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                                                                  EXHIBIT 10.4
 
                              SINTER METALS, INC.
                                50 PUBLIC SQUARE
                           TERMINAL TOWER, SUITE 3200
                              CLEVELAND, OH 44113
 
                                 April 29, 1997
 
GKN plc
7 Cleveland Row
London SW1A 1DB
England
Attention: David J. Turner, Esq.
 
GENTLEMEN:
 
     To assist you in your evaluation (the "Evaluation") of the business and
prospects of Sinter Metals, Inc., a Delaware corporation (the "Company"), in
connection with a possible business combination or similar transaction with the
Company involving the Company's stock or all or a substantial part of the
Company's assets or business (a "Transaction"), the Company is prepared to
furnish to you certain information which is confidential, proprietary or
otherwise not generally available to the public. As a condition to, and in
consideration of, the Company furnishing the Information, you agree as follows:
 
     1. Nondisclosure of Information. The Information will (a) be kept
confidential by you, (b) not be used by you in any manner detrimental to the
Company, and (c) not be used other than in connection with the Evaluation and
the Transaction. You may, however, disclose the Information to your
Representatives, but only if your Representatives reasonably need to know the
Information in connection with the Evaluation. You will (i) inform each of your
Representatives receiving Information of the confidential nature of the
Information and of this letter agreement, (ii) direct your Representatives to
treat the Information confidentially and not to use it other than in connection
with the Evaluation and the Transaction, and (iii) be responsible for any
improper use of the Information by you or your Representatives (including,
without limitation, your Representatives who, subsequent to the first date of
disclosure of Information hereunder, become your former Representatives).
Without the prior consent of the Company or your prior written consent, as
appropriate, or except as otherwise provided herein, you and the Company will
not, and will direct your Representatives not to, disclose to any person (1)
that the Information has been made available to you, (2) that discussions
regarding a Transaction are taking place, or (3) any other facts with respect to
the discussions between you and the Company. The restrictions set forth in the
immediately preceding sentence shall terminate upon the execution of a
Definitive Agreement.
 
     2. Notice Preceding Compelled Disclosure. If you or any of your
Representatives are requested, pursuant to a subpoena, civil investigative
demand or similar process or other oral or written request issued by a court of
competent jurisdiction or a federal, state, local or foreign governmental or
regulatory body or agency, to disclose any Information, you will promptly notify
the Company to permit the Company to seek a protective order or take other
appropriate action. You will also cooperate in the Company's efforts to obtain a
protective order or other reasonable assurance that confidential treatment will
be accorded the Information. If, in the absence of a protective order, you or
any of your Representatives are compelled as a matter of law to disclose the
Information, you will disclose, without liability hereunder, to the party
compelling disclosure only that part of the Information as is required by law to
be disclosed (in which case, prior to such disclosure, you will advise and
consult with the Company and its counsel as to such disclosure and the nature
and wording of such disclosure), and you will use your reasonable best efforts
to obtain confidential treatment for any Information so disclosed.
 
     3. Treatment of Information. As soon as possible upon the Company's written
request or upon a determination to terminate the Evaluation made by you or the
Company (if no Transaction results) you and your Representatives will return to
the Company all tangible Information which has been provided to you and will
destroy (or, at your option, return to the Company) all Information prepared by
you or your
 
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Representatives. Such destruction (or return) will be confirmed in writing to
the Company. Any Information not so destroyed (or returned) will remain subject
to this letter agreement. You hereby acknowledge that you are aware and that
your Representatives have been advised by you that the United States securities
laws prohibit any person who has material non-public information from purchasing
or selling securities of such company or from communicating the information to
any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
 
     4. Public Information. The term "Information" does not include, and this
letter agreement will not apply to, information that (a) is or becomes generally
available to the public through no action by you or your Representatives in
violation of the provisions of this letter agreement, or (b) is or becomes
available to you on a nonconfidential basis from a source, other than the
Company or its Representatives, which you believe, after reasonable inquiry, is
not prohibited from disclosing such portions to you by a contractual, legal or
fiduciary obligation, or (c) you or your Representatives can prove was obtained
as a result of work which is independent of and not based on any of the
Information.
 
     5. No Warranty of Accuracy. You understand that the Company will endeavor
to include in the Information materials it believes to be relevant for the
Evaluation, but you acknowledge that neither the Company nor any Representative
of the Company makes any representation or warranty as to the accuracy or
completeness of any Information except as otherwise provided in the Definitive
Agreement. You agree that neither the Company nor any of its Representatives
will have any liability to you or your Representatives resulting from the use of
the Information by you or any of your Representatives, except, in the case of
the Company, as otherwise provided in the Definitive Agreement. You also agree
that if you determine to enter into the Transaction, such determination will be
based solely on the terms of the Definitive Agreement and on your own
investigation, analysis and assessment of the business to be acquired.
 
     6. Certain Actions. (a) During the course of the Evaluation, you and your
Representatives will only direct your inquiries that are made to the Company
regarding the Transaction to the following directors, officers and employees of
the Company: Joseph W. Carreras, Michael T. Kestner, Ronald A. Campbell and Ian
B. Hessel.
 
     (b) As of the date of this letter agreement, except as previously disclosed
by you to the Company in writing, you confirm that you do not beneficially own
any securities of the Company, whether equity or debt securities, or any direct
or indirect options or other rights to acquire any such securities
("Securities"). If discussions relating to a possible Transaction have been
terminated by either party, you agree that for a period of eighteen months from
the date of this letter agreement, except in accordance with Section 6(d) hereof
or otherwise with the consent of the Company, you will not (A) propose or
publicly announce or otherwise disclose an intent to propose, or enter into or
agree to enter into, singly or with any other person or directly or indirectly,
(i) any form of business combination, acquisition, or other transaction relating
to the Company or any majority-owned affiliate thereof, (ii) any form of
restructuring, recapitalization or similar transaction with respect to the
Company or any such affiliate, or (iii) any demand, request or proposal to
amend, waive or terminate any provision of this paragraph, or (B) (i) acquire,
or offer, propose or agree to acquire, by purchase or otherwise, any Securities,
(ii) make, or in any way participate in, any solicitation of proxies with
respect to any Securities (including by the execution of action by written
consent), become a participant in any election contest with respect to the
Company, seek to influence any person with respect to any Securities or demand a
copy of the Company's list of its stockholders or other books and records, (iii)
participate in or encourage the formation of any partnership, syndicate, or
other group which owns or seeks or offers to acquire beneficial ownership of any
Securities or which seeks to effect control of the Company or for the purpose of
circumventing any provision of this letter agreement, or (iv) otherwise act,
alone or in concert with others (including by providing financing for another
person), to seek or to offer to control or influence, in any manner, the
management, Board of Directors, or policies of the Company.
 
     (c) You further agree that, for a period of eighteen (18) months from the
date of this letter agreement, you will not directly or indirectly solicit for
employment or employ any of the current officers or employees of the Company
with whom you have had contact or who was specifically identified to you during
the period of the Evaluation, without obtaining the prior written consent of the
Company; provided, however, that the
 
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foregoing provision will not prevent you from employing any such person who
contacts you on his or her own initiative without any direct or indirect
solicitation by or encouragement from you.
 
     (d) The Company, prior to entering into an agreement with a third party not
affiliated with the Company pursuant to which such third party would acquire all
or substantially all of the stock or assets of the Company, shall notify you of
such event in order to provide you with a reasonable opportunity to make a
proposal for a Transaction and the terms of subparagraph 6(b)(B)(i) and (iv)
shall be waived solely for the purposes of permitting you to make such a
proposal. For purposes of the immediately preceding sentence, "reasonable
opportunity" shall be as determined by the Board of Directors of the Company, in
its reasonable discretion, based on the circumstances at such time in light of
the Board's fiduciary duties. In addition, such terms shall not be applicable to
the purchase and sale of any securities of the Company by (i) independent
third-party managers of any of your pension or other related employee benefit
plans or (ii) ordinary brokerage or trading transactions by your financial
advisors acting as a securities dealer on behalf of or institutional investors
unaffiliated with you who are purchasing solely for investment purposes, in
either case, only to the extent that any of such persons have not received any
of the Information or do not have knowledge of the existence of a possible
transaction involving the Company, and who are acting as passive investors in
the Company.
 
     (e) The provisions of this Paragraph 6 will survive for the periods stated
above notwithstanding that some or all of the Information has become publicly
disclosed or outdated or that any portion of this letter agreement has become
inoperative as to any portion of the Information.
 
     7. Certain Obligations Only on Definitive Agreement. No agreement providing
for any Transaction will be deemed to exist unless and until a Definitive
Agreement has been executed and delivered by the Company and each of the other
parties thereto, and you hereby irrevocably waive any claims (including, without
limitation, claims related to an alleged breach of contract) in connection with
any Transaction unless and until a Definitive Agreement has been so executed and
delivered and then only in accordance with the terms thereof and applicable law.
Unless and until a Definitive Agreement has been so executed and delivered, none
of the Company or any of its Representatives has any legal obligation to you of
any kind with respect to any Transaction because of this letter agreement or any
other written or oral expression with respect to any Transaction, except, in the
case of this letter agreement, for the matters specifically agreed to herein.
You agree that you will not have any claims against the Company or any of its
Representatives arising out of or relating to any Transaction other than those
claims, if any, arising out of or relating to a Definitive Agreement with the
Company and then only in accordance with the terms of such Definitive Agreement.
 
     8. General Provisions. No failure or delay in exercising any right
hereunder will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right. No document or other action purporting to have been signed
on behalf of or to bind the Company will be operative for purposes of this
letter agreement unless it is in writing and is signed by the Chairman and Chief
Executive Officer, President or a Vice President of the Company while such
person was still in office. This letter agreement will be binding on and inure
to the benefit of the parties hereto and their respective successors and
assigns. In addition, because money damages would not be a sufficient remedy for
any violation of the terms of this letter agreement, the parties hereto will be
entitled to specific performance and injunctive relief as remedies for any
violation, in addition to all other remedies available at law or equity. You
hereby consent to personal jurisdiction in any action brought in any federal or
state court within the State of Delaware having subject matter jurisdiction in
the matter for purposes of any action arising out of this letter agreement. This
letter agreement will be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the principles of conflict of
laws thereof.
 
     9. Exclusivity. Until the earlier of (i) 11:59 p.m. New York City time on
May 2, 1997 or (ii) the date on which a Definitive Agreement is executed,
neither the Company nor any of its Representatives shall, directly or
indirectly, encourage, solicit, initiate or participate in any way in any
discussions or negotiations with, or provide any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any corporation,
partnership, person or other entity or group (other than you and your
Representatives) with respect to any tender offer, merger, consolidation,
business combination, liquidation, reorganization, sale of significant assets,
sale of shares of
 
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capital stock or similar transactions involving the Company or any subsidiary or
any division of any thereof and shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
 
     10. Certain Definitions. As used in this letter agreement, (a) the terms or
phrases "affiliate," "beneficial owner," "election contest," "equity security,"
"group," "participant," "person," "proxy," "security," and "solicitation" (and
the plurals thereof) will be ascribed a meaning no less broad than the broadest
definition or meaning of such terms under the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder, (b) the term
"Company" and any word referring to the Company includes the Company and its
affiliates, (c) the term "you" and "your" includes the entity named as the
addressee of this letter agreement and its affiliates, (d) with the exceptions
that are set forth in Section 4 hereof, the information concerning the Company
furnished to you as contemplated by this letter agreement, whether furnished by
the Company or any of its Representatives, together with all written or
electronically stored documentation prepared by you or your Representatives
based upon, reflecting or incorporating, in whole or in part, such information
or the Evaluation is herein referred to as the "Information," (e) any director,
officer, employee, agent, lender, partner or representative, including, without
limitation, any accountant, attorney, and financial advisor, is herein referred
to as a "Representative," and (f) a definitive, written agreement providing for
a Transaction that is executed by us and you and that states it is intended to
be binding is herein referred to as a "Definitive Agreement;" provided, however,
that a Definitive Agreement does not include a letter of intent or any other
preliminary agreement, whether or not executed, nor does it include any actual
or purported written or verbal acceptance of any offer or bid.
 
     Please sign and return one copy of this letter agreement to evidence your
acceptance of and agreement to the foregoing, whereupon this letter agreement
will become the binding obligation of each of the undersigned.
 
                                            SINTER METALS, INC.
 
                                            By: /s/  Joseph W. Carreras
                                            ------------------------------------
                                            Name: Joseph W. Carreras
                                            Title: Chairman and Chief Executive
                                            Officer
 
Accepted and agreed to as of
the date first above written:
 
GKN plc
 
By: /s/  David J. Turner
------------------------------------
Name: David J. Turner
Title: Finance Director
 
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