.  Without limiting the generality of the foregoing, since
March 31, 1998, the Champion Companies have not taken any action that would
constitute a violation of any of the provisions under Section 5.1 of this
Agreement except as set forth in Disclosure Schedule 3.7.





                                     - 16 -
<PAGE>   22
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         3.8.      UNDISCLOSED LIABILITIES.  The Champion Companies do not have
any material liabilities of the type required to be reflected in a statement of
net assets prepared in accordance with GAAP except for: (i) liabilities
reflected or reserved against in the combined balance sheet as of March  31,
1998, included in the Financial Statements or disclosed in the notes to the
Financial Statements for the year ended December 31, 1997 and liabilities not
so reflected and reserved against due to the fact that the Financial Statements
do not comply with GAAP for a reason described in Disclosure Schedule 3.6, (ii)
liabilities that have arisen in the ordinary course after March 31, 1998; and
(iii) liabilities which have been disclosed to Buyer in one of the disclosure
schedules to this Agreement, including Disclosure Schedule 3.8.

         3.9.      LITIGATION.  Except as set forth in Disclosure Schedule 3.9,
(i) none of the Champion Companies is a party to any pending (nor is there as
of the date hereof, to Seller's Knowledge, any threatened) lawsuit,
governmental proceeding or arbitration proceeding (nor is Seller or any
Affiliate of Seller party to any pending lawsuit, governmental proceeding or
arbitration proceeding that affects or could affect any of the Champion
Companies or their assets); (ii) there are not any judgments, decrees,
directives, rulings or orders of any Governmental Authority binding on any of
the Champion Companies (or Seller or any Affiliate of Seller that affects or
could affect any of the Champion Companies or their assets); and (iii) there
are no pending or, to Seller's Knowledge, threatened governmental
investigations, actions, charges, complaints, claims, demands, inquiries or
proceedings concerning the Champion Companies.  After Closing, Buyer and its
Affiliates shall assume responsibility for the matters set forth in Disclosure
Schedule 3.9 (except for the AlliedSignal Lawsuit and Bosch Infringement Claim
which are subject to Section 5.21).

         3.10.     COMPLIANCE WITH APPLICABLE LAW.  Except as set forth in
Disclosure Schedule 3.10 (and except with respect to environmental matters
which are addressed in Section 3.11 hereof), to Seller's Knowledge, (i) the
Champion Companies are in compliance with all laws, ordinances, rules,
regulations, decrees and orders of all Governmental Authorities applicable to
the operation of the Business, except where the failure to be in compliance is
not reasonably likely to have a Material





                                     - 17 -
<PAGE>   23
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Adverse Effect, and (ii) the Champion Companies hold all Permits necessary to
conduct the Business as currently conducted, except where the failure to hold
such Permits would not be reasonably likely to have a Material Adverse Effect.

         3.11.     ENVIRONMENTAL MATTERS.

                   (a)          Except as set forth in Disclosure Schedule
3.11(a), the Champion Companies are now in compliance in all material respects
with all Environmental Laws, and have been in compliance with Environmental
Laws except where the failure to be in compliance is not reasonably likely to
have a Material Adverse Effect.

                   (b)          Except as set forth in Disclosure Schedule
3.11(b), the Champion Companies have made all material filings and possess all
material Environmental Permits necessary to conduct the Business as it is
presently being conducted and in compliance with all applicable Environmental
Laws, such Environmental Permits are in full force and effect, and the Champion
Companies are  in compliance in all material respects with all of the terms,
conditions and requirements of such Environmental Permits.

                   (c)          [Intentionally omitted]

                   (d)          Except as set forth in Disclosure Schedule
3.11(d), (i) none of the Champion Companies has received any formal complaint
or notice from any Governmental Authority or any other Person alleging any past
or present violation of any Environmental Law in connection with the operation
of the Business and which is currently unresolved, (ii) as of the date hereof,
there is no investigative proceeding against the Champion Companies by any
Governmental Authority in connection with the past or present operation of the
Business, and (iii) there are no pending Environmental Claims involving the
Champion Companies or the Business.





                                     - 18 -
<PAGE>   24
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (e)          Except as set forth in Disclosure Schedule
3.11(e), none of the Champion Companies has been subject to any administrative
or judicial enforcement action pursuant to any Environmental Law either now or
at any time during the past three years in connection with the Business or the
Champion Companies.

                   (f)          Except as set forth in Disclosure Schedule
3.11(f), none of the Champion Companies is subject to any remedial obligation
or other response action under a currently issued and applicable administrative
order, decree, or agreement pursuant to any Environmental Law.

                   (g)          Except as set forth in Disclosure Schedule
3.11(g), no real property currently or formerly owned, leased, operated or used
by the Champion Companies (including real property used for off-site disposal
of any Regulated Material) is listed on any federal list of Superfund or
National Priorities List sites or similar governmental lists regarding waste
sites at which there has been a Release or threatened Release of Regulated
Materials.

                   (h)          Except as set forth in Disclosure Schedule
3.11(h), there are no (i) underground storage tanks (as defined under the
Resource Conservation and Recovery Act or any equivalent Environmental Law), or
(ii) capacitors, transformers or other equipment or fixtures containing
polychlorinated biphenyls ("PCBs") (other than light fixtures which contain
PCBs), located in, at, under or on the Owned Real Property or the Leased Real
Property.

                   (i)          Except as set forth in Disclosure Schedule
3.11(i), there are no facts, actions, activities, circumstances, conditions,
occurrences, events or incidents, including any Release, threatened Release,
generation, treatment, storage, transportation, or the presence of Regulated
Materials, that are reasonably likely to (i) result in any Environmental
Liability that would cause a Material Adverse Effect, or (ii) prevent or
interfere with the operation of the Business as it is currently being
conducted, in compliance with all applicable Environmental Laws.





                                     - 19 -
<PAGE>   25
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         3.12.     MATERIAL CONTRACTS; NO DEFAULTS.  Except as set forth in
Disclosure Schedule 3.12 or reflected in the Financial Statements, no Champion
Company is a party to any: (i) indenture, mortgage, note or other agreement
relating to the borrowing of money by a Champion Company other than payables
arising in the ordinary course of business; (ii) guaranty by a Champion Company
of an obligation of a third party for the borrowing of money; (iii) payment
bond, performance bond or letter of credit under which a Champion Company is
liable; (iv) agreement which involves an obligation of a Champion Company of
more than $1 million in any twelve-month period; (v) joint venture or
partnership agreement, or (vi) agreement which involves consideration of more
than $1 million and which relates to the sale of assets outside the ordinary
course of business within the last twelve months (collectively, the "MATERIAL
CONTRACTS").  There is not under any of the Material Contracts any existing
breach or default by any Champion Company, or to Seller's Knowledge, any other
party thereto, except such breaches or defaults which will not have a Material
Adverse Effect.

         3.13.     ASSETS.  Except with respect to real property which is
addressed in Section 3.14, the Champion Companies (or with respect to the
Canadian Division, Cooper Industries (Canada), Inc.) have good title to, or
hold by valid lease or license all of the assets, properties, contracts, rights
and licenses used to operate the Business as presently conducted (in each case
free and clear of all Encumbrances other than Permitted Encumbrances) except
for: (i) the assets and contract rights of Seller and its Affiliates used to
provide corporate administrative services to the Champion Companies including
employee benefits administration, cash management, risk management and
insurance, legal services, legal compliance programs, public relations, tax
reporting, internal and external audit, traffic agreements and provision and
maintenance of computer hardware and software; and (ii) cases in which the
failure to own or to have a valid lease or license will not have a Material
Adverse Effect.  At Closing, Cooper Industries (Canada) Inc. will transfer to
Buyer or its designated Affiliate good title to the "Transferred Assets" of the
Canadian Division pursuant to the Canadian Asset Transfer Agreement, free and
clear of all Encumbrances other than Permitted Encumbrances.  Each of the
leases and other agreements relating to personal property is in full force and
effect and constitute a legal, valid and binding obligation of the respective
parties thereto, and there is not under any of such





                                     - 20 -
<PAGE>   26
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



leases or agreements any existing monetary default or material non-monetary
default by a Champion Company, or to Seller's Knowledge, any other party
thereto.

         3.14.     REAL PROPERTY.

                   (a)          Disclosure Schedule 3.14(a) sets forth a list
of all the real property of the Business that is owned by the Champion
Companies (or with respect to the Canadian Division, which is owned by Cooper
Industries (Canada) Inc.) (the "OWNED REAL PROPERTY").  The Champion Companies
(or with respect to the Canadian Division, Cooper Industries (Canada) Inc.)
have good title to the Owned Real Property, free and clear of all Encumbrances
other than Permitted Encumbrances.  At Closing, Cooper Industries (Canada) Inc.
shall transfer to Buyer or its designated Affiliate good title to the Owned
Real Property of the Canadian Division, free and clear of all Encumbrances
other than Permitted Encumbrances.  There are no appropriation, condemnation,
eminent domain or like proceedings relating to the Owned Real Property and, to
Seller's Knowledge, none are threatened.

                   (b)          Disclosure Schedule 3.14(b) lists all real
property of the Business that is leased by the Champion Companies (or with
respect to the Canadian Division, which is leased by Cooper Industries (Canada)
Inc.) (the "LEASED REAL PROPERTY").  The Champion Companies (or with respect to
the Canadian Division, Cooper Industries (Canada) Inc.) have a valid leasehold
interest in the Leased Real Property.  At Closing, Cooper Industries (Canada)
Inc. shall assign to Buyer or its designated Affiliate the interest of Cooper
Industries (Canada) Inc. under those leases for the Leased Real Property to
which Cooper Industries (Canada) Inc. is a party.  There are no existing
material defaults by any Champion Company, or to Seller's Knowledge, by any
other party, under any leases for the Leased Real Property.





                                     - 21 -
<PAGE>   27
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         3.15.     INTELLECTUAL PROPERTY.

                   (a)          The Champion Companies own or have the right to
use each material item of Intellectual Property used by them in the Business as
presently conducted.

                   (b)          Disclosure Schedule 3.15(b) lists all patents,
copyrights, trademarks, service marks, and registrations and applications
therefor, relating to the Business which are owned by the Champion Companies.
No license, sublicense or permission to use any such item of Intellectual
Property has been granted to any Person except as set forth in Disclosure
Schedule 3.15(b) (in each such case identifying the item licensed, the
licensee, and the date of the license agreement or other agreement which allows
the Person to use such item).

                   (c)          Disclosure Schedule 3.15(c) lists all patents,
copyrights, trademarks, service marks, and registrations and applications
therefor, which are not owned by the Champion Companies but are used or
licensed for use by them in the Business as presently conducted.  Disclosure
Schedule 3.15(c) identifies the item licensed or used, the owner or licensor,
and the date of the license agreement or other agreement which allows the
Champion Company  to use such item.  There is no material default by a Champion
Company or, to Seller's Knowledge, any other party under such licenses or other
agreements and each such item of Intellectual Property will continue to be
available for use on terms and conditions substantially identical to those
existing prior to Closing without additional restrictions as to its use
occurring because of Closing.

                   (d)          Except as set forth in Disclosure Schedule
3.15(d), no proceedings have been instituted against the Champion Companies
alleging that any material item of Intellectual Property used in the Business
infringes upon or otherwise violates the rights of any Person.  Except as set
forth in Disclosure Schedule 3.15(d), to the Knowledge of Seller, within the
past five years none of the Champion Companies has materially interfered with,
infringed upon, misappropriated





                                     - 22 -
<PAGE>   28
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



or otherwise come into conflict with any Intellectual Property rights of third
parties, and to the Knowledge of Seller, no third party has materially
interfered with, infringed upon, misappropriated or otherwise come into
conflict with any of the Intellectual Property rights of any of the Champion
Companies.

         3.16.     LABOR MATTERS.  Disclosure Schedule 3.16(a) lists all
collective bargaining agreements with labor unions or associations representing
employees of the Champion Companies.  No labor strike, lockout, slowdown or
work stoppage against the Champion Companies is pending or, to Seller's
Knowledge, threatened.  Disclosure Schedule 3.16(b) lists all unfair labor
practice charges against the Champion Companies within the United States that
are either pending or that were made within the 3 year period before the date
of this Agreement.  To Seller's Knowledge, there are no material pending unfair
labor practice charges outside the United States.

         3.17.     INSURANCE.  Disclosure Schedule 3.17 lists and briefly
describes all current property and casualty insurance policies (i) which are
owned or held by Seller or its Affiliates and which cover a Champion Company,
or (ii) which are owned or held by a Champion Company.  Seller agrees that it
shall maintain such policies, or policies which in the aggregate are
substantially similar thereto, until Closing.

         3.18.     SUFFICIENCY OF ASSETS.  Except for the assets of Seller and
its Affiliates used to provide corporate and administrative services to the
Champion Companies as described in Section 3.13(i), the assets, properties,
contract rights and licenses of the Champion Companies and the assets of the
Canadian Division to be transferred to Buyer or its designated Affiliate (i)
constitute all of the assets, properties, contract rights and licenses that are
used to operate the Business in substantially the same manner as such
operations are presently conducted and are reasonably sufficient to operate the
Business as a going concern, and (ii) the operating condition of such assets
and properties is sufficient to operate the Business in substantially the same
manner as such operations are presently conducted.





                                     - 23 -
<PAGE>   29
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         3.19.     BROKERS, FINDERS, ETC.  Other than Merrill Lynch & Co.
whose fees will be paid by Seller, Seller has not retained any broker, finder or
agent in connection with the transactions contemplated by this Agreement who
would have a valid claim for a fee or commission in connection with such
transactions for which Buyer or its Affiliates may be held liable.

         3.20.     PRODUCT LIABILITY.  None of the Champion Companies has any
liability arising out of any injury to individuals or property as a result of
the ownership, possession or use of any product manufactured, sold, leased or
delivered by any of the Champion Companies except: (i) for any asbestos related
actions or claims; (ii) for any environmental matters which are addressed in
Section 3.11; and (iii) with respect to matters not covered by clauses (i) and
(ii) above, except to the extent accrued or reserved against on the Final
Closing Statement of Net Assets.  To Seller's Knowledge, there are no such
pending product liability claims against the Champion Companies except as set
forth on Disclosure Schedule 3.20.

         3.21.     PRODUCT WARRANTY.  To Seller's Knowledge, (i) except as set
forth in Section 3.21 of the Disclosure Schedule, none of the products
manufactured, sold, leased, or delivered by the Champion Companies prior to
Closing is currently the subject of a product recall and (ii) the accrual
included in the Financial Statements for product warranty claims is adequate.

         3.22.     DISCLOSURE SCHEDULES.  All Disclosure Schedules attached
hereto are true, correct and complete as of the date of this Agreement, and will
be true, correct and complete as of the Closing Date.





                                     - 24 -
<PAGE>   30
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



4.       REPRESENTATIONS AND WARRANTIES OF BUYER.

         Buyer represents and warrants to Seller that the statements contained
in this Section 4 are true and correct as of the date of this Agreement and
will be true and correct in all material respects on the Closing Date.

         4.1.      ORGANIZATION OF BUYER.  Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.

         4.2.      AUTHORIZATION OF TRANSACTION AND VALIDITY OF AGREEMENT.
Buyer has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.  The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the respective boards of directors of
Buyer and the designated Affiliates of Buyer which will acquire shares of the
Related Companies or the assets of the Canadian Division and no other corporate
proceedings on the part of Buyer or its Affiliates are necessary to authorize
this Agreement and to consummate the transactions so contemplated.  This
Agreement has been duly and validly executed and delivered by Buyer and
(assuming it is duly and validly executed by Seller) constitutes a valid and
binding agreement of Buyer, enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by general equitable principles.

         4.3.      CONSENTS, APPROVALS AND FILINGS.  Buyer and its Affiliates
are not required to give any notice to, make any filing with, or obtain any
consent, authorization or approval from any Governmental Authority in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby except: (i) those set
out on Disclosure Schedule 4.3;  (ii) the filings required under the
Hart-Scott-Rodino Act and similar laws of foreign jurisdictions; and (iii)
where the failure to give notice, to file, or to obtain any consent,
authorization or approval would not have a material adverse effect on Buyer's
ability to consummate the transactions evidenced hereby.





                                     - 25 -
<PAGE>   31
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         4.4.      NON-CONTRAVENTION.  Neither the execution and the delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will: (i) conflict with or breach any provision of the certificate of
incorporation or by-laws (or similar organizational documents) of Buyer or its
designated Affiliates that acquire the Related Companies or the Canadian
Division; (ii) violate any statute, regulation, rule, injunction, judgment,
order or decree of any Governmental Authority applicable to Buyer, its
Affiliates or any of their assets; (iii) result in a breach of, constitute a
default under, or give rise to any right of termination or acceleration under,
any provision of any agreement, contract, lease, license, or instrument to
which Buyer or its Affiliates is a party, is bound or by which any of their
assets is subject, except in the case of clauses (ii) and (iii) for violations,
breaches, defaults or rights of termination or acceleration would not have a
material adverse effect on Buyer's ability to consummate the transactions
evidenced hereby.

         4.5.      BROKERS, FINDERS, ETC.  Other than Chase Securities, Inc.,
whose fees will be paid by Buyer, Buyer has not retained any broker, finder, or
agent in connection with the transactions contemplated by this Agreement who
would have a valid claim for a fee or commission in connection with such
transactions for which Seller or its Affiliates may be held liable.

         4.6.      AVAILABILITY OF FUNDS.  Buyer will have available on the
Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.

         4.7.      INVESTMENT.  Buyer is not acquiring the Champion Common
Stock (and by virtue thereof the shares of the Champion Subsidiaries) and Buyer
and its designated Affiliates are not acquiring the shares of the Related
Companies with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act of 1933, as amended.  Buyer
acknowledges that it has received, or has had access to, all information
necessary or advisable to enable it and its Affiliates to make a decision
concerning the purchase of the Champion Common Stock and the shares of the
Related Companies.





                                     - 26 -
<PAGE>   32
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



5.       COVENANTS OF SELLER AND BUYER.

         5.1.      BUSINESS COVENANTS OF SELLER. Except for transactions set
forth on Disclosure Schedule 3.7 and for transactions contemplated by this
Agreement, during the period from the date of this Agreement and continuing
until the Closing Date, Seller will cause the Champion Companies to carry on
their respective businesses in the ordinary course consistent with past
practice.  Without limiting the generality of the foregoing, and except for
transactions set forth on Disclosure Schedule 3.7 and for transactions
contemplated by this Agreement, Seller will not, without the prior consent of
Buyer (which shall not be unreasonably withheld or delayed), cause or permit
the Champion Companies to:

                   (a)          authorize for issuance, issue, sell or deliver
(whether through the issuance or granting of options, warrants, subscriptions
or otherwise) any stock of any class or any other securities (including
indebtedness having the right to vote) or equity equivalents (including stock
appreciation rights) to Persons other than another Champion Company, except
pursuant to any Champion Benefit Arrangement providing for the issuance of
Seller's stock;

                   (b)          acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or acquiring by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof;

                   (c)          sell, lease or otherwise dispose of any of its
material assets, except in the ordinary course of business consistent with past
practices;

                   (d)          amend its charter or by-laws (or similar
organizational documents) except for changes made to a company's name in
connection with the transactions contemplated hereunder;





                                     - 27 -
<PAGE>   33
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (e)          make any capital expenditures which in the
aggregate exceed $2 million (excluding any capital expenditures reflected in
any capital authorizations, additions or budgets previously disclosed to
Buyer);

                   (f)          create, incur or assume any long-term debt;

                   (g)          except in the ordinary course of business
consistent with past practice, create, incur or assume any short-term debt to
Persons other than another Champion Company or to Cooper Finance Inc. in the
ordinary course of daily cash management activities consistent with past
practices;

                   (h)          assume, guarantee, endorse or otherwise become
liable or responsible for the obligations of any other Person other than
another Champion Company;

                   (i)          permit any of its current insurance policies to
be canceled or terminated or any of the coverage thereunder to lapse, unless
simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage substantially similar to or greater than coverage
remaining under those canceled, terminated or lapsed are in full force and
effect;

                   (j)          except as required by law, or pursuant to the
terms of any collective bargaining agreement; (i) enter into, adopt, amend or
terminate any Champion Employee Plan, Champion Benefit Arrangement or Champion
International Plan; or (ii) increase the compensation or fringe benefits of any
director, officer or other employee, except such increases as are granted in
the ordinary course of business consistent with past practice (which shall
include normal periodic performance reviews and related compensation and
benefit increases); or

                   (k)          agree to take any of the foregoing actions.





                                     - 28 -
<PAGE>   34
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   Notwithstanding the provisions of this Section 5.1, nothing
in this Agreement shall be construed or interpreted to (i) prevent Seller and
the Champion Companies from making, accepting or settling intercompany advances
to, from or with one another, or engaging in any other transaction incidental
to their normal cash management procedures including short-term investments in
time deposits, certificates of deposit and bankers acceptances made in the
ordinary course of business; or (ii) prevent the Champion Companies from paying
dividends.

         5.2.      ACCESS TO INFORMATION.

                   (a)           Between the date of this Agreement and the
Closing Date, Seller will give Buyer (or its authorized representatives)
reasonable access to all books, records, plants, offices, warehouses and other
facilities and properties of the Champion Companies during regular business
hours and upon reasonable notice, and will reasonably permit Buyer to make
copies of such books and records.  Buyer shall not (and shall cause its
authorized representatives not to) conduct any such investigation in a manner
which interferes unreasonably with the operation of the Business.

                   (b)           With respect to any environmental due
diligence: (i) Buyer shall not conduct any soil, groundwater, air or other
sampling upon any Owned Real Property, Leased Real Property or any property
otherwise used by the Champion Companies (including off-site locations),
without Seller's prior written consent (which shall not be unreasonably
withheld), and (ii) Buyer shall notify Seller prior to contacting any
Governmental Authority concerning environmental matters relating to the
Business and keep Seller apprised of any material communications with or any
material inquiries or requests made by any Governmental Authority.   Buyer
shall conduct such environmental due diligence of the Champion Companies as
Buyer, in its sole discretion, deems reasonable and appropriate, and Seller
shall cooperate in good faith with such investigation.  Buyer shall indemnify,
defend and hold Seller harmless from any and all material liability (excluding
consequential damages) from environmental conditions to the extent they arise
directly out of or are aggravated by the performance of Buyer's environmental
inspection.





                                     - 29 -
<PAGE>   35
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (c)          All information provided or obtained by Buyer
under this Section 5.2 shall be subject to the terms and conditions of the
Confidentiality Agreement between Seller and Buyer dated April 21, 1998
attached hereto as Exhibit IX.

         5.3.      CONSENTS; FILINGS; FULFILL CONDITIONS.

                   (a)          Each of the parties hereto will use its
reasonable best efforts to obtain consents of all Persons necessary for the
consummation of the transactions contemplated by this Agreement.

                   (b)          Each of the parties hereto will use its
reasonable best efforts (i) to file expeditiously all filings or submissions
required under the Hart-Scott-Rodino Act in order that Seller and Buyer may
consummate the transactions contemplated by this Agreement, and (ii) to make
all such other filings, notifications and requests for consent, approval or
permission that may be required by any statute, Law, Environmental Law,
regulation or judicial decree of any jurisdiction in connection with the
transactions contemplated by this Agreement and the Other Agreements.  Buyer
and Seller shall each furnish to the other such necessary information and
reasonable assistance as the other may request in connection with the
preparation of any such filings, submissions, notifications and requests.
Buyer and Seller shall each keep the other apprised of any communications with
and any inquiries or requests for additional information made by any
Governmental Authority.  Buyer and Seller shall, upon the request of any
Governmental Authority, supply such authority with any additional requested
information as expeditiously as is reasonably possible, and shall use their
reasonable best efforts to cause the satisfaction or termination of the
applicable waiting period or any extension thereof under the Hart-Scott-Rodino
Act or any other applicable pre-merger notification laws.

                   (c)          Seller and Buyer shall each use its reasonable
best efforts (i) to cause to be fulfilled the conditions to their respective
obligations set forth in Sections 8.1 and 8.2 and (ii) to





                                     - 30 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



take, or cause to be taken, such other actions as are necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement.

         5.4.      FEES AND EXPENSES.  Whether or not the transactions
contemplated by this Agreement are consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expenses.

         5.5.      PUBLIC ANNOUNCEMENTS.  Neither Buyer nor Seller (nor any of
their respective Affiliates) will issue any press release or otherwise make any
public statement with respect to the transactions contemplated hereby without
the prior written consent of the other party (which shall not be unreasonably
withheld or delayed); provided, however, either party hereto may make any
public disclosure it believes in good faith and upon advice of counsel is
required by applicable law or stock exchange rules or regulations in which case
the disclosing party will use its reasonable efforts to advise the other party
prior to making the disclosure.

         5.6.      USE OF THE COOPER NAME.  No interest in or right to use the
"Cooper" name is being conveyed pursuant to this Agreement, and following the
Closing Date, Buyer and its Affiliates (including the Champion Companies) shall
not use the "Cooper" name as part of any trade name, corporate name, assumed or
fictitious name, trademark or service mark; provided, however, the Champion
Companies may sell, use and distribute the existing supply of products and
materials bearing the "Cooper" name including signage, packaging, sales aids,
sales literature and stationery. Promptly, but in no event later than 30 days
after the Closing Date, Buyer shall, or shall cause its Affiliates to, take
such actions as are necessary to change the name of any Champion Company which
includes the name "Cooper" so that "Cooper" does not appear in the Champion
Company's name.

         5.7.      COMPANY BOOKS AND RECORDS.  After the Closing Date, Buyer
shall, and shall cause its Affiliates to, (i) permit Seller and its employees
or agents to inspect and copy all books, records and other documents of the
Champion Companies which relate to the period prior to the Closing





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PURCHASE AND SALE AGREEMENT BETWEEN
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Date, (ii) maintain and preserve all such books, records and other documents at
least for the greater  of 7 years after the Closing Date or any applicable
statutory or regulatory retention period, and (iii) notify Seller before any
such books, records and other documents are disposed of and allow Seller the
right to obtain the originals of such books, records or other documents prior
to their disposal.

         5.8.      INSURANCE COVERAGE.

                   (a)           As of the Closing Date, Seller or its
Affiliates shall cancel insurance coverage and claims service contracts
relating to self insured programs applicable to the Champion Companies for
occurrences (with respect to any "occurrence" policies) or claims made (with
respect to any "claims-made" policies) after the Closing Date (other than
insurance policies in the name of a Champion Company); provided, however, that
the remaining insurance coverage shall be available to the Champion Companies
with respect to insured occurrences on or prior to the Closing Date relating to
the Business if and only to the extent that Buyer and its Affiliates including
the Champion Companies have assumed or paid the loss or liability attributed to
such occurrences.  If after the Closing, Seller or one of its Affiliates
actually receives cash proceeds (excluding any return of premium or reimbursed
attorney's or investigation or other fees) from an insurer that are
attributable to such insurance coverage with respect to any insured occurrences
on or prior to the Closing Date, then such cash proceeds shall be paid to Buyer
(net of any deductible, co-payment, retro fees, self-insured premiums, defense
costs or other charges paid or payable to the insurance carrier or other third
parties or obligations to reimburse the insurance carrier for which Seller, or
any of its Affiliates, is liable and which relate to the insured occurrences)
to the extent that Buyer or its Affiliates have assumed or paid the loss or
liability attributed to such occurrences.

                   (b)          Buyer shall reimburse Seller for any
administrative costs, retro fees, premiums, self- insured or deductible loss
costs or other expenses that Seller or its Affiliates is charged after the
Closing by an insurance carrier relating to insurance coverage applicable to
the Champion Companies prior to Closing.  Buyer shall indemnify Seller for any
claims by insurance carriers for





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PURCHASE AND SALE AGREEMENT BETWEEN
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indemnity arising from or out of claims by or against any Champion Companies,
acts or omissions of any Champion Company, or related to the Business.  Within
30 days of Closing, the Buyer shall replace any applicable outstanding
certificates of insurance provided to Persons in connection with the Business
with a new certificate of insurance for the requisite coverage.

                   (c)           The obligations of Seller and its Affiliates
under this Section 5.8 hereunder shall not include prosecuting or defending
litigation relating to claims of the Champion Companies unless Seller elects to
engage in such litigation upon a request by Buyer to do so, which litigation
would be conducted at Buyer's expense.

         5.9.      TRANSFER COSTS.  Regardless of which party is required to
pay the following transfer costs under applicable law, Buyer and Seller shall
equally share the cost of (i) any sales, use, value added, transfer,
documentary, registration or stamp and any recording, notarial or filing, and
other similar taxes, fees and expenses (including all applicable stock
transfer, real estate transfer taxes, and including any penalties, interest and
additions to such Tax) incurred in connection with this Agreement and the
transactions contemplated hereby; (ii) any license fees or other costs and
expenses payable to a licensor or lessor in order to assign, license,
sublicense, lease, sublease or otherwise transfer any computer hardware or
software used in the Business to Buyer or its Affiliates including the Champion
Companies, and (iii) any fees for appraisals obtained for the purpose of
supporting the allocation of the Purchase Price pursuant to Section 2.10.
Notwithstanding the foregoing, any value added taxes or Canadian General Sales
Taxes will be fully paid by the party customarily responsible therefor to the
extent such taxes are recoverable by credit or otherwise.

         5.10.     DISCLOSURE SUPPLEMENTS.  If, prior to Closing, Seller
notifies Buyer in writing of any condition, event or development causing a
breach of any of the representations and warranties of Seller in this Agreement
and such condition, event or development has had a Material Adverse Effect upon
the financial condition of the Champion Companies taken as a whole, then Buyer
may have the right to terminate this Agreement pursuant to Section 10.1(b).
Unless Buyer terminates this





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Agreement within 10 days of the date of Seller's notice pursuant to Section
10.1(b) by reason of such condition, event or development, Seller's written
notice will be deemed to have amended the disclosure schedules or otherwise
qualify the relevant representations and warranties so as to cure any breach of
the relevant representations and warranties.

         5.11.     WARN ACT.  Buyer agrees to indemnify, defend and hold
harmless the Seller Indemnified Parties from any Adverse Consequences arising
from the failure to comply with the Worker Adjustment and Retraining
Notification Act relating to a "plant closing" or "mass layoff" (as those terms
are defined in such Act), by Buyer or the Champion Companies, occurring on or
after the Closing Date.  Seller agrees to indemnify, defend and hold harmless
Buyer Indemnified Parties from any Adverse Consequences arising from the
failure to comply with the WARN Act relating to a "plant closing" or "mass
layoff," by Seller or the Champion Companies, occurring on or prior to the
Closing Date.

         5.12.     ASSUMPTION OF CERTAIN SELLER OBLIGATIONS.

                   (a)          "SELLER'S COMPANY OBLIGATIONS" shall mean any
obligation, commitment, liability or responsibility of Seller, its Affiliates
or its or their Predecessors (whether or not also an obligation, commitment,
liability, or responsibility of or claim against, in whole or in part, the
Champion Companies) arising, undertaken or created in connection with, on
behalf of or for the benefit of the Champion Companies, or arising from the
conduct of the Business, and relating to (i) any employment or severance
agreements (with the employees set forth on Disclosure Schedule 5.12(i), (ii)
any stock purchase or asset purchase agreements concerning the acquisition or
divestiture of any shares or assets of the Champion Companies or of the
Business (including the obligations of Seller and its Affiliates under the
agreements set forth in Disclosure Schedule 5.12(ii)); (iii) any labor or
collective bargaining agreements relating to the Champion Companies; (iv) any
contracts with any Governmental Authority relating to the Champion Companies;
(v) any licenses or  leases of computer hardware and software relating to the
Champion  Companies (including the licenses or leases set forth





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



on Disclosure Schedule 5.12(v)); (vi) Performance Obligation Instruments,
Outstanding FX Contracts and Additional FX Contracts; (vii) the orders and
decrees with the Governmental Authorities relating to the Champion Companies
described in Disclosure Schedules 3.9 and 3.11 except to the extent Seller is
obligated to reimburse or indemnify Buyer and its Affiliates for liabilities
relating to such orders and decrees pursuant to this Agreement; (viii) fees,
expenses and costs incurred in the recruitment and relocation of employees
including the excess of any advances made or costs incurred by Seller or its
Affiliates over proceeds received on disposition of the property relating to
home sale assistance program or employee relocation policy; (ix) the
commitments for charitable contributions set forth on Disclosure Schedule
5.12(ix); (x) the operation of and products manufactured or sold by the Wagner
industrial brake business including all liabilities arising from or related to
asbestos in such industrial brakes regardless of when the industrial brakes
were manufactured or sold which business was sold by Seller to Magnetek, Inc.
pursuant to an Agreement for Sale of Stock dated as of December 30, 1986; (xi)
the contingent fees payable to Seller's outside counsel to the extent such fees
relate to harbor maintenance tax refunds that are received by the Champion
Companies and estimated savings recognized by the Champion Companies for 1998
harbor maintenance taxes if such taxes would have been paid consistent with
past practice; (xii) retrospectively rated casualty insurance policies in the
name of a Champion Company including those policies set forth in Disclosure
Schedule 5.12(xii); (xiii) the agreement with Sprint for telephone services,
voice and data communications; (xiv) regional supply agreements for the
purchase of office supplies/MRO materials;  (xv) any agreements for motor
contract carriage relating to the Champion Companies; (xvi) the agreement with
Donlen Corp. and GE Capital Fleet Services for the acquisition, maintenance and
disposal of vehicles; and (xvii) costs incurred by Seller for travel
arrangements for Employees.

                   (b)           Buyer expressly agrees that it shall assume
Seller's Company Obligations (except for the liabilities described in Section
5.12(a)(x)) to the extent related solely to the Champion Companies and shall
discharge the same in accordance with their terms.  Buyer shall cause one of
its designated Affiliates to assume the Seller's Company Obligations described
in Section 5.12(a)(x).  For purposes of clarification, after the Closing the
Champion Companies will not be





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PURCHASE AND SALE AGREEMENT BETWEEN
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eligible to participate in the agreements and programs referred to in clauses
(xiv) through (xvii) above, however, the Buyer will assume any liability for
charges under such agreements including those which the Champion Companies may
incur during the transition period following Closing when Buyer is establishing
comparable arrangements for the Champion Companies.  Seller shall retain the
cash proceeds for any rebates relating to the agreements and programs referred
to in clauses (xvi) and (xvii) above.  Buyer acknowledges that it will be
liable for all continuing obligations of Seller after the Closing with respect
to the Seller Company Obligations referred to in clauses (i) through (xiii)
above.  Buyer agrees that it will cause the Champion Companies to continue to
participate in Seller's agreement with Sprint for telephone services, voice and
data communications until the current agreement expires on April 30, 2000 and
the Champion Companies will continue to receive the discounts and service
credits related to their use of the Sprint services.

                   (c)          After the Closing Date and upon Seller's
request, and for no further consideration, Buyer shall use and shall cause any
Affiliate of Buyer to use its reasonable best efforts to obtain full releases
of Seller and any of its Affiliates from liability under the Seller's Company
Obligations assumed by the Buyer pursuant to paragraph (b) above, provided,
however, that until Buyer obtains such releases, Buyer shall not take, and
shall not permit any Affiliate of Buyer to take, any action that has the effect
of amending or otherwise modifying any provisions of any of the Seller's
Company Obligations assumed by the Buyer for which Seller or any of its
Affiliates may have continuing liability, either primary or contingent, except
for amendments or modifications which do not (i) increase in any material
respect any liability of Seller or any of its Affiliates thereunder, or (ii)
extend the period of time during which Seller or any of its Affiliates will be
obligated or liable thereunder.

         5.13.     PAYMENT FOR INTER- AND INTRA-COMPANY ACCOUNTS.

                   (a)          Subject to paragraph (b) below, effective as of
the Closing, (i) Buyer shall be deemed to have acquired from Seller and its
Affiliates, all inter- and intra-company payables





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



and loans that are due to Seller and its Affiliates from the Champion Companies
and (ii) Seller shall be deemed to have acquired from the Champion Companies
all inter- and intra-company payables and loans that are due to the Champion
Companies from the Seller and its Affiliates.  Seller and Buyer agree that the
consideration payable under Section 2.2 hereof is net and inclusive of the
amount of inter- and intra-company accounts deemed transferred pursuant to this
Section 5.13.  Notwithstanding the foregoing, any liabilities on the books of
the Champion Companies that are paid by Seller or its Affiliates but not yet
booked as inter- and intra-company payables or receivables (a) for items shown
on Disclosure Schedule 2.3(h), or (b) for items not shown on Disclosure
Schedule 2.3(h) but which provide a direct and measurable benefit to the
Champion Company on whose behalf the liability was paid, shall be settled after
Closing in cash within 45 days after the date of the invoice which Seller shall
issue to Buyer for such amounts.  If Buyer fails to pay such invoice in full
within 30 days of the invoice date, then interest shall accrue on the amount
due and payable at the rate of 9% per annum.

                   (b)          Within five (5) business days following the
date on which the Final Closing Statement of Net Assets is determined (i) if
there is a receivable due to Champion Automotive S.p.A. under clause (i) of
Section 2.3(i), Seller shall cause Cooper Italia S.p.A. to pay Champion
Automotive S.p.A. the amount of the receivable, if any, due from Cooper Italia
S.p.A. to Champion Automotive S.p.A. set forth in the Final Closing Statement
of Net Assets, or (ii) if there is a receivable due to Cooper Italia S.p.A.
under clause (ii) of Section 2.3(i), Buyer shall cause Champion Automotive
S.p.A. to pay Cooper Italia S.p.A. the amount of the payable, if any, due from
Champion Automotive S.p.A. to Cooper Italia S.p.A. set forth in the Final
Closing Statement of Net Assets.

         5.14.     PATENT AND TRADEMARK MATTERS.  Seller agrees to cooperate
with Buyer in transferring registrations to and perfecting the title of the
Champion Companies in the Intellectual Property used in the Business.  In
respect of any Intellectual Property listed on Disclosure Schedule 3.15(b)
which is registered in  name of Seller or its Affiliates, Seller shall execute
all documents necessary to perfect title to such Intellectual Property in the
Champion Companies prior to Closing.





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



If such Intellectual Property is registered in the United States, Seller shall
complete and file the documents necessary to record the transfer of such
registrations of title with the United States Patent and Trademark Office prior
to Closing and Seller shall pay any government fees or professional fees
relating thereto.  If such Intellectual Property is registered outside the
United States, Seller shall deliver the documents, duly executed by Seller, to
foreign legal counsel prior to Closing with instructions and any authorizations
necessary to record the transfer of such registrations with the appropriate
Governmental Authorities and Seller shall pay any professional or recording
fees relating thereto that are incurred before the Closing Date.  After
Closing, Seller shall complete the recordation of transfer of registrations
outside the United States, and Buyer will reimburse Seller for one-half of any
professional and recording fees incurred by Seller after Closing in connection
therewith.

         5.15.     PERFORMANCE OBLIGATION INSTRUMENTS.  Buyer shall use
commercially reasonable efforts, on or as soon as practicable after the Closing
Date, to replace all "PERFORMANCE OBLIGATION INSTRUMENTS" (as defined below)
existing on the Closing Date, or to obtain the full release of Seller and its
Affiliates from any liability related thereto.  Without limiting Buyer's
obligations under Section 5.12, Buyer shall reimburse Seller and its Affiliates
for any liability that Seller or its Affiliates incur in connection with any
Performance Obligation Instruments as a result of such Performance Obligation
Instrument not being so replaced (or otherwise terminated) or as a result of
the failure to obtain the full release of Seller and its Affiliates from any
liability related thereto including the value of payments made under a claim or
drawing together with associated costs and fees to maintain, renew or extend
such instruments.  "PERFORMANCE OBLIGATION INSTRUMENTS" shall mean,
collectively, each commercial letter of credit, standby letter of credit, bond,
bank guarantee, guarantees of Industrial Development Revenue Bonds, guarantees
of leases and other contracts, or other similar types of instrument and bid,
payment, performance or other bond or surety, in each case that relates  solely
to the Business and including those specifically described on Disclosure
Schedule 5.15 or that may be created after the date hereof in the ordinary
course of conducting the Business consistent with past practices (and as to
which Seller has notified Buyer in writing prior to the Closing Date.)  If, by
March 31, 1999, Buyer has not obtained releases or effected the complete
replacement of any





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



outstanding Performance Obligation Instrument such that Seller and its
Affiliates are fully released from any liability related thereto, Buyer shall
obtain and deliver to Seller letters of credit in favor of Seller, from
financial institutions reasonably acceptable to Seller and on terms reasonably
satisfactory to Seller, which fully cover the liabilities under each such
Performance Obligation Instrument.  Seller or its Affiliates may elect not to
renew or extend any Performance Obligation Instrument to the extent (a)
required by any applicable law; (b) reasonably necessary to avoid a material
Adverse Consequence to Seller or its Affiliates or (c) Buyer has not obtained
and delivered to Seller letters of credit required because of Buyer's failure
to effectuate any replacement required under this Section 5.15.  Seller shall
use reasonable efforts to notify Buyer prior to Seller's renewal or extension
of any Performance Obligation Instruments provided that, notwithstanding
anything to the contrary in this Agreement, in no event shall Seller incur any
liability whatsoever for failure to so notify.  Any election by Seller or its
Affiliates not to renew or extend a Performance Obligation Instrument shall not
affect any indemnification obligation of Buyer.  Furthermore, Buyer
acknowledges and agrees that Seller has no obligation or intention to renew or
extend a Performance Obligation Instrument beyond the first anniversary of the
Closing Date.

         5.16.     FOREIGN EXCHANGE CONTRACTS.

                   (a)          On or as soon as practicable after the Closing
Date, Buyer shall use commercially reasonable efforts to obtain the full
release of Seller and its Affiliates from any liability under the "Outstanding
FX Contracts" and "Additional FX Contracts" (as such terms are defined below).
Until such time as Buyer obtains such release, the procedures set forth in
Section 5.16(b) shall apply to the settlement of such foreign exchange
contracts.

                   (b)           Seller has set forth on Disclosure Schedule
5.16 all outstanding foreign exchange contracts entered into by Seller or its
Affiliates on or before the date hereof which relate exclusively to the
Business (the "OUTSTANDING FX CONTRACTS").  For each Outstanding FX Contract:
(i) Buyer shall deliver on the "Maturity Date" to the "Bank" designated on such
schedule the amount





                                     - 39 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



of the currency sold (which is designated in such schedule as a negative
number) in the currency designated in such schedule; and (ii) Seller shall
direct each Bank designated in such schedule to deliver to Buyer, or a Buyer
Affiliate as instructed by Buyer, the amount of the currency purchased (which
is designated in such schedule as a positive number) in the currency designated
in such schedule.  Any delivery instructions under this Section 5.16 shall be
provided in writing no later than two business days before the applicable
Maturity Date.  For any foreign exchange contract entered into by Seller or its
Affiliates after the date hereof on behalf of or for the benefit of the
Champion Companies in the ordinary course of the Business consistent with past
practices that requires delivery after the Closing Date ("ADDITIONAL FX
CONTRACTS"), (i) Seller shall promptly notify Buyer in writing of any
Additional FX Contracts, (ii) Buyer shall timely deliver the amount of the
currency sold thereunder in accordance with the terms thereof, and (iii) Seller
shall direct the Bank to each such Additional FX Contract to deliver timely to
Buyer or a Buyer Affiliate (as Buyer may instruct) the currency purchased
thereunder in accordance with the terms thereof.  On and after the Closing
Date, Buyer shall be entitled to all rights of Seller under all Outstanding FX
Contracts and Additional FX Contracts (including the right to receive all
payments due to Seller and its Affiliates thereunder in accordance with the
terms thereof), and Seller shall take such actions as Buyer may reasonably
request on or after the Closing Date to provide Buyer with the benefit of all
rights and remedies available to Seller and its Affiliates under each
Outstanding FX Contract and Additional FX Contract.

         5.17.     STANDARD MOTOR PRODUCTS PURCHASE PRICE ADJUSTMENT AND
CONSIGNED INVENTORY.  Seller and Buyer confirm and agree that Seller has the
right to receive any and all payments due from Standard Motor Products pursuant
to Sections 7.20(d), (e) and (f) of the Asset Exchange Agreement dated as of
March 28, 1998 among Standard Motor Products and certain Champion Companies.
If Buyer or its Affiliates receive any such payments from Standard Motor
Products, the Buyer shall and shall cause its Affiliates promptly to remit any
such payments to Seller, but in no event later than five business days
following the receipt of such payments by Buyer or its Affiliates.  If Buyer or
its Affiliates fail to timely remit such payments to Seller, Buyer shall pay
Seller interest on such amount at the rate of nine percent (9%) per annum from
the due date of such





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PURCHASE AND SALE AGREEMENT BETWEEN
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remittance.  Seller agrees that it shall be responsible for the purchase price
adjustment, if any, that may be due to Standard Motor Products pursuant to
Section 2.9(b) of such Asset Exchange Agreement.

         5.18.     FURTHER ASSURANCES/CONSENTS AND APPROVALS.

                   (a)          Seller and Buyer agree that, from time to time,
whether before, at or after the Closing Date, each of them will, and will cause
their respective Affiliates to, execute and deliver such further instruments of
conveyance and transfer and take such other action (including any action
associated with providing notice to, making filings with or obtaining the
consent of appropriate Governmental Authorities with respect to, or causing the
transfer, of any Environmental Permits) as may be reasonably necessary to carry
out the purposes and intents hereof.





PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (b)          This Agreement and the transactions
contemplated hereby shall not constitute an assignment, sale, conveyance,
transfer or lease of any interest in any contract, lease or other agreement if
an assignment, sale, conveyance, transfer, lease or an attempt to make such an
assignment, sale, conveyance, transfer or lease (a) without the consent of or
notice to a third party would constitute a breach or violation or affect
adversely the rights of Seller, Buyer or their respective Affiliates thereunder
or (b) is restricted or prohibited by law, including any Environmental Law.
Any transfer, sale, conveyance, assignment or lease to Buyer or its Affiliates
(including the Champion Companies) of any interest in any contract, lease or
other agreements that requires filing with, notice to or the consent of a third
party shall be made subject to such filing or notice being given or such
consent or approval being obtained.  If such consent or approval is not
obtained on or prior to the Closing Date, Seller and Buyer shall continue to
use commercially reasonable efforts to obtain any such approval or consent
until the earliest of (i) such time as such consent or approval has been
obtained or (ii) the date Seller reasonably determines that the third party
will not provide its consent or approval.  In the event Seller reasonably
determines that the third party will not provide its consent or approval,
Seller will cooperate with Buyer and its Affiliates in any lawful and feasible
arrangement





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



to provide that Buyer and its Affiliates shall receive the benefits under any
such contract, lease or other agreement, including performance by Seller as
agent, provided that Buyer and its Affiliates shall undertake to pay, satisfy
and indemnify the Seller against the corresponding liabilities for the
enjoyment of such benefit as if such consent or approval has been obtained.
Buyer shall reimburse Seller for any costs and expenses it incurs after the
Closing Date in seeking to obtain or obtaining any consent or approval.

         5.19.     OTHER AGREEMENTS.  At Closing, the parties hereto shall or
shall cause their respective Affiliates to execute and deliver the following
agreements (collectively, the "OTHER AGREEMENTS"):

                   (a)          Canadian Asset Transfer Agreement;

                   (b)          Assignments or subleases of computer hardware
and software;

                   (c)          Transition Services Agreement; and

                   (d)          Such other agreements or documents as are
reasonably required to consummate the transactions contemplated by this
Agreement.

         5.20.     BUYER INVESTIGATION: NO REPRESENTATIONS OR WARRANTIES.

                   (a)          BUYER HEREBY ACKNOWLEDGES THAT IT HAS
INDEPENDENTLY EVALUATED AND CONDUCTED DUE DILIGENCE SATISFACTORY TO BUYER WITH
RESPECT TO THE ASSETS OF THE "CHAMPION COMPANIES" (INCLUDING, BUT NOT LIMITED
TO, THE OPERATIONS, FACILITIES, CONTRACTS, CUSTOMER FILES, INTELLECTUAL
PROPERTY, FINANCIAL INFORMATION AND PROSPECTS OF THE BUSINESS), AND HAS BEEN
REPRESENTED BY, AND HAD THE





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



ASSISTANCE OF, COUNSEL IN THE CONDUCT OF SUCH DUE DILIGENCE, THE PREPARATION
AND NEGOTIATION OF THIS AGREEMENT AND THE ANCILLARY DOCUMENTS, AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

                   (b)          SELLER HAS MADE AVAILABLE TO BUYER AND ITS
REPRESENTATIVES CERTAIN INFORMATION AND RECORDS RELATING TO THE ASSETS OF THE
"CHAMPION COMPANIES".  IT IS UNDERSTOOD AND AGREED BY THE PARTIES THAT NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, HAS BEEN MADE BY SELLER OR ITS
AGENTS REGARDING THE ACCURACY OR COMPLETENESS OF ANY SUCH INFORMATION OR
RECORDS, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY OF THE "OTHER
AGREEMENTS", AND THAT SELLER WILL NOT HAVE OR BE SUBJECT TO ANY LIABILITY TO
BUYER OR ANY OTHER "PERSON" RESULTING FROM THE DISTRIBUTION TO BUYER, OR
BUYER'S USE, OF ANY SUCH INFORMATION OR RECORDS, EXCEPT AS EXPRESSLY PROVIDED
IN THIS AGREEMENT.  FURTHERMORE, BUYER AGREES THAT ANY REPRESENTATIONS OR
WARRANTIES MADE BY SELLER OR ITS AFFILIATES WITH RESPECT TO THE STOCK OF THE
CHAMPION COMPANIES OR THE ASSETS OF THE CHAMPION COMPANIES BEING ACQUIRED BY
BUYER OR ITS AFFILIATES BY VIRTUE OF THE ACQUISITION OF THE STOCK OF THE
CHAMPION COMPANIES OR ASSETS OF THE CANADIAN DIVISION ARE SET FORTH IN THIS
AGREEMENT AND THE OTHER AGREEMENTS, AND THAT EXCEPT AS SO SET FORTH, THERE IS
NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.   EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 3.11 OF THIS AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER TO THE BUYER REGARDING THE PRESENCE OR
ABSENCE OF ANY HAZARDOUS SUBSTANCES, ASBESTOS CONTAINING MATERIALS, UNDERGROUND
STORAGE TANKS OR PCBS IN, AT OR UNDER ANY OF THE ASSETS OF THE "CHAMPION
COMPANIES" OR THE ACCURACY





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



OR COMPLETENESS OF ANY STATEMENTS, DOCUMENTS OR REPORTS REGARDING ENVIRONMENTAL
MATTERS RECEIVED FROM SELLER; HOWEVER, TO SELLER'S KNOWLEDGE, NO SUCH
STATEMENT, DOCUMENT OR REPORT REGARDING ENVIRONMENTAL MATTERS IS MATERIALLY
INACCURATE OR INCOMPLETE.

         5.21.     INDEMNIFICATION FOR ALLIEDSIGNAL LAWSUIT AND BOSCH
INFRINGEMENT CLAIM.

                   (a)          Cooper Automotive Company is a defendant in a
lawsuit known as AlliedSignal, Inc. v.  Cooper Automotive, Inc., Case No.
96-540 SLR (United States District Court, District of Delaware) involving a
patent infringement claim relating to the process of manufacturing
platinum-tipped spark plugs ("AlliedSignal Lawsuit").  Seller shall use
commercially reasonable efforts to obtain and deliver to Buyer at Closing a
license agreement, in a form reasonably acceptable to Buyer, granting Cooper
Automotive Company the right to make, use, sell, offer for sale or import any
product, process or invention of whatever nature covered by the patent(s) that
are the basis of AlliedSignal's claim.  If Seller is able to deliver such
license agreement to Buyer (whether on or after Closing), Seller shall
indemnify the Buyer Indemnified Parties for any royalties or other amounts due
under such license agreement.  If Seller is not able to deliver such license
agreement to Buyer (whether on or after Closing), Seller shall, for the
remaining term of the patent(s)' life, indemnify, defend and hold harmless the
Buyer Indemnified Parties from and against all Adverse Consequences relating to
the AlliedSignal Lawsuit.

                   (b)          Robert Bosch GmbH has accused certain Champion
Companies of infringing Bosch's European Patent No. EP523062 relating to a glow
plug having a ferro-cobalt alloy (the "Bosch Infringement Claim").  Seller
shall use commercially reasonable efforts to obtain and deliver to Buyer at
Closing a license agreement, in a form reasonably acceptable to Buyer, granting
Champion Automotive (U.K.) Ltd and Champion Automotive S.p.A. the right to
make, use, sell, offer for sale or import any product, process or invention of
whatever nature covered by the patent(s) that are the basis of Bosch's claim.
If Seller is not able to deliver such license agreement to Buyer





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<PAGE>   50
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



(whether on or after Closing), Seller shall, for the remaining term of the
patent(s)' life, indemnify, defend and hold harmless the Buyer Indemnified
Parties from and against all Adverse Consequences relating to the Bosch
Infringement Claim.

                   (c)          Notwithstanding Section 5.21(a), if the final
judgment for the AlliedSignal Lawsuit (including all applicable appeals) does
not enjoin or otherwise prohibit any of the Champion Companies from
manufacturing platinum tipped spark plugs using the platinum ball welding
method used by the Champion Companies, which was the subject of the
AlliedSignal Lawsuit, then Seller's indemnity obligations for the AlliedSignal
Lawsuit shall cease, except for Seller's obligation to satisfy any claims for
damages.

                   (d)          For purposes of determining the Seller's
indemnity obligations under this Section 5.21, the provisions of Section 9.6(b)
shall apply.  Buyer and its Affiliates shall cooperate fully with Seller and
assist Seller, from and after the Closing Date, regarding all aspects of any
judicial, quasi-judicial, administrative, legal or equitable proceedings
relating to the AlliedSignal Lawsuit.  Such cooperation shall include (a)
complying with all requests from the Seller for information from the Champion
Companies which relates to the AlliedSignal Lawsuit and (b) causing employees,
officers and directors of the Champion Companies (i) to make themselves
available for interviews by and consultations with attorneys and other
representatives for Seller; (ii) to testify at any depositions, hearings,
trials or any other proceedings in connection with the AlliedSignal Lawsuit;
and (iii) to analyze documents, testimony or other information relating to the
AlliedSignal Lawsuit.  Buyer shall provide such cooperation and information
without the issuance of a subpoena, discovery request or other formal legal
process.  All travel and out-of-pocket expenses associated with such
cooperation shall be borne by Seller, excluding cost of time expended by
officers, employees and directors of Buyer and its Affiliates.

         5.22.     THIRD PARTY DEBT.  Seller shall use its reasonable best
efforts to pay off all foreign third party debt set forth on Disclosure
Schedule 2.3(m) before Closing.  Following the Closing, the





                                     - 45 -
<PAGE>   51
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Buyer and its Affiliates will be responsible for the third party debt of the
Champion Companies set forth in Disclosure Schedule 2.3(m) and the obligations
of the Champion Companies relating to the industrial development revenue bonds
described in Section 5.23 below.

         5.23.     ASSIGNMENT OF BONDS TO BUYER.  Seller holds and is entitled
to receive payments under the following industrial development revenue bonds:

                   (a) $7,200,000 City of Scottsville, Kentucky Industrial
Building Revenue Bond (Wagner Electric Corporation Project) Series 1994;

                   (b) $7,600,000 City of Glasgow, Kentucky Industrial Building
Revenue Bond (Wagner Electric Corporation Project);

                   (c) $20,000,000 Industrial Development Board of the Town of
Sparta, Tennessee Revenue Bond (Wagner Lighting Division of Cooper Automotive,
Inc. Project) Series 1995; and

                   (d) $4,100,000 Industrial Development Board of the City of
Smithville, Tennessee Revenue Bond (Moog Automotive, Inc. Project) Series 1995.

         The payments due to Seller under these bonds are funded by real estate
lease payments from certain Champion Companies.  At Closing, Seller shall
assign to Buyer, or its designated Affiliate, all of Seller's rights and
interest under such bonds including the right to receive any payment due
thereunder after the Closing Date.

         5.24.     TRANSITION SERVICES AGREEMENT.  The parties shall commence
negotiating a mutually acceptable agreement pursuant to which Seller and its
Affiliates shall assist Buyer and its Affiliates in certain areas, such as
employee benefits, claims management and environmental in the transition of the
Business to Buyer's control after Closing.





                                     - 46 -
<PAGE>   52
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         5.25.     ASBESTOS CLAIMS.

                   (a)          EIS LIABILITIES.  To the extent that Buyer or
its applicable Affiliate is not fully indemnified by Standard Motor Products
Company or its successors for Adverse Consequences arising from Asbestos Claims
due to products manufactured or sold prior to March 28, 1998, by Standard Motor
Products Company, its Affiliates, and their Predecessors in accordance with
that certain Asset Exchange Agreement, dated as of March 28, 1998,  among SMP
Motor Products, Ltd., Standard Motor Products, Inc., Cooper Industries (Canada)
Inc., Moog Automotive Company, and Moog Automotive Products, Inc. and for
Adverse Consequences arising from Asbestos Claims due to  products manufactured
by Seller or its Affiliates after March 28, 1998, through the Closing Date that
are sold under the tradenames formerly used by Standard Motor Products Company,
Seller shall indemnify, defend and hold Buyer and its Affiliates harmless from
and against such Adverse Consequences.

                   (b)          INSURANCE CLAIMS.  Seller shall make available
(and shall cause its Affiliates to make available) to Buyer and the Champion
Companies the rights of Seller and its Affiliates to any benefits, including
insurance proceeds, of or arising out of any insurance policy that covers
Asbestos Claims. Buyer shall (or shall cause its Affiliates to) promptly notify
Seller and submit any Asbestos Claims to the relevant insurance company or
companies on behalf of and in the name of either Pneumo Abex Corporation or
Moog Automotive Products, Inc., as successor by merger with Wagner Electric
Corporation.  Buyer acknowledges that certain Insurance Agreement that is
Exhibit 2.6 (b) (iii) to the Asset Purchase Agreement dated as of November 21,
1994, by and between  Pneumo Abex Corporation and Wagner Electric Corporation
and agrees to abide by its terms.

                   (c)          INDEMNITY FOR DENIED CLAIMS UNDER WORKING LAYER
POLICIES.

                                (i)         Subject to Section 5.25(c)(ii) and
(e), to the extent that an insurance carrier (a "DENYING CARRIER") denies Buyer
or the Champion Companies access to an 


                                   - 47 -

<PAGE>   53
insurance policy under or as a result of which coverage for Asbestos Claims is
being provided as of the Closing Date as  set forth on Exhibit X (collectively,
the "WORKING LAYER POLICIES") on the basis that Buyer or such Champion Company
is not, and does not succeed to the rights of, one or more of  the insureds
under the policy, Seller shall indemnify, defend and hold Buyer and the
Champion Companies harmless against Adverse Consequences for Asbestos Claims in
the proportion equal to the percentage of participation the Seller or its
Affiliates is then achieving from the Denying Carrier under the then existing
agreement with the Denying Carrier, or, in the absence of an agreement with the
Denying Carrier as to the percentage of participation, could reasonably expect
to achieve from the Denying Carrier (the "WORKING LAYER POLICY INDEMNITY") .

                                (ii)        At Seller's option upon written
notice to Buyer, which Seller may exercise in whole or in part from time to
time and in lieu of the Working Layer Policy Indemnity for the Asbestos Claims
for which the option is exercised, Buyer shall (or Buyer shall cause its
applicable Affiliate to) assign to Seller or its designated Affiliate (the
"CLAIM ASSIGNEE"), which the Claim Assignee shall assume, the liability for any
Asbestos Claim, for which the option is exercised, made before the Abex
Termination Date for Abex Products or made before the tenth anniversary of the
Closing Date for other applicable products for which coverage to Buyer or the
Champion Companies is being denied to the extent that neither Buyer nor any of
its Affiliates have been paid by an insurance carrier or another responsible
third party (the "UNCOMPENSATED CLAIMS"). Although, upon exercising such
option, the Claim Assignee will have assumed liability for the Uncompensated
Claims, Buyer shall indemnify and hold harmless the Claim Assignee from that
amount of the Uncompensated Claim that the Buyer would have paid on the claim
had the insurance not been denied.  In other words, Buyer shall indemnify and
hold harmless the Claim Assignee for that portion of the Uncompensated Claim
that the Denying Carrier would not have paid even if the claim were accepted.





                                     - 48 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (d)          SUBSEQUENT  LAYER POLICIES.

                                (i)         With respect to coverage for
Asbestos Claims under any policy other than the Working Layer Policies (the
"SUBSEQUENT  LAYER POLICIES"), Seller shall use its best efforts to support
Buyer  in pursuing coverage under the Subsequent  Layer Policies whether in the
name of Buyer or any of its Affiliates (including the Champion Companies) or in
the name of Seller or any of its Affiliates for the benefit of Buyer and its
Affiliates, including the Champion Companies. Subject to Section 5.25(d)(ii)
and (e), to the extent that an insurance carrier (a "SUBSEQUENT LAYER DENYING
CARRIER") denies Buyer or the Champion Companies access to a Subsequent  Layer
Policy on the basis that Buyer or such Champion Company is not, and does not
succeed to the rights of, one or more insureds under the policy, Seller shall
indemnify, defend and hold Buyer and the Champion Companies harmless against
Adverse Consequences for Asbestos Claims in the proportion equal to the
percentage of participation Seller or its Affiliates is then achieving from the
Subsequent Layer Denying Carrier under the then existing agreement with the
Subsequent Layer Denying Carrier, or, in the absence of an agreement with the
Subsequent Layer Denying Carrier as to the percentage of participation, could
reasonably expect to achieve from the Subsequent  Layer Denying Carrier (the
"SUBSEQUENT  LAYER INDEMNITY").

                                (ii)        At Seller's option upon written
notice to Buyer, which Seller may exercise from time to time and in lieu of the
Subsequent  Layer Indemnity for the Asbestos Claims for which the option is
exercised, Buyer shall (or Buyer shall cause its applicable Affiliate
(including the Champion Companies)) to assign to Seller or its designated
Affiliate (the "SUBSEQUENT  LAYER CLAIM ASSIGNEE"), which the Subsequent  Layer
Claim Assignee shall assume, the liability for any Asbestos Claim, for which
the option is exercised, made before the Abex Termination Date for Abex
Products or made before the tenth anniversary of the Closing Date for other
applicable products for which coverage to Buyer or the Champion Companies is
being denied to the extent that neither Buyer nor any of its Affiliates have
been paid by an insurance carrier or another responsible third party (the
"SUBSEQUENT  LAYER UNCOMPENSATED CLAIMS"). Although, upon exercising such
option, the Subsequent  Layer Claim Assignee will have assumed liability for
the Subsequent  Layer





                                     - 49 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



Uncompensated Claims, Buyer shall indemnify and hold harmless the Subsequent
Layer Claim Assignee from that amount of the Subsequent  Layer Uncompensated
Claim that the Buyer would have paid on the claim had the insurance not been
denied.  In other words, Buyer shall indemnify and hold harmless the Subsequent
Layer Claim Assignee for that portion of the Subsequent Layer Uncompensated
Claim that the Denying Carrier would not have paid even if the claim were
accepted.

                   (e)          LIMITATIONS.  Seller's obligation to indemnify,
defend and hold Buyer and the Champion Companies harmless against Adverse
Consequences for Asbestos Claims:

                                (i)         shall not apply (A) with respect to
Asbestos Claims for products manufactured or sold by Pneumo Abex Corporation or
its Predecessors prior to December 30, 1994 (the "ABEX PRODUCTS"), unless the
Seller is notified of the specific Asbestos Claim on or before the date twelve
years and six months after the Closing Date (the "ABEX TERMINATION DATE")  and
(B) with respect to all other Asbestos Claims, unless the Seller is notified of
the specific Asbestos Claim on or before the tenth anniversary of the Closing
Date, and

                                (ii)        shall cease with respect to any
Denying Carrier or Subsequent Layer Denying Carrier, upon such Denying Carrier
or Subsequent Layer Denying Carrier acknowledging the right of Buyer or the
applicable Champion Company to access to the applicable policies under which
coverage for Asbestos Claims may be made.

         Seller's obligations  pursuant to Section 5.25(d) and the Subsequent
Layer Claim Assignee's obligation to assume liability upon the exercises of the
option shall cease when the Adverse Consequences (A) indemnified by Seller and
its Affiliates, (B) assumed by the Subsequent  Layer Claim Assignee (for which
the Subsequent  Layer Claim Assignee is not indemnified by Buyer), and (C) paid
by any and all carriers under the Subsequent  Layer Policies, in the aggregate
after totaling the amounts in subsections (A), (B) and (C) immediately above,
reaches $50,000,000 (the "STOP LOSS POINT").





                                     - 50 -
<PAGE>   56
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         Notwithstanding anything in this Section 5.25 to the contrary, in
determining Seller's obligation to indemnify, defend and hold Buyer and the
Champion Companies harmless against any Adverse Consequences for Asbestos
Claims resulting from the denial of coverage by a Denying Carrier and
Subsequent Layer Denying Carrier, the amount that Seller or its Affiliates
achieves or could reasonably expect to achieve is net of any self insurance
retention, retrospective premiums, fronting mechanisms or other self insurance
programs.

                   (f)          BUYER'S INDEMNITY.  Buyer shall indemnify,
defend, and hold Seller and its Affiliates harmless against Adverse
Consequences (regardless whether the claim is made against Seller or its
Affiliates or Buyer and its Affiliates):

                                (i)         for any Asbestos Claim related to
any Abex Product if the notice of the specific claim is not provided to Seller
on or before the Abex Termination Date, and

                                (ii)        for any other Asbestos Claim if the
notice of the specific claim is not provided to the Seller on or before the
tenth anniversary of the Closing Date, and

                                (iii)       for any Asbestos Claim upon 
reaching the Stop Loss Point,  and

                                (iv)        for any Asbestos Claim denied by
any Denying Carrier or Subsequent  Layer Denying Carrier, upon such carrier
acknowledging Buyer's or any of  its Affiliates' access to the policy, and

                                (v)         for any retrospective premium,
fronting mechanisms or claim handling arrangements associated with an Asbestos
Claim under a policy that the carrier acknowledges Buyer or its Affiliates had
access.





                                     - 51 -
<PAGE>   57
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         Notwithstanding anything herein to the contrary, Buyer shall be
responsible for and shall indemnify and hold Seller and its Affiliates harmless
against any Adverse Consequences incurred in connection with bringing suit or
participating in any mediation, arbitration or other alternative dispute
resolution proceeding against any insurance carrier in pursuit of coverage for
Asbestos Claims.

                   (g)          COOPERATION.  With respect to pursuit of
insurance coverage for Asbestos Claims, Buyer agrees use its best efforts to
commence suit and pursue coverage in the suit against any Denying Carrier or
Subsequent Layer Denying Carrier, unless otherwise agreed by the Parties.
Buyer and Seller will (and will cause their Affiliates to) cooperate with the
other and its counsel in connection with the pursuit of insurance coverage, the
pursuit of indemnity from SMPC, and the defense of Asbestos Claims, including,
making available their personnel, and providing such testimony and access to
their books and records as shall be reasonably necessary.  Each party shall
(and each party shall cause its Affiliates to) negotiate using its best efforts
and in good faith with any carrier regarding coverage for Asbestos Claims.
Further, each party shall consult with the other in its discussions and
negotiations with the applicable carriers.  Buyer shall on a quarterly basis
provide a report to Seller regarding the Asbestos Claims including a
description of the claims made, status of pending claims and claims which are
disposed.  Neither party (nor its Affiliates)  which a carrier acknowledges is
or has succeeded to the rights of one or more of the insureds under an Working
Layer Policy or a Subsequent  Layer Policy shall enter into agreements with
such carrier as to coverage levels, without the consent of the other party,
which consent shall not be unreasonably withheld or delayed.  If  requested by
Seller, Buyer shall (and shall cause its Affiliates to) assign to Seller to the
extent that Seller or its Affiliates have indemnified Buyer or its Affiliates
for Asbestos Claims or assumed liabilities associated with Asbestos Claims any
rights or claims of Buyer or its Affiliates against any other Person associated
with such Asbestos Claims.

                   (h)          DISCLAIMER.  Other than pursuant to Section
3.17, Seller does not make any representation or warranty as to the financial
condition of any carrier, the adequacy of insurance coverage, the identity or
number of  parties that may make claims under the policies, whether





                                     - 52 -
<PAGE>   58
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



pertaining to the Working Layer Policies or the Subsequent  Layer Policies.
The parties acknowledge that other Persons may have claims under these
policies.

                   (i)          ASSIGNMENT.  Buyer or a Champion Company may
assign its rights and obligations under this Section 5.25 to an Affiliate of
Buyer provided it obtains Seller's prior written consent, which shall not be
unreasonably withheld or delayed.  However, Buyer shall continue to have
responsibility for its indemnity of Seller and its Affiliates under this
Section 5.25 and Buyer shall bear the risk of  and indemnify, defend and hold
Seller and its Affiliates harmless  against any Adverse Consequences for
Asbestos Claims arising from any carrier denying either party or their
Affiliates access to an insurance policy as a result of such assignment.

                   (j)          CONFIDENTIALITY.  Except for any disclosure
required by law, rule of any stock exchange, or the requirement of any
Governmental Authority, the covenants and agreements of the parties pursuant to
this Section 5.25, including the amounts paid by Cooper or its Affiliates to
Buyer or its Affiliates based on what percentage of participation could be
reasonably expected to be achieved, is confidential and shall not at any time
be disclosed by either party (and each party shall cause its Affiliates not to
disclose it at any time) to any other Person.

         5.26.     ENVIRONMENTAL INSURANCE POLICY.  Seller shall purchase an
environmental insurance policy in a form reasonably acceptable to both parties.
In the event Buyer elects to be a co-insured under such policy, Seller and
Buyer shall share equally the cost of the premium of the policy and any related
premium taxes.  Further, in the event that a claim is made under such policy,
the related $250,000 deductible shall be paid by Buyer and shall apply to the
aggregate amount of Adverse Consequences suffered by the Buyer Indemnified
Parties as described in Section 9.3.  Notwithstanding anything to the contrary
contained in this Agreement, a copy of this Agreement may be disclosed to the
insurer, whether such policy is purchased jointly by Buyer and Seller or solely
by Seller.





                                     - 53 -
<PAGE>   59
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         5.27.     FRIABLE ASBESTOS REMEDIATION.  Within sixty (60) days after
the Closing, a qualified contractor(s) or consultant(s) shall have conducted
surveys to identify friable asbestos, if any, at all of the active and
inactive, in whole or in part, Owned Real Property and Leased Real Property (to
the extent the Champion Companies have any obligation for facility or asbestos
maintenance at any Leased Real Property).  Prior to the Closing, Seller and
Buyer shall have mutually agreed upon the choice of the contractor(s) or
consultant(s) and shall share equally the expenses related to such survey
services to be performed by the contractor(s) or consultant(s).  Seller and
Buyer shall agree upon (i) the scope of services to be performed by such
contractor(s) or consultant(s), and (ii) the agreement to be executed with, and
the terms of retainer of, such contractor(s) or consultant(s).  The surveys
shall include an estimate of the costs of remediation (including full or
partial encapsulation, removal, any air monitoring during the remediation or
other action) of any identified friable asbestos.  With regard to any friable
asbestos identified in the surveys, Seller shall, at its option, either (a)
promptly reimburse Buyer the amount of money required to conduct such
remediation of any friable asbestos to the minimum extent required by
applicable Environmental Law, or (b) conduct such remediation itself to the
minimum extent required by applicable Environmental Law, using a qualified
contractor(s) or consultant(s), which contractor(s) or consultant(s), and the
terms of their retainer, shall be reasonably acceptable to Buyer.  Seller shall
complete as soon as reasonably practicable its obligations in the immediately
preceding sentence, and then notwithstanding anything to the contrary contained
in this Agreement, Seller shall have no further liability or obligation
whatsoever (including Environmental Liability) to the Buyer Indemnified Parties
arising out of any friable asbestos at the Owned Real Property and Leased Real
Property.  Seller and Buyer shall mutually agree regarding access to the
facilities for the conduct of the surveys and such remediation.

6.       EMPLOYEE MATTERS.

         6.1.      CERTAIN DEFINITIONS.  For the purpose of this Agreement, the
following capitalized terms have the meanings ascribed to such terms as set
forth below:





                                     - 54 -
<PAGE>   60
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (a)          "BENEFIT PLAN" means, collectively, each
Champion Employee Plan listed on Disclosure Schedule 6.3(a), each Champion
International Plan listed on Disclosure Schedule 6.3(d) and each Champion
Benefit Arrangement listed on Disclosure Schedule 6.3(b).

                   (b)          "CHAMPION BENEFIT ARRANGEMENT" means any
employment, severance or similar contract, arrangement or policy, or any plan
or arrangement providing for severance benefits, insurance coverage (including
any self-insured arrangements), disability benefits, supplemental unemployment
benefits, vacation benefits, pension or retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, fringe benefits, or other forms of compensation or any post-retirement
benefits, compensation or benefits that (i) is not a Champion Employee Plan,
(ii) is entered into or maintained, as the case may be, by Seller or any of its
Affiliates including the Champion Companies, and (iii) covers any Employee or
Former Employee in the United States.

                   (c)          "CHAMPION EMPLOYEE PLAN" means any "employee
benefit plan", as defined in Section 3(3) of ERISA that (i) is subject to any
provision of ERISA, (ii) is maintained, administered or contributed to by
Seller or any of its Affiliates including the Champion Companies, and (iii)
covers any Employee or Former Employee.

                   (d)          "CHAMPION INTERNATIONAL PLAN" means any
employment, severance or similar contract, arrangement or policy or any plan or
arrangement providing for severance benefits, insurance coverage (including any
self-insured arrangements), disability benefits, supplemental unemployment
benefits, vacation benefits, pension or retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights, fringe benefits or other forms of compensation or any post-retirement
benefits, compensation or benefits that (i) is not a Champion Employee Plan or
a Champion Benefit Arrangement, (ii) is maintained or contributed to by Seller
or any of its Affiliates including the Champion Companies, and (iii) covers any
Employee or Former Employee.





                                     - 55 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



                   (e)          "EMPLOYEE" means any individual who, on the
Closing Date, is employed by Seller or the Champion Companies in the Business
in any active or inactive status and whose current employment has not been
terminated.

                   (f)          "FORMER EMPLOYEE" means any individual
previously employed in the Business by Seller, the Champion Companies, or any
of their Affiliates or Predecessors and who retired or whose employment has
been otherwise terminated prior to the Closing Date and who is not an Employee.

         6.2.      EMPLOYMENT.  As of the Closing Date, every Employee will be
permitted to continue as an employee of Champion, the Champion Subsidiaries and
the Related Companies, as the case may be, or shall be permitted to become an
employee of Buyer or the Affiliate of Buyer which acquires the assets of the
Canadian Division.  The employment of Employees by Champion, the Champion
Subsidiaries, the Related Companies, Buyer or its Affiliates shall be on the
same terms, at the same salary or wage levels, and with substantially similar
benefits as provided to the Employees prior to Closing; provided that nothing
herein shall prevent Buyer or its Affiliates (including the Champion Companies)
from altering such terms, salary, wages or benefits after the Closing except as
specifically provided herein.

         6.3.      REPRESENTATIONS REGARDING EMPLOYEE BENEFIT PLANS.  Seller
represents and warrants to Buyer that the statements contained in this Section
6.3 are true and correct as of the date of this Agreement and will be true and
correct on the Closing Date:

                   (a)          Disclosure Schedule 6.3(a) identifies each
Champion Employee Plan.  Seller has furnished or made available to Buyer: (i)
true and complete copies of such Champion Employee Plans (and, if applicable,
related trust agreements or funding contracts); (ii) the most recent annual
report (Form 5500 series) or financial report prepared in connection with any
such Champion Employee Plan relating to Employees and Former Employees; (iii)
the summary plan description (if





                                     - 56 -
<PAGE>   62
PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



any) currently in effect for Employees covered under each such Champion
Employee Plan; (iv) a written description of each such Champion Employee Plan
in effect for Employees and Former Employees for which there is no summary plan
description or plan; and (v) the most recent financial statements and actuarial
reports or statement  (if any) prepared in connection with each such Champion
Employee Plan and relating to Employees and Former Employees.   Each such
Champion Employee Plan has been maintained in compliance in all material
respects with its terms and with the requirements prescribed by any applicable
statutes, orders, rules and regulations including but not limited to ERISA and
the Internal Revenue Code.

                   (b)          Disclosure Schedule 6.3(b) identifies each
material Champion Benefit Arrangement.  Seller has furnished or made available
to Buyer true and complete copies of or, if no written document exists,
descriptions of each such Champion Benefit Arrangement.  Each such Champion
Benefit Arrangement has been maintained in compliance in all material respects
with its terms and with the requirements prescribed by any applicable statutes,
orders, rules and regulations.

                   (c)          Disclosure Schedule 6.3(c) identifies each
Multiemployer Pension Plan to which the Seller or any of its Affiliates
including the Champion Companies have made contributions in the most recent
five calendar years with respect to Employees and Former Employees and the most
recently determined liability for withdrawal from each Multiemployer Plan which
has been provided to the Seller.

                   (d)          Disclosure Schedule 6.3(d) identifies each
material Champion International Plan.  Seller has furnished or made available
to Buyer true and complete copies of or, if no written document exists,
descriptions of each such Champion International Plan.  Each such Champion
International Plan has been maintained in all material respects in compliance
with its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (e)          Except as set forth on Disclosure Schedule
6.3(e), there are no actions, suits, arbitrations or other proceedings pending
(other than routine claims for benefits) with respect to any Champion Employee
Plan, Champion Benefit Arrangement or Champion International Plan which would
be reasonably likely to have a Material Adverse Effect.

                   (f)          Neither Seller, a Champion Company nor any
Benefit Plan has engaged in any prohibited transaction, as defined in Section
4975 of the Internal Revenue Code or Section 406 of ERISA, which could subject
any Benefit Plan to any material tax or penalty imposed under Section 4975(a)
of the Internal Revenue Code or Section 502(i) of ERISA.

                   (g)          Except as set forth on Disclosure Schedule
6.3(g), the Benefit Plan documents provided to Buyer describe all currently
effective benefits and all benefits which Seller or any Champion Company has
undertaken to provide in the future under such plans.  Neither Seller nor any
Champion Company has made any material written or oral, implied or express
representations that are inconsistent with the terms of the documents provided
to Buyer.  Further, neither Seller nor any Champion Company has made any
material written or oral, express or implied representations regarding the
continuation of any Benefit Plan after the Closing Date.  There are no
amendments to the benefit formulas of the Automotive Hourly Plans (as defined
in Section 6.4(a)) or the Cooper Salaried Plan (as defined in Section 6.4(c))
that have been approved and that increase benefits after the Closing Date.

                   (h)          Disclosure Schedule 6.3(a) specifically
identifies each Champion Employee Plan that is represented to be a qualified
plan under Section 401(a) of the Internal Revenue Code.  With respect to each
Champion Employee Plan so identified unless noted to the contrary on Disclosure
Schedule 6.3(a), the IRS has issued a favorable determination letter to such
plan to the effect that the form of such Champion Employee Plan (or predecessor
plan) satisfies the requirements of Section 401(a) of the Internal Revenue
Code.  For all years subsequent to the establishment of each such qualified
plan (or predecessor plan) and with respect to which Seller's and each Champion





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PURCHASE AND SALE AGREEMENT BETWEEN
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Company's tax returns or such Champion Employee Plan's and trust's returns are
open to audit, the plan has satisfied in all material respects, in form and
operation, the qualification requirements of Section 401(a) of the Internal
Revenue Code, and no action which has been taken or not taken with respect to
such plan subsequent to such date has had or will have any adverse impact on
the continued qualification of such plan through the Closing Date.  Each such
Champion Employee Plan is in compliance in all material respects with the
special nondiscrimination rules under sections 401(k)(3) and (m) of the
Internal Revenue Code, if applicable.  The IRS has not revoked any letter of
determination or opinion letter to which reference is made above, nor has the
IRS threatened any such revocation.

                   (i)          Funding Status.

                                (1) No "accumulated funding deficiency" within
the meaning of either Section 412 of the Internal Revenue Code or ERISA Section
302 exists with respect to any Champion Employee Plan nor would there exist any
such deficiency but for the application of an alternative minimum funding
standard.  No waiver of the minimum funding standards imposed by the Code with
respect to any such plan has been issued.

                                (2) Except for the liabilities associated with
the employment continuity agreements listed on Disclosure Schedule 5.12(i), the
actuarial present values of all accrued deferred compensation entitlements of
Employees and Former Employees of Seller or any Champion Company and their
respective beneficiaries, other than entitlements accrued pursuant to funded
retirement plans subject to the provisions of Section 412 of the Internal
Revenue Code or Section 302 of ERISA, have been fully reflected on the
Financial Statements of Seller and the Champion Companies.  Such entitlements
include, without limitation, any entitlements under any executive compensation
or supplemental retirement agreement.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (j)          Neither Seller nor any Champion Company has
engaged in any transaction with respect to any Benefit Plan which may result in
the imposition on Seller or any Champion Company of any excise tax under
Sections 4971, 4972, 4975, and 4976 through 4980 of the Code, or otherwise
incurred a liability for any excise tax, other than excise taxes which have
heretofore been paid or have been accrued, and, in either case are fully
reflected in the Financial Statement, and neither Seller nor any Champion
Company is now, nor at any time will be by virtue of any action taken prior to
the Closing Date, subject to a requirement to provide security under Section
401(a)(29) of the Code, nor shall any asset of Seller or any Champion Company
be subject to a lien by reason of the provisions of Section 412(n) of the Code.
The execution by Seller of the employment continuity agreements listed on
Disclosure Schedule 5.12(i) shall not constitute a transaction which may result
in the imposition of an excise tax.





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PURCHASE AND SALE AGREEMENT BETWEEN
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         6.4.      EMPLOYEE BENEFIT PLANS.

                   (a)          DOMESTIC DEFINED BENEFIT PENSION PLANS

                                (i)         Before the Closing Date, Seller
shall:

                                        A.          merge the Champion Spark
Plug Company UAW Pension Plan, the Moog Automotive, Inc. Pension Plan and Trust
for UAW Employees, the Moog Automotive, Inc. United Rubber, Cork, Linoleum and
Plastic Workers Pension Plan, the Morenci Engineered Rubber Products Pension
Plan, and the Pension Plan for Bargaining Unit Employees at Winchester,
Virginia, (collectively the "AUTOMOTIVE HOURLY PLANS", and individually the
"AUTOMOTIVE HOURLY PLAN") to form the Champion Spark Plug Company consolidated
Defined Benefit Pension Plan (the "CHAMPION PENSION PLAN");

                                        B.          provide for coverage of
Employees and Former Employees participating in the Salaried Employees
Retirement Plan of Cooper Industries, Inc. (the "COOPER SALARIED PLAN")
immediately prior to the Closing Date under the Champion Pension Plan on the
Closing Date immediately after the Closing with benefits, rights, and features
in accordance with Section 411(d)(6) of the Code; and

                                        C.          cause Champion to assume
the plan sponsorship of the Champion Pension Plan.

                                (ii)        Seller shall amend the Cooper
Salaried Plan to cause a transfer of assets and liabilities attributable to
Employees and Former Employees under the Cooper Salaried Plan as of the
Salaried Plan Transfer Date (as hereinafter defined) to the Champion Pension
Plan.  The assets transferred from the Cooper Salaried Plan to the Champion
Pension Plan shall be equal to the sum of:





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PURCHASE AND SALE AGREEMENT BETWEEN
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                                        A.          the Transfer Plan
Liabilities (as hereinafter defined) attributable to the Employees and Former
Employees under the Cooper Salaried Plan.

                                        B           an amount which when added
to the sum of the amount calculated under the provisions of clause (a) above,
and the market value of the assets of the Champion Pension Plan as of the
Salaried Plan Transfer Date (as hereinafter defined) will equal the Full
Funding Liabilities (as hereinafter defined) of the Champion Pension Plan.

         The date as of which the Transfer Plan Liabilities of the Cooper
Salaried Plan are calculated shall be called the "SALARIED PLAN TRANSFER DATE"
and shall occur after the Closing Date and on the last day of the month in
which the Closing Date occurs.  The "TRANSFER PLAN LIABILITIES" of the Cooper
Salaried Plan to be transferred to the Champion Pension Plan shall be the
actuarial present value of the accrued plan benefits with respect to the
Employees and Former Employees who participated in the Cooper Salaried Plan
immediately prior to the Closing Date calculated as of the Salaried Plan
Transfer Date and pursuant to Section 414(1) of the Internal Revenue Code and
the regulations thereunder.  Such calculations will be made and certified to be
accurate by the Cooper Salaried Plan's actuary.  As soon as practicable
following the Closing Date but no later than 60 days after the Closing Date,
Buyer and Seller will work together to furnish to the Cooper Salaried Plan's
actuary the data needed by the Cooper Salaried Plan's actuary to determine the
Transfer Plan Liabilities.  Such data shall include the Social Security number,
account balance, date of birth, date of hire, gender and annual pensionable
compensation of each participant as of the Salaried Plan Transfer Date
(collectively, the "Demographic Data").

          "FULL FUNDING LIABILITIES" means, with respect to Employees and
Former Employees, the sum of the Salaried Full Funding Liabilities and the
Hourly Full Funding Liabilities as those terms are hereinafter defined.





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PURCHASE AND SALE AGREEMENT BETWEEN
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         "SALARIED FULL FUNDING LIABILITIES" means the actuarial accrued
liability with respect to all Employees and Former Employees who participated
in the Cooper Salaried Plan immediately prior to the Closing determined as of
the Salaried Plan Transfer Date by the Cooper Salaried Plan's actuary in
accordance with the actuarial assumptions, methods and factors set forth on
Disclosure Schedule 6.4(a) using the Demographic Data used to calculate the
Transfer Plan Liabilities.  The Cooper Salaried Plan's actuary shall, within
ninety (90) days of the date Buyer and Seller furnish the required Demographic
Data, determine the Transfer Plan Liabilities and the Salaried Full Funding
Liabilities as of the Salaried Plan Transfer Date and shall deliver a report to
Seller, at Seller's expense, setting forth the details of the determination of
the values of the Transfer Plan Liabilities and the Salaried Full Funding
Liabilities.

         The "HOURLY FULL FUNDING LIABILITIES" means the actuarial accrued
liability with respect to all Employees and Former Employees who participated
in the Automotive Hourly Plans prior to the date said Automotive Hourly Plans
were merged to form the Champion Pension Plan determined in accordance with the
actuarial assumptions methods and factors set forth on Disclosure Schedule 6.4
(a)  and the following procedures.  Using the participant data used for the
January 1, 1998 actuarial valuations for each of the Automotive Hourly Plans,
the actuary for the Automotive Hourly Plans shall calculate the actuarial
accrued liability or actuarial reserve for each Plan as of January 1, 1998
using the actuarial assumptions, methods and factors set forth on Disclosure
Schedule 6.4 (a).  This January 1, 1998 actuarial accrued liability or
actuarial reserve for each Automotive Hourly Plan shall be adjusted to take
into consideration the time period between January 1, 1998 and the Salaried
Plan Transfer Date using the actuarial assumptions, methods and factors set
forth on Disclosure Schedule 6.4 (a), and further adjusted for actual benefit
payments made from January 1, 1998 through the Salaried Plan Transfer Date to
produce an adjusted actuarial accrued liability or actuarial reserve for each
Automotive Hourly Plan.  The adjusted actuarial accrued liability or actuarial
reserve for all Automotive Hourly Plans will be aggregated to produce the
Hourly Full Funding Liabilities.  The Automotive Hourly Plan's actuary shall
within ninety (90) days of the Salaried Plan Transfer Date deliver a report to
Seller at Seller's expense setting forth the details of the determination of
the Hourly Full Funding Liabilities.





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PURCHASE AND SALE AGREEMENT BETWEEN
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         Upon receipt of the reports prepared by the respective actuaries,
Seller shall deliver to Buyer for its review a copy of the reports and the
underlying information necessary to prepare the reports.  Buyer shall have
fourteen (14) days to notify Seller in writing of any objections regarding the
determination of the Full Funding Liabilities.  If Buyer does not timely notify
Seller of any objections, the calculations shall be final and binding on all
parties.  If Buyer timely notifies Seller of any objections resulting from
Buyer's review of the respective actuaries' reports which Seller and Buyer
cannot resolve within thirty days of the date Buyer notifies Seller of such
objections, Seller and Buyer shall appoint an actuarial firm satisfactory to
both parties (the cost of which shall be shared equally by Seller and Buyer) to
resolve such objections, which resolution shall be final and binding on both
parties.  As soon as practicable following the Salaried Plan Transfer Date, but
not prior to the date on which the Buyer and Seller reach agreement on the Full
Funding Liabilities and not prior to the date on which the Buyer has provided
all documentation requested by the trustee of the Cooper Salaried Plan, Seller
shall cause assets of the Cooper Salaried Plan equal to the sum of the Transfer
Plan Liabilities and the amount determined pursuant to 6.4(a) (ii) B plus
interest at the rate of 7.25% per annum and adjusted for benefit payments made
to Employees and Former Employees who participated in the Cooper Salaried Plan
immediately prior to the Closing, from the Salaried Plan Transfer Date to the
date such assets are actually conveyed, to be conveyed to the Champion Pension
Plan.  Until the assets of the Cooper Salaried Plan are transferred to the
Champion Pension Plan, Seller will continue to process distributions required
to be made to Employees and Former Employees under the Cooper Salaried Plan on
and after the Closing Date in accordance with its terms and procedure.

                   (b)          RETIREMENT SAVINGS PLAN.  Certain Employees and
Former Employees participate in the Cooper Industries, Inc. Retirement Savings
and Stock Ownership Plan ("COOPER RETIREMENT SAVINGS PLAN"), which is composed
of a qualified, 401(k), defined contribution profit





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PURCHASE AND SALE AGREEMENT BETWEEN
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sharing plan and an employee stock ownership plan.  Seller shall cause the
assets and liabilities of the Cooper Retirement Savings Plan attributable to
such Employees and Former Employees to be transferred as provided in this
Section 6.4(b) from the Cooper Retirement Savings Plan to a qualified, 401(k)
defined contribution profit sharing plan prepared by Seller to be adopted by
Champion effective as of the Closing Date (the "CHAMPION RETIREMENT SAVINGS
PLAN") which shall provide that such Employees' and Former Employees' periods
of service credited under the Cooper Retirement Savings Plan will be
transferred to and credited for all purposes under the Champion Retirement
Savings Plan.  The Champion Retirement Savings Plan shall provide benefits,
rights and features to the Employees and Former Employees in accordance with
Section 411(d)(6) of the Code.

                   No later than thirty days following the Closing Date, Buyer
shall designate a trustee with respect to the Champion Retirement Savings Plan
and provide Seller with the information necessary to cause a transfer of assets
to the designated trustee.  As soon as possible thereafter, the assets and
liabilities of the Cooper Retirement Savings Plan shall be transferred in-kind
to the designated trustee of the Champion Retirement Savings Plan in an amount
equal to the total of all account balances of said Employees and Former
Employees under the Cooper Retirement Savings Plan as of the close of business
on the day immediately prior to the transfer.

                   (c)          QUALIFIED DOMESTIC HOURLY DEFINED CONTRIBUTION
PLANS.  Certain Employees and Former Employees participate or have participated
in the Champion Employee Plans listed on Disclosure Schedule 6.4(c).  Prior to
the Closing Date, Seller shall cause Champion to assume sponsorship and
maintain the Champion Employee Plans listed on Disclosure Schedule 6.4(c) for
the benefit of such Employees and Former Employees.

                   No later than thirty days following the Closing Date, Buyer
shall designate a trustee or trustees with respect to the Champion Employee
Plans listed on Disclosure Schedule 6.4(c) and provide Seller with the
information necessary to cause a transfer of assets to the designated trustee
or trustees.  As soon as practicable thereafter, Seller shall cause the assets
of the Champion Employee Plans listed on Disclosure Schedule 6.4(c) to be
transferred in kind to the trustee or trustees designated by Buyer.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   Certain Former Employees participate or have participated in
the Temperature Control Division 401(k) Plan.  Prior to the Closing Date,
Seller shall cause Champion to assume sponsorship and maintain the Temperature
Control Division 401(k) Plan for the benefit of such Former Employees and
accept the transfer of the insurance contract by which the plan is funded.

                   (d)          SUPPLEMENTAL PENSION PLANS.  Certain Employees
and Former Employees participate in either or both of the Cooper Industries,
Inc. Supplemental Excess Defined Benefit Plan (the "COOPER SUPPLEMENTAL DB
PLAN") and the Cooper Industries, Inc. Supplemental Excess Defined Contribution
Plan (the "COOPER SUPPLEMENTAL DC PLAN"), both of which are non-qualified and
unfunded pension plans.  Such plans are designed to provide benefits that
cannot be paid from the Cooper Salaried Plan or the Cooper Retirement Savings
Plan due to provisions of the Internal Revenue Code.  Effective as of the
Closing Date, Seller shall cause Champion to adopt two new supplemental plans
which shall be substantially similar to the Cooper Supplemental DB Plan and the
Cooper Supplemental DC Plan, respectively.  These two new pension plans (the
"CHAMPION SUPPLEMENTAL DB PLAN" and the "CHAMPION SUPPLEMENTAL DC PLAN") shall
recognize all service previously credited under the Cooper Supplemental DB Plan
and the Cooper Supplemental DC Plan, respectively, as in effect immediately
prior to the Closing Date, and assume all obligations to provide benefits to
the eligible Employees and Former Employees and their eligible beneficiaries
and dependents.  Thereafter, the Cooper Supplemental DB Plan, the Cooper
Supplemental DC Plan and the Seller shall not have any further obligation to
provide any benefits to any Employee or Former Employee.

                   (e)          WELFARE BENEFIT PLANS.  Certain Employees and
Former Employees are covered by welfare benefit plans maintained by Seller
providing medical, dental, life insurance, long





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PURCHASE AND SALE AGREEMENT BETWEEN
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term disability, short term disability, accidental death and dismemberment, and
severance benefits ("COOPER'S WELFARE BENEFIT PLANS").  Effective as of the
Closing Date, subject to the paragraph immediately below, Employees and Former
Employees, and all eligible beneficiaries and dependents of the Employees and
Former Employees, shall cease to be covered under Cooper's Welfare Benefit
Plans and shall be covered under welfare benefit plans maintained by Buyer
("BUYER'S WELFARE BENEFIT PLANS").  Buyer's Welfare Benefit Plans shall provide
Employees and Former Employees with welfare benefits substantially similar to
those provided to them immediately prior to the Closing Date under Cooper's
Welfare Benefit Plans.  Buyer shall retain the right to amend or terminate
Buyer's Welfare Benefit Plans as they pertain to said Employees and Former
Employees; provided, however,  Buyer shall provide the Employees listed on
Disclosure Schedule 6.4(e) with up to five years of coverage (depending on
their years of service as set forth in such Disclosure Schedule 6.4(e)) for
retiree medical benefits under Buyer's Welfare Benefit Plans on terms
substantially similar to those available to Buyer's active employees.

                   At the request of Buyer, Seller shall continue to provide
coverage under Cooper's Welfare Benefit Plans which are self-insured and which
are specified by Buyer at least fifteen days prior to the Closing Date,
including the administration of claims and payment of benefits, as appropriate,
on behalf of the Employees and Former Employees and their beneficiaries and
dependents for a period ending on the later of December 31, 1998 or the day
which is 60 days after the Closing Date in order to allow Buyer time to install
or establish welfare benefit plans for such employees.  Buyer shall reimburse
Seller for all payments relating to claims which are paid pursuant to this
Section 6.4(e) and for all out-of-pocket costs and administrative expenses
incurred by Seller in connection with such claim administration services within
thirty (30) days after an invoice for such reimbursement is mailed to Buyer.

                   (f)          CHAMPION BENEFIT ARRANGEMENTS.  Certain
Employees and Former Employees are covered by certain Champion Benefit
Arrangements providing the benefits described in Disclosure Schedule 6.3(b)
("EMPLOYEE BENEFITS").  Effective as of the Closing Date or as soon





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PURCHASE AND SALE AGREEMENT BETWEEN
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as practicable thereafter, Buyer shall cause the Company to provide Employees
and Former Employees with benefits that are substantially similar to the
benefits provided to them immediately prior to the Closing Date under the
Champion Benefit Arrangements.  Buyer shall assume all obligations to Employees
for Employee Benefits accrued under the applicable Champion Benefit Arrangement
prior to the Closing Date.

                   (g)          CHAMPION CANADIAN PLANS.  With respect to the
Champion International Plans that cover Employees and Former Employees in
Canada, the assets and liabilities of such Champion International Plans shall
be transferred to Buyer or its Affiliate in accordance with the provisions of
the Canadian Asset Transfer Agreement.

                   (h)          CHAMPION AUSTRALIAN PLANS.  Certain Employees
and Former Employees participate in the Cooper Industries (Australian)
Employees Superannuation Fund (the "COOPER AUSTRALIAN PLAN"), a defined
contribution pension plan that is qualified under Australian law.  On or before
the Closing Date, Seller shall cause Cooper Automotive Pty Ltd to adopt the
Champion Australia Pty Ltd Employees Superannuation Fund, a defined
contribution pension plan, that is substantially similar to the Cooper
Australian Plan (the "CHAMPION AUSTRALIAN PLAN").  As of the effective date of
the Champion Australian Plan, all Employees who participate in the Cooper
Australian Plan shall participate in the Champion Australian Plan for benefit
accruals on and after said effective date and all benefit accruals of Employees
under the Cooper Australian Plan shall cease as of the end of the day prior to
the effective date of the Champion Australian Plan.  As required by Australian
law, each Employee and Former Employee who participates in the Cooper
Australian Plan will be given the opportunity to elect in writing to have his
accrued benefit under the Cooper Australian Plan transferred to the Champion
Australian Plan.  For each Employee and Former Employee who elects to transfer
his accrued benefits to the Champion Australian Plan, the Champion Australian
Plan shall  provide that such Employees' and Former Employees' periods of
service credited under the Cooper Australian Plan shall be transferred to and
credited for all purposes under the Champion Australian Plan.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   As soon as practicable following the Closing Date, the
assets and liabilities of the Cooper Australian Plan for each Employee and
Former Employee who elected to have his accrued benefit transferred to the
Champion Australian Plan shall be transferred to the Champion Australian Plan.
The assets and liabilities to be so transferred shall be equal to the total of
all of the account balances of each such Employee and Former Employee under the
Cooper Australian Plan.  However, if at the time such assets and liabilities
are transferred, the proceeds of the AMP Ltd. demutualization have not been
allocated to participant accounts a pro rata share of such proceeds shall also
be transferred to the Champion Australian Plan.

         6.5.      COOPER EMPLOYEE STOCK PURCHASE PLAN.

                   (a)           Certain Employees and Former Employees are
participating in the 1997 offering of Seller's Employee Stock Purchase Plan
(the "1997 ESPP").  Such Employees and Former Employees are hereinafter called
"ESPP PARTICIPANTS".  Under the 1997 ESPP, the ESPP Participants were granted
on July 1, 1997, options to purchase shares of Seller's common stock on
September 10, 1999.  The Champion Companies are performing the payroll
administration for the ESPP Participants in accordance with Seller's 1997 ESPP
Standard Administration Manual.  Before the Closing Date and subject to
Closing, Seller will cause the 1997 ESPP to be modified for the ESPP
Participants in order to provide each participant with the option of: (i)
withdrawing from the 1997 ESPP and receiving a refund of all contributions plus
accrued interest less applicable taxes; or (ii) remaining an ESPP Participant
with the option to purchase the number of full shares of Seller's common stock
that may be purchased at the option price with the amount (exclusive of accrued
interest) credited to the participant as of a date specified by Seller or to
withdraw from the ESPP as of the last date that a withdrawal is permitted.
ESPP Participants that elect to remain in the 1997 ESPP will not receive a
refund of contributions or certificates for Seller's common stock until after
the exercise date (September 10, 1999) for the 1997 ESPP.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (b)           Effective on or before the Closing Date, the
Champion Companies shall terminate payroll administration for the 1997 ESPP
and, within 30 days after the Closing Date, Buyer shall pay Seller the total
cash withheld by the Champion Companies from ESPP Participants pursuant to the
1997 ESPP prior to the Closing Date plus related interest accrued on behalf of
the ESPP Participants up to the date on which the payment is made.  The payment
shall be accompanied by a list (in paper and established electronic format)
showing with respect to each ESPP Participant the name, most recent address,
total cash withholdings and related accrued interest under the 1997 ESPP as of
the Closing Date.  Seller shall promptly inform Buyer of the value of Seller's
common stock as of September 10, 1999.  Buyer, on Seller's behalf, shall
determine and collect the required tax withholding from the ESPP Participants
based on the value of Seller's common stock as of September 10, 1999, and remit
such tax withholdings to Seller no later than October 8, 1999 and any accrued
interest, together with an updated list setting forth the current names and
addresses of the ESPP Participants and the tax withheld with respect to each
such ESPP Participant.  Buyer shall not be required to pay any employment taxes
with respect to the 1997 ESPP, Seller will pay the employer's matching FICA
contribution directly to the tax authorities.

7.       TAX MATTERS.

         7.1.      REPRESENTATIONS AND WARRANTIES REGARDING TAX MATTERS.
Seller represents and warrants to Buyer that the statements contained in this
Section 7.1 are true and correct as of the date of this Agreement and will be
true and correct in all respects on the Closing Date.

                   (a)          All Tax Returns required to be filed on or
prior to the Closing Date by  Champion, the Champion Subsidiaries and the
Related Companies, or by Seller or its Affiliates with respect to any
activities of the Canadian  Division, have been or will be filed in accordance
with all applicable laws, and all Taxes shown to be due on any such Tax Returns
have been or will be paid prior to the Closing Date.  Except as set forth on
Schedule 7.1(a), to the best of the Seller's Knowledge, none of the foregoing
Tax Returns contains any position which is or would be subject to penalties
under Section 6662 of the Internal Revenue Code (or any corresponding provision
of state, local or foreign Tax Law).





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (b)          Except as set forth on Disclosure Schedule
7.1(b), no material deficiency or adjustment in respect of any Taxes claimed
against Champion, the Champion Subsidiaries or the Related Companies, or
against Seller or its Affiliates with respect to the Canadian Division, remains
unpaid and no material claim or assessment for any such deficiency or
adjustment is pending and there are no ongoing or pending Tax Proceedings with
any taxing authorities with respect to Champion, the Champion Subsidiaries or
the Related Companies, or Seller or its Affiliates with respect to the Canadian
Division.

                   (c)          To Seller's Knowledge, there are no
Encumbrances on any of the assets of the Champion Companies that arose in
connection with any failure (or alleged failure) to pay any Taxes, except for
Encumbrances related to real and personal property Taxes not yet due or for
Taxes that are being contested in good faith through appropriate proceedings
and for which appropriate reserves have been established.

                   (d)          The income attributable to the income, assets
or operations of the Canadian Division while the same are or have been owned by
Cooper Industries (Canada) Inc. will, to the extent permitted by law, be
included in income Tax Returns filed by Cooper Industries (Canada) Inc. or in
income Tax Returns filed by an affiliated, consolidated, unitary or combined
group of companies of which the Seller or its Affiliates are a member.

                   (e)          Except as set forth on Disclosure Schedule
7.1(e) neither Champion, the Champion Subsidiaries or the Related Companies are
bound by any tax indemnity, tax allocation, tax sharing, or similar agreement.
Except for the tax indemnity and tax allocation agreements contained in the
various acquisition and divestiture agreements set forth in Disclosure Schedule
5.12(ii), all such





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PURCHASE AND SALE AGREEMENT BETWEEN
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agreements will be terminated with respect to the Champion Companies as of the
Closing Date and will have no further effect for any taxable year (whether
current, future, or past).

                   (f)          Except as set forth on Disclosure Schedule
7.1(f), none of the Champion Companies has, or has had, a permanent
establishment (as defined by any applicable tax treaty) or other taxable
presence in any country other than the United States.

                   (g)          Except as set forth in Disclosure Schedule
7.1(g), none of the Champion Companies is a party to any joint venture,
partnership or other arrangement or contract that could be treated as a
partnership for United States tax purposes.

                   (h)          Except as set forth in Disclosure Schedule
7.1(h), none of the Champion Companies has granted any power of attorney with
respect to matters relating to Taxes.

                   (i)          Except as set forth in Disclosure Schedule
7.1(i), there is no closing agreement, compromise, or settlement with any
taxing authority that is binding on any of the Champion Companies for any
taxable period ending after the Closing Date.

                   (j)          Except as set forth in Disclosure Schedule
7.1(j), there are no requests for rulings or determinations relating to any of
the Champion Companies pending with any taxing authority.

                   (k)          Disclosure Schedule 7.1(k) sets forth the
following information: (i) the amount of any operating loss, net capital loss,
and unused credits of the Champion Companies; and (ii) the amount of any
deferred gain or loss allocable to any of the Champion Companies arising out of
any intercompany or intergroup transaction.

                   (l)          Except as set forth in Disclosure Schedule
7.1(l), none of the Champion Companies has ever been owned by or affiliated
with any entity, other than Seller or an entity





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affiliated with Seller and except for the group of which Seller is currently a
member none of the Champion Companies has ever been a member of an affiliated
group of corporations within the meaning of Internal Revenue Code Section 1504.

                   (m)          Each asset in respect of which any of the
Champion Companies claims any depreciation, amortization or similar expense is
owned for tax purposes by the applicable Champion Company.

                   (n)          None of the Champion Companies has any excess
loss account as defined in Treasury Regulation Section 1.15012-19.

         7.2.      TAX INDEMNITY.

                   (a)  Seller shall be liable for, and shall indemnify, defend
and hold harmless the Buyer Indemnified Parties from and against:

                                (i)  Any and all income Taxes (including,
without limitation, U.S. federal and state income taxes on capital gains)
imposed with respect to the sale of the Champion Common Stock, the shares of
the Related Companies, the Nominal Shares of the Champion Subsidiaries and the
assets of the Canadian Division under the terms of this Agreement;

                                (ii)  Any and all Taxes relating to the
Canadian Division while the same was owned by Cooper Industries (Canada) Inc.,
or any Predecessor, except to the extent a reserve or accrual in respect of
Taxes is included in the Final Closing Statement of Net Assets;

                                (iii) Any and all Taxes with respect to
Champion, the Champion Subsidiaries and the Related Companies for any taxable
period ending on or before the Closing Date, except to the extent a reserve or
accrual in respect of Taxes is included in the Final Closing Statement of Net
Assets;





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                                (iv)  Notwithstanding anything to the contrary
contained in this Section 7.2(a), if any of the Indemnified Parties pays any
Preclosing Creditable Foreign Tax (as defined below), the provisions of
Section 7.2(a)(ii) shall not apply if, and to the extent that, as a result of
the payment of the applicable Preclosing Creditable Foreign Tax, any of the
Buyer Indemnified Parties actually receives a foreign tax credit under the
applicable provisions of the Internal Revenue Code (including, without
limitation, any limitation under Internal Revenue Code Section 904) which
results in the reduction (on a present value basis) of Taxes payable in the
United States which would have otherwise been payable by a Buyer Indemnified
Party (in the absence of such foreign tax credit) for any taxable period ending
after the Closing Date and otherwise properly allocable to Buyer under this
Section 7 generally.  A Preclosing Creditable Foreign Tax is a Tax (x) which is
paid by a Buyer Indemnified Party, (y) which is incurred with respect to
Champion, the Champion Subsidiaries, or any of the Related Companies and in
respect of a taxable period ending on or before the Closing Date, and (z) which
is eligible for a credit under the foreign tax credit provisions of the
Internal Revenue Code (Internal Revenue Code Sections 901 though 960).  Nothing
in the first sentence of this Section 7.2(a)(iii) shall be construed to relieve
Seller of its obligation to make an indemnification payment (hereinafter the
"Provisional Payment") in accordance with the terms of this Section 7.2 to a
Buyer Indemnified Party if Buyer Indemnified Party pays any Taxes for any
period ending on or before the Closing Date for which a current foreign tax
credit is not available; provided, however, that after the Provisional Payment
has been made by the Seller and received by a Buyer Indemnified Party, Buyer
Indemnified Party shall reimburse the Seller when, and to the extent, that a
Buyer Indemnified Party receives a credit under Sections 901 through 960 of the
Internal Revenue Code which is related to the Taxes associated with the
Provisional Payment.

                   (b)          Notwithstanding any other provision of this
Agreement, Buyer shall be liable for and shall indemnify, defend and hold
harmless the Seller Indemnified Parties from and against: (i) any Taxes
relating to the Canadian Division while the same was owned by Cooper Industries
(Canada) Inc. or any Predecessor, but only to the extent a reserve or accrual
in respect of such Taxes is included in the  Final Closing Statement of Net
Assets; (ii) any Taxes due with respect to the Canadian Division for any period
subsequent to the Closing Date; and (iii) any Taxes with respect to Champion,
the Champion Subsidiaries and the Related Companies for any taxable period
ending after the Closing Date.





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                   (c)          Any liability for or refund of Taxes for a
taxable period beginning before the Closing Date and ending after the Closing
Date (a "STRADDLE PERIOD") with respect to a Champion Company shall be
apportioned between Seller and Buyer based on the actual operations of the
Champion Company during that portion of such period ending on the Closing Date
(the "PRE-CLOSING STRADDLE PERIOD") and the portion of such period beginning on
the date following the Closing Date, and for purposes of Sections 7.2(a),
7.2(b), 7.2(e) and 7.5, each such portion of a Straddle Period shall be deemed
to be a taxable period.  Anything herein to the contrary notwithstanding, Buyer
shall prepare (in a manner consistent with prior practice) and file all
Straddle Period Tax Returns and shall pay all Taxes due with respect thereto;
provided, however, that Seller shall pay Buyer the amount of Taxes calculated
as due for the Pre- Closing Straddle Period except to the extent that a reserve
or accrual in respect of such Taxes is included in the Final Closing Statement
of Net Assets.  To the extent Buyer or any of its Affiliates, including
Champion, the Champion Subsidiaries and the Related Companies, receives
(whether by way of payment, credit, or otherwise) any refund of Taxes allocable
to a Pre-Closing Straddle Period, Buyer shall promptly upon receipt thereof
remit the same to Seller.

                   (d)           At least thirty days prior to the due date for
the payment of Taxes for a Straddle Period, Buyer shall present Seller with a
schedule detailing the computation of Taxes for the Pre-Closing Straddle Period
together with a copy of the relevant Tax Return and any supporting
documentation reasonably requested by Seller.  Within 20 days after Buyer
presents Seller with such schedule, Seller shall pay Buyer the amount of the
Pre-Closing Straddle Period Tax as computed by Buyer except to the extent that
a liability in respect of such Taxes is included in the Final Closing Statement
of Net Assets.  In making the computation Seller shall receive full credit for
any estimated tax payments or other





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prepayments or credits against Taxes made by Seller or its Affiliates on or
before the Closing Date and Buyer shall receive full credit for any estimated
tax payments or other prepayments or credits against Taxes made by Buyer or its
Affiliates after the Closing Date.  If Seller disputes Buyer's computation of
the Pre-Closing Straddle Period Tax, Seller shall not be relieved of its
obligation to pay, in the first instance, any such disputed amount.  Whether
any such disputed amount was in fact due from Seller shall be resolved by the
Accounting Arbitrator in accordance with the procedures set out in Section 2.7
which shall be deemed modified as necessary to accommodate the resolution of
the dispute between the parties.  If upon such resolution it is determined that
any of such disputed amount was not payable to Buyer and such amount has
nevertheless been paid to Buyer, then Buyer shall refund to Seller such amount,
plus interest at the rate required to be paid under Section 6621 of the
Internal Revenue Code.

                   (e)          Any franchise tax shall be allocated to the
taxable period during which the right to do business obtained by the payment of
such franchise tax relates, regardless of whether such franchise tax is
measured by income, operations, assets or capital relating to another taxable
period.

                   (f)          Any deduction, loss or credit of Champion, the
Champion Subsidiaries or the Related Companies generated in any taxable period
prior to the Closing Date, the economic benefit of which is realized in a
taxable period ending after the Closing Date shall be for the account of
Seller, and Buyer shall remit to Seller as additional consideration the amount
of any such benefit.  If any deduction or expense of Champion, the Champion
Subsidiaries or the Related Companies  is denied or provision is disallowed by
a governmental taxing authority in respect of a period prior to the Closing
Date and a benefit is obtained in a period after the Closing Date by Champion,
the Champion Subsidiaries or the Related Companies, or Buyer or its Affiliates
(or their successors in title), Buyer shall pay to Seller an amount equal to
the tax savings produced by such benefit.

                   (g)          Buyer shall cause Champion, the Champion
Subsidiaries and the Related Companies to elect, where permitted by law, to
carry forward any net operating loss, net capital loss, charitable contribution
or other item arising after the Closing Date that could, in the absence of such
an election, be carried back to a taxable period of Champion, the Champion
Subsidiaries or the





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Related Companies ending on or before the Closing Date in which Champion, the
Champion Subsidiaries or the Related Companies filed a consolidated, combined
or unitary tax return with Seller or its Affiliates.  Buyer, on its own behalf
and on behalf of its Affiliates, hereby waives any right to use or apply any
net operating loss, net capital loss, charitable contribution or other item of
Champion, the Champion Subsidiaries or the Related Companies for any taxable
period ending on any date following the Closing Date to part or all of the
period prior to the Closing Date and any refund of Taxes relating to a carry
back of such items to part or all of a taxable period prior to the Closing Date
shall be retained by Seller.  Nothing in this Section 7.2(g) shall be construed
to preclude Buyer from utilizing the foreign tax credits described in Section
7.2(d)(iv).

                   (h)          Buyer agrees that it will not pay a dividend or
cause or allow a dividend to be paid by the Champion Subsidiaries or Related
Companies until after the close of the taxable year of each of the Champion
Subsidiaries or Related Companies in which the Closing occurs.

                   (i)          Buyer shall cause Champion Automotive (U.K.)
Ltd. to remain at all times in a "group" as such term is defined by the Inland
Revenue.

                   (j)          Buyer and Seller agree that any obligation to
prepare 1998 personal returns for any Employee of the Champion Companies
working outside of the United States shall be an obligation of the Buyer.

         7.3.      SECTION 338 ELECTIONS.  Except for the CFC Section 338
Elections as defined and described in the immediately succeeding sentence,
Buyer or its Affiliates shall not make an election to have the provisions of
Section 338 of the Internal Revenue Code or similar provisions of state law
(collectively "Section 338 Elections") apply to the acquisition of Champion,
the Champion Subsidiaries or the Related Companies.  Nothing in the immediately
preceding sentence shall be construed to preclude Buyer from making Section 338
Elections (to the extent otherwise allowed under applicable law) in respect of
the following entities: Cooper Automotive Pty. Ltd., Cooper Automotive
Electrical do Brasil Ltda., Champion Automotive (U.K.) Ltd. (the "CFC Section
338





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PURCHASE AND SALE AGREEMENT BETWEEN
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Elections"); provided, however, that the parties acknowledge that as of the date
of this Agreement Champion Automotive (U.K.) Ltd. is a partnership for U.S.
federal income tax purpose.

         7.4.      TAX RETURN FILINGS FOR PRE-CLOSING PERIODS.

                   (a)          Buyer shall prepare (in a manner consistent
with prior practice) and submit to Seller for Seller's review and filing not
later than 10 days prior to the due date for the filing thereof, all non-income
Tax Returns for the Canadian Division that are required to be filed (after the
Closing Date) with respect to any period for which the Canadian Division was
owned by Cooper Industries (Canada) Inc., together with Buyer's check in
payment of all Taxes in respect of such Tax Returns but only to the extent a
reserve or accrual for such Taxes was included in the Final Closing Statement
of Net Assets.  After reviewing and modifying (to the extent Seller in its sole
discretion determines is appropriate) such Tax Returns, Seller shall file such
Tax Returns and Seller shall pay or cause to be paid all Taxes shown as due
thereon.  Seller shall promptly send to Buyer copies of all such Tax Returns,
to the extent modified by Seller, and copies of documentation showing such
filing and payment.  Buyer shall include Seller's name on all 1998 IRS Forms
5471 for the Champion Companies.

                   (b)          Buyer shall prepare (in a manner consistent
with prior practice) and submit to Seller for its review and approval not later
than 10 days prior to the due date for the filing thereof, all Tax Returns for
Champion, the Champion Subsidiaries and the Related Companies that are required
to be filed (after the Closing Date) for any taxable period ending on or before
the Closing Date; provided that Seller shall prepare and file any such Tax
Returns of Champion, the Champion Subsidiaries and the Related Companies that
are required to include, on a consolidated or combined basis, the operations of
Champion, the Champion Subsidiaries or the Related Companies for any taxable
period ending on or before the Closing Date.  After reviewing and modifying (to
the extent Seller in its sole discretion determines is appropriate) such Tax
Returns, Seller shall return such Tax Returns to Buyer together with a check in
payment of all Taxes shown as due thereon (reduced to the extent a reserve or
accrual in respect of such Taxes was included on the Final Closing Statement





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PURCHASE AND SALE AGREEMENT BETWEEN
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of Net Assets) not less than two (2) days prior to the due date thereof
(provided that Buyer is in compliance with the immediately preceding sentence).
Buyer shall promptly file each such Tax Return (as resubmitted to it by Seller)
and pay all Taxes shown as due thereon, and Buyer shall send Seller copies of
documentation showing such filing and payment.


         7.5.      TAX REFUNDS.  Seller shall be entitled to any refunds or
credits of Taxes attributable to (i) Seller, its Affiliates, Champion, the
Champion Subsidiaries or the Related Companies with respect to any taxable
period ending on or before the Closing Date; (ii) Champion's registered branch
in Germany (Champion Zundkerzen Deutschland Nierderlassung Deutschland der
Champion Spark Plug Company) with respect to any taxable period ending on or
before the Closing Date; and (iii) the Canadian Division for any period while
the Canadian Division was owned by Cooper Industries (Canada) Inc., its
Affiliates or any Predecessors.  If Buyer or any of its Affiliates, including
Champion, the Champion Subsidiaries or the Related Companies, receives any such
refund or credit of Taxes by way of payment, credit or otherwise, to which
Seller is entitled under this Paragraph), Buyer shall promptly upon receipt
thereof remit the same to Seller.  Any refunds or credits of Taxes of any
Champion Company relating to taxable periods beginning after the Closing Date
shall belong to Buyer.

         7.6.      WAGE REPORTING.  Pursuant to the alternative procedure
prescribed by Section 5 of Revenue Procedure 96-60: (i) Seller and Buyer shall
report on a "predecessor-successor" basis with respect to employees of Seller
who are employed by Buyer or its Affiliates after the Closing, (ii) Buyer will
assume Seller's entire obligation to prepare, file and furnish Forms W-2 for
the year ended December 31, 1998, with respect to such employees, (iii) Seller
and its Affiliates shall be relieved of any obligation to provide Forms W-2 to
such persons for such year, and (iv) Seller and Buyer will work in good faith
to adopt similar procedures under applicable state or local laws.  The parties
shall cooperate with each other in preparing filings and forms relating to
these procedures, and Seller shall provide Buyer with any information in its
possession which Buyer needs to satisfy its obligations under this Section.





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PURCHASE AND SALE AGREEMENT BETWEEN
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         7.7.      COOPERATION AND EXCHANGE OF INFORMATION.

                   (a)          Seller and Buyer shall each (i) provide the
other party with such information and assistance as may be reasonably requested
by the other party in connection with the preparation and filing of any Tax
Returns (including Buyer's completion of Seller's federal, state and foreign
tax information packages prepared in a manner consistent with the packages
customarily prepared for periods ending prior to the Closing), any audit or
examination by any taxing authority, any judicial or administrative proceeding,
or any other reasonable business purpose relating to liability for Taxes with
respect to the Champion Companies; (ii) retain for the applicable statute of
limitations period (including any extensions) such material records or
information as may be relevant to such Tax Returns, audits, examinations or
proceedings including without limitation all Tax Returns and related schedules
and work papers; (iii) provide the other party with reasonable access to, and
allow the other party to make copies of such records or information, and prior
to disposing of any such records or information allow the other party the right
to obtain the originals of such records or information;  (iv) provide the other
party with a copy of any final determination of any audit, examination or
proceeding that affects the amount required to be shown on any Tax Return of
the other party for any period.  Buyer agrees to cause the Champion Companies
to provide Seller with all information reasonably necessary for Seller to
compute and defend research and development tax credits,
transaction-by-transaction foreign sales corporation commissions, and transfer
pricing for periods for which Seller has responsibility; (v) provide such
documentation, information or other materials currently in Seller's possession
necessary to determine, (A) the tax basis of the Champion Companies and the
Related Companies assets, (B) the current and accumulated earnings and profits
of each of the Champion Companies; (C) tax pools related to the earnings and
profits of the Champion Companies and the Related Companies; and (vi) copies of
all Forms 8832 filed for the Champion Companies and the Related Companies.

                   (b)          Subject to the final sentence in this
paragraph, in the case of any audit, examination, judicial or administrative
proceeding, or other proceeding with respect to Taxes ("TAX





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PROCEEDING") for which Seller is or may be liable pursuant to this Agreement,
Buyer shall promptly notify Seller, and Seller, at Seller's expense, shall have
the right to control the conduct and resolution of such Tax Proceeding,
provided, however, that Seller shall consult with Buyer with respect to the
resolution of any issue relating to or that could affect any Taxes or taxable
periods with respect to which Buyer may be liable under this Agreement or
otherwise, and Seller shall not settle any such issue, or otherwise take any
position with respect to such an issue, without the prior written consent of
Buyer.  Buyer shall execute or cause to be executed powers of attorney or other
documents necessary to enable Seller to take all actions desired by Seller (to
the extent that such actions are consistent with the terms of this paragraph)
with respect to such Tax Proceeding to the extent such Tax Proceeding may
affect the amount of Taxes for which Seller is or may be liable pursuant to
this Agreement.  If Seller elects to exercise its right to control the conduct
and resolution of any Tax Proceeding pursuant to the terms of this paragraph,
Seller shall within thirty calendar days of receiving notice of such Tax
Proceeding from Buyer (or sooner, if the circumstances of the Tax Proceeding so
require) notify Buyer of its intent to do so.  If Seller elects not to control
the conduct and resolution of any such Tax Proceeding, fails to comply with the
notice provision of the immediately preceding sentence, or contests its
indemnity obligation under Section 7.2, then Buyer may direct the conduct and
resolution (including settlement or compromise) of such Tax Proceeding.  Any
such resolution by Buyer shall not affect Seller's indemnity obligations under
Section 7.2, provided, however, that Seller shall not be obligated to indemnify
Buyer for expenses (including, but not limited to, legal fees) incurred by
Buyer in connection with a Tax Proceeding to the extent such expenses relate to
the contest of Taxes or asserted Taxes with respect to which Seller has
acknowledged its indemnity obligation under Section 7.2.  In any event, each of
Buyer and Seller may participate, at its own expense, in any such Tax
Proceeding.  Buyer shall have the right, at its expense, to control the conduct
and resolution of any Tax Proceedings relating to any Taxes for any taxable
period ending after the Closing Date with respect to the Champion Companies;
provided, however, Buyer shall consult with Seller with respect to the
resolution of any issue relating to or which could affect a Straddle Period and
Buyer shall not settle any such issue, or file any amended return relating to
any such issue, without the prior written consent of Seller.





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         7.8.      Sales and Other Tax.  The payment of all transfer,
documentary, recording, notarial, sales, use, registration, stamp, and other
similar taxes, fees, and expenses (including, but not limited to, all
applicable stock transfer or real estate transfer taxes, and including any
penalties, interest,  and additions to such Tax) incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne equally
by Buyer and Seller as provided in Section 5.9.  Buyer and Seller shall
cooperate in timely making and filing all Tax Returns that may be required to
comply with the applicable laws relating to such Taxes.

8.       CONDITIONS TO OBLIGATION TO CLOSE.

         8.1.      CONDITIONS TO OBLIGATION OF BUYER. The obligation of Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:

                   (a)          the representations and warranties of Seller
set forth in this Agreement shall be true and correct in all material respects
as of the Closing Date;

                   (b)          Seller shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;

                   (c)          there shall not be any injunction, judgment,
decree or order of any court of competent jurisdiction in effect preventing
consummation of any of the transactions contemplated by this Agreement;

                   (d)          Seller shall have delivered to Buyer a
certificate to the effect that each of the conditions specified above in
clauses (a) through (c) is satisfied in all respects;





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                   (e)          the waiting period (and any extensions thereof)
under the Hart-Scott-Rodino Act and any other applicable pre-merger
notification laws shall have expired or otherwise been terminated; and

                   (f)          the relevant parties shall have entered into 
the Other Agreements.

         8.2.      CONDITIONS TO OBLIGATION OF SELLER.  The obligation of
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:

                   (a)          the representations and warranties of Buyer set
forth in this Agreement shall be true and correct in all material respects as
of the Closing Date;

                   (b)          Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;

                   (c)          there shall not be any injunction, judgment,
decree or order of any court or other Governmental Authority threatened or in
effect preventing consummation of any of the transactions contemplated by this
Agreement;

                   (d)          Buyer shall have delivered to Seller a
certificate to the effect that each of the conditions specified above in
clauses (a) through (c) is satisfied in all respects;

                   (e)          the applicable waiting period (and any
extensions thereof) under the Hart-Scott-Rodino Act and any other applicable
pre-merger notification laws shall have expired or otherwise been terminated;
and

                   (f)          the relevant parties shall have entered into 
the Other Agreements.





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PURCHASE AND SALE AGREEMENT BETWEEN
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         8.3.      WAIVER; RIGHT TO PROCEED.  If any of the conditions
specified in Section 8.1 hereof have not been satisfied, Buyer, in addition to
any other rights that may be available to it, may waive its rights to have such
conditions satisfied at Closing and may proceed with the transactions
contemplated hereby.  If any of the conditions specified in Section 8.2 hereof
have not been satisfied at Closing, Seller, in addition to any other rights
that may be available to it, may waive its rights to have such conditions
satisfied and may proceed with the transactions contemplated hereby.  Any such
waiver by Buyer or Seller, as the case may be, shall in no way diminish or
eliminate any other rights that may be available to the waiving party related
to or as a result of the waived condition or conditions not having been
satisfied at Closing.

9.       SURVIVAL; INDEMNIFICATION.

         9.1.      IN GENERAL.

                   (a)          The indemnification provisions in this
Agreement and the specific performance remedy in Section 11.14 hereof are the
sole and exclusive remedies after the Closing of any Seller Indemnified Party
or Buyer Indemnified Party with respect to any and all claims relating to the
subject matter of this Agreement (including claims for any breach of a
representation, warranty, covenant or agreement in this Agreement).  Except for
the right to seek indemnification on the terms and subject to the conditions of
this Section 9 or specific performance under Section 11.14, each of Seller, on
behalf of itself and any other Person who is a Seller Indemnified Party, and
Buyer, on behalf of itself and any other Person who is a Buyer Indemnified
Party, hereby irrevocably waives any and all rights, claims, causes of action
or theories of liability it might otherwise have, which relate to the subject
matter of the Agreement, against any  other party hereto or its Affiliates
under or based upon any principle of equity or any federal, state, local or
foreign statute, law, ordinance, rule or regulation (including those relating
to hazardous substances, asbestos-containing materials, underground storage
tanks and PCBs).  Without limiting the foregoing, Buyer on behalf of itself and
any other Person who is a Buyer Indemnified Party, waives any rights they may
have to contribution from Seller or any of





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its Affiliates under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, but only to the extent that such rights
relate to the subject matter of this Agreement.

                   (b)          Seller and Buyer shall treat any
indemnification payment made pursuant to this Agreement as an adjustment to the
purchase price and Seller and Buyer agree not to take any position inconsistent
therewith for any purpose.

                   (c)          Any Indemnified Party seeking indemnification
under this Agreement shall use its reasonable efforts to mitigate losses for
which it seeks indemnification hereunder.

                   (d)          The Indemnified Party shall use reasonable
efforts to pursue insurance claims relating to any claim for which it is
seeking indemnification pursuant to this Agreement.  However, the Indemnified
Party is not obligated to pursue an insurance claim if the Indemnified Party,
in its reasonable judgment, believes that the cost of pursuing the insurance
claim together with any corresponding increase in insurance premiums or other
chargebacks to the Indemnified Party would exceed the value of the insurance
claim.

                   (e)          If requested by an Indemnifying Party, the
Indemnified Party shall (and shall cause its Affiliates to) assign to the
Indemnifying Party, to the extent the Indemnified Party has been indemnified,
any rights or claims of the Indemnified Party and its Affiliates against any
other person.

         9.2.      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.

                   (a)          With the exception of the representations and
warranties in Section 3.11, each representation and warranty of the parties
contained in this Agreement or in any schedule, certificate or other document
delivered in connection with this Agreement shall survive the Closing and
continue in effect for a period of 18 months thereafter and then expire.  Each
representation and





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PURCHASE AND SALE AGREEMENT BETWEEN
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warranty in Section 3.11 shall survive the Closing and continue in effect for a
period of 5 years and then expire.  No party may claim indemnification for
breach of a representation or warranty unless the Indemnified Party notifies
the Indemnifying Party in writing of the indemnity claim including a reasonable
description of the claim (whether or not fixed as to liability or liquidated as
to amount) before the survival period expires.  Any timely asserted claim for
indemnification for breach of a representation or warranty shall not expire at
the end of the survival period, but shall continue to be valid and assertible
(and the Indemnifying Party's obligation to indemnify the Indemnified Party for
such a claim shall survive) until the claim is finally resolved.

                   (b)          Any covenant or other agreement of the parties
contained in this Agreement or in any schedule, certificate or other document
delivered in connection with this Agreement survives the Closing and continues
until fully performed.  The Indemnifying Party's obligation to indemnify the
Indemnified Party for any claims, other than a claim for indemnification for
breach of a representation or warranty, shall survive without limitation.

         9.3.      LIMITS ON INDEMNIFICATION.

                   (a)          No Indemnified Party may claim indemnification
for breach of a representation or warranty unless and until the aggregate
amount of all Adverse Consequences and Environmental Claims incurred by or
asserted against the Indemnified Party by reason of all such breaches exceeds
$25 million and then only to the extent the aggregate amount of the Adverse
Consequences and Environmental Claims exceeds such threshold amount.  The
aggregate indemnification obligations of each of Seller or Buyer for breaches
of representations and warranties shall not exceed $1 billion.

                   (b)          Indemnification claims for breaches of
covenants or other agreements are not subject to any minimums or maximums.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (c)          In calculating the amount of Adverse
Consequences or Environmental Claims payable to any Indemnified Party pursuant
to this Agreement, the amount of such Adverse Consequences and Environmental
Claims shall be reduced by: (i) any insurance proceeds actually received by the
Indemnified Party in respect of the Adverse Consequences or Environmental
Claims net of any expenses incurred (including any resulting increase in
insurance premiums) by the Indemnified Party to obtain the insurance proceeds
(provided, however, an Indemnified Party shall not be obligated to institute
any legal proceedings in connection with the collection or pursuit of any
insurance in order to exercise its indemnification remedy under this
Agreement); (ii) the amount accrued or reserved against as a liability on the
Final Closing Statement of Net Assets with respect to such Adverse Consequences
or Environmental Claims less any amounts paid in cash since Closing with
respect thereto and recorded as an accrual or reserve reduction for which
indemnification will not be sought; and (iii) any recoveries from third parties
pursuant to indemnification (or otherwise) with respect thereto net of any
expenses incurred by the Indemnified Party in obtaining such third party
payment.

                   (d)          Notwithstanding anything in this Agreement to
the contrary, no Indemnifying Party shall be liable to an Indemnified Party for
any punitive damages, exemplary damages, lost profits or other consequential
damages (which shall not include natural resource damages) in connection with
any claim for indemnification under this Agreement.

         9.4.      INDEMNIFICATION BY SELLER.  Subject to the qualifications
contained in this Section 9 and subject to Section 5.27, Seller shall
indemnify, defend and hold harmless Buyer, and its Affiliates, and its and
their directors, officers, employees and assigns ("BUYER INDEMNIFIED PARTIES")
from any Adverse Consequences and Environmental Claims incurred by or asserted
against the Buyer Indemnified Parties to the extent such Adverse Consequences
or Environmental Claims arise out of or relate to: (i) a breach by Seller of
its representations, warranties, covenants or other agreements contained in
this Agreement or in any schedule, certificate or other document delivered in
connection with this Agreement; (ii) the Seller's indemnity obligations under
Section 7.2(a); (iii) all liabilities and obligations of Cooper Industries
Norge AS (other than liabilities or obligations relating to the conduct





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



of any business in or through Cooper Industries Norge AS by Seller or its
Affiliates after the Closing); and (iv) any liabilities and obligations of
Cooper A&S Company and Champion Automotive S.p.A. to the extent such
liabilities and obligations relate to non-automotive businesses conducted by
such companies before the Closing Date.  Seller shall also indemnify, defend
and hold harmless the Buyer Indemnified Parties from the Adverse Consequences
and Environmental Claims (a) described in Section 5.21 relating to the
AlliedSignal Lawsuit and the Bosch Infringement Claim and (b) for Asbestos
Claims to the extent provided in Section 5.25.

         9.5.      INDEMNIFICATION BY BUYER.  Subject to the qualifications
contained in this Section 9, Buyer shall (and Buyer shall cause the Champion
Companies and any of Buyer's Affiliates which acquire assets of the Canadian
Division to) indemnify, defend and hold harmless Seller, and its Affiliates,
and its and their directors, officers, employees and assigns ("SELLER
INDEMNIFIED PARTIES") from any Adverse Consequences and Environmental Claims
incurred by or asserted against the Seller Indemnified Parties to the extent
such Adverse Consequences and Environmental Claims arise out of or relate to:
(i) a breach by Buyer of its representations, warranties, covenants or other
agreements contained in this Agreement or in any schedule, certificate or other
document delivered in connection with this Agreement; (ii) Seller's Company
Obligations; (iii) the Buyer's indemnity obligations under Sections 5.11, 5.25
and 7.2(b); (iv) all Environmental Claims; and (v) all liabilities and
obligations of Champion, the Champion Subsidiaries and the Related Companies,
and all liabilities and obligations relating to the Canadian Division that are
assumed by Buyer or its Affiliates, whether arising before, on or after
Closing; provided, however, with respect to clauses (iv) and (v) above, Buyer
shall not have any obligation to indemnify, defend and hold harmless the Seller
Indemnified Parties to the extent any Adverse Consequences or Environmental
Claims are subject to the indemnification provisions of Section 9.4.

         9.6.      THIRD PARTY CLAIMS.    The obligations and liabilities of
the parties with respect to claims for indemnification resulting from the
assertion of liability by a third party are subject to the following terms and
conditions.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (a)          If any third party shall notify the Indemnified
Party with respect to any matter which may give rise to a claim for
indemnification against the Indemnifying Party (or an Indemnified Party
otherwise discovers such a third party claim), then the Indemnified Party shall
promptly provide written notice of such matter to the Indemnifying Party
describing the matter in reasonable detail; provided, however, a delay by the
Indemnified Party in notifying the Indemnifying Party shall not relieve the
Indemnifying Party from any liability hereunder unless (and then solely to the
extent) the Indemnifying Party's position is actually prejudiced by such delay.

                   (b)          If the Indemnifying Party notifies the
Indemnified Party within 30 days after the Indemnified Party has given notice
of the matter that the Indemnifying Party is assuming all responsibility for
the matter including the defense thereof: (i) the Indemnifying Party shall
reimburse the Indemnified Party for any costs it has incurred relating to the
matter and shall defend the Indemnified Party against the matter with counsel
of the Indemnifying Party's choice provided such counsel is reasonably
satisfactory to the Indemnified Party; (ii) although the Indemnifying Party
shall direct and control the defense of such matter, the Indemnified Party may
retain separate co- counsel at its sole cost and expense; (iii) the Indemnified
Party will not consent to the entry of any judgment or enter into any
settlement with respect to the matter without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld or delayed; and
(iv) the Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the matter, which judgment or
settlement does not include a provision whereby the plaintiff or claimant in
the matter releases the Indemnified Party from all liability with respect
thereto, without the prior written consent of the Indemnified Party, which
shall not be unreasonably withheld or delayed.

                   (c)          If the Indemnifying Party does not notify the
Indemnified Party within 30 days after the Indemnified Party has given notice
of the matter that the Indemnifying Party is assuming all responsibility
therefor including the defense thereof, the Indemnified Party may defend
against, consent to the entry of any judgment or enter into any settlement with
respect to the matter in any manner the Indemnified Party reasonably deems
appropriate without waiving any right to indemnity therefor by the Indemnifying
Party.





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (d)          The parties shall cooperate in defending any
third-party claim.  The defending party shall have reasonable access to the
books, records and personnel which are pertinent to the defense and which are
in the possession or control of the other party.

10.      TERMINATION.

         10.1.     TERMINATION OF AGREEMENT.  This Agreement may be terminated
at any time prior to Closing as provided below:

                   (a)          Buyer and Seller may terminate this Agreement
by mutual written consent at any time prior to the Closing;

                   (b)          Buyer may terminate this Agreement by giving
written notice to Seller at any time prior to the Closing: (i) if, pursuant to
Section 5.10 above, Seller has within the then preceding 10 days given Buyer
any notice by means of a disclosure supplement of a condition, event or
development that has had a Material Adverse Effect upon the financial condition
of the Champion Companies taken as a whole; (ii) if there has been a material
breach by Seller of any of its representations, warranties, or covenants
contained in this Agreement, Buyer has notified Seller of the breach, and the
breach has continued without cure for a period of 30 days after the notice of
breach; or (iii) if the Closing shall not have occurred on or before December
31, 1998 by reason of the failure of any condition precedent under Section 8.1
hereof (unless the failure results primarily from Buyer breaching any
representation, warranty, or covenant contained in this Agreement).
Notwithstanding the preceding, the parties acknowledge and Buyer agrees that
the risk of a partial or total loss of the Carquest account or any other
account by the Champion Companies has been taken into account in Buyer's
calculation of the Purchase Price, and any change or occurrence with respect to
any account (including partial or total loss) shall not be deemed a basis for
the termination of this Agreement; and





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PURCHASE AND SALE AGREEMENT BETWEEN
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                   (c)          Seller may terminate this Agreement by giving
written notice to Buyer at any time prior to the Closing: (i) if there has been
a material breach by Buyer of any of its representations, warranties, or
covenants contained in this Agreement, Seller has notified Buyer of the breach,
and the breach has continued without cure for a period of 30 days after the
notice of breach; or (ii) if the Closing shall not have occurred on or before
December 31, 1998, by reason of the failure of any condition precedent under
Section 8.2 hereof (unless the failure results primarily from Seller breaching
any representation, warranty, or covenant contained in this Agreement).

         10.2.     EFFECT OF TERMINATION.  If either party terminates this
Agreement pursuant to Section 10.1 above, all rights and obligations of Seller
and Buyer hereunder shall terminate without any liability of either party to
the other (except for any liability of any party then in breach and except for
any continuing obligations under the Confidentiality Agreement attached hereto
as Exhibit IX).

11.      MISCELLANEOUS.

         11.1.     NO THIRD-PARTY BENEFICIARIES.  Except for Sections 9.4 and
9.5 which are intended to benefit and be enforceable by any of the Seller
Indemnified Parties and Buyer Indemnified Parties, as the case may be, this
Agreement does not confer any rights or remedies upon any Person other than the
parties hereto and their respective successors and permitted assigns.

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

         11.3.     SUCCESSORS AND ASSIGNS.  This Agreement is binding upon and
inures to the benefit of the parties hereto and their respective successors and
permitted assigns.  No party may assign either this Agreement or any of the
party's rights, interests, or obligations hereunder without the prior





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



written approval of the other party; provided, however, either party may assign
any of its rights, interests and obligations hereunder to one or more of its
Affiliates without the prior written approval of the other party in which case
the assigning party shall continue to remain liable for the performance of all
its obligations under this Agreement.  Any assignment prohibited hereunder is
void.

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

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

         11.6.     NOTICES.  All notices expressly required under this
Agreement (other than notices provided under Section 2.8 hereof) shall be in
writing and shall be deemed given if delivered personally (upon the recipient's
actual receipt), if mailed by certified mail, return receipt requested (upon
the date of delivery to recipient), if by a nationally recognized air courier
which confirms delivery (upon date of delivery to the recipient), or if sent by
facsimile (upon the sender's receipt of written confirmation showing receipt by
the recipient), to the parties at the following addresses (or at such other
address for a party as shall be specified by notice given pursuant hereto):

                                (a)         If to Seller, at:
                                            Cooper Industries, Inc.
                                            600 Travis, Suite 5800
                                            Houston, Texas   77002
                                            Attention:  General Counsel
                                            Fax to:  (713) 209-8989

                                (b)         If to Buyer, at:
                                            Federal-Mogul Corporation
                                            26555 Northwestern Highway
                                            Southfield, MI  48034
                                            Attention: General Counsel
                                            Fax to: (248)-354-8103





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



         11.7.     GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without giving
effect to any choice or conflict of law provision or rule, except that the
Federal Arbitration Act 9 U.S.C Sections 1-16 shall govern all questions
relating to the arbitrability of any claim or dispute in connection with this
Agreement including such claims or disputes relating to the purchase price
adjustment pursuant to Section 2 hereof, and to the enforcement of the
arbitration provisions contained in Sections 2 and 12 hereof.

         11.8.     AMENDMENTS AND WAIVERS.  No amendment of any provision of
this Agreement is valid unless the same shall be in writing and signed by all
the parties hereto.  No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to a prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any such prior or subsequent occurrence.

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

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





                                     - 93 -
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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



terms) in the singular shall be held to include the plural and vice versa and
words of one gender shall be held to include the other genders as the context
requires.  The terms "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole (including all of the Schedules and Exhibits hereto) and not to any
particular provision of this Agreement, and Section, Exhibit and Schedule
references are to this Agreement unless otherwise specified.  It is understood
and agreed that neither the specification of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits
is intended to imply that such amounts or higher or lower amounts, or the items
so included or other items, are or are not material, and neither party shall
use the fact of the setting of such amounts or the fact of the inclusion of any
such item in the Schedules or Exhibits in any dispute or controversy between
the parties as to whether any obligation, item or matter is or is not material
for purposes hereof.

         11.11.    INCORPORATION OF EXHIBITS AND SCHEDULES.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.  Disclosure of any fact or circumstance in any Schedule or
Exhibit referenced by a particular section or paragraph of the Agreement shall
be deemed to be disclosed with respect to any other paragraph or section
regardless of whether an explicit cross-reference appears.

         11.12.    BULK TRANSFER LAWS.  Buyer acknowledges that Seller will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.

         11.13.    DECEPTIVE TRADE PRACTICES WAIVER.  Buyer waives the
provisions of the Texas Deceptive Trade Practices Act, Chapter 17, subchapter
E, Section 17.41 through 17.63, inclusive (other than 17.555, which is not
waived), Texas Business and Commerce Code, or any similar legislation that
supersedes such act.  To evidence its ability to grant this waiver, Buyer
represents and warrants to Seller that Buyer (i) is in the business of seeking
or acquiring, by purchase or lease, goods





                                     - 94 -
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PURCHASE AND SALE AGREEMENT BETWEEN
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or services for commercial or business use, (ii) has assets of $5,000,000 or
more according to its most recent financial statement prepared in accordance
with generally accepted accounting principles, (iii) has knowledge and
experience in financial and business matters that enable it to evaluate the
merits and risk of the transaction contemplated, and (iv) is not in a
significantly disparate bargaining position.

         11.14.    SPECIFIC PERFORMANCE.  Each party acknowledges and agrees
that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached.  Each party agrees that the other
party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any remedy to which
they may be entitled as set forth in this Agreement.

12.      DISPUTE RESOLUTION

         12.1.     MEETING OF SENIOR OFFICERS.  Any claim or dispute between
Seller and Buyer arising out of or in connection with this Agreement or any
alleged breach hereof or thereof except those to which the arbitration
provisions in Section 2.7 apply (a "CLAIM") shall be submitted for resolution
to a senior officer of each of Seller and Buyer, as designated by their
respective chief executive officers, who shall meet within thirty (30) days of
such submission to seek in good faith an amicable settlement.  In seeking an
amicable settlement, the parties may consult with a neutral third party
mediator if both parties agree in writing.

         12.2.     BINDING ARBITRATION.

                   (a)           GOVERNING PRINCIPLES.  If any Claim is not
settled by the parties within sixty (60) days after written notice of the Claim
is first given by either party to the other, then either party may submit a
written demand for arbitration and the Claim shall be finally settled by
arbitration under the Commercial Arbitration Rules and the Guidelines for
Expediting Larger, Complex





                                     - 95 -
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PURCHASE AND SALE AGREEMENT BETWEEN
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Commercial Arbitrations of  the American Arbitration Association (the "RULES"),
and judgment upon the award rendered by the Arbitrator may be entered in any
court having jurisdiction over it.

                   (b)          SELECTION AND QUALIFICATION OF THE ARBITRATOR.
If the Claim does not exceed $1,000,000, there shall be one arbitrator.  If the
Claim is more than $1,000,000, there shall be three arbitrators (all
arbitrators are hereafter collectively referred to as the "ARBITRATOR").  The
parties shall endeavor to agree on the selection of an Arbitrator, but if no
agreement has been reached within thirty (30) days of claimant's demand for
arbitration the Arbitrator shall be selected by the American Arbitration
Association.  The Arbitration shall be held in Chicago, Illinois.  The
Arbitrator shall conduct himself or themselves as a neutral, and be subject to
disqualification pursuant to Section 19 of the Rules.  The Arbitrator shall be
compensated at such Arbitrator's normal hourly or per diem rates for all time
spent in connection with the arbitration proceeding, and pending final award,
appropriate compensation and expenses shall be advanced equally by the parties.

                   (c)          INTERIM RELIEF FROM A COURT.  Either party may
request a court to provide interim or provisional relief, and such request
shall not be deemed incompatible with the agreement to arbitrate or as a waiver
of that agreement.

                   (d)          POWERS OF THE ARBITRATOR AND ARBITRATION
PROCEDURES.  The Arbitrator shall permit and facilitate such discovery as the
Arbitrator determines is appropriate, including prehearing depositions,
particularly of witnesses who will not appear, and orders to protect the
confidentiality of proprietary information, trade secrets, and other sensitive
information disclosed in discovery.  Papers, documents and written
communications shall be delivered by the parties directly to each other, the
Arbitrator, and the American Arbitration Association tribunal administrator.
The Arbitrator shall actively manage the proceeding to make it fair,
expeditious, economical and less burdensome and adversarial than litigation.
The Arbitrator may limit the issues, limit the time for each party to present
its case, exclude testimony and other evidence that it deems irrelevant,
cumulative or inadmissible, and order that the direct testimony of witnesses be
furnished by written sworn statement.  All documents that a party proposes to
offer in evidence, except for those objected





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PURCHASE AND SALE AGREEMENT BETWEEN
COOPER INDUSTRIES, INC. AND FEDERAL-MOGUL CORPORATION      DATED AUGUST 17, 1998



to by an opposing party, shall be self-authenticated.  There shall be a
stenographic transcript of the proceedings, the cost of which shall be borne
equally by the parties, pending the final award.  Any Claim submitted to
arbitration shall be resolved in accordance with Title 9 of the U.S. Code (U.S.
Arbitration Act), which shall govern the interpretation, enforcement and
proceedings pursuant to this arbitration provision.

                   (e)          RENDERING OF AWARD.  The award rendered by the
Arbitrator shall be itemized, shall not include punitive damages, exemplary
damages, lost profits or other consequential damages, but may include all or a
part of a party's reasonable attorneys' fees, and shall state the reasoning on
which it rests.  Before rendering the final award, the Arbitrator shall submit
to the parties an unsigned draft of the proposed award, and each party may
deliver, within fifteen (15) days after receipt of such draft, a written
statement of alleged errors of fact, computation, law or otherwise.  The
Arbitrator may disregard any party's statement to the extent that it is in
substance an application for reargument.  With twenty (20) days after receipt
of such party statements, the Arbitrator shall render the final award.

                              * * * * * * * * * *





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

                                COOPER INDUSTRIES, INC.
                                 
                                 
                                By:   /s/ David A. White, Jr.                
                                     -------------------------------------------
                                Title: Senior Vice President, Strategic Planning
                                       -----------------------------------------
                                 
                                 
                                FEDERAL-MOGUL CORPORATION
                                 
                                 
                                By:    /s/ Charles B. Grant                    
                                     -------------------------------------------
                                Title:  Vice President, Corporate Development 
                                     -------------------------------------------
                                 
                                 
                                FEDERAL-MOGUL COMERCIO
                                INTERNACIONAL, S.A.
                                 
                                 
                                By:    /s/ Charles B. Grant                    
                                     -------------------------------------------
                                Title:  Vice President, Corporate Development 
                                     -------------------------------------------
                                 
                                 
                                FEDERAL-MOGUL PTY. LTD.
                                 
                                 
                                By:    /s/ Charles B. Grant                    
                                     -------------------------------------------
                                Title:  Vice President, Corporate Development 
                                     -------------------------------------------
                                 
                                 
                                FEDERAL-MOGUL GLOBAL GROWTH LTD.
                                 
                                 
                                By:    /s/ Charles B. Grant                    
                                     -------------------------------------------
                                Title:  Vice President, Corporate Development 
                                     -------------------------------------------





                                     - 98 -
<PAGE>   104
                                   EXHIBIT I

                              CERTAIN DEFINITIONS


         "ABEX PRODUCTS" has the meaning set forth in Section 5.25.

         "ABEX TERMINATION DATE" has the meaning set forth in Section 5.25.

         "ACCOUNTING ARBITRATOR" has the meaning set forth in Section 2.7.

         "ADDITIONAL FX CONTRACTS" has the meaning set forth in Section 5.16.

         "ADVERSE CONSEQUENCES" means all actions, suits, proceedings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, directives, notices of violation or non-compliance, rulings,
damages, penalties, fines, costs, liabilities, obligations, Taxes, liens,
losses, expenses, and fees, including court costs and reasonable fees and
expenses of attorneys, accountants, consultants and experts.

         "AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or is under common control
with such first Person.  Unless otherwise specified, the term "Affiliate", when
used with respect to Seller, shall not include the Champion Companies.  Unless
otherwise specified, the term "Affiliate", when used with respect to Buyer,
shall include the Champion Companies and any designee of Buyer which acquires
the Canadian Division.

         "ALLIEDSIGNAL LAWSUIT" has the meaning set forth in Section 5.21(a).

         "ASBESTOS CLAIM" means a claim arising from personal injury, including
death, resulting from exposure to asbestos-containing products manufactured or
sold prior to the Closing Date by (a) Pneumo Abex Corporation ("Pneumo")
(provided the products were manufactured or sold prior to December 30, 1994),
(b) Wagner Electric Corporation ("WEC"), (c) each of Pneumo and WEC's
Predecessors and successors as of the Closing Date, and (d) for the purpose of
Section 5.25(a) and 5.25(g) only: Standard Motor Products Company ("SMPC"),
SMPC's Affiliates, and SMPC's and its Affiliates' Predecessors.

         "AUTOMOTIVE HOURLY PLANS" has the meaning set forth in Section 6.4(a).

         "BENEFIT PLAN" has the meaning set forth in Section 6.1(a).

         "BOSCH INFRINGEMENT CLAIM" has the meaning set forth in Section 5.21.

         "BUSINESS" means the business, activity, and operations historically
or currently conducted by the Champion Companies.

         "BUYER" means Federal-Mogul Corporation, a corporation organized under
the laws of Michigan.
<PAGE>   105
                             EXHIBIT I (CONTINUED)


         "BUYER INDEMNIFIED PARTIES" has the meaning set forth in Section 9.4.

         "BUYER'S LETTER" has the meaning set forth in Section 2.5.

         "BUYER'S WELFARE BENEFIT PLANS" has the meaning set forth in Section
6.4(e).

         "CANADIAN ASSET TRANSFER AGREEMENT" means the Asset Transfer Agreement
between Cooper Industries (Canada) Inc.  and Buyer or its designated Affiliate
in the form similar to that attached as Exhibit VI hereto, with terms and
conditions mutally agreed.

         "CANADIAN DIVISION" means the division of Cooper Industries (Canada)
Inc. that is engaged in the Business.

         "CHAMPION" means Champion Spark Plug Company, a corporation organized
under the laws of Delaware.

         "CHAMPION AUSTRALIAN PLAN" has the meaning set forth in Section
6.4(h).

         "CHAMPION BENEFIT ARRANGEMENT" has the meaning set forth in Section
6.1(c).

         "CHAMPION COMMON STOCK" has the meaning set forth in the preamble of
the Agreement.

         "CHAMPION COMPANIES" means Champion, the Champion Subsidiaries, the
Related Companies, the Canadian Division and (except for purposes of Sections 2
and 3) their respective Predecessors.  Each such company or division is
individually referred to as a "CHAMPION COMPANY".

         "CHAMPION EMPLOYEE PLAN" has the meaning set forth in Section 6.1(c).

         "CHAMPION INTERNATIONAL PLAN" has the meaning set forth in Section
6.1(d).

         "CHAMPION PENSION PLAN" has the meaning set forth in Section 6.4(a).

         "CHAMPION RETIREMENT SAVINGS PLAN" has the meaning set forth in
Section 6.4(b).

         "CHAMPION SALARIED PLAN" has the meaning set forth in Section 6.4(a).

         "CHAMPION SUBSIDIARIES" means the direct and indirect subsidiaries of
Champion as set forth on Exhibit II.  Each such company is individually
referred to as a "CHAMPION SUBSIDIARY".

         "CHAMPION SUPPLEMENTAL DB PLAN" and "CHAMPION SUPPLEMENTAL DC PLAN"
have the respective meanings set forth in Section 6.4(d).



                                     -2-
<PAGE>   106
                             EXHIBIT I (CONTINUED)


         "CHANGE PERIOD" has the meaning set forth in Section 2.3(a).

         "CLOSING" means the closing of the transactions contemplated by the
Agreement.

         "CLOSING DATE" means the date on which the Closing actually takes
place.

         "COOPER AUSTRALIAN PLAN" has the meaning set forth in Section 6.4(h).

         "COOPER RETIREMENT SAVINGS PLAN" has the meaning set forth in Section
6.4(b).

         "COOPER SALARIED PLAN" has the meaning set forth in Section 6.4(a).

         "COOPER SUPPLEMENTAL DB PLAN" and "COOPER SUPPLEMENTAL DC PLAN" have
the respective meanings set forth in Section 6.4(d).

         "COOPER'S WELFARE BENEFIT PLANS" has the meaning set forth in Section
6.4(e).

         "EMPLOYEE" has the meaning set forth in Section 6.1(a).

         "EMPLOYEE BENEFITS" has the meaning set forth in Section 6.4(f).

         "ENCUMBRANCE" means any mortgage, lien, security interest, easement,
encroachment, assessment, judgment, rights of first refusal, purchase options
(and with respect to real property only, third party rights affecting
marketability) and any other encumbrance affecting title.

         "ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or
judicial actions, causes of action, suits, obligations, Environmental
Liabilities, losses, proceedings, decrees, judgments, penalties, fines, fees,
demands, demand letters, orders, directives, claims (including any claims
involving Environmental Liability in tort, strict, absolute or otherwise),
liens, notices of noncompliance or violation, legal and consultant fees and
costs of investigations or proceedings, arising from any Environmental Law.

         "ENVIRONMENTAL LAWS" means any and all Laws or Environmental Permits
relating to public or employee health or safety, pollution, natural resources,
or the environment, including any Law relating to: (i) the manufacture,
processing, distribution, generation, use, ownership, management, handling,
collection, treatment, storage, transportation, abatement, remediation
(including assessment, monitoring, operation and maintenance), recovery,
recycling, removal, Release, threat of Release, discharge, or disposal of, or
exposure to, Regulated Materials; (ii) record keeping, notification or
reporting requirements relating to Regulated Materials; or (iii) negligence,
gross negligence, strict liability, intentional tort, toxic tort or any other
theory of liability at law (whether common or statutory) or in equity to the
extent claims thereunder arise from contamination by, exposure to, any Release
or threatened Release of, or conditions or non-compliance relating to,
Regulated Materials in the environment.



                                     -3-
<PAGE>   107
                             EXHIBIT I (CONTINUED)


         "ENVIRONMENTAL LIABILITIES" means any and all Adverse Consequences
arising under any Environmental Law, whether direct or indirect, known or
unknown, joint or several, and whenever arising (including after Closing),
including all fees; forms of financial assurance; fines; penalties; judgments;
capital costs; wetlands mitigation, response, cleanup, removal, treatment,
monitoring, operating and maintenance costs; investigation, remedial and
inspection costs; disbursements; and expenses of counsel, experts, contractors
and consultants, based on, arising out of or otherwise in respect to: (i) the
Champion Companies or property (whether real or personal) or assets currently
or formerly owned, operated, used or leased (including the Owned Real Property
and the Leased Real Property) by the Champion Companies (including off-site
locations); (ii) conditions or Regulated Materials existing, generated, used,
treated, stored, recovered, recycled or Released on, at or under, transported
to or from, or originating from any such property or operation of the Business
(including off-site locations); or (iii) expenditures to cause any such
property, off-site locations, or natural resources affected in any way by such
conditions or Regulated Materials, or any other aspect of the Business to be in
compliance with any requirements of Environmental Laws.

         "ENVIRONMENTAL PERMIT" means any Permit, registration, consent,
waiver, exception, variance, exemption, or filing relating in any way to or
required by any Environmental Law.

         "ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.

         "ESPP PARTICIPANTS" has the meaning set forth in Section 6.5.

         "1997 ESPP" has the meaning set forth in Section 6.5.

         "FINAL CLOSING STATEMENT OF NET ASSETS" has the meaning set forth in
Section 2.3.

         "FINANCIAL STATEMENTS" has the meaning set forth in Section 3.6.

         "FORMER EMPLOYEE" has the meaning set forth in Section 6.1(f).

         "FULL FUNDING LIABILITIES" has the meaning set forth in Section
6.4(a).

         "GAAP" means generally accepted United States accounting principles.

         "GOVERNMENTAL AUTHORITY" means the United States, any other country,
any national body (including the European Union), any state, province,
municipality, or subdivision of any of the foregoing, any agency, governmental
department, court, entity, commission, board, ministry, bureau, locality or
authority of any of the foregoing, or any quasi- governmental or private body
exercising any regulatory, taxing, importing, exporting, or other governmental
or quasi- governmental function or any arbitrator.



                                     -4-
<PAGE>   108
                             EXHIBIT I (CONTINUED)


         "HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.

         "HOURLY FULL FUNDING LIABILITIES" has the meaning set forth in Section
6.4(a).

         "INDEMNIFIED PARTY" means the Person who is entitled to the benefits
of any indemnity provision under this Agreement.

         "INDEMNIFYING PARTY" means the party to the Agreement who is obligated
to indemnify the Buyer Indemnified Parties or Seller Indemnified Parties, as
the case may be, pursuant to any provision under this Agreement.

         "INTELLECTUAL PROPERTY" means all domestic and foreign patents,
copyrights, trade names, trademarks, service marks and registrations and
applications for any of the foregoing (together with the goodwill associated
with such trade names, trademarks and service marks), trade secrets,
inventions, proprietary processes, research and development information,
designs, confidential and technical information, engineering and technical
drawings, specifications, know- how, formulae and other proprietary property,
rights and interests.

         "INTERNAL REVENUE CODE" or "CODE" means the Internal Revenue Code of
1986, the regulations thereunder, any amendments thereto and any successor law.

         "KNOWLEDGE" means actual knowledge, after due inquiry, and shall not
include any constructive or imputed knowledge.  Any reference to Seller's
Knowledge shall be limited to the actual knowledge of the  persons set forth on
Exhibit VIII.

         "LAWS" means all laws; statutes; regulations; by-laws, codes;
ordinances; decrees; rules; judicial, arbitral, administrative, ministerial,
departmental or regulatory judgments, orders, decisions, rulings, injunctions,
or awards; policies; voluntary restraints; guidelines; directives; agreements
with, requirements of, or instructions by any Governmental Authority; general
principles of common or civil law; and equity.

         "LEASED REAL PROPERTY" has the meaning set forth in Section 3.14(b).

         "MATERIAL ADVERSE EFFECT" means a material and adverse effect on the
business, operations or financial condition of the Champion Companies taken as
a whole.

         "MATERIAL CONTRACTS" has the meaning set forth in Section 3.12.

         "MOOG COMMON STOCK" has the meaning set forth in Section 2.10.



                                     -5-
<PAGE>   109
                             EXHIBIT I (CONTINUED)


         "NEGATIVE PURCHASE PRICE ADJUSTMENT" has the meaning set forth in
Section 2.2(b).

         "NOMINAL SHARES" means the shares of Cooper Automotive France, S.A.
and Cooper Automotive, Taiwan, Inc. that are owned by certain individuals and
which will be delivered to Buyer (or its designee) pursuant to Section
2.9(b)(iii) and (iv).

         "OTHER AGREEMENTS" has the meaning set forth in Section 5.19.

         "OUTSTANDING FX CONTRACTS" has the meaning set forth in Section 5.16.

         "OWNED REAL PROPERTY" has the meaning set forth in Section 3.14(a).
         "PEG DATE" has the meaning set forth in Section 2.3(a).

         "PEG STATEMENT OF NET ASSETS" has the meaning set forth in Section
2.3.

         "PERFORMANCE OBLIGATION INSTRUMENTS" has the meaning set forth in
Section 5.15.

         "PERMITS" means all licenses, permits, approvals, certificates and
authorizations of any Governmental Authority primarily relating to the
Business.

         "PERMITTED ENCUMBRANCES" means any Encumbrance: (i) for Taxes or other
governmental assessments or charges the payment of which is not yet due or
which are being contested in good faith by appropriate proceedings; (ii) of
carriers, warehousemen, mechanics, materialmen or similar encumbrances imposed
by law arising or incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith;  (iii) other imperfections of
title or encumbrances, if any, which individually or in the aggregate do not
materially detract from the value of the property subject thereto, or
materially impair the use of such property as presently used in the Business.
Further, with respect to the Owned Real Property and the Leased Real Property,
Permitted Encumbrances shall also include (i) zoning and similar restrictions;
and (ii) such imperfections of title, easements, liens, charges and other
encumbrances as are of record or as would be described on a current survey.

         "PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Authority.

         "POSITIVE PURCHASE PRICE ADJUSTMENT" has the meaning set forth in 
Section 2.2(b).

         "PRE-CLOSING STRADDLE PERIOD" has the meaning set forth in Section
7.2(c).

         "PRE-CLOSING CREDITABLE FOREIGN TAX" has the meaning set forth in
Section 7.2(a)(iv).



                                     -6-
<PAGE>   110
                             EXHIBIT I (CONTINUED)


         "PREDECESSOR" means a Person which has previously held an interest to
which the Person to whom the reference is made has succeeded, including a
Person that conveyed, transferred or assigned all or substantially all of its
assets to the Person to whom the reference is made or a Person which was merged
or amalgamated into or consolidated with the Person to whom the reference is
made.

         "PRELIMINARY CLOSING STATEMENT OF NET ASSETS" has the meaning set
forth in Section 2.3.

         "PROVISIONAL PAYMENT" has the meaning set forth in Section 7.2(a)(iv).

         "PURCHASE PRICE ADJUSTMENT" has the meaning set forth in Section
2.2(b).

         "REGULATED MATERIALS" means (i) any solid waste, hazardous waste,
pollutant, contaminant or petroleum (including any crude oil or fraction
thereof) and (ii) any hazardous, toxic or other substance, material, liquid,
gas or chemical regulated by or which is the basis for liability under any
Environmental Law.

         "RELATED COMPANIES" means the companies set forth on Exhibit III.

         "RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, placing, burying
or disposing into the environment of any Regulated Material.

         "SALARIED FULL FUNDING LIABILITIES" has the meaning set forth in
Section 6.4(a).

         "SELLER" means Cooper Industries, Inc., a corporation organized under
the laws of Ohio.

         "SELLER INDEMNIFIED PARTIES" has the meaning set forth in Section 9.5.

         "SELLER'S COMPANY OBLIGATIONS" has the meaning set forth in Section
5.12.

         "SELLER'S LETTER" has the meaning set forth in Section 2.4.

         "STRADDLE PERIOD" has the meaning set forth in Section 7.2(c).

         "TAX" or "TAXES" means all federal, provincial, state, local or
foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax of any kind, including, without limitation,
liability for taxes arising from a consolidated return and imposed by Treasury
Reg. Section 1.1502.6, together with any interest, penalty, or additions,
whether disputed or not.



                                     -7-
<PAGE>   111
                             EXHIBIT I (CONTINUED)


         "TAX PROCEEDING" has the meaning set forth in Section 7.7(b).

         "TAX RETURN" means any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Authority in connection with the determination, assessment,
collection, or payment of any Taxes.

         "TRANSFER PLAN LIABILITIES" has the meaning set forth in Section
6.4(a).



                                     -8-
<PAGE>   112
                         

                                   EXHIBIT II

                         LIST OF CHAMPION SUBSIDIARIES


Champion Aviation, Inc.
Champion Interamericana, Ltd.
Champion Automotive S.p.A. (f/k/a Cooper Industries Italia S.p.A.)
Champion Spark Plug Belgium S.A. (as to 56%)
Champion Sparking Plug Company (Ireland) Limited
Cooper A&S Company
Cooper Automotive Company
Cooper Automotive de Mexico, S.A. de C.V.
Cooper Automotive de Venezuela C.A.
Cooper Automotive do Brasil, Ltda.
Cooper Automotive Filtration S.p.A.
Cooper Automotive France, S.A.
Cooper Automotive Iberica, S.A.
Cooper Automotive K.K.
Cooper Automotive Netherlands B.V.
Cooper Automotive of Latin America, S.A. de C.V.
Cooper Automotive of South Africa (Pty.) Limited
Cooper Automotive Products, Inc.
Cooper Automotive S.A.
Cooper Automotive, S.A. de C.V.
Cooper Automotive, Taiwan, Inc.
Cooper Industries Norge AS (in liquidation)
Farloc Argentina S.A.I.C. y F (24%)
Frenos Hidraulicos Automotrices, S.A. de C.V. (49%)
Industrias Cooper de Venezuela, S.A.
ZV Zundkerzenvertriebs GmbH (in liquidation)
<PAGE>   113
                                  EXHIBIT III

                           LIST OF RELATED COMPANIES


Champion Automotive (U.K.) Ltd.

         Subsidiaries:      Champion Executive Pensions Limited

                            Firecom Ltd.

                            [New pension company in U.K. may be incorporated
                            before closing]


Cooper Automotive Electrical do Brasil Ltda.

         Subsidiaries:      none


Cooper Automotive Pty. Ltd.

         Subsidiaries:      Cooper Automotive Products (India) Private Limited

                            Guangzhou Champion Spark Plug Co., Ltd. (50%)

                            [New pension company in Australia may be
                            incorporated before closing]


Moog Automotive Products, Inc.

         Subsidiaries:      Moog Automotive Company

                            Moog Automotive Batesville, Inc.

                            Moog Redevelopment Corporation

                            Moog Automotive, Ltd.

                            Qingdao Precision Universal Joint Company Limited 
                            (50%)

                            Productos de Frenos Automotrices de Calidad, S.A. 
                            de C.V.

                            Crucetas Mexicanas, S.A. de C.V. (40%)


Veda Manufacturing Pty. Limited (in liquidation)

Champion Spark Plug Belgium S.A. (as to 44%)
<PAGE>   114
                          PURCHASE AND SALE AGREEMENT
                                    BETWEEN
                            COOPER INDUSTRIES, INC.
                                      AND
                           FEDERAL-MOGUL CORPORATION


LIST OF OMITTED EXHIBITS AND DISCLOSURE SCHEDULES

The following exhibits and disclosure schedules to the Purchase and Sale
Agreement have not been filed with the Securities and Exchange Commission
pursuant to Rule 601(b) of Regulation S-K.  Cooper Industries, Inc. shall
furnish supplementally a copy of any omitted exhibit or schedule to the
Securities and Exchange Commission upon request.

OMITTED EXHIBITS

Exhibit IV     - Peg Statement of Net Assets of the Champion Companies dated
                 March 31, 1998.

Exhibit V      - The following financial statements for the Champion Companies:

                 Unaudited combined financial statements for the three months
                 ended March 31, 1998.

                 Audited combined financial statements as of December 31, 1997
                 and for the three years then ended.

Exhibit VI     - Preliminary draft of Canadian Asset Transfer Agreement between
                 Cooper Industries (Canada) Inc., as the seller, and the
                 Federal-Mogul affiliate that will be acquiring the Canadian
                 automotive business.

Exhibit VII    - Allocation of the Purchase Price (to be completed after
                 closing).

Exhibit VIII   - List of individuals at Cooper Industries, Inc. or the Champion
                 Companies who have  "knowledge" for purposes of the
                 representations and warranties under the Purchase and Sale
                 Agreement.

Exhibit IX     - Confidentiality Agreement with Federal-Mogul Corporation.

Exhibit X      - A list of certain insurance policies that provide coverage for
                 asbestos liabilities.

OMITTED DISCLOSURE SCHEDULES

The following disclosure schedules disclose those matters that are described in
and are required to be disclosed under the corresponding sections of the
Purchase and Sale Agreement:  2.3(h), 2.3(m), 3.2, 3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11, 3.12, 3.14, 3.15, 3.16, 3.17, 3.20, 3.21, 5.12, 5.15, 5.16,
6.3, 6.4 and 7.1.