STOCK PURCHASE AGREEMENT
                            ------------------------


Agreement made as of the _______day of February, 1996 by and between Performance
Industries,  Inc., an Ohio corporation  having an address at 2425 East Camelback
Road, Suite 620, Phoenix,  Arizona 85016 (hereinafter  referred to as "Seller"),
and Markwood LLC, a New York limited  liability  company,  with an address at 35
Engel Street,  Hicksville,  New York 11801 or its assignee (hereinafter referred
to as "Purchaser").


                              W I T N E S S E T H:
                              - - - - - - - - - -


Whereas,  Seller is the owner of six hundred  twenty four (624) shares of common
stock,  one peso par  value,  of  Fabricaciones  Metalicas  Mexicanas,  S.A.,  a
corporation formed under the laws of Mexico (the "Corporation"),  represented by
stock certificate number 1, constituting ninety-nine and 84/100 (99.84%) percent
of all of the issued and outstanding capital stock of the Corporation;

Whereas,  Joe Hrudka ("Hrudka") is the owner of one (1) share of common stock, 1
peso par value, of the Corporation  (the "Hrudka  Stock"),  represented by stock
certificate number 6, constituting  sixteen one hundredths (.16%) percent of all
of the issued and outstanding  capital stock of the Corporation,  which stock is
owned  beneficially  by Seller  (the shares of common  stock of the  Corporation
owned by Performance and Hrudka are hereinafter  collectively referred to as the
"Shares");

Whereas, the Corporation is the owner of certain tangible,  intangible, real and
personal  property,   including,   without  limitation,  that  certain  improved
industrial real property situated in the City of Mexicali, Baja, California,  at
Calle  Villa  Hermosa,  #1300 y Avenida  Navolato,  Colonia,  Guajardo,  and the
fixtures, equipment and machinery used in connection with the operation thereof;
and

Whereas,  Seller desires to sell to Purchaser and Purchaser  desires to purchase
from  Seller  the  Shares,  subject  to and in  accordance  with the  terms  and
conditions hereinafter set forth.

Now, therefore, in consideration of the premises and the mutual covenants herein
contained,  and for other  good and  valuable  consideration,  the  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereby  agree as
follows:
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1.       PURCHASE AND SALE OF SHARES
         ---------------------------

(a) Purchase and Sale of Shares.  Subject to the terms and conditions  contained
in this Agreement and effective at the Closing (as hereinafter defined),  Seller
hereby agrees to sell, assign, transfer,  convey and deliver to Purchaser all of
Seller's right, title and interest in and to the Shares and, on the basis of the
representations,  warranties and covenants of Seller herein contained, Purchaser
hereby agrees to purchase, acquire and accept the Shares from Seller.

(b) Purchase  Price.  The total purchase price for the Shares shall be an amount
equal to the difference between (a) Three Million  (US$3,000,000.00) Dollars and
(b) the outstanding  principal balance of that certain  indebtedness owed by the
Corporation   to  Seller,   together   with   interest   accrued   thereon  (the
"Indebtedness"),  determined  and  confirmed  as of  the  day  of  Closing.  The
Indebtedness   is   evidenced   by   that   certain   promissory   note,   dated
____________________, given by the Corporation, as maker and obligor, to Seller,
as payee and obligee, in the outstanding principal amount of US$2.1 million (the
"Note")  (hereinafter  referred  to as the  "Purchase  Price"),  as same  may be
adjusted as set forth below. The Purchase Price shall be payable as follows: (i)
the sum of One Hundred Thousand  (US$100,000.00)  Dollars (the "Deposit") on the
signing of this  Agreement by check subject to collection or by wire transfer of
funds, the receipt of which is hereby acknowledged; and (ii) at the consummation
of the Closing in accordance  with all of the terms and conditions  herein,  the
balance of the Purchase  Price by good  certified  check,  bank check or by wire
transfer of funds. The Deposit shall be delivered to Mandel and Resnik, P.C., as
escrow agent (the "Escrow Agent"),  to be held in escrow in a federally  insured
interest  bearing account in accordance with an escrow  agreement in the form of
Exhibit "A" annexed hereto and made a part hereof.

(c)  Closing.  Subject to the  provisions  hereinafter  set forth,  the  closing
("Closing") of the  transaction  contemplated by this Agreement shall take place
at the  offices  of Seller or such other  location  agreed  upon by the  parties
hereto,  commencing at 10:00 a.m. on May 15, 1996 (the "Closing Date"),  subject
to the satisfaction or waiver of all conditions  precedent to the obligations of
the parties to  consummate  the Closing.  At the Closing,  Seller and  Purchaser
shall  each  deliver  to  the  other  all of the  documentation  required  to be
delivered  by such  party as set  forth  in  Article  6  below.  Notwithstanding
anything to the contrary  herein  contained,  if (a) Seller shall have satisfied
all of the conditions precedent to Closing required to be satisfied by Seller on
or before the  Closing  Date and is ready,  willing and able to  consummate  the
transaction  contemplated  hereby  in  accordance  with  all  of the  terms  and
conditions  herein set forth and (b) Purchaser shall elect for any reason not to
close on such
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date,  then  Purchaser  shall be  entitled to adjourn the Closing up to June 15,
1996.  In such  event,  Purchaser  shall  pay to Seller  the sum of Two  Hundred
(US$200.00)  Dollars  per day (the  "Extension  Fee")  for each day  beyond  the
Closing Date that Purchaser postpones the Closing. At any time after the Closing
Date up to and including June 15, 1996, Purchaser shall have the right to either
consummate  the  transaction  subject  to and in  accordance  with the terms and
conditions  hereof or to terminate this  Agreement,  in which event Seller shall
forthwith return to Purchaser the Deposit,  plus accrued interest thereon,  less
the Extension  Fee due from  Purchaser to Seller  pursuant to the  provisions of
this  subparagraph,  and upon such  refund  being  made,  this  Agreement  shall
terminate,  be null and void and of no further force or effect and neither party
shall have any further  obligations  or liabilities  hereunder.  Notwithstanding
anything to the contrary  herein  contained,  if (a) Seller shall have satisfied
all of the conditions precedent to Closing required to be satisfied by Seller on
or  before  June 15,  1996 and is  ready,  willing  and able to  consummate  the
transaction  contemplated  hereby  in  accordance  with  all  of the  terms  and
conditions herein set forth, (b) Purchaser has elected to adjourn the Closing up
to June 15, 1996 as provided above and (c) Purchaser  shall elect for any reason
not to close on or before June 15,  1996,  then  Purchaser  shall be entitled to
adjourn the Closing up to August 31, 1996 (the "Extended  Closing Date"). At any
time  after  June  15,  1996 up to and  including  the  Extended  Closing  Date,
Purchaser shall have the right to either  consummate the transaction  subject to
and in  accordance  with the terms and  conditions  hereof or to terminate  this
Agreement, in which event Seller may retain the Deposit and the Deposit shall be
deemed liquidated  damages and this Agreement shall terminate,  be null and void
and of no  further  force or effect and  neither  party  shall have any  further
obligations or liabilities hereunder.

(d) Closing  Adjustments.  Purchaser  shall be charged at the  Closing  with the
following  items,  adjusted as of midnight of the day immediately  preceding the
Closing:  prepaid real estate taxes  apportioned on the basis of the real estate
tax  year;  prepaid  water  and  sewer  rents  apportioned  on the  basis of the
applicable  payment  period;  the  reasonable  value  of fuel on  hand;  and the
pro-rated value of all existing policies of insurance.  Purchaser shall likewise
be credited at the Closing  with the  following  items:  (i) accrued real estate
taxes  apportioned  on the basis of the real estate tax year;  (ii) accrued real
estate assessments;  (iii) charges accrued for electricity,  sewer, water, steam
and gas; (iv) prepaid  rents  covering any period from and after the Closing (it
being understood and agreed that for purposes hereof,  "prepaid rents" shall not
be  deemed  to  include  the  amount  of free  rent  to  which  American  Tissue
Corporation is entitled under its lease with the Corporation of a portion of the
real  property  owned by the  Corporation);  (v) an amount equal to the deposits
made by tenants under leases; (vi) an amount equal to all items
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carried by the Corporation,  or which should be carried, for rent refunds; (vii)
accounts  payable;  (viii) an amount  equal to the sum of all  unpaid  Taxes (as
hereinafter  defined)  (other than real estate taxes) of the Corporation for any
fiscal  year up to and  including  its fiscal  year  ended  December  31,  1995,
together with the amount of Taxes,  if any,  accrued for the elapsed part of the
fiscal  year of the  Corporation  commencing  January  1,  1996,  and  ending at
Closing.  Such  apportionment,  however,  shall  not be deemed  conclusive  upon
Purchaser or  prejudice  any of  Purchaser's  rights or claims in respect of the
Corporation's  unpaid Taxes or liabilities,  if any; (ix) an amount equal to the
sum of operating  expenses and insurance,  unpaid and accrued as of the Closing,
exclusive of water  charges,  if any,  payable by tenants.  The term  "operating
expenses" shall be deemed to include (but not be limited to) employee's salaries
and wages and apportioned  vacation pay; and (x) an amount equal to the total of
all  transfer  taxes  payable in  connection  with the transfer of the Shares by
Seller to  Purchaser  and such  amount  shall be applied  to the  payment of the
transfer taxes.

(e) Purchase and Sale of Note. Subject to the terms and conditions  contained in
this  Agreement  and  effective at the Closing,  Seller  hereby  agrees to sell,
assign,  transfer,  convey and deliver to Purchaser all of Seller's right, title
and interest, as payee and obligee, in and to the Note, and, on the basis of the
representations,  warranties and covenants of Seller herein contained, Purchaser
hereby  agrees to purchase,  acquire and accept the Note from Seller.  The total
purchase price for the Note shall be the outstanding  amount of the Indebtedness
as of the day of Closing (the "Note Price").  The Note Price shall be payable at
the  consummation  of the  Closing  in  accordance  with  all of the  terms  and
conditions herein by good certified check, bank check or wire transfer of funds.
At the Closing,  Seller  shall  deliver to  Purchaser  all of the  documentation
relating to the Note required to be delivered as set forth in Article 6 below.

2.       REPRESENTATIONS AND WARRANTIES OF SELLER AND HRUDKA
         ---------------------------------------------------

As a material inducement to Purchaser to execute and deliver this Agreement, and
to purchase  and pay for the Shares and the Note,  Seller and Hrudka each hereby
represent,  warrant and, where applicable,  covenant as set forth below. Each of
the  representations  and  warranties  contained  herein are true,  accurate and
complete  as of the date of this  Agreement  and  shall be  true,  accurate  and
complete as of the Closing as though made as of such date and as though the date
of the Closing were substituted for the date of this Agreement:

         (i) Organization and Authorization of Seller. Seller is duly organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its incorporation and has
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         full  corporate  power and  authority to execute this  Agreement and to
         perform  its  obligations  hereunder.  This  Agreement  has  been  duly
         executed and delivered by Seller and  constitutes the valid and legally
         binding  agreement of Seller  enforceable in accordance  with its terms
         except as such enforceability may be limited by bankruptcy,  insolvency
         or other laws  affecting  generally  the  enforceability  of creditors'
         rights and by application of equitable principles. Seller need not give
         any  notice  to,  make any  filing  with or obtain  any  authorization,
         consent or approval of any government or  governmental  agency in order
         to consummate the transaction contemplated hereby.

         (ii) Shares.  With the exception only of the Hrudka Stock, Seller holds
         of record and owns beneficially all of the Shares. The Shares are owned
         by Seller  and  Hrudka  free and clear of any and all  restrictions  on
         transfer,  taxes,  mortgages,  deeds of trust, pledges, liens, security
         interests,   purchase   rights,   contracts,   commitments,   equities,
         violations,  adverse claims,  beneficial interests,  assessments and/or
         other charges or  encumbrances of any nature  whatsoever  (collectively
         "Charges").  The Shares are not subject to any voting trusts,  options,
         warrants,   other   agreements   or   restrictions   with   respect  to
         transferability,  except  those  restrictions  as may be imposed by law
         upon unregistered shares of stock of privately held corporations. There
         are no agreements or  understandings,  written or oral, to which Seller
         or Hrudka is a party relating to the acquisition, disposition or voting
         of the Shares or otherwise  affecting  the Shares.  Seller has the full
         right and power to sell and transfer the Shares to Purchaser  under and
         pursuant to the terms and conditions of this Agreement. The transfer of
         the Shares to Purchaser hereunder will convey and transfer to Purchaser
         good, marketable,  indefeasible and valid title to the Shares, free and
         clear of any and all Charges.  The Shares  constitute all of the issued
         and outstanding  shares of capital stock,  securities or other property
         interests  of any kind or  nature  owned  beneficially  or of record by
         Seller and Hrudka, or any person or entity related to Seller or Hrudka,
         including,  without  limitation,  any member of Hrudka's family,  in or
         relating to the  Corporation.  From and after the Closing,  the Seller,
         Hrudka and any  related  party  shall have no further  interest  of any
         nature  whatsoever  in the  Corporation  or its  businesses,  assets or
         operations.

         (iii) Note.  Seller is the sole owner and holder of Seller's  interest,
         as payee and obligee,  in and to the Note.  The Note is owned by Seller
         free and clear of any and all Charges,  including,  without limitation,
         collateral or other assignments or security  arrangements in respect of
         Seller's interest therein. The Note is fully negotiable and Seller
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<PAGE>
         has the full  right and power to sell,  assign  and  transfer  Seller's
         interest  in and to the Note to  Purchaser  under and  pursuant  to the
         terms and conditions of this Agreement.  The  Indebtedness is currently
         in the outstanding  principal  amount of US$2.1 million,  together with
         interest  thereon at the annual rate of  ___________ ( %) percent;  the
         Indebtedness is payable in equal monthly  installments of interest only
         and  matures on  _________________,  19___.  The Note  constitutes  the
         legal,  valid  and  binding  indebtedness  of the  Corporation  owed to
         Seller,  enforceable  and due and payable in accordance with its terms.
         There  exists no  offsets,  defenses  or  counterclaims  of any  nature
         whatsoever to the liability of the  Corporation  for the  Indebtedness.
         The  interest  rate  payable  under  the Note is not in  excess  of the
         maximum  interest  rate which the  Corporation  is  permitted by law to
         contract or agree to pay, nor could such rate subject the holder of the
         Note to either  civil or  criminal  liability  as a result of such rate
         being in excess of the maximum  legal  interest  rate under  applicable
         usury laws or otherwise.  The  Corporation  is not in breach or default
         under the Note, all sums due and owing  thereunder have been fully paid
         and no event  has  occurred  which,  with  notice or the lapse of time,
         would constitute such a breach or default.

         (iv) Noncontravention by Seller. Neither the execution and the delivery
         of  this  Agreement,   nor  the   consummation   of  the   transactions
         contemplated  hereby,  will  (a)  violate  any  constitution,  statute,
         regulation,  rule, injunction,  judgment, order, decree, ruling, charge
         or other restriction of any government, governmental agency or court to
         which Seller is subject,  or (b) conflict with,  result in a breach of,
         constitute a default under,  result in the  acceleration  of, create in
         any party the right to  accelerate,  terminate,  modify or  cancel,  or
         require  notice  under,  any  agreement,   contract,   lease,  license,
         instrument or other  arrangement to which Seller is a party or by which
         Seller is bound or to which any of Seller's  assets is subject,  or (c)
         violate any provision of the charter,  certificate of  incorporation or
         by-laws of Seller.

         (v) Organization, Qualification and Corporate Power of the Corporation.
         The Corporation (a) is a corporation  duly organized,  validly existing
         and  in  good  standing  under  the  laws  of the  jurisdiction  of its
         incorporation,  (b) is duly  authorized  to conduct  business and is in
         good  standing  under  the  laws  of  each   jurisdiction   where  such
         qualification  is  required,  and there are no actions  or  proceedings
         pending or threatened to dissolve the  Corporation or to declare any or
         all of its corporate rights, powers,  franchises or privileges null and
         void,  (c) has full  corporate  power and  authority  and all licenses,
         permits and authorizations
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         necessary  to carry on the  businesses  in which it is engaged,  as now
         being  conducted,  and to own and use the properties  owned and used by
         it,  (d) is  solvent  and not in the  hands of a  receiver,  nor is any
         application  for  receivership  pending,  and (e) does not  contemplate
         insolvency  and  no  proceedings  are  pending  by  or  against  it  in
         bankruptcy  or  reorganization  in any  court,  nor  has it  filed  any
         petition in bankruptcy.  Seller has delivered to Purchaser  correct and
         complete copies of the charter,  notarial deed and other organizational
         documents of the Corporation (as amended to date).  The  organizational
         documents  have  never  been  amended  and,  to the  best  of  Seller's
         knowledge,  no proceeding  has been  instituted  or authorized  for the
         purpose of any such amendment. The minute books (containing the records
         of  meetings  of the  stockholders,  the  board  of  directors  and any
         committees of the board of directors),  the stock certificate books and
         the stock record books of the Corporation are correct and complete.  To
         the best of Seller's  knowledge,  there are no minutes other than those
         contained in the minute book and such books fully, correctly and fairly
         reflect the Corporation's  affairs.  To the best of Seller's knowledge,
         there have been no  meetings of  directors  or  shareholders  except as
         reflected in the minute book of the Corporation. The Corporation is not
         in default  under or in  violation  of any  provision  of its  charter,
         certificate   of   incorporation,   by-laws  or  other   organizational
         documents.

         (vi)  Capitalization.  The  entire  authorized  capital  stock  of  the
         Corporation  consists of 625 common  shares,  one peso par value all of
         are issued and outstanding.  The Shares have been duly authorized,  are
         validly issued, fully paid and nonassessable.  There are no outstanding
         or  authorized  options,  equity  securities  of  any  class  or  kind,
         warrants,  purchase rights,  subscription  rights,  conversion  rights,
         exchange  rights or other  contracts or commitments  that could require
         the Corporation to issue, sell or otherwise cause to become outstanding
         any of its capital stock.  There are no outstanding or authorized stock
         appreciation,  phantom stock,  profit  participation  or similar rights
         with respect to the Corporation.

         (vii)  Noncontravention  by the Corporation.  Neither the execution and
         the  delivery  of  this   Agreement,   nor  the   consummation  of  the
         transactions  contemplated  hereby,  will (a) violate any constitution,
         statute, regulation, rule, injunction, judgment, order, decree, ruling,
         charge or other restriction of any government,  governmental  agency or
         court to which the  Corporation  is  subject  or any  provision  of the
         charter, certificate of incorporation,  by-laws or other organizational
         documents of the Corporation, (b) conflict with, result in a breach of,
         constitute a default under,  result in the  acceleration  of, create in
         any party the right
                                        7
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         to  accelerate,  terminate,  modify,  or cancel,  or require any notice
         under, any agreement,  contract,  lease,  license,  instrument or other
         arrangement to which the Corporation is a party or by which it is bound
         or to  which  any of its  assets  is  subject,  or  (c)  result  in the
         imposition of any security interest,  Charge or encumbrance upon any of
         its assets. The Corporation is not required to give any notice to, make
         any filing with,  or obtain any  authorization,  consent or approval of
         any governmental agency in order for Seller and Purchaser to consummate
         the transactions contemplated by this Agreement.

         (viii) Broker's Fees. The Corporation has no liability or obligation to
         pay any fees or commissions to any broker, finder or agent with respect
         to the  transactions  contemplated  by this  Agreement.  Seller  has no
         liability or obligation to pay any fees or  commissions  to any broker,
         finder or agent with respect to the  transactions  contemplated by this
         Agreement for which Purchaser could become liable or obligated.

         (ix)  Title  to  Assets.  The  Corporation  has  good,  marketable  and
         indefeasible  title to all  properties  and assets owned or used by it,
         located  on its  premises  and shown on the  balance  sheet of the Most
         Recent Financial  Statements (as hereinafter defined) or acquired after
         the date  thereof,  free and clear of all Charges  except as may be set
         forth on the disclosure  schedule annexed hereto and made a part hereof
         as Schedule "A" (the "Disclosure  Schedule").  Seller acknowledges that
         for purposes of this Agreement and the  representations  and warranties
         set forth herein,  nothing in the  Disclosure  Schedule shall be deemed
         adequate to disclose an exception to a representation  or warranty made
         herein unless the  Disclosure  Schedule  identifies  the exception with
         particularity  and  describes  the  relevant  facts in detail.  Without
         limiting  the  generality  of  the  foregoing,  the  mere  listing  (or
         inclusion  of a copy) 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).

         (x) Subsidiaries. The Corporation does not own a majority of the common
         stock or have the power to vote or  direct  the  voting  of  sufficient
         securities  to elect a  majority  of the  directors  of any  entity and
         otherwise has no subsidiaries.

         (xi)  Financial  Statements.  Annexed  hereto and made a part hereof as
         Exhibit "B" are the following financial statements  (collectively,  the
         "Financial  Statements")  (i) audited and unaudited  balance sheets and
         statements of income,  changes in stockholders' equity and cash flow as
         of and for the
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         fiscal years ended December 31, 1992,  December 31, 1993,  December 31,
         1994, and December 31, 1995 (the "Most Recent Fiscal Year End") for the
         Corporation;  and (ii)  unaudited  balance  sheets  and  statements  of
         income, changes in stockholders' equity and cash flow (the "Most Recent
         Financial  Statements")  as of and for the month ended January 31, 1996
         (the "Most Recent Fiscal Month End") for the Corporation. The Financial
         Statements  (including  the notes  thereto)  (a) have been  prepared in
         accordance with the applicable standard of GAAP applied on a consistent
         basis throughout the periods covered thereby,  (b) present  completely,
         fairly and accurately the financial  condition of the Corporation as of
         such dates and the results of  operations of the  Corporation  for such
         periods,  including all of the Corporation's  assets and liabilities of
         every  kind  and  nature,  whether  accrued,  absolute,  contingent  or
         otherwise,  (c) are correct and complete,  and (d) are consistent  with
         the books and records of the  Corporation  (which books and records are
         correct and complete).

         (xii) Events  Subsequent to Most Recent Fiscal Year End. Since the Most
         Recent  Fiscal Year End,  there has not been any adverse  change in the
         business,  financial  condition,  operations,  results of operations or
         future prospects of the Corporation. Without limiting the generality of
         the  foregoing,  since that  date:  (a) the  Corporation  has not sold,
         leased,  transferred  or  assigned  any  of  its  assets,  tangible  or
         intangible,  other than for a fair consideration in the ordinary course
         of business;  (b) the  Corporation  has not entered into any agreement,
         contract, lease or license (or series of related agreements, contracts,
         leases  or   licenses)   either   involving   more  than  Ten  Thousand
         (US$10,000.00)  Dollars or outside the ordinary course of business; (c)
         no party  (including  the  Corporation)  has  accelerated,  terminated,
         modified or cancelled  any  agreement,  contract,  lease or license (or
         series of related agreements,  contracts, leases or licenses) involving
         more than Five Thousand (US$5,000.00) Dollars, to which the Corporation
         is a party or by which it is bound; (d) the Corporation has not imposed
         any security  interest,  charge,  restriction  or  encumbrance or other
         Charge  upon  any  of its  assets,  tangible  or  intangible;  (e)  the
         Corporation has not made any capital  expenditure (or series of related
         capital expenditures)  involving more than Five Thousand  (US$5,000.00)
         Dollars;  (f) the Corporation  has not made any capital  investment in,
         any loan to, or any  acquisition  of the  securities  or assets of, any
         other  person  (or  series of  related  capital  investments,  loans or
         acquisitions)  involving more than Five Thousand (US$5,000.00) Dollars;
         (g) the  Corporation  has not  issued  any  note,  bond or  other  debt
         security or created,  incurred,  assumed or guaranteed any indebtedness
         for borrowed money or capitalized lease
                                        9
<PAGE>
         obligation either involving more than Five Thousand ($5,000.00) Dollars
         singly or Ten Thousand (US$10,000.00) Dollars in the aggregate; (h) the
         Corporation  has not  delayed or  postponed  the  payment  of  accounts
         payable or other  liabilities  outside the ordinary course of business;
         (i) the Corporation has not cancelled,  compromised, waived or released
         any  right or claim (or  series of  related  rights to  claims)  either
         involving more than Five Thousand  (US$5,000.00) Dollars or outside the
         ordinary  course of  business;  (j)  there  has been no change  made or
         authorized in the charter,  certificate  of  incorporation,  by-laws or
         other organizational documents of the Corporation;  (k) the Corporation
         has not  issued,  sold or  otherwise  disposed  of, any of its  capital
         stock, or granted any options,  warrants or other rights to purchase or
         obtain  (including  upon  conversion,  exchange or exercise) any of its
         capital  stock;  (l) the  Corporation  has not  redeemed,  purchased or
         otherwise  acquired any of its capital stock;  (m) the  Corporation has
         not experienced any damage, destruction or loss (whether or not covered
         by insurance) to its  properties;  (n) the Corporation has not made any
         loan  to,  or  entered  into any  other  transaction  with,  any of its
         directors,  officers or employees;  (o) the Corporation has not entered
         into  any  employment  contract  or  collective  bargaining  agreement,
         written or oral, or modified the terms of any such existing contract or
         agreement; (p) the Corporation has not granted any increase in the base
         compensation  of any of its directors,  officers or employees;  (q) the
         Corporation has not adopted, amended, modified or terminated any bonus,
         profit-sharing,   incentive,  severance  or  other  plan,  contract  or
         commitment  for  the  benefit  of  any of its  directors,  officers  or
         employees (or taken any such action with respect to any other  employee
         benefit  plan);  (r) the  Corporation  has not made any other change in
         employment terms for any of its directors,  officers or employees;  (s)
         the Corporation has not made or pledged to make any charitable or other
         capital contribution outside the ordinary course of business; (t) there
         has not been any other occurrence,  event, incident, action, failure to
         act or transaction  outside the ordinary  course of business  involving
         the  Corporation;  (u) the  Corporation has not committed to any of the
         foregoing;  and (v) there has not been an occurrence,  event, incident,
         action,  failure to act or other  transaction  which has or may have an
         adverse  effect  on  the  Corporation   not  heretofore   disclosed  to
         Purchaser.

         (xiii)  Undisclosed  Liabilities.  The  Corporation  has  no  liability
         (whether  known  or  unknown,  asserted  or  unasserted,   absolute  or
         contingent, accrued or unaccrued, liquidated or unliquidated, due or to
         become  due),  and there is no basis for any present or future  action,
         suit, proceeding, hearing,  investigation,  charge, complaint, claim or
         demand against
                                       10
<PAGE>
         the Corporation  giving rise to any material  liability  except for (a)
         liabilities  set forth on the balance sheet  contained  within the Most
         Recent  Financial  Statements,  and (b)  liabilities  which have arisen
         after  the Most  Recent  Fiscal  Month  End in the  ordinary  course of
         business  (none of which  adversely  affect the financial  condition or
         operation of the  Corporation  or results from,  arises out of, relates
         to, is in the nature of or was caused by any breach of contract, breach
         of warranty,  tort,  infringement or violation of law). As used herein,
         "material  liability" means liability or liabilities in an amount equal
         to or exceeding  US$10,000.00 in the aggregate.  All liabilities of the
         Corporation,   whether   disclosed  or   undisclosed,   "material"   or
         non-material, shall be paid and discharged by Seller at or prior to the
         Closing, except the indebtedness evidenced by the Note.

         (xiv) Legal  Compliance.  Each of the  Corporation  and, to the best of
         Seller's  knowledge,  its predecessors has complied with all applicable
         laws, rules, regulations, codes, plans, injunctions, judgments, orders,
         decrees,  rulings and charges of all Mexican and other governments (and
         all agencies and political  subdivisions thereof including the Town and
         City of  Mexicali)  relating  to it, its assets and  properties  and no
         action, suit, proceeding,  hearing,  investigation,  charge, complaint,
         claim, demand or notice has been filed or commenced against any of them
         alleging any failure so to comply.

         (xv)  Tax  Matters.   (a)  The   Corporation  has  filed  all  returns,
         declarations,   reports,   information   returns  or  statements  ("Tax
         Returns")  relating to any Mexican 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,  value added,  alternative or add-on  minimum,
         estimated  and/or  other tax of every kind  whatsoever,  including  any
         interest,   penalty  or  addition  thereto,  whether  disputed  or  not
         (collectively,  "Taxes")  that it was  required  to file.  All such Tax
         Returns were correct and  complete in all  respects.  All Taxes owed by
         the  Corporation  (whether  or not shown on any Tax  Return)  have been
         paid. The Corporation is not currently the beneficiary of any extension
         of time  within  which to file any Tax  Return.  No claim has ever been
         made by an authority in a jurisdiction  where the Corporation  does not
         file Tax  Returns  that it is or may be  subject  to  taxation  by that
         jurisdiction. There are no liens, charges or encumbrances on any of the
         assets of the Corporation that arose in connection with any failure (or
         alleged failure) to pay any
                                       11
<PAGE>
         Taxes;  (b) the Corporation has withheld and paid all Taxes required to
         have been withheld and paid in connection with amounts paid or owing to
         any employee,  independent contractor,  creditor,  stockholder or other
         third party; (c) neither Seller nor Hrudka or a director or officer (or
         employee  responsible for Tax matters) of the  Corporation  expects any
         authority to assess any  additional  Taxes for any period for which Tax
         Returns have been filed.  There is no dispute or claim  concerning  any
         liability for Taxes of the Corporation  either claimed or raised by any
         authority  in  writing  or as to which any of Seller  and  Hrudka,  the
         directors and officers (and employees  responsible  for Tax matters) of
         the  Corporation  has knowledge  based upon  personal  contact with any
         agent of such authority. None of the Corporation's Tax Returns has been
         audited  and none are  currently  the  subject  of  audit.  Seller  has
         delivered to Purchaser  correct and complete copies of all Tax Returns;
         (d) the  Corporation  has not waived  any  statute  of  limitations  in
         respect of Taxes or agreed to any  extension  of time with respect to a
         Tax assessment or deficiency;  (e) the unpaid Taxes of the  Corporation
         (A) did not, as of the Most Recent Fiscal Month End, exceed the reserve
         for  Tax  liability   (rather  than  any  reserve  for  deferred  Taxes
         established to reflect timing differences  between book and Tax income)
         set forth on the face of the balance sheet in the Most Recent Financial
         Statements  (rather than in any notes  thereto),  and (B) do not exceed
         that reserve as adjusted for the passage of time through the Closing in
         accordance  with the past  custom and  practice of the  Corporation  in
         filing  its  Tax  Returns;  and  (f)  if  the  amount  referred  to  in
         subparagraph  (e) above as having been set aside for the  Corporation's
         Taxes for the fiscal year or period  ended  before the Closing is found
         to be  insufficient,  Seller  shall pay  Purchaser  the  amount of such
         deficiency.  If at any time hereafter,  by reason of any examination or
         audit made by the Mexican or other governments, any additional Taxes or
         assessments, with interest or penalties (other than those now set forth
         in the reserve account), are levied or assessed against the Corporation
         for the fiscal year or period ended  before the  Closing,  Seller shall
         forthwith  pay such amounts to  Purchaser.  If the Mexican or any other
         government   makes  or  asserts  any  claim  for  additional  Taxes  or
         assessments against the Corporation for any fiscal year or period ended
         before the Closing,  Seller may employ  Seller's own counsel to contest
         such claims,  and to litigate such claims at Seller's expense.  In such
         case,  however,  Seller shall  indemnify the  Corporation and Purchaser
         against any damage  resulting from the failure to pay such claims while
         such litigation is pending,  and shall pay or discharge such assessment
         or  assessments,  with  interest and  penalties,  as finally  fixed and
         determined.
                                       12
<PAGE>
         (xvi) Contracts.  The Disclosure Schedule lists the following contracts
         and other  agreements  to which  the  Corporation  is a party:  (a) any
         agreement  (or group of related  agreements)  for the lease of personal
         property to or from any person or entity; (b) any agreement  concerning
         a partnership or joint  venture;  (c) any agreement for the purchase or
         sale of supplies,  products,  goods,  materials,  commodities  or other
         personal  property or for the receipt of labor or  services,  including
         the management of the Corporation's  real property,  the performance of
         which will or may extend over a period of more than one year or involve
         consideration in excess of Five Thousand (US$5,000.00) Dollars; (d) any
         agreement (or group of related  agreements) under which the Corporation
         has created,  incurred,  assumed or  guaranteed  any  indebtedness  for
         borrowed money, or any capitalized lease obligation,  or under which it
         has imposed a Charge on any of its assets, tangible or intangible;  (e)
         any agreement  concerning  confidentiality or non-competition;  (f) any
         agreement with either Seller or Hrudka;  (g) any profit sharing,  stock
         option,  stock purchase,  stock  appreciation,  deferred  compensation,
         severance or other plan or  arrangement  for the benefit of its current
         or  former  directors,  officers,  and  employees;  (h) any  collective
         bargaining  agreement;  (i) any  agreement  for the  employment  of any
         individual on a full-time,  part-time,  consulting or other basis;  (j)
         any  agreement  under which it has advanced or loaned any amount to any
         of its directors,  officers or employees; (k) any agreement under which
         the  consequences  of a default  or  termination  could have an adverse
         effect on the business,  financial  condition,  operations,  results of
         operations or future  prospects of the  Corporation;  and (l) any other
         agreement (or group of related  agreements)  the  performance  of which
         involves   consideration  in  excess  of  Five  Thousand  (US$5,000.00)
         Dollars.  Seller has delivered to Purchaser a correct and complete copy
         of each written agreement listed in the Disclosure Schedule (as amended
         to date) and a written  summary  setting forth the terms and conditions
         of each oral  agreement  referred to in the Disclosure  Schedule.  With
         respect to each such  agreement:  (A) the  agreement  is legal,  valid,
         binding,  enforceable  and in full force and effect;  (B) the agreement
         will  continue to be legal,  valid,  binding,  enforceable  and in full
         force and effect on identical terms  following the  consummation of the
         transaction  contemplated hereby; (C) no party is in breach or default,
         and no event has  occurred  which  with  notice or lapse of time  would
         constitute a breach or default, or permit termination, modification, or
         acceleration,  under  the  agreement,  and the  Corporation  has  fully
         performed and observed all terms and provisions of each agreement,  and
         (D) no party has repudiated any provision of the agreement.  There will
         be no commitments, agreements or contracts
                                       13
<PAGE>
         outstanding  as of the  Closing  except as set forth in the  Disclosure
         Schedule.

         (xvii) Notes and Accounts Receivable. All notes and accounts receivable
         of the Corporation,  including the Note, are reflected  properly on its
         books and  records,  are valid  receivables  subject  to no  setoffs or
         counterclaims,  are current and  collectible,  and will be collected in
         accordance with their terms at their recorded amounts,  subject only to
         the reserve  for bad debts set forth on the  balance  sheet of the Most
         Recent Financial  Statement as adjusted for the passage of time through
         the  Closing in  accordance  with the past  custom and  practice of the
         Corporation.

         (xviii) Powers of Attorney. There are no outstanding powers of attorney
         executed on behalf of the Corporation.

         (xix)  Insurance.  The  Disclosure  Schedule  sets forth the  following
         information with respect to each insurance policy  (including  policies
         providing  property,  casualty,  liability  and  worker's  compensation
         coverage and bond and surety arrangements) to which the Corporation has
         been a party, a named insured or otherwise the  beneficiary of coverage
         at any time within the past ten (10) years: (a) the name, address,  and
         telephone number of the agent; (b) the name of the insurer, the name of
         the policyholder,  and the name of each covered insured; (c) the policy
         number  and the  period  of  coverage;  (d)  the  scope  (including  an
         indication of whether the coverage was on a claims made,  occurrence or
         other basis) and amount (including a description of how deductibles and
         ceilings are calculated and operate) of coverage; and (e) a description
         of  any   retroactive   premium   adjustments  or  other   loss-sharing
         arrangements.  With  respect  to each such  insurance  policy:  (A) the
         policy  is,  or  during  the life of such  policy  was,  legal,  valid,
         binding,  enforceable and in full force and effect;  (B) the policy, to
         the extent  currently  in effect,  will  continue  to be legal,  valid,
         binding,  enforceable  and in full force and effect on identical  terms
         following the consummation of the transaction  contemplated hereby; (C)
         neither the  Corporation nor any other party to the policy is in breach
         or default  (including  with  respect to the payment of premiums or the
         giving of notices), and no event has occurred which, with notice or the
         lapse of time,  would  constitute  such a breach or default,  or permit
         termination,  modification or acceleration under the policy; and (D) no
         party  to  the  policy  has  repudiated  any  provision  thereof.   The
         Corporation  has  been  covered  during  the  past  ten  (10)  years by
         insurance in scope and amount customary and reasonable for the business
         in  which  it  has  engaged  during  the  aforementioned   period.  The
         Disclosure Schedule describes any self-insurance arrangements affecting
         the Corporation.
                                       14
<PAGE>
         In  the  event  of  damage  to  or  destruction   of  the   properties,
         appurtenances  or  personal  property of the  Corporation  prior to the
         Closing,  Seller shall make good such damage at Seller's expense and if
         such  damage  is  insured   against,   Seller   shall  be  entitled  to
         reimbursement  for such  expense  out of the net  amount  of  insurance
         proceeds.  Seller shall not take or permit any action,  or omit to take
         any action,  which would or might cause any existing  policies to lapse
         or be  invalidated  or the rights of the  Corporation  thereunder to be
         impaired.

         (xx)  Litigation.  No suit,  proceeding  or  litigation  is  pending or
         threatened  against or relating to the  Corporation or its  properties,
         assets or business.  The  Corporation is not subject to any outstanding
         injunction,  judgment,  order,  decree,  ruling or charge, and is not a
         party or threatened to be made a party to any action, suit, proceeding,
         hearing or investigation  of, in or before any court or  quasi-judicial
         or administrative agency of any Mexican or other jurisdiction or before
         any arbitrator.  None of the Seller,  Hrudka, the directors or officers
         (or  employees  with  responsibility  for  litigation  matters)  of the
         Corporation  knows, or has reasonable grounds to know, of any basis for
         any such action, suit, proceeding,  hearing or investigation or has any
         reason to believe that any such action,  suit,  proceeding,  hearing or
         investigation may be brought or threatened against the Corporation.

         (xxi) Employees.  The Disclosure Schedule lists all persons employed by
         the  Corporation,  their  respective  title, job description and annual
         salary.  There is no contract of employment with any officer,  director
         or employee of the  Corporation  which is not  terminable at will.  The
         Corporation  is not a party to or bound  by any  collective  bargaining
         agreement,  nor has it experienced any strikes,  grievances,  claims of
         unfair labor practices or other  collective  bargaining  disputes.  The
         Corporation  has not committed any unfair labor  practice.  None of the
         Seller,   Hrudka,   the  directors  or  officers  (or  employees   with
         responsibility  for  employment  matters)  of the  Corporation  has any
         knowledge  of  any  organizational   effort  presently  being  made  or
         threatened by or on behalf of any labor union with respect to employees
         of the Corporation.

         (xxii) Employee Benefits.  The Disclosure  Schedule lists each employee
         benefit plan that the Corporation maintains or to which the Corporation
         contributes. Each such plan (and each related trust, insurance contract
         or fund)  complies in form and in operation  in all  respects  with the
         requirements of applicable laws and regulations and orders.
                                       15
<PAGE>
         (xxiii)  Guaranties.  The  Corporation  is not a guarantor or otherwise
         liable for any liability or obligation (including  indebtedness) of any
         other  individual,   partnership,   corporation,   association,  trust,
         unincorporated organization or other entity.

         (xxiv) Environment,  Health and Safety. To the extent applicable to the
         Corporation and its assets and to the best of Seller's  knowledge,  its
         predecessors,  have complied with all Environmental,  Health and Safety
         Laws as hereinafter defined, and no action, suit, proceeding,  hearing,
         investigation,  charge,  complaint,  claim,  demand or notice  has been
         filed or  commenced  against  any of them  alleging  any  failure so to
         comply. Without limiting the generality of the preceding sentence, each
         of the  Corporation  and,  to  the  best  of  Seller's  knowledge,  its
         predecessors, has obtained and been in compliance with all of the terms
         and conditions of all permits,  licenses and other authorizations which
         are required  under  applicable  Mexican  federal,  state and municipal
         environmental and occupational safety and health laws, and has complied
         with  all  other  limitations,   restrictions,  conditions,  standards,
         prohibitions, requirements, obligations, schedules and timetables which
         are  contained  in, all  Environmental,  Health and  Safety  Laws.  For
         purposes  hereof,  "Environmental,  Health and Safety Laws" include all
         laws,  statutes,   rules,   regulations,   codes,  plans,  injunctions,
         judgments,  orders,  decrees,  rulings  and  charges of the  country of
         Mexico, its political subdivisions, departments, agencies, commissions,
         regulatory and quasi-governmental  bodies,  including the Town and City
         of Mexicali,  and to the extent  applicable to the  Corporation and its
         assets,  the  Comprehensive  Environmental  Response,  Compensation and
         Liability Act of 1980,  the Resource  Conservation  and Recovery Act of
         1976,  the  Occupational  Safety  and  Health  Act of 1970,  the  Toxic
         Substances  Control  Act,  the  General Law of  Ecological  Balance and
         Environmental  Protection of 1988,  its  Regulations in the area of (i)
         Environmental  Impact,  (ii)  Prevention  and Control of Air Pollution,
         (iii)  Prevention  and Control of Water  Pollution  and (iv)  Hazardous
         Wastes,  the  National  Waters  Law of 1992  and its  Regulations,  the
         Regulations on Land Transportation of Hazardous Wastes of 1993, the Law
         of Ecological Balance and Environmental Protection of the State of Baja
         California  of  1992,   and  its   Regulations   in  the  area  of  (i)
         Environmental  Impact and (ii) Prevention and Control of Air, Water and
         Soil  Pollution,  the General  Regulations of Safety and Hygiene in the
         Workplace  of  1978,  each as  amended,  and  all  other  laws,  rules,
         regulations,  codes, plans,  injunctions,  judgments,  orders, decrees,
         rulings and charges of federal,  state,  local and foreign  governments
         (and all agencies thereof  including,  without  limitation,  the United
         States Environmental Protection Agency, the Department of
                                       16
<PAGE>
         Environment, Natural Resources and Fisheries, the National Institute of
         Ecology,  the Federal Bureau of Environmental  Protection,  the General
         direction  of  Ecology  of  the  State  of  Baja  California,  and  the
         Department of Labor and Social Welfare) to the extent applicable to the
         Corporation and its assets,  concerning  pollution or protection of the
         environment,  public health and safety,  or employee  health and safety
         including  laws  relating  to (a)  emissions,  discharges,  releases or
         threatened   releases  of   pollutants,   contaminants   or   chemical,
         industrial,  hazardous  or toxic  materials or wastes into ambient air,
         surface  water,   ground  water  or  lands  or  (b)  the   manufacture,
         processing,  distribution, use, treatment, storage, disposal, transport
         or  handling  of  pollutants,  contaminants  or  chemical,  industrial,
         hazardous  or  toxic  materials  or  wastes.  The  Corporation  has  no
         liability, (whether known or unknown, asserted or unasserted,  absolute
         or contingent, accrued or unaccrued, liquidated or unliquidated, due or
         to become due  ("Liability")  and has not  handled or  disposed  of any
         substance,  arranged  for the  disposal of any  substance,  exposed any
         employee or other  individual to any substance or condition or owned or
         operated  any  property  or  facility in any manner that could form the
         basis for any  present or future  action,  suit,  proceeding,  hearing,
         investigation,   charge,   complaint,   claim  or  demand  against  the
         Corporation  giving  rise to any  Liability  for  damage  to any  site,
         location or body of water (surface or  subsurface),  for any illness of
         or  personal  injury to any  employee  or other  individual  or for any
         reason under any  Environmental,  Health and Safety Law. All properties
         and equipment  owned or used in the business of the Corporation and its
         predecessors  are  and  have  been  free of all  hazardous  substances,
         including,  without limitation,  asbestos,  PCB's,  methylene chloride,
         trichloroethylene,  1,2-transdichloroethylene,  dioxins,  dibenzofurans
         and hazardous substances.

         (xxv) Disclosure.  The representations and warranties contained in this
         Article 2 do not  contain  any  untrue  statement  of a fact or omit to
         state  any  fact   necessary  in  order  to  make  the  statements  and
         information contained in this Article 2 not misleading.

         (xxvi) Books and  Records.  If  Purchaser  or the  Corporation,  or the
         representatives  of  either,  at any time  within  one year  after  the
         Closing,  require the aid or assistance of, or  consultation  with, the
         Corporation's   present  accountants  in  connection  with  its  books,
         records,  tax return and reports or financial  transactions  before the
         Closing,  Seller shall make  available the services of its  accountants
         for such purposes at no cost to Purchaser or the Corporation.

3.       REAL PROPERTY
         -------------
                                       17
<PAGE>
(a) Ownership.  The Corporation is, and will be at the Closing, (i) the owner in
fee simple of the real  property  and all  buildings  and  improvements  thereon
situated in the City of  Mexicali,  Baja,  California,  at Calle Villa  Hermosa,
#1300 y Avenida Navolato Guajardo and more particularly described on Exhibit "C"
annexed  hereto  and made a part  hereof  (the  "Property"),  together  with all
hereditaments  and  appurtenances  thereto,  and (ii) the owner of all fixtures,
machinery,  equipment and articles of personal  property  attached to or used in
connection with the Property ("Personal Property").

(b)  Representations  and  Warranties  of Seller.  As a material  inducement  to
Purchaser to execute and deliver this Agreement, and to purchase and pay for the
Shares and the Note,  Seller  represents  and warrants  and,  where  applicable,
covenants, as set forth below. Each of the statements set forth herein are true,
accurate  and  complete  as of the  date of this  Agreement  and  shall be true,
accurate  and  complete  as of the Closing as though made then and as though the
date of Closing were substituted for the date of this Agreement:

         (i) The Corporation has good, marketable,  indefeasible and valid title
         to the  Personal  Property  free and clear of all Charges of any nature
         whatsoever.

         (ii) The Corporation has good,  indefeasible,  insurable and marketable
         title to the  Property,  which title as of Closing will be insured by a
         duly  licensed  reputable  title company in the amount of Three Million
         (US$3,000,000.00)  Dollars,  free and clear of all Charges,  including,
         without  limitation,  all mortgages,  liens,  covenants,  restrictions,
         conditions,  encumbrances,  security  interests,  underlying  or ground
         leases, easements, encroachments and any other matters affecting title,
         other  than the  matters of public  record set forth in the  Disclosure
         Schedule (the "Permitted  Encumbrances").  The Permitted  Encumbrances:
         are  not  violated  by  existing  structures  or  the  maintenance  and
         operation   thereof  or  the  use  of  the  Property  for   industrial,
         manufacturing, warehousing and office purposes, and customary accessory
         uses; do not interfere with the maintenance, use, occupancy or value of
         the Property;  do not render title unmarketable or uninsurable;  and do
         not require the expenditure of monies or other  affirmative acts by the
         Corporation.   In  addition,  the  Property  is  not  burdened  by  any
         covenants,  restrictions,  liens,  rights-of-way  or  easements  not of
         record or utility  easements not limited to within fifteen (15) feet of
         the street line or with any greater  privilege  than keep lines clear a
         distance of not more than fifteen (15) feet.
                                       18
<PAGE>
         (iii)  There is no  mortgage,  deed of trust or other lien or  security
         agreement, instrument or interest encumbering the Property.

         (iv) The  legal  description  for the  Property  contained  in the deed
         thereof describes the Property fully and adequately.  All buildings and
         improvements  are located within the boundary lines of the Property and
         are  not  in  violation   of   applicable   municipal  or   subdivision
         regulations,   including,  without  limitation,  setback  requirements,
         zoning laws or  ordinances.  Neither the Property nor the  buildings or
         improvements  thereon are subject to "permitted  non-conforming use" or
         "permitted non-conforming structure" classifications or encroach on any
         easement which may burden the Property. The Property does not serve any
         adjoining  property  for any purpose  inconsistent  with the use of the
         Property. To the best of Seller's knowledge, in the construction of all
         buildings  and  improvements  on the  Property,  all  applicable  laws,
         ordinances,  rules and  regulations  (including all  applicable  zoning
         laws,  ordinances and  regulations)  of all federal,  local and foreign
         governmental and quasi-governmental  authorities having jurisdiction of
         the Property,  including, without limitation, the country of Mexico and
         its  political  subdivisions,  including the Town and City of Mexicali,
         were  fully  and  faithfully  complied  with.  To the best of  Seller's
         knowledge,  prior to construction of such buildings, plans therefor and
         all other  requisite  data were duly  filed with all  governmental  and
         quasi-governmental  authorities  having  jurisdiction  of the  Property
         including,  without limitation, the country of Mexico and its political
         subdivisions,  including the Town and City of Mexicali. Prior to and in
         the course of the  construction of such  buildings,  all permits needed
         from any  governmental  or  quasi-governmental  authorities  including,
         without  limitation,  from the country of Mexico  and/or its  political
         subdivisions, including the Town and City of Mexicali, were duly issued
         and procured.  Certificates of occupancy were duly issued for each such
         building,  and all of such  certificates of occupancy are in full force
         and  effect.   The  use  of  the  Property  for   industrial,   office,
         manufacturing and warehouse  purposes and all customary  accessory uses
         is currently  permitted under the certificate of occupancy for, and all
         other laws, rules and regulations affecting, the Property. The Property
         is currently in full  compliance  with all  federal,  state,  local and
         foreign laws, rules, ordinances,  orders,  regulations and requirements
         applicable  to the  Property  including  the laws,  rules,  ordinances,
         orders,  regulations and  requirements of the country of Mexico and its
         political  subdivisions,  including the Town and City of Mexicali,  all
         applicable Environmental, Health and Safety Laws (collectively, "Laws")
         and is free of all hazardous substances. No alterations
                                       19
<PAGE>
         have  been  made  to  the  Property  which  would  require  an  amended
         certificate  of  occupancy.  No zoning or other  ordinance is currently
         violated by the  current  use and  maintenance  of all  structures  and
         improvements erected on the Property.

         (v) Seller has not  received  any notice of any  violation  of Laws and
         knows of no facts, circumstances,  conditions, bases or grounds for any
         such  violations.  There are no actions,  suits,  claims or proceedings
         seeking money damages,  injunctive relief, remedial action or any other
         remedy pending or threatened  relating to a violation of Laws.  Seller,
         for the benefit of the Corporation, shall comply with all violations of
         Laws against or affecting the Property,  including  those issued by the
         state or municipal  departments having authority as to lands,  housing,
         buildings,  fire, health and labor conditions,  whether noted before or
         after the Closing,  provided the condition  existed  before the Closing
         and violated the then existing Laws.

         (vi) No  portion of the  Property  is  subject  to or  affected  by any
         assessment  for public  improvements,  whether or not  presently a lien
         thereon.  No notice of pending assessable public improvements issued by
         any  governmental  authority has been served upon the  Corporation.  No
         notice or order by any  governmental or other public authority has been
         served upon the  Corporation or otherwise  issued for  assessments  for
         public  improvements  which  remain  unpaid or which (a)  requires  the
         performance  of any work or the making of any repairs or alterations on
         the  Property  or in the  streets  bounding  thereon  or (b) orders the
         construction,  repair or  alteration of any public  improvements  on or
         about the Property or on the streets  bounding thereon which may become
         a lien on the  Property.  The real estate  taxes for the  Property  are
         currently US$____________ per annum.

         (vii) All buildings, improvements,  facilities and appurtenances are in
         good condition.  All fixtures,  plumbing, air conditioning,  sprinkler,
         heating,  electrical  and other  systems are in good working  order and
         condition.  The roof of each  building at the Property is free of leaks
         and in good  condition.  The basement (if any) of each  building at the
         Property  is,  and at the time of  Closing  will be,  free of  seepage,
         leakage and/or standing water.

         (viii) No person,  firm,  corporation  or other entity has any legal or
         equitable  rights or  interests in or rights to acquire the Property or
         any part thereof.  There are no outstanding  options or rights of first
         refusal to  purchase  the  Property  or any part  thereof  or  interest
         therein.
                                       20
<PAGE>
         (ix) Seller has received no written  notice and has no knowledge of (i)
         any pending or contemplated  annexation or condemnation  proceedings or
         private  purchase in lieu  thereof,  affecting  or which may affect the
         Property,  or any part thereof, (ii) any proposed or pending proceeding
         to change or redefine the zoning  classification  of all or any part of
         the  Property,  (iii)  any  proposed  or  pending  special  assessments
         affecting  the  Property or any portion  thereof,  or (iv) any proposed
         change(s) in any road or grades with  respect to the roads  providing a
         means of ingress and egress to the Property.

         (x) No work has been  performed  or is in progress at, and no materials
         have been furnished to the Property on behalf of the Corporation  which
         might give rise to mechanic's, materialmen's or other liens against the
         Property  or any  portion  thereof.  If any lien for such work is filed
         before  or  after  the  Closing  hereunder,  Seller  on  behalf  of the
         Corporation shall promptly discharge the same at Seller's sole cost and
         expense.

         (xi) No  default,  breach or  violation  exists  under  any  covenants,
         conditions,   restrictions,   rights-of-way,   easements,  obligations,
         agreements or contracts, if any, affecting or all or any portion of the
         Property.

         (xii)  There is no  litigation,  at law or in  equity,  or  proceedings
         before any commission, agency or other administrative authority pending
         or, to the  knowledge of Seller,  threatened  against or affecting  the
         Property or arising out of or by virtue of the Corporation's  ownership
         of the Property.  There is no pending,  and Seller has no notice of any
         threatened, judicial, municipal or administrative proceedings affecting
         the Property or in which the Corporation is or may be a party by reason
         of the ownership of the Property or any portion  thereof.  There are no
         outstanding  decrees,   orders,   awards  or  specific   administrative
         determinations  relating to the Corporation or any part of the Property
         or any other matters adversely  affecting the current use, occupancy or
         value thereof.

         (xiii) All  facilities  have  received all  approvals  of  governmental
         authorities  (including  licenses and permits)  required in  connection
         with the  ownership  or  operation  thereof and have been  operated and
         maintained in accordance with applicable Laws.

         (xiv) There are no parties in possession  of the  Property,  other than
         tenants under leases disclosed in the Disclosure Schedule,  all of whom
         are in possession of space to which they are entitled.
                                       21
<PAGE>
         (xv) The  Property is connected to and supplied as of right by a public
         water system.  The sanitary sewage disposal system and/or septic system
         is located  entirely  within the bounds of the Property and such system
         and all equipment  appurtenant  thereto are in good working order.  All
         facilities  located on the  Property are supplied  with  utilities  and
         other  services   necessary  for  the  operation  of  such  facilities,
         including gas, electricity,  water, telephone, sanitary sewer and storm
         sewer,  all of which  services are installed and operating and adequate
         in accordance  with all  applicable  Laws,  and are provided via public
         roads or via permanent, irrevocable,  appurtenant easements benefitting
         the Property.  All installation and connection  charges have been fully
         paid.

         (xvi) The Property abuts on and has direct vehicular access to a public
         road,  or has  access to a public  road via a  permanent,  irrevocable,
         appurtenant  easement  benefitting  the  Property,  and  access  to the
         Property is provided by paved public  right-of-way  with  adequate curb
         cuts available.

         (xvii) The Property is not located within a "flood plain",  "flood way"
         or "flood hazard area".

         (xviii) Except as set forth in the Disclosure Schedule, no material has
         been manufactured, stored or disposed of on the Property which material
         is a hazardous substance,  toxic waste or other prohibited or regulated
         substance under any Environmental  Health and Safety Laws. With respect
         to  any  such  material  manufactured,  stored  or  disposed  of on the
         Property as set forth on the Disclosure Schedule, (a) all such material
         has  been  removed  from the  Property  and  disposed  of  strictly  in
         accordance  with all applicable  Environmental  Health and Safety Laws,
         (b) any and all remediation work required with respect thereto has been
         fully  and  properly  completed  in  accordance   therewith,   and  (c)
         certification thereof has been duly issued by all applicable regulatory
         or governmental  agencies having  jurisdiction of the Property.  To the
         best  of  Seller's  knowledge  at  no  time  prior  to  or  during  the
         Corporation's  ownership of the Property  were  hazardous  materials or
         waste  disposed of on or about the  Property or  adjacent  thereto;  no
         material or equipment  which contain PCBs exists or is installed on the
         Property;  no storage tanks for gasoline,  petroleum  products or other
         substance  are located  either on the  Property or  underground  at the
         Property;   and  the  Property  is  not  affected  by  any   subsurface
         encroachment of toxic chemicals or waste.

         (xix)  The  Corporation  has  received  no  notice  from  any  insurer,
         insurance underwriter, agency or mortgagee requiring performance of any
         maintenance work with respect
                                       22
<PAGE>
         to the Property in accordance with the terms of applicable  policies or
         agreements, which work has not been completed and paid for.

         (xx) The Property  consists of 272,409  rentable  square feet, of which
         272,409 is rented pursuant to written leases. The leases annexed hereto
         and made a part hereof as Exhibit "D" are true,  accurate  and complete
         copies  of all  leases,  tenancies  and  rights  of  possession  and/or
         occupancy  affecting  the  Property.  There  are no  leases,  occupancy
         agreements  or  other  agreements  for  the  use  or  occupancy  of the
         Property, except those set forth in the Disclosure Schedule and Exhibit
         "D". The rents,  expiration  dates and  securities  listed  therein are
         true,  accurate and complete in all respects.  The rents listed are the
         amounts  actually and currently  being collected and there are no rents
         past due.  There are no  applications,  orders,  protests or complaints
         with reference to rents,  services or equipment pending with any rental
         authority or court and there has been no diminution of services  and/or
         equipment. If any of the rentable space becomes vacant between the date
         of this  Agreement  and the Closing,  the same shall not be relet.  The
         Corporation  shall not modify,  terminate  or amend any lease after the
         date hereof, without Purchaser's prior written consent. With respect to
         each lease listed in the Disclosure  Schedule:  (A) the lease is legal,
         valid,  binding,  enforceable  and in full force and effect and has not
         been modified or amended in any respect; (B) the lease will continue to
         be legal, valid,  binding,  enforceable and in full force and effect on
         identical   terms   following  the   consummation  of  the  transaction
         contemplated hereby; (C) no party to the lease is in breach or default,
         and no event has occurred  which,  with notice or lapse of time,  would
         constitute a breach or default or permit  termination,  modification or
         acceleration  thereunder;  (D) no party to the lease has repudiated any
         provision  thereof;  (E) no tenant has been  granted any  allowance  or
         concession in connection with rents;  (F) only those tenants  indicated
         as lease  tenants  have  leases;  no written  agreements,  except  such
         leases,  have  been  entered  into  with any  tenant  related  to or in
         connection with their occupancy of the Property;  (G) all work provided
         to be done or equipment  to be  furnished  by the  landlord  under such
         leases  has been done or  furnished;  (H) there  are no  deposits  by a
         tenant  as  prepayment  of  rent;  (I)  there  are  no  disputes,  oral
         agreements or forbearance  programs in effect as to the lease;  (J) the
         Corporation has not assigned, transferred,  conveyed, mortgaged, deeded
         in  trust  or  encumbered  any  interest  in  the  leasehold;  (K)  all
         facilities  leased are legally occupied and have received all approvals
         of  governmental  authorities  (including  (i) to the best of  Seller's
         knowledge,  licenses and permits and (ii)  certificates  of  occupancy)
         required in connection with the
                                       23
<PAGE>
         operation  thereof and have been operated and  maintained in accordance
         with all applicable  Laws; (L) all facilities  leased are supplied with
         utilities  and  other  services  necessary  for the  operation  of said
         facilities;  and (M) there are no claims,  counterclaims  or offsets by
         any tenant.  Seller shall deliver to Purchaser  prior to Closing tenant
         estoppel  letters executed by each of the tenants and subtenants of any
         portion  of the  Property  in the form  annexed  hereto and made a part
         hereof as Exhibit "E" and otherwise acceptable to Purchaser.

(c)  Assessments.  If at the Closing  all or any part of the  Property is or has
been affected by any one or more assessments  which are or may become payable in
annual  installments of which the first installment is then a charge or lien, or
has been paid, for the purpose of this Agreement, all of the unpaid installments
of any such  assessment,  including  those  that are due and  payable  after the
Closing,  shall be deemed to be due and payable and shall be paid and discharged
by Seller at the Closing.

4.       REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
         -----------------------------------------------

The Purchaser  hereby  represents and warrants that this Agreement has been duly
executed and delivered by Purchaser and this Agreement constitutes the valid and
legally binding agreement of Purchaser enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy,  insolvency or other
laws  affecting  generally  the  enforceability  of  creditors'  rights  and  by
application of equitable principles.

5.       PRE-CLOSING COVENANTS OF SELLER
         -------------------------------

(a) Undertakings of Seller.  Seller covenants and agrees that from and after the
date of this Agreement and until the Closing, the Corporation shall not: change,
modify or amend its corporate  structure or its  certificate  of  incorporation,
by-laws or other organizational  documents; make any change in the amount of its
authorized or issued shares or redeem,  purchase or otherwise acquire any of its
capital stock; extend the time for payment,  modify or otherwise amend the terms
of the Note;  in any manner sell or encumber  the  properties  or  appurtenances
owned by it; make any  commitment  for  compensation  for services to any of its
officers or directors;  enter into any transaction,  contractual  arrangement or
obligation, or incur any expenses other than in the ordinary course of business;
make or enter into any lease of the Property or  terminate,  modify or amend any
lease thereof; make any agreement of employment or increase compensation payable
or paid by the Corporation to any of its employees or agents;  default under the
Note or any agreement to which the  Corporation is a party or in the maintenance
of all policies of insurance in effect;  default in the filing of any reports or
returns due to any Mexican or foreign authority; or engage in any practice or
                                       24
<PAGE>
take any action outside of the ordinary course of business  consistent with past
custom and  practice  (including  with respect to quantity  and  frequency).  In
addition,  Seller shall (i) operate the business of the Corporation  only in the
normal and  ordinary  manner  consistent  with past  practice;  (ii) operate and
manage the  Property in the  ordinary  course of business and in the same manner
operated and managed to date and perform such necessary repairs and replacements
so that the Property is in the condition required hereunder;  (iii) maintain all
services in connection with the Property as presently maintained; (iv) not cause
or permit any waste or nuisance to or against the Property; (v) pay in full when
due and payable all bills and invoices for labor, goods,  materials and services
of any kind  relating  to the  Property;  and (vi) pay when due and  payable all
installments  due under the Note.  Seller will cause the Corporation to keep its
business and properties  substantially intact, including its present operations,
physical facilities, working conditions and relationships with lessors, lessees,
suppliers, vendors and employees.

(b)  Access.   Seller  shall  permit,  and  cause  the  Corporation  to  permit,
representatives  of Purchaser to have full access to all  premises,  properties,
personnel,  books,  records,  contracts  and  documents of or  pertaining to the
Corporation.

(c) Notice.  Seller shall give  Purchaser  prompt written notice of any material
adverse development causing a breach of any of the  representations,  warranties
or covenants of Seller herein contained,  provided,  however, no such disclosure
shall be deemed to cure any  misrepresentation,  breach of warranty or breach of
covenant.

(d) Removal of Property.  The Corporation covenants and agrees that on or before
Closing,  it will remove its office files and other  personalty  from the locked
office which adjoins Purchaser's leased premises at the Property.

6.       DELIVERY OF CLOSING DOCUMENTS
         -----------------------------

(a) Delivery by Seller.  At the Closing,  Seller shall  deliver to Purchaser the
following:

         (i) certificates  representing the Shares,  each such certificate to be
         duly  endorsed to Purchaser or  accompanied  by a separate  stock power
         duly endorsed for transfer,  with the signature of Seller guaranteed by
         an officer of a national bank or duly  notarized,  and with all revenue
         stamps   necessary  to  transfer  such  Shares  and  the   certificates
         representing such Shares affixed and cancelled;

         (ii) the original  Note,  duly endorsed to Purchaser with the signature
         of Seller guaranteed by an officer of a national
                                       25
<PAGE>
         bank  or  duly  notarized,  together  with  (x)  a  duly  executed  and
         acknowledged    Assignment   of   Note,   with   covenant,    warranty,
         representation  and full recourse  against Seller;  and (y) an estoppel
         letter and  certification of the  Corporation,  signed by an authorized
         officer thereof, certifying that, or confirming, as the case may be (a)
         the Note is in full force and  effect;  (b) the  outstanding  principal
         balance of the Indebtedness,  accrued interest thereon and the terms of
         payment  thereof;  (c) the  maturity  date of the  Note;  (d) the  Note
         constitutes   the  legal,   valid  and  binding   indebtedness  of  the
         Corporation  and is enforceable  and due and payable in accordance with
         its terms;  (e) there exists no off-sets,  defenses or counterclaims of
         any nature  whatsoever  to the  liability  of the  Corporation  for the
         Indebtedness;  (f) the interest  rate payable  under the Note is not in
         excess of the maximum  interest rate which the Corporation is permitted
         by law to contract or agree to pay; and (g) the  Corporation  is not in
         breach or  default  under the Note,  all sums due and owing  thereunder
         have been fully paid and no event has  occurred  which,  with notice or
         lapse of time, would constitute such a breach or default.

         (iii) the minute books of the Corporation  with a complete and accurate
         record  of  all  meetings  and  transactions  of its  shareholders  and
         directors from its inception to the time of Closing;

         (iv) the  Corporation's  share certificate and share transfer books and
         seal;

         (v) deed or deeds  to the  Property,  title  policy  issued  by a title
         insurer  acceptable to Purchaser and all other papers relating to title
         to the Property and all  certificates  of occupancy  for each  building
         owned by the  Corporation  and any other  plans of the  Property or the
         improvements erected thereon in Seller's possessions;

         (vi)  all  original   executed   leases,   together  with  an  estoppel
         certificate  of each tenant in the form required  pursuant to Article 3
         above;

         (vii) all certificates and policies of insurance;

         (viii) copies of all tax returns and reports  filed by the  Corporation
         in the seven (7) years preceding the Closing;

         (ix)  all of  the  Corporation's  books,  records,  papers,  documents,
         agreements,   instruments,   invoices,   bills,  vouchers,   bankbooks,
         checkbooks and books of original account and entry;
                                       26
<PAGE>
         (x) the  certificate  of Seller to the effect that no default exists as
         to any items warranted by Seller hereunder;

         (xi) an opinion  from  counsel to Seller in form and  substance  as set
         forth in Exhibit "F" annexed  hereto and made a part hereof,  addressed
         to Purchaser and dated as of the Closing;

         (xii)  written  resignations  of  each  officer  and  director  of  the
         Corporation,  effective as of the Closing,  together with a certificate
         of  the  Corporation's  resigning  secretary,  duly  certified  by  the
         resigning president and each resigning  director,  certifying that at a
         meeting of the  Corporation's  directors,  duly  called and held and at
         which a  quorum  was  present,  the  resignation  of each  officer  and
         director was accepted and that there were duly elected,  in their place
         as officers and directors,  persons designated in writing by Purchaser;
         and

         (xiii) a  general  release  running  in favor of the  Corporation  from
         Seller,  Hrudka  and each  director  and  officer,  duly  executed  and
         acknowledged  in the form  annexed  hereto  and made a part  hereof  as
         Exhibit "G" (collectively, "Seller Documents").

(b)  Acts of  Seller  at  Closing.  On the  Closing  date,  concurrent  with the
deliveries  provided for in subparagraph (a) above, Seller shall do and cause to
be done all things necessary and proper to cause the Corporation to elect as new
officers and  directors the persons  designated  by Purchaser,  and to cause the
Corporation  to register in the name of and issue to  Purchaser,  or any persons
Purchaser designates, new certificates for the Shares of the Corporation.

(c)  Delivery by  Purchaser.  At the  Closing,  upon  delivery of the Shares and
Seller  Documents  to  Purchaser,  Purchaser  shall  deliver  to Seller the cash
consideration  to be paid to Seller in accordance with the provisions of Article
1 above.

(d) Breach and/or  Failure to Close.  Seller  acknowledges  that (a) neither the
Shares  nor the Note are  readily  marketable,  (b) the  Shares and the Note are
unique,  and (c) Seller's  failure to close in  accordance  with the  provisions
hereof or the breach or inaccuracy of any of the representations,  warranties or
covenants of Seller made herein,  will cause irreparable damage to Purchaser for
which remedies at law will not be adequate.  Seller hereby  consents to a decree
of specific performance entitling Purchaser,  without limiting Purchaser's other
rights or remedies at law, in equity and hereunder,  to specifically enforce all
of the  provisions  of this  Agreement  and all  costs and  expenses,  including
attorneys'  fees, court costs and  disbursements  which Purchaser shall incur in
connection therewith, shall be paid by Seller to Purchaser forthwith upon demand
therefor.
                                       27
<PAGE>
7.       CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
         --------------------------------------------

Without  limiting  Seller's  remedies  under this  Agreement,  the obligation of
Seller  to sell  the  Shares  and the  Note at the  Closing  is  subject  to the
following conditions precedent, one or both of which may be waived by Seller, at
Seller's sole discretion:

         (i) Each of the  representations  and warranties of Purchaser contained
         in Article 4 hereof shall be true and correct in all respects at and as
         of the time of the  Closing  with the same  effect as  though  all such
         representations  and warranties  were made at and as of the time of the
         Closing; and

         (ii)  Purchaser  shall have observed and performed all of the covenants
         on Purchaser's part to be observed and performed through the Closing.

8.       CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
         -----------------------------------------------

Without limiting  Purchaser's  remedies under this Agreement,  the obligation of
Purchaser  to purchase  the Shares and the Note at the Closing is subject to the
following conditions precedent, one or more of which may be waived by Purchaser,
at Purchaser's sole discretion:

         (i) Each of the  representations  and warranties of Seller contained in
         Articles 2 and 3 hereof  shall be true and  correct in all  respects at
         and as of the time of the  Closing  with the same  effect as though all
         such  representations and warranties were made at and as of the time of
         the Closing;

         (ii) Seller shall have  observed and  performed all of the covenants on
         Seller's part to be observed and performed through the Closing;

         (iii) No action,  suit or  proceeding  shall be  pending or  threatened
         before  any court or  quasi-judicial  or  administrative  agency of any
         federal,  state, local or foreign jurisdiction or before any arbitrator
         wherein an unfavorable injunction,  judgment,  order, decree, ruling or
         charge  would or might (A)  prevent  consummation  of the  transactions
         contemplated by this Agreement, (B) cause the transactions contemplated
         by this Agreement to be rescinded  following  consummation,  (C) affect
         adversely  the right of  Purchaser  to own the Shares or the Note or to
         collect all payments due thereunder and to control the Corporation,  or
         (D) affect adversely the right of the Corporation to own its assets and
         to operate its  businesses  and no such  injunction,  judgment,  order,
         decree, ruling or charge shall be in effect;
                                       28
<PAGE>
         (iv) Purchaser shall have obtained on terms and conditions satisfactory
         to  Purchaser  all  of  the  financing  Purchaser  needs  in  order  to
         consummate the  transactions  contemplated  hereby and fund the working
         capital requirements of the Corporation;

         (v)  All  actions  to  be  taken  by  Seller  in  connection  with  the
         consummation   of  the   transactions   contemplated   hereby  and  all
         certificates,  opinions,  instruments and other  documents  required to
         effect  the  transactions  contemplated  hereby  shall  be in form  and
         substance reasonably satisfactory to Purchaser;

         (vi) The  physical  condition of the  Property  and the  buildings  and
         improvements  erected  thereon,  including,   without  limitation,  all
         structural components, roofs, systems, equipment, facilities, utilities
         and  appurtenances  thereof,  shall be satisfactory to Purchaser and no
         unrestored  loss or  damage  by fire or other  casualty  or by  eminent
         domain or  condemnation  proceedings  shall have occurred to all or any
         portion of the Property.  Purchaser  shall be satisfied with the terms,
         covenants and conditions of all leases;

         (vii) A current title report of the Property  issued by a title insurer
         acceptable to Purchaser shall indicate that title to the Property is as
         represented  by Seller  hereunder  and title to the  Property  shall be
         reinsured in such amount as Purchaser  reasonably  determines to be the
         fair market  value of the  Property  under a policy of title  insurance
         which shall (a) insure title to the Property and all recorded easements
         benefitting the Property to be in the Corporation,  subject only to the
         Permitted  Encumbrances,  (b) contain an extended coverage  endorsement
         and ALTA zoning endorsement (or equivalent); (c) contain an endorsement
         insuring  that the  Property  is the same  real  estate as shown on the
         survey  delivered  with  respect  to  the  Property;   (d)  contain  an
         endorsement  insuring  that each street  adjacent to the  Property is a
         public street and that there is direct and unencumbered  pedestrian and
         vehicular  access to such street from the Property;  (e) at Purchaser's
         expense,   contain  an  inflation   endorsement  providing  for  annual
         adjustments  in the  amount of  coverage  corresponding  to the  annual
         percentage  increase,  if  any,  in the  United  States  Department  of
         Commerce Composite Construction Cost Index (Base Year = 95); (f) if the
         Property   consists  of  more  than  one  record   parcel,   contain  a
         "contiguity"  endorsement  insuring that all of the record  parcels are
         contiguous  to  one  another;   and  (g)  contain  a   "non-imputation"
         endorsement  to the effect that title  defects  known to the  officers,
         directors and  stockholders of the owner prior to the Closing shall not
         be deemed "facts known to the insured" for
                                       29
<PAGE>
         purposes of the policy.  Any survey of the Property  shall not disclose
         any survey defect or  encroachment  from or onto the Property which has
         not been cured or insured over prior to Closing; and

         (ix)  All of the  Corporation's  debts,  contractual  arrangements  and
         liabilities,  other than the indebtedness  evidenced by the Note, shall
         have been paid,  extinguished and satisfied,  as the case may be, prior
         to or concurrently with the Closing.

9.       POST-CLOSING COVENANTS
         ----------------------

(a) Further  Action.  If, at any time after the Closing,  any further  action is
necessary or desirable to carry out the purposes of this  Agreement,  Seller and
Purchaser shall each take such further action,  and Seller shall cause Hrudka to
take such further  action  (including the execution and delivery of such further
instruments and documents), as the other reasonably may request, all at the sole
cost and  expense  of the  requesting  party  (unless  the  requesting  party is
entitled to indemnification therefor hereunder).

(b)  Non-Intervention.  Seller  shall not take any action  that is  designed  or
intended  to have the  effect of  discouraging  any  lessor,  lessee,  licensor,
vendor, customer,  supplier or other business associates of the Corporation from
maintaining  the same  business  relationships  with the  Corporation  after the
Closing as it maintained with the Corporation prior to the Closing.  Seller will
refer all inquiries  relating to the businesses or properties of the Corporation
to Purchaser from and after the Closing.

(c)  Confidential  Information.   Seller  shall  treat  and  hold  as  such  all
Confidential   Information  as  hereinafter  defined,  refrain  from  using  any
Confidential  Information except in connection with this Agreement,  and deliver
promptly to Purchaser or destroy,  at the request and option of  Purchaser,  all
tangible  embodiments (and all copies) of Confidential  Information which are in
his or its possession. In the event that either Seller or Hrudka is requested or
required (by oral question or request for  information or documents in any legal
proceeding,  interrogatory,  subpoena,  civil  investigative  demand or  similar
process) to disclose any Confidential Information,  Seller will notify Purchaser
promptly of the request or requirement so that Purchaser may seek an appropriate
protective  order or waive  compliance  with the provisions of this Section.  As
used herein,  "Confidential Information" includes any information concerning the
business, properties or affairs of the Corporation that is not already generally
available to the public.
                                       30
<PAGE>
10.      REMEDIES FOR BREACH OF THIS AGREEMENT
         -------------------------------------

As a material  inducement to Purchaser to execute and deliver this Agreement and
to purchase the Shares and the Note, Seller hereby agrees that:

         (i) All of the  warranties,  representations,  covenants and agreements
         made  by  Seller   herein  shall  be  deemed   continuing   warranties,
         representations,  covenants and agreements  which shall forever survive
         the Closing and the  execution  and  delivery  of all  instruments  and
         documents,  notwithstanding any investigation at any time made by or on
         behalf  of  Purchaser  or  that  Purchaser  had  reason  to know of any
         misrepresentation or breach of warranty at the time of Closing.

         (ii)  Without  limiting  any of  Purchaser's  other  rights or remedies
         including,  without  limitation,  the  right of  specific  performance,
         Seller hereby agrees to and shall  indemnify and hold Purchaser and the
         Corporation, or both, as the case may be, harmless from and against any
         and all losses,  liabilities,  obligations,  demands, damages, actions,
         causes  of  action,  fines,  deficiencies,   penalties,  taxes,  suits,
         proceedings,   liens,  hearings,   investigations,   charges,   claims,
         injunctions,  judgments,  orders, decrees,  rulings, costs and expenses
         (including,  without  limitation,  attorneys'  fees,  court  costs  and
         disbursements) (collectively, "Claims") resulting from, arising out of,
         relating to or in connection with (A) any misrepresentation,  omission,
         breach of warranty or  nonfulfillment  of any  covenant or agreement by
         Seller under or relating to this Agreement; (B) the unenforceability or
         invalidity of the Note or the rate of interest payable thereunder;  (C)
         any Taxes or  assessments  imposed upon the  Corporation  other than as
         reflected on its Tax Returns  previously  filed;  (D) each Liability of
         the  Corporation  (other  than the Note) of any nature  existing  on or
         before   Closing,   (E)  all  liabilities  of  or  claims  against  the
         Corporation arising out of the conduct of its business between the date
         of this Agreement and the Closing date;  and (F) all  liabilities of or
         claims  against  the  Corporation  arising  out of any  suits,  claims,
         demands, obligations, debts, liabilities, contract commitments or other
         matters.  The  provisions  hereof  shall  survive  the  Closing and the
         delivery and acceptance of the Note and the Shares.

         (iii) If any third party shall  notify  Purchaser  with  respect to any
         matter  (a  "Third  Party  Claim")  which  may give rise to a claim for
         indemnification  against  Seller,  then Purchaser shall promptly notify
         Seller thereof in writing; provided, however, that no delay on the part
         of  Purchaser  in  notifying  Seller  shall  relieve  Seller  from  any
         obligation
                                       31
<PAGE>
         hereunder  unless (and then solely to the extent)  Seller is prejudiced
         thereby.  Seller shall have the right to defend  Purchaser  against the
         Third Party Claim with counsel of its choice  satisfactory to Purchaser
         so long as (A) Seller notifies Purchaser in writing within fifteen (15)
         days after  Purchaser  has given  notice of the Third  Party Claim that
         Seller  will  indemnify   Purchaser  from  and  against  any  liability
         Purchaser may suffer  resulting  from,  arising out of, relating to, in
         the nature of, or caused by the Third Party Claim,  (B) Seller provides
         Purchaser  with evidence  acceptable to Purchaser that Seller will have
         the  financial  resources  to defend  against the Third Party Claim and
         fulfill it indemnification  obligations hereunder,  (C) the Third Party
         Claim  involves  only money  damages and does not seek an injunction or
         other equitable relief,  (D) settlement of, or an adverse judgment with
         respect  to, the Third  Party  Claim is not  adverse to the  continuing
         business interests of Purchaser, and (E) Seller conducts the defense of
         the Third Party Claim  actively  and  diligently.  So long as Seller is
         conducting the defense of the Third Party Claim in accordance  with the
         provisions hereof, (i) Purchaser may retain separate  co-counsel at its
         sole cost and expense and participate in the defense of the Third Party
         Claim,  (ii) Purchaser will not consent to the entry of any judgment or
         enter into any settlement with respect to the Third Party Claim without
         the prior written consent of Seller,  and (iii) Seller will not consent
         to the entry of any judgment or enter into any settlement  with respect
         to  the  Third  Party  Claim  without  the  prior  written  consent  of
         Purchaser.  However,  unless Seller fully  complies with the provisions
         hereof,  Purchaser  may defend  against and consent to the entry of any
         judgment or enter into any  settlement  with respect to the Third Party
         Claim in any manner  Purchaser may deem appropriate (and Purchaser need
         not  consult  with,  or obtain any consent  from  Seller in  connection
         therewith);  Seller shall reimburse Purchaser promptly and periodically
         for the costs of  defending  against the Third  Party Claim  (including
         attorneys'  fees,  court  costs and  disbursements);  and Seller  shall
         remain  responsible  for any liability  Purchaser may suffer  resulting
         from,  arising out of,  relating to, in the nature of, or caused by the
         Third Party Claim to the fullest extent provided herein.  The foregoing
         indemnification  provisions  are in addition to, and not in  derogation
         of,  any  statutory,  equitable,   contractual  or  common  law  remedy
         Purchaser may have for Seller's breach of  representation,  warranty or
         covenant.

11.      MISCELLANEOUS PROVISIONS
         ------------------------

(a) 
Notices. Any notice required or permitted to be given under this Agreement shall
be in writing and shall be sent by United States  
                                       32
<PAGE>
registered or certified mail,  postage  prepaid,  return receipt  requested,  by
personal  delivery,   receipt  requested,   or  facsimile  transmission  with  a
confirmation  copy  delivered on the next business day by  recognized  overnight
courier service  addressed as set forth below or to such other person or persons
at such address or addresses as may be designated by written  notice  hereunder.
Notices shall be deemed to be given three (3) business days after mailing in any
post office or branch  post office  regularly  maintained  by the United  States
government, on the date personal delivery or facsimile transmission is effected,
as the case may be:

         (1)  If to Seller:                     Performance Industries, Inc.
                                                2425 East Camelback Road
                                                Suite 620
                                                Phoenix, Arizona 85016
                                                Attention: Mr. Ed Fochtman, Jr.
                                                Facsimile No.: (602) 912-0480

         with a copy to:                        Industrial Brokerage, Inc.
                                                2425 East Camelback Road
                                                Suite 960
                                                Phoenix, Az 85016
                                                Attention: Mr. Jonathan Tratt
                                                Facsimile No.: (602) 468-1808

         (2)  If to Purchaser:                  Markwood, LLC
                                                35 Engel Street
                                                Hicksville, New York  11801
                                                Facsimile No.:  (516) 435-8980

         with a copy to:                        Barry H. Mandel, Esq.
                                                Mandel and Resnik, P.C.
                                                220 East 42nd Street
                                                New York, New York  10017
                                                Facsimile Number: (212) 573-0067

(b) Entire  Agreement.  This  Agreement  and any  documents  referred  to herein
contain the entire  agreement  between the  parties  hereto with  respect to the
transactions  contemplated herein, and no modification hereof shall be effective
unless in  writing  and  signed by the  party  against  which it is sought to be
enforced.

(c)  Further  Action.  At any  time  and from  time to  time,  whether  prior or
subsequent  to the  Closing,  each  of the  parties  hereto,  at its or his  own
expense,  shall take such actions and execute and deliver such  documents as may
be  necessary  or  reasonably  requested by the other party hereto to carry out,
consummate and effectuate the transactions contemplated in this Agreement.

(d) Expenses. Each of the parties hereto shall bear such party's own expenses in
connection with this Agreement and the
                                       33
<PAGE>
transactions  contemplated herein, including,  without limitation,  the fees and
expenses of such party's respective legal counsel.

(e)  Governing  Law.  This  Agreement  shall be  governed  by and  construed  in
accordance  with the laws of the  Country  of Mexico  applicable  in the case of
agreements made and to be entirely performed within such Country.

(f) Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed an original,  but all of which taken together  shall  constitute
one and the same instrument.

(g)  Captions.  The Article and Section  captions  used herein are for reference
purposes only and shall not in any way affect the meaning or  interpretation  of
this Agreement.

(h) Binding  Effect.  This Agreement  shall bind and inure to the benefit of the
parties  and their  respective  heirs,  legal  representatives,  successors  and
permitted assigns.

(i) Waiver.  No waiver of any of the provisions hereof shall be effective unless
in writing  and signed by the party to be charged  with such  waiver.  No waiver
shall be deemed a  continuing  waiver or waiver  in  respect  of any  subsequent
breach or default,  whether of similar or different nature,  unless expressly so
stated in writing.

(j) Assignment. Seller shall not assign this Agreement without the prior written
consent of Purchaser, which consent may be withheld for any reason.

(k)  Severability.  If any  provision  of this  Agreement is found to be void or
unenforceable by a court of competent jurisdiction,  the remaining provisions of
this  Agreement  shall  nevertheless  be binding  upon the parties with the same
effect as though the void or unenforceable part had been severed and deleted.

In witness whereof,  this Agreement has been duly executed by the parties hereto
as of the date first above written.

                                        Seller:

                                        Performance Industries, Inc.


                                        By:____________________
                                        Its:___________________


                                        -----------------------
                                        Joe Hrudka
                                       34
<PAGE>
                                        Purchaser:

                                        Markwood LLC


                                        By:_______________________
                                        Its: Member
                                       35
<PAGE>
                       SCHEDULE OF EXHIBITS AND SCHEDULES
                       ----------------------------------



       Exhibit A                                  Form of Escrow Agreement

       Exhibit B                                  Financial Statements

       Exhibit C                                  Property Description

       Exhibit D                                  Leases

       Exhibit E                                  Form of Estoppel Letter

       Exhibit F                                  Form of Opinion Letter

       Exhibit G                                  Form of General Release

       Schedule A                                 Disclosure Schedule
                                       36
<PAGE>
                             Mandel and Resnik, P.C.
                                Counselors at Law
                              220 East 42nd Street
                            New York, New York 10017
richard m. resnik                (212) 573-0000                  marvin sussman 
barry h. mandel                                                  david f. yahner
robert w. freiman                                                    counsel    
elizabeth d. schrero+                                            
nicholas j. kaiser
     ----                                                             ----

andrew e. hazen
jerry a. montag*
lorrie b. franco                                                     facsimile
valerie pulver                                                     (212)573-0067
edward m. shapiro*                                                 (212)573-0012
scott a. mautner~
david a. nadel+                                          writer's direct number:
frederick c. horwood

*also admitted in new jersey
+also admitted in massachusetts                                    (212)573-0093
~also admitted in connecticut
                                                       March 20, 1997           
VIA FACSIMILE (602) 468-1808                      
AND VIA FEDERAL EXPRESS
-----------------------

Mr. Jonathan Tratt
Industrial Brokerage, Inc.
2425 East Camelback Road
Suite 950
Phoenix, Arizona   85016

                  Re:      Markwood LLC with PerformanceiIndustries, Inc.
                           ----------------------------------------------
                                                  
Dear Jonathan:                                    

Thank  you  for  your  voice   mail   message   of  April  16,   1996.   As  you
requested,iincorderbto:properly    document   the   contract   amendment   which
Performance  Industries,  Inc.  ("PI") has proposed and which is  acceptable  to
Markwood LLC  ("Markwood"),  it is necessary to amend  Section 1(c) of the Stock
Purchase  Agreement  dated as of  February  15,  1996  between PI and  Markwood.
Therefore, Section 1(c) of the Stock Purchase Agreement is hereby deemed deleted
and replaced in its entirety by the following:

"(c)  Closing.  Subject to the  provisions  hereinafter  set forth,  the closing
("Closing") of the  transaction  contemplated by this Agreement shall take place
at the  offices  of Seller or such other  location  agreed  upon by the  parties
hereto,  commencing at 10:00 a.m. on May 15, 1996 (the "Closing Date"),  subject
to the satisfaction or waiver of all conditions  precedent to the obligations of
the parties to  consummate  the Closing.  At the Closing,  Seller and  Purchaser
shall  each  deliver  to  the  other  all of the  documentation  required  to be
delivered  by such  party as set  forth  in  Article  6  below.  Notwithstanding
anything to the contrary  herein  contained,  if (a) Seller shall have satisfied
all of the conditions precedent to Closing required to be satisfied by Seller on
or before the  Closing  Date and is ready,  willing and able to  consummate  the
transaction  contemplated  hereby  in  accordance  with  all  of the  terms  and
conditions  herein set forth and (b) Purchaser shall elect for any reason not to
close on such 
<PAGE>
Mandel and Resnik, P.C.

Industrial Brokerage, Inc.
March 20, 1997
Page -2-


date,  then  Purchaser  shall be  entitled to adjourn the Closing up to July 15,
1996.  In such  event,  Purchaser  shall  pay to Seller  the sum of Two  Hundred
(US$200.00)  Dollars per day (the "Extension  Fee") for each day beyond June 15,
1996 that Purchaser postpones the Closing. At any time after the Closing Date up
to and  including  July 15,  1996,  Purchaser  shall  have the  right to  either
consummate  the  transaction  subject  to and in  accordance  with the terms and
conditions  hereof or to terminate this  Agreement,  in which event Seller shall
forthwith return to Purchaser the Deposit,  plus accrued interest thereon,  less
the  Extension  Fee,  if any,  due from  Purchaser  to  Seller  pursuant  to the
provisions of this subparagraph, and upon such refund being made, this Agreement
shall terminate,  be null and void and of no further force or effect and neither
party   shall  have  any   further   obligations   or   liabilities   hereunder.
Notwithstanding  anything to the contrary herein contained,  if (a) Seller shall
have  satisfied  all of the  conditions  precedent  to  Closing  required  to be
satisfied by Seller on or before July 15, 1996 and is ready, willing and able to
consummate the  transaction  contemplated  hereby in accordance  with all of the
terms and conditions  herein set forth, (b) Purchaser has elected to adjourn the
Closing up to July 15, 1996 as provided above and (c) Purchaser  shall elect for
any reason not to close on or before  July 15,  1996,  then  Purchaser  shall be
entitled to adjourn the  Closing up to August 31,  1996 (the  "Extended  Closing
Date"). At any time after July 15, 1996 up to and including the Extended Closing
Date,  Purchaser  shall  have the right to  either  consummate  the  transaction
subject  to and in  accordance  with  the  terms  and  conditions  hereof  or to
terminate this  Agreement,  in which event Seller may retain the Deposit and the
Deposit shall be deemed  liquidated  damages and this Agreement shall terminate,
be null and void and of no further  force or effect and neither party shall have
any further obligations or liabilities hereunder."

Please confirm PI's acceptance of the foregoing  amendment to the Stock Purchase
Agreement by having an  authorized  representative  of PI execute a copy of this
letter  under the  caption  "Accepted  and Agreed  to:" and return a copy of the
executed letter to me by facsimile and the original by overnight delivery.

Following  countersignature of this letter by Markwood,  we will prepare revised
pages for insertion into the Stock Purchase Agreement.
<PAGE>
Mandel and Resnik, P.C.

Industrial Brokerage, Inc.
March 20, 1997
Page -2-



We are looking forward to a prompt closing of this matter.

                                        Sincerely,



                                        Nicholas J. Kaiser
NJK/sdw
cc:      Mr. Robert Cassalia
         Mr. Nourollah Elghanayan
         Mr. Mehdi Gabayzadeh
         Barry H. Mandel, Esq.



ACCEPTED and AGREED TO:

PERFORMANCE INDUSTRIES, INC.:


By:___________________________


MARKWOOD LLC



By:__________________________
<PAGE>
                                  Markwood LLC
                               135 Engineers Road
                            Hauppauge, New York 11788


                                                                   July 15, 1996



Mr. Jonathan Tratt
Industrial Brokerage, Inc.
2425 East Camelback Road
Suite 950
Phoenix, Arizona  85016

                  Re:  Markwood LLC
                         -with-
                       Performance Industries, Inc.
                       ----------------------------

Dear Jonathan:

Reference is made to that certain Stock  Purchase  Agreement  dated February 15,
1996, between Performance Industries, Inc. ("PI") and Markwood LLC ("Markwood"),
as amended by that  certain  letter  agreement  dated  April 18, 1996 (the Stock
Purchase Agreement and letter agreement are hereinafter collectively referred to
as the
"Agreement").

The parties  desire to further  amend the  Agreement,  effective  as of the date
hereof, by making certain  modifications to the Agreement,  all on the terms and
conditions hereinafter set forth.

1. Capitalized  terms not otherwise  defined herein shall have the same meanings
as set forth in the Agreement.

2.  Section  1(b) of the  Agreement  is hereby  amended by the  deletion  of the
language  after  "The  Purchase  Price  shall be payable  as  follows:"  and the
following shall be inserted in its place:

                  (i) the sum of One Million  (US$1,000,000.00)  Dollars by wire
                  transfer  pursuant  to the  directions  provided  by Seller at
                  Closing,  adjusted  as of the  Closing  Date  (as  hereinafter
                  defined)  pursuant  to Section  1(d)  below,  said One Million
                  (US$1,000,000.00)  Dollars  consisting  of (x)  the sum of One
                  Hundred  Thousand  (US$100,000.00)  Dollars (the "Deposit") on
                  the signing of this letter amendment by wire transfer from the
                  attorney escrow account of Mandel and Resnik,  P.C., which sum
                  is being held pursuant to that certain escrow  agreement dated
                  February  15,  1996  among  Purchaser,  Seller  and Mandel and
                  Resnik, P.C., receipt of which is hereby acknowledged; and (y)
                  the sum of
<PAGE>
                                                                          page 2

                  Nine  Hundred  Thousand  (US$900,000.00)  Dollars,  receipt of
                  which is hereby acknowledged;  and (ii) at the consummation of
                  the Closing in accordance with all of the terms and conditions
                  herein,  the balance of the Purchase Price evidenced by a duly
                  executed  promissory  note  in  the  principal  amount  of Two
                  Million  (US$2,000,000.00)  Dollars, made by Purchaser payable
                  to the order of Seller in the form  annexed  hereto and made a
                  part hereof as Exhibit "A",  together with interest thereon at
                  the rate of Ten (10%)  percent per annum,  payable in eighteen
                  (18) equal consecutive  monthly  installments of principal and
                  interest, commencing August 15, 1996, and on the fifteenth day
                  of each month thereafter.

3.  Section  1(c) of the  Agreement  is hereby  deleted in its  entirety and the
following is inserted as Section 1(c):

                  The closing  ("Closing") of the  transaction  contemplated  by
                  this  Agreement  shall take place at the  offices of Seller or
                  such  other  location  agreed  upon  by  the  parties  hereto,
                  commencing  at 10:00  a.m.  on July  15,  1996  (the  "Closing
                  Date").  At the  Closing,  Seller  and  Purchaser  shall  each
                  deliver to the other all of the  documentation  required to be
                  delivered  by such party as set forth in  Article 6 below.  If
                  Seller shall have satisfied all of the conditions precedent to
                  Closing  required to be  satisfied  by Seller on or before the
                  Closing Date and is ready,  willing and able to consummate the
                  transaction  contemplated  hereby in accordance with the terms
                  and provisions hereof, and in the event the Closing should not
                  occur as a result of a failure of  Purchaser  to  perform  its
                  obligations hereunder,  then the Deposit shall be paid over to
                  the Seller and the Deposit shall be deemed liquidated  damages
                  and this Agreement shall terminate, be null and void and of no
                  further  force or effect  and  neither  party  shall  have any
                  further  obligations  or  liabilities  hereunder.   Otherwise,
                  should the Closing not occur,  the Deposit  shall be paid over
                  to Purchaser.

4.  Simultaneously  with the execution hereof,  Seller shall cause Fabricaciones
Metalicas Mexicanas S.A. (the "Corporation") to execute and deliver to Purchaser
the  Lease  Modification  Agreement  annexed  hereto  and made a part  hereof as
Exhibit "B", and Seller shall cause the  Corporation to give proper legal notice
to  Tecnologias  Internacionales  de  Manufactura,  S.A. de C.V.  ("NASSCO")  
<PAGE>
                                                                          page 3

to vacate, quit and surrender that certain  approximately 100,000 square feet of
outside space that NASSCO is presently leasing from the Corporation  pursuant to
that certain lease dated July 1, 1995, between NASSCO and the Corporation.

5. Seller acknowledges that it has not satisfied all of the conditions precedent
to Closing that are required to be satisfied by it on or before the Closing Date
in accordance with the terms and provisions of the Agreement. Seller agrees that
Purchaser's  willingness  to consummate the Closing as of the Closing Date shall
not be deemed a waiver by  Purchaser  of  Seller's  obligation  to satisfy  said
conditions precedent.  Seller hereby undertakes to prepare,  execute and deliver
to Purchaser such documents,  take such actions and expend such monies which are
necessary in order to satisfy the conditions precedent pursuant to the Agreement
and all of Seller's closing delivery obligations pursuant to Section 6(a) of the
Agreement  within  thirty  (30) days  from the date  hereof,  including  without
limitation  satisfaction of all of the items set forth in the letters of Baker &
McKenzie  dated  February 23, 1996,  March 29, 1996 and April 11, 1996 which are
annexed  hereto and made a part hereof as Exhibit "C".  Seller further agrees to
execute and deliver within three (3) business days of Seller's  receipt  thereof
any  documents  requested  by  Purchaser  from time to time in order to  satisfy
Seller's obligations  pursuant to this paragraph.  All adjustments shall be made
as of the Closing Date. If the amount of any  adjustment  item is not able to be
ascertained  on the Closing  Date, it shall be  apportioned  on a basis which is
agreed to by Buyer and Seller, subject to apportionment following the Closing.

6. It is agreed and understood that neither  Purchaser nor the Corporation shall
sell, transfer,  hypothecate nor otherwise dispose of any material assets of the
Corporation while monies are owed to Seller from Purchaser under the Agreement.

7. Except as otherwise set forth in this letter amendment,  all of the terms and
provisions of the Agreement and related documents shall remain unmodified and in
full force and effect.

8. No  waiver  of any of the  provisions  hereof  shall be  effective  unless in
writing and signed by the party to be charged with such waiver.  No waiver shall
be deemed a continuing  waiver or waiver in respect of any subsequent  breach or
default,  whether of similar or different nature,  unless so expressly stated in
writing.

9. This letter amendment may be executed in any number of counterparts,  each of
which when so executed and  delivered  shall be deemed to be an original and all
of which together shall constitute but one and the same instrument.


Please confirm PI's  acceptance of the foregoing  amendments to the 
<PAGE>
                                                                          page 4

Agreement by having an  authorized  representative  of PI execute a copy of this
letter  under the  caption  "Accepted  and Agreed  to:" and return a copy of the
executed letter to me by facsimile and the original by overnight delivery.


We are looking forward to a prompt closing of this matter.

                                        Sincerely,

                                        Markwood LLC


                                        By:____________________________
                                           Mehdi Gabayzadeh


NJK/sm

ACCEPTED and AGREED TO:

PERFORMANCE INDUSTRIES, INC.



By:___________________________
<PAGE>
                            DEPOSIT ESCROW AGREEMENT
                            ------------------------


Agreement  dated as of February __, 1996, by and among  Performance  Industries,
Inc.  ("Performance"),  with an address at 2425 East Camelback Road,  Suite 620,
Phoenix,  Arizona 85016 (Performance may hereinafter be referred to as "Seller")
and Markwood LLC with an address at 35 Engle Street,  Hicksville, New York 11801
("Purchaser")  (Seller and Purchaser may  hereinafter be jointly  referred to as
"Principal Parties") and Mandel and Resnik, P.C. ("Escrow Agent"),  with offices
at 220 East 42nd Street, New York, New York 10017.


                              W I T N E S S E T H:
                              - - - - - - - - - -

Whereas,  the Principal  Parties have entered into an agreement  dated even date
herewith ("Stock Purchase Agreement") for the sale by Seller to Purchaser of (i)
all of the issued  and  outstanding  capital  stock of  Fabricaciones  Metalicas
Mexicanas,  S.A., a corporation  formed under the laws of Mexico and (ii) all of
Seller's right, title and interest, as payee and obligee, in and to that certain
promissory  note,  dated  ______________,  evidencing  the  indebtedness  of the
Corporation to Seller in the principal  amount of US$2.1 million,  together with
interest thereon,  subject to and in accordance with the terms and provisions of
the Stock Purchase Agreement;

Whereas,  Purchaser  has paid the sum of One  Hundred  Thousand  (US$100,000.00)
Dollars as a contract deposit pursuant to the Stock Purchase Agreement; and

Whereas,  the  Principal  Parties  desire that Escrow  Agent hold such  contract
deposit  ("Escrow  Fund") in trust  pursuant to the terms of this  agreement and
Escrow  Agent is  willing to so hold the  Escrow  Fund  subject to the terms and
conditions hereinafter set forth.

Now, therefore, the parties hereto agree as follows:

1. The Principal Parties hereby jointly and severally  designate Escrow Agent to
receive,  hold and deliver the Escrow Fund and Escrow Agent hereby  accepts such
designation, on the terms and conditions set forth in this agreement.

2. Upon the execution of this agreement, Purchaser has delivered to Escrow Agent
a check,  subject  to  collection,  payable  to the  order of Escrow  Agent,  as
attorneys,  in the amount of $100,000.00,  representing the Escrow Fund.  Escrow
Agent shall  deposit the Escrow Fund in a  federally  insured  interest  bearing
account.  All  interest  or income  earned in respect  of the Escrow  Fund shall
accrue and be paid to such party entitled to payment
<PAGE>
or refund of the  Escrow  Fund  pursuant  to the terms of this  agreement.  Such
interest or income shall be paid by Escrow Agent when the aforementioned payment
or refund is made.

3. If the  transactions  close pursuant to and in accordance with the provisions
of the Stock  Purchase  Agreement,  Escrow Agent is  authorized,  empowered  and
directed to deliver the Escrow Fund to Seller. If the transactions fail to close
pursuant  to and in  accordance  with  the  provisions  of  the  Stock  Purchase
Agreement for any reason whatsoever,  Escrow Agent is authorized,  empowered and
directed to deliver the Escrow Fund to  Purchaser,  less an amount  equal to the
Extension  Fee  which  may be due  from  Purchaser  to  Seller  pursuant  to the
provisions  of the Stock  Purchase  Agreement.  In that event,  Escrow  Agent is
hereby  authorized,  empowered  and  directed to deduct from the Escrow Fund and
deliver to Seller an amount  equal to the  Extension  Fee due from  Purchaser to
Seller.

4. Escrow Agent is hereby  expressly  authorized  and directed by the  Principal
Parties to comply with any and all orders, judgments or decrees relating to this
transaction, and if Escrow Agent obeys or complies with any such order, judgment
or decree it shall not be liable to the Principal Parties or to any other person
by reason of such compliance,  notwithstanding that any such order,  judgment or
decree may be subsequently reversed,  modified,  annulled, set aside or vacated,
or found to have been entered without jurisdiction.

5. In  consideration  of the acceptance of this  agreement by Escrow Agent,  the
Principal  Parties hereby agree,  jointly and  severally,  to indemnify and hold
Escrow  Agent  harmless as to any  liability it may incur to any other person by
reason of its having entered into this agreement, or in connection herewith, and
to  reimburse  Escrow  Agent for all of its  expenses,  including,  among  other
things,  attorneys'  fees  (either  paid to retained  attorneys  or in an amount
representing the fair value of legal services  rendered to itself),  incurred in
connection  herewith  otherwise than in connection  with the  performance of its
ministerial duties hereunder.

6. If any disagreement or dispute shall arise between or among any or all of the
Principal  Parties  and/or any other  persons  resulting  in  adverse  claims or
demands  being made for all or any  portion of the Escrow  Fund,  whether or not
litigation  has been  instituted,  then and in any such event,  Escrow Agent may
refuse to comply with any claims or demands made on or against it for the Escrow
Fund,  in which event Escrow Agent shall  continue to hold the Escrow Fund until
Escrow  Agent  receives  either  (i) a written  notice  or  notices  signed  and
acknowledged by both of the Principal  Parties directing the actions to be taken
with  respect to the Escrow Fund or (ii) as set forth in  paragraph 4 above,  an
order, judgment or decree entered in an action, suit or proceeding in which both
of the  Principal  Parties are parties,  directing  the actions to be taken with
respect to the Escrow
<PAGE>
Fund,  in either of which  events  Escrow  Agent shall then take such actions in
accordance  with such  direction.  Escrow Agent shall not be or become liable in
any way or to any person  for its  refusal  to comply  with any such  claims and
demands unless and until it has received such  direction.  Upon  compliance with
such  direction,  Escrow  Agent  shall be  released  of and  from all  liability
hereunder.

7.  Without  limiting  the  foregoing,  Escrow  Agent  shall have the  following
additional  rights in the circumstances  described in the immediately  preceding
paragraph 6: (a) if Escrow Agent shall have  received a notice  signed by either
of the  Principal  Parties  advising  that a  litigation  between the  Principal
Parties  over the  actions to be taken with  respect to the Escrow Fund has been
commenced,  Escrow Agent may, on notice to the  Principal  Parties,  deposit the
Escrow Fund with the clerk of the Court in which such litigation is pending;  or
(b) Escrow Agent may, on notice to the Principal Parties,  take such affirmative
steps as it may, at its option, elect in order to terminate its duties as Escrow
Agent,  including,  but not  limited  to, the  deposit of the Escrow Fund in its
possession  with a Court of competent  jurisdiction  and the  commencement of an
action for interpleader,  the costs of which action shall be borne,  jointly and
severally,  by  whichever of the  Principal  Parties is the losing  party.  Upon
taking  the  action  described  in  either  clause  (a) or  (b) of the  previous
sentence, Escrow Agent shall be released of and from all liability hereunder.

8. Escrow Agent shall not be responsible or liable in any manner  whatsoever for
(a) the  sufficiency,  correctness,  genuineness  or  validity  of any  document
deposited  with it,  or any  notice  or  demand  given to it, or (b) the form of
execution  of such  document,  notice  or  demand,  or (c)  the  identification,
authority or rights of any person  executing,  depositing or giving the same, or
(d) the terms and conditions of any instrument pursuant to which the parties may
act.

9. Escrow Agent shall not have any duties or  responsibilities  except those set
forth in this agreement,  which the parties agree are ministerial in nature, and
Escrow Agent shall not incur any  liability:  (a) in acting upon any  signature,
notice, demand,  request,  waiver,  consent,  receipt or other paper or document
believed  by Escrow  Agent to be genuine,  and Escrow  Agent may assume that any
person  purporting  to  give  it any  notice  on  behalf  of one or  both of the
Principal  Parties  in  accordance  with the  provisions  hereof  has been  duly
authorized  to do so; or (b) in  otherwise  acting or  failing to act under this
agreement  except in the case of Escrow  Agent's  gross  negligence  or  willful
default.

10.  Escrow  Agent  shall  not be bound  by any  modification,  cancellation  or
rescission of this agreement  unless and until the same is in writing and signed
by all of the parties hereto and a duly executed original or counterpart thereof
has been received by Escrow Agent. In no event, however,  shall any modification
of 
<PAGE>
this  agreement  which  shall  affect  the  rights or duties of Escrow  Agent be
binding on the  Escrow  Agent  unless  Escrow  Agent  shall have given its prior
written consent thereto.

11.  Notwithstanding the substance of this agreement,  Seller agrees that Escrow
Agent may represent  Purchaser as  Purchaser's  counsel in  connection  with any
dispute or any action, suit or other proceeding between the Principal Parties.

12. Any notice to or demand upon Escrow  Agent  shall be  sufficient  only if in
writing and  received by Escrow  Agent  within the  applicable  time periods set
forth herein,  if any.  Notices to or demands upon Escrow Agent shall be sent to
Mandel and Resnik,  P.C., 220 East 42nd Street,  New York, New York,  Attention:
Barry H. Mandel,  Esq., by certified  mail,  return receipt  requested or served
personally upon the foregoing with receipt acknowledged.  Notices and deliveries
from Escrow  Agent to any party  hereto  shall be given in  accordance  with the
provisions of paragraph 13 of this agreement.

13. Any notices and other communications required or permitted to be given under
this agreement shall be in writing and shall be sent by United States registered
or certified  mail,  postage  prepaid,  return receipt  requested or by personal
delivery,  receipt requested, or by facsimile with a confirmation copy delivered
on the second  business day by  recognized  overnight  courier  service,  to the
Principal Parties at their respective addresses set forth above and, in the case
of  Purchaser,  with a copy of each  notice  sent in like  manner to Mandel  and
Resnik, P.C., 220 East 42nd Street, New York, New York 10017,  Attention:  Barry
H.  Mandel,  or at such  other  address  as  either  party may from time to time
designate  to the other party by notice  given in  accordance  with the terms of
this  paragraph.  Notices  shall be deemed given three (3)  business  days after
mailing in any post  office or branch post office  regularly  maintained  by the
United  States  government,  or on  the  date  personal  delivery  or  facsimile
transmission is effected, as the case may be.

14. No waiver  of any of the  provisions  hereof  shall be  effective  unless in
writing and signed by the party to be charged with such waiver.  No waiver shall
be deemed a continuing  waiver or waiver in respect of any subsequent  breach or
default,  whether of similar or different nature,  unless expressly so stated in
writing.

15. The  provisions  of this  agreement  shall  extend to, bind and inure to the
benefit  of each  of the  parties  hereto  and its  respective  heirs,  personal
representatives, successors and permitted assigns, if any.

16. This  agreement  and any documents  executed in  connection  herewith may be
executed  in any  number of  counterparts  and by  different  parties  hereto or
thereto in separate  counterparts,  each of which  counterparts when so executed
shall be deemed to be 
<PAGE>
an original and all of which when taken  together  shall  constitute one and the
same agreement or document.

17. This agreement shall be construed without regard to any presumption or other
rule requiring  construction  or  interpretation  against the party causing this
agreement to be drafted.

18. This agreement,  including all other documents referred to herein which form
a part hereof,  contains  the entire  understanding  of the parties  hereto with
respect to the subject  matter  contained  herein and  therein.  This  agreement
supersedes all prior agreements and understandings  between or among the parties
with respect to such subject matter.

19. This agreement may not be orally  cancelled,  changed,  modified or amended,
and no  cancellation,  change,  modification  or amendment shall be effective or
binding, unless in writing and signed by all the parties to this agreement.

20. If any provision hereof is found to be void and  unenforceable by a court of
competent  jurisdiction,  the  remaining  provisions  of  this  agreement  shall
nevertheless be binding upon the parties with the same effect as though the void
or unenforceable part had been severed and deleted.

21. If any words or phrases in this  agreement  shall have been  stricken out or
otherwise eliminated, whether or not any other words or phrases have been added,
this agreement  shall be construed as if the words or phrases so stricken out or
otherwise eliminated had never appeared in this agreement.

22. Regardless of the place of execution or performance  hereof,  this agreement
shall be governed by and construed in  accordance  with the laws of the State of
New York,  without  giving effect to conflict of laws,  applicable to agreements
made  and to be  performed  entirely  within  such  State.  The  parties  hereby
irrevocably  consent to (i) the  jurisdiction  of the courts of the State of New
York,  subject to venue  requirements,  and (ii) service of process upon each of
the parties hereto by the method prescribed for the giving of notice pursuant to
Section 13 above.

23. Each party hereto  shall  cooperate  and shall take such further  action and
shall execute and deliver such further documents as may be reasonably  requested
by any other  party in order to carry out the  provisions  and  purposes of this
agreement.

24.  Capitalized terms not otherwise defined herein shall have the same meanings
as set forth in the Stock Purchase Agreement.

In witness  whereof,  the parties  hereto have executed this agreement as of the
day and year first above written.
<PAGE>
                                        Performance Industries, Inc., Seller



                                        By:________________________________


                                        Markwood LLC



                                        By:_________________________________





Escrow Agent:

Mandel and Resnik, P.C.


By:_____________________________