UNITED STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549




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FORM 10-K

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|----------------------------------------------------------------------------------------------------------------
|FOR ANNUAL AND TRANSITION REPORTS PURSUANT
        TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



|(Mark One)
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|                                          |                                                                                             
|----------------------------------------- | --------------------------------------------------------------------------------------------
|[X]                                       | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
        THE SECURITIES EXCHANGE ACT OF 1934
|For the Fiscal Year Ended January 1, 2000



|      |                                                                                                 
|----- | ------------------------------------------------------------------------------------------------
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934
|      | For the Transition Period from                                                                  

Commission File Number 333-29141

MMI PRODUCTS, INC.


(Exact name of registrant as specified
  in its charter)


|                                                 |  |                               
|------------------------------------------------ |  | ------------------------------
|                                                
|                                                
|                                                
|                                                
|Delaware                                         |  | 74-1622891                    
|(State or
        other jurisdiction of          |  | (I.R.S.
        Employer      
|incorporation
        or organization)           |  | Identification
        Number)
|                                                
|515 Greens
        Road, Suite 710               |  |                               
|Houston,
        Texas                           |  | 77067                         
|(Address
        of principal executive offices) |  | (Zip code)                    
|                                                 |  |                               

Securities registered pursuant to Section 12(b) of the Act:
    None

Securities registered pursuant to Section 12(g) of the Act:
    None

Indicate by check mark whether the registrant (1) has filed
    all reports required to be filed by Section 13 or 15(d) of the Securities
    Exchange Act of 1934 during the preceding 12 months (or for such shorter period
    that the registrant was required to file such reports), and (2) has been subject
    to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers
    pursuant to Item 405 of Regulation S-K is not contained herein, and will not
    be contained, to the best of registrant's knowledge, in definitive proxy or
    information statements incorporated by reference in Part III of this Form
    10-K or any amendment to this Form 10-K. [X]

The common stock of the registrant is not publicly registered
    or traded and, therefore, no market value whether held by affiliates or non-affiliates,
    can be readily ascertained.

There were 252,000 shares of the Registrant's Class A Common
    Stock outstanding as of the close of business on March 30, 2000, all of which
    are held by Merchants Metals Holding Company.

DOCUMENTS INCORPORATED BY REFERENCE
    NONE



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Part I

Item 1. Business

General

MMI Products, Inc. ("MMI"), a Delaware corporation and a wholly owned
  subsidiary of Merchants Metals Holding Company ("MMHC"), was organized
  in 1953. MMI was acquired by Citicorp Venture Capital, Ltd. and members of MMI's
  management in 1986.

MMI is a leading manufacturer and distributor of products used in the commercial,
  infrastructure, and residential construction industries. MMI has established
  leading market positions in the fence and concrete construction industries by
  combining efficient manufacturing, high quality and broad product offerings
  and extensive distribution capabilities. MMI employs a combination of state-of-the-art
  and traditional production methods to achieve cost efficiencies in its manufacturing
  processes. In addition, while MMI's manufacturing facilities are geared primarily
  toward high-volume, standardized production to promote efficiencies, many of
  MMI's manufacturing facilities are capable of producing customized products
  in response to specific customer requirements or applications that are unique
  to particular geographic regions of the United States. Consequently, each plant
  is configured to serve as both a high-volume producer of standard products and
  a job lot producer of specialty products. MMI also benefits from raw material
  purchasing efficiencies because the majority of manufactured products are produced
  from the same raw material.

MMI has developed an extensive and well-positioned distribution network, consisting
  of 82 company-operated distribution centers, located in 33 states. MMI's distribution
  network services over 5,000 customers, including construction contractors, fence
  wholesalers, industrial manufacturers, highway construction contractors and
  fabricators of concrete reinforcing bar. In addition to serving customers nationwide,
  distribution centers and production facilities are well positioned to serve
  areas of high population and construction growth. MMI currently has manufacturing
  or distribution facilities in each of the ten states with the largest projected
  increases in population through 2025. MMI manufactures its products from 23
  principal manufacturing facilities strategically located throughout the United
  States.

Acquisitions

Historically, a significant portion of MMI's growth has been achieved through
  acquisitions. Since 1989, MMI has completed eighteen acquisitions, including
  eleven in the past four years, which have substantially increased MMI's net
  sales and EBITDA. MMI completed two acquisitions in 1999 and one acquisition
  early in 2000.

On June 7, 1999, MMI purchased certain assets of the wholesale fence division
  of National Wholesale Fence Supply, Inc. ("National Wholesale") for
  cash of approximately $13.2 million, which was funded by the revolving credit
  facility. The operations acquired include a manufacturer of ornamental iron
  fence products in San Fernando, California and distributors of fence products
  in California. MMI entered into subleases for the ornamental iron fence manufacturing
  plant and the four distribution locations. The acquisition was accounted for
  as a purchase. The excess of the purchase price over the preliminary estimate
  of the fair value of the assets acquired of $2.9 million is being amortized
  over 20 years. The consolidated financial statements include the results of
  the former National Wholesale operations from the date of the acquisition.

2

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On December 30, 1999, MMI purchased certain assets of Reforce Steel and Wire
  Corporation for cash of approximately $3.4 million, which was funded by the
  revolving credit facility. The operations acquired include a manufacturer of
  concrete accessories parts in Brooklyn, New York. The acquisition was accounted
  for as a purchase. The excess of the purchase price over the preliminary estimate
  of the fair value of the assets acquired of $1.7 million is being amortized
  over 20 years.

On February 3, 2000, MMI purchased all of the issued and outstanding capital
  stock of Hallett Wire Products Company, a Minnesota corporation ("Hallett").
  Hallett manufactured welded wire mesh at facilities located in St. Joseph, Missouri
  and Kingman, Arizona. Hallett had net sales of approximately $37 million for
  the year ended December 31, 1999. The total acquisition price was $40 million
  in cash and was funded by the Company's revolving credit facility. To facilitate
  the purchase, the revolving credit facility was increased from $48.5 million
  to $75 million on February 3, 2000.

Business Segments

MMI reports the results of its operations in two business segments. Financial
  information for each business segment is disclosed in Note 12 of Notes to Consolidated
  Financial Statements.

The Fence and Concrete Construction Products segments share common factors
  in relation to seasonality of business and raw materials.

Seasonality and Cyclicality. MMI's products are used in the residential,
  commercial and infrastructure construction industries. These industries are
  both cyclical and seasonal, and changes in demand for construction services
  have a material impact on sales and profitability. Although MMI believes that
  a cyclical downturn is inevitable, MMI has implemented the following strategies
  which it believes will mitigate the impact of any such downturn on its future
  operating results and liquidity:

· Increased the focus on products used in the commercial and infrastructure
  construction industries, which historically have been less cyclical than the
  residential construction industry.
  · Positioned Concrete Construction Products segment to benefit from anticipated
  increases in infrastructure spending.
  · Expanded distribution network to serve diverse areas of high population
  growth, as well as to limit the effects of any regional economic downturns.

As a result of seasonality, the highest level of sales and profitability occur
  during the times of the year when climatic conditions are most conducive to
  construction activity. Accordingly, sales will typically be higher in the second
  and third quarters.

Raw Materials. MMI's manufactured products are produced primarily from
  steel rod. Because both business segments require large quantities of the same
  raw material, MMI purchases steel rod in significantly larger quantities than
  would be the case if the business segments were part of separate stand-alone
  enterprises. Because of such large volume purchases, MMI believes that it typically
  purchases steel rod at a cost below industry standard. Since steel rod cost
  comprises a substantial portion of cost of goods sold (approximately 25% in
  fiscal year 1999), MMI believes such cost savings provide a significant competitive
  advantage.

3

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Generally, 50% to 60% of annual steel rod purchased has been produced overseas.
  MMI purchases steel rod from several suppliers overseas and in the United States.
  The ample availability of steel rod provides MMI with many purchasing options
  and as such MMI is not reliant on any one supplier.

MMI will normally negotiate quantities and pricing on a quarterly basis for
  both domestic and foreign steel rod purchases. Because all agreements for the
  purchase of steel rod, whether foreign or domestic, are denominated in United
  States dollars, there is no exposure to significant risks of fluctuations in
  foreign currency exchange rates with respect to such agreements.

Fence Segment

The Fence segment is made up of three operating entities, Merchants Metals,
  Security Fence and Anchor Die Cast. Merchants Metals is headquartered in Houston,
  Texas with the operations segregated and managed by geographic divisions. Security
  Fence is a manufacturer and distributor of a variety of fence products and is
  located in Bladensburg, Maryland. Anchor Die Cast, a small manufacturer and
  distributor of fence fittings, is located in Harrison, Arkansas. The Fence segment
  contributed 56.3%, 49.7% and 51.2% of consolidated net sales in fiscal years
  1999, 1998 and 1997, respectively.

Products. The Fence segment manufactures galvanized and vinyl coated
  chain link fence fabric, a full line of aluminum die cast and galvanized pressed
  steel fittings, and vinyl coated colored pipe, ornamental iron fence products,
  and vinyl fencing. These products are manufactured at ten principal facilities.

The segment also distributes a variety of fence products that it purchases
  from third parties. Such products include pipe, tubing, wood, vinyl, aluminum,
  and ornamental iron fence products, gates, hardware, and other related products.
  The segment also assembles wooden fence panels for residential fences at several
  of its facilities.

Fence products are used in a variety of applications. The chain link fence
  products primarily serve as security fencing at residential, commercial and
  governmental facilities, including manufacturing and other industrial facilities,
  warehouses, schools, airports, correctional institutions, military facilities,
  recreational facilities, swimming pools and dog kennels. PVC color coated wire,
  together with vinyl coated colored pipe, tubing and fittings, are used primarily
  for tennis courts and other residential applications. The segment also offers
  other fence products that are used primarily in the construction of wood, vinyl,
  aluminum or ornamental iron fence systems, and in the construction of all sizes
  and styles of fence gates for the residential and commercial markets.

In fiscal year 1999, approximately 50% of the Fence segment sales represented
  products manufactured by the segment. The remaining fence products were purchased
  as finished goods from third parties for distribution. Purchases of finished
  fence products are primarily from domestic manufacturers. MMI believes that
  its full line of fence products provides a competitive advantage by enabling
  it to provide "one-stop shopping" to its customers, thereby promoting
  customer loyalty.

4

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Production Process. The chain link fence manufacturing process is virtually
  the same at each manufacturing facility. The dominant manufacturing process,
  which is known as "GAW" or "galvanized after weaving", involves
  three steps.

· The first step, wire drawing, transforms steel rod into steel wire,
  primarily ranging in thickness from 12.5 gauge (.095 inches) to 6.0 gauge (.192
  inches).
  · In the second step, the wire is woven into chain link fabric by automated
  fabric weaving machines pre-set to a specific width (which ranges from three
  to 20 feet) of chain link fence fabric and to a specific "diamond"
  size ranging from 3/8 inch to 2 3/8 inches.
  · The third step consists of the galvanizing process which involves coating
  the surface of the steel wire with zinc to provide, among other things, corrosion
  protection.

The segment also produces other types of coated wire fabric, including polyvinyl
  chloride or "PVC" coated, aluminum coated, and galvanized before weaving
  ("GBW"). In addition, vinyl coatings are applied to the pipe, tubing,
  and fittings used with vinyl coated chain link fabric. Anchor Die Cast manufactures
  a full line of aluminum die cast and galvanized pressed steel fittings.

Sales and Marketing; Principal Customers. The Fence segment sells fence
  products principally to fence wholesalers and residential and commercial contractors.
  Although some sales of fence products are through home centers, such sales are
  not a primary focus of sales efforts. No one customer accounted for more than
  10% of the Fence segment revenues in fiscal year 1999.

The segment's dedicated sales force consists of approximately 84 employees
  whose sales territories cover the 48 contiguous states. Sales generally are
  made through 56 regional distribution centers (nine of which are located at
  manufacturing facilities), which are located in 30 states. Because customer
  orders typically require rapid turn-around time, the distribution centers are
  strategically located near customers' facilities. The segment also distributes
  its fence products through a network of 363 authorized dealers located throughout
  the country.

Competition. The Fence segment's major national competitor is Master-Halco,
  Inc., which has a more extensive distribution network than MMI. MMI believes,
  however, that its more extensive fence manufacturing capabilities provide an
  advantage to some major accounts. The segment also competes with two strong
  regional competitors, one of which operates primarily on the East Coast, with
  particular emphasis on Florida, and one of which operates only manufacturing
  facilities (with no internal distribution network) primarily east of the Rocky
  Mountains. The remaining competitors are smaller regional manufacturers and
  wholesalers.

Although the ability to sell fence products at a competitive price is an important
  competitive factor, MMI believes that other factors, such as perceived quality
  of product and service and ability to deliver products to customers quickly,
  are also important to its fence customers. MMI believes that its reputation
  for quality and service and its ability to deliver product quickly due to the
  locations of its 56 fence distribution centers, enable MMI to obtain a slight
  premium in its sales price for fence products, as compared to its principal
  competitors.

5

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Concrete Construction Products Segment

The Concrete Construction Products segment is made up of two operating entities,
  Ivy Steel and Wire and Meadow Burke Products. Ivy is headquartered in Houston,
  Texas and Meadow Burke is headquartered in Tampa, Florida. Both companies segregate
  their management and operations by geographic region. The Concrete Construction
  Products segment contributed 43.7%, 50.3% and 48.8% of consolidated net sales
  in fiscal years 1999, 1998 and 1997, respectively.

Products. Concrete construction products include various classes of
  wire mesh, which serve as a structural reinforcing grid for concrete construction,
  including concrete pipe, roads, bridges, runways and sewage and drainage projects.
  In addition, the segment produces over 2,000 specialized accessories used in
  concrete construction, including products used to position and install steel
  reinforcing bar and wire mesh reinforcing grid.

The segment manufactures three principal classes of wire mesh, consisting of
  commodity building mesh (Class B-2), pipe mesh (Class C), and structural mesh
  (Class D). The wire mesh is produced from wire that ranges in size from 1/8-inch
  diameter to 3/4-inch diameter, in both smooth and deformed patterns.
  Class B-2 mesh is a commodity building mesh used in housing and light commercial
  construction, including driveways, slab foundations and concrete walls. Class
  C mesh is used to construct reinforced concrete pipe for, among other things,
  drainage and sewage systems and water treatment facilities. Ivy has been producing
  pipe mesh for over 40 years. Class D mesh is a structural wire mesh that is
  designed as an alternative to steel reinforcing bar for certain types of concrete
  construction, including roads, bridges and other heavy construction projects.
  Structural mesh is marketed as a cost-effective alternative to steel reinforcing
  bars. Although structural mesh has a higher initial cost to the customer than
  does steel reinforcing bar, MMI believes that the overall construction cost
  to the customer is generally lower if structural mesh is utilized. The segment
  also manufactures galvanized strand wire which is used by manufacturers and
  processors of all types of wire products, including shelving, household and
  automotive products.

The concrete accessory products include supports for steel reinforcing bars
  and wire mesh, form ties and related products, basket assemblies (including
  welded and loose dowel basket assemblies), anchors and inserts (including imbedded
  attachments and lifting devices, composite structural wire members and prestress
  strand hold down anchors) and bracing devices for holding in place tilt-up concrete
  walls. Although the segment manufactures most of its concrete accessories, certain
  products, such as plastic supports for steel reinforcing bar and certain types
  of form ties, are purchased from third parties for distribution by the segment.
  New products are continually introduced in an effort to provide a full line
  of concrete accessories to customers.

Concrete accessories are used in a variety of applications. Supports are used
  to position and install steel reinforcing bars and wire mesh in the construction
  of roads, bridges and other heavy construction projects. Welded and loose dowel
  basket assemblies are used to reinforce joints between concrete pieces in the
  paving of roads, highways, and runways. Anchors and inserts are used to fasten
  and lift precast panels and floor panels in the construction of, among other
  things, commercial buildings.

6

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In fiscal year 1999, approximately 92% of the segments sales represented manufactured
  products. The remaining 8% of segment sales were purchased as finished goods
  for resale through 18 regional distribution facilities.

Production Process. The Concrete Construction Products
  segment manufactures its products at 14 principal facilities, which are strategically
  located throughout the United States. Wire mesh is manufactured with wire that
  ranges in size from 1/8-inch diameter to 3⁄4-inch diameter, in both smooth
  and deformed patterns. The wire mesh is manufactured from low-carbon steel rod,
  which is cleaned by removing "mill scale" by passing the rod through
  a series of pulleys that mechanically descales the rod. The rod is then pulled
  through a die that reduces the area of the rod approximately 30 percent. This
  "cold working" process produces wire that is clean, uniform in diameter
  and nearly 100 percent stronger than the original rod. The wire is then processed
  into the finished product using automatic welding machines. This method of welding,
  known as electrical resistance welding, produces a very strong welded joint
  without weakening the steel as much as electrode welding.

Certain aspects of the production process vary depending on the class of mesh
  being produced. Commodity building mesh generally is produced in roll and sheet
  form and is made with small diameter wire. Pipe mesh generally is custom-made
  to customer specifications. Additional steps in the process of producing structural
  wire mesh often include bending the mesh to precise shapes, cutting the exact
  sizes and preparing the surface to allow for the application of special coatings.

The concrete accessory manufacturing process also consists of drawing steel
  rod into wire that is then fed into automatic forming and resistance welding
  machines which produce the finished product. Additional manufacturing processes
  include various punch press operations, threading, machining, painting and plastic
  and epoxy coating of products. In addition to steel rod, which is the primary
  raw material for concrete accessories, other raw materials are used such as
  round bar stock, slit steel coils, reinforcing steel bars and paints, plastisol
  and epoxy powder used for various coatings.

Sales and Marketing; Principal Customers. The segment sells its products
  principally to construction products distributors, industrial manufacturers
  (such as pre-casters of concrete products), large reinforcing bar fabricators,
  commercial building supply dealers and construction contractors.

The specialized sales force for the wire mesh product line consists of approximately
  12 employees whose sales territories cover the 48 contiguous states. Members
  of the wire mesh sales force generally have engineering backgrounds which permit
  them to consult with customers regarding product specifications. Because orders
  for wire mesh products typically do not require the quick turn-around time that
  is required for concrete accessories, wire mesh products are shipped directly
  from one of the eight wire mesh manufacturing facilities to the customer, generally
  in truckload quantities. Most wire mesh production is in response to particular
  customer orders. Light wire mesh used for residential construction, however,
  is produced in standard patterns in anticipation of customer orders.

The dedicated sales force for concrete accessories consists of approximately
  35 employees whose sales territories cover the 48 contiguous states. Concrete
  accessories are distributed primarily through 18 regional distribution centers
  (six of which are located at concrete accessories manufacturing facilities).
  Because orders for concrete accessories typically require rapid turn-around
  time, these distribution centers are strategically located near customers' facilities.

7

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No one customer accounted for more than 10% of the Concrete Construction Products
  segment revenues in fiscal year 1999.

Competition. The segment's major competitor for wire mesh is Insteel
  Wire Products, Inc. The segment faces strong regional competitors in Midwestern,
  Southeastern, and Mid-Atlantic states. There is also competition from smaller
  regional manufacturers and wholesalers of wire mesh products.

The concrete accessories product line faces competition from several significant
  competitors. Dayton-Superior Corporation is the leading full line national participant
  in the concrete accessories market, with a market share greater than that of
  MMI. The segment also faces strong full line competition from a regional competitor
  and from two other significant competitors, who offer a more limited number
  of products.

MMI believes that its ability to produce a greater variety of wire mesh products
  in a wider geographical area provides an advantage to major accounts. MMI believes
  that its willingness and ability to provide custom-made products that fit its
  customers' individual needs provide a competitive advantage. For concrete accessories,
  MMI believes that price, extensive product selection and ability to deliver
  product quickly are the principal competitive factors.

MMI believes that its raw material costs (which MMI believes are lower than
  many of its competitors) enhance the segment's ability to compete effectively
  with respect to product price in the concrete construction market.

Regulation

Environmental Regulation. MMI is subject to extensive and changing federal,
  state and local Environmental Laws including laws and regulations (i) that relate
  to air and water quality, (ii) impose limitations on the discharge of pollutants
  into the environment, and (iii) establish standards for the treatment, storage,
  and disposal of toxic and hazardous wastes. Stringent fines and penalties may
  be imposed for non-compliance with these Environmental Laws. In addition, Environmental
  Laws could impose liability for costs associated with investigating and remediating
  contamination at MMI's facilities or at third-party facilities at which MMI
  has arranged for the disposal treatment of hazardous materials.

Although no assurances can be given, MMI believes that MMI and its operations
  are in compliance in all material respects with all Environmental Laws and MMI
  is not aware of any non-compliance or obligation to investigate or remediate
  contamination that could reasonably be expected to result in material liability.
  This being said, Environmental Laws continue to be amended and revised to impose
  stricter obligations. MMI cannot predict the effect such future requirements,
  if enacted, would have on MMI although MMI believes that such regulations would
  be enacted over time and would affect the industry as a whole.

Health and Safety Matters. MMI's facilities and operations are governed
  by laws and regulations, including the federal Occupational Safety and Health
  Act, relating to worker health and workplace safety. MMI believes that appropriate
  precautions are taken to protect employees and others from workplace injuries
  and harmful exposure to materials handled and managed at its facilities. While
  it is not anticipated that MMI will be required in the near future to expend
  material amounts by reason of such health and safety laws and regulations, MMI
  is unable to predict the ultimate cost of compliance with these changing regulations.

8

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Employees

As of March 30, 2000, MMI had approximately 2,700 full time employees. MMI
  is a party to seven collective bargaining agreements with five unions, of which
  a total of 307 employees are members. Such collective bargaining agreements
  cover employees of the Baltimore, Maryland; Tampa, Florida; Whittier, California;
  Hackensack, New Jersey; Chicago, Illinois; and Oregon, Ohio facilities. MMI
  considers its relations with its employees to be good.

Available Information

MMI files annual, quarterly and special reports, proxy statements and other
  information with the SEC. You may read and copy any reports, statements and
  other information filed by MMI at the SEC's public reference rooms at 450 Fifth
  Street, N.W., Washington, D.C. 20549. Please call (800) SEC-0330 for further
  information on the public reference rooms. MMI's filings are also available
  to the public from commercial document retrieval services and at the web site
  maintained by the SEC at http://www.sec.gov/.

Item 2. Properties

MMI's principal executive offices are located in approximately 13,000 square
  feet of leased space in Houston, Texas.

The operating facilities of MMI can be broken down into two categories, manufacturing
  plants and distribution centers. The majority of the manufacturing plants are
  owned by MMI. The majority of the distribution centers are leased from third
  parties. The following table sets forth the facilities general information by
  operating segment:

|Fence Manufacturing Plants                                      |  | States         |  | Square Feet (1)
|--------------------------------------------------------------- |  | -------------- |  | ---------------
|                                                                |  |                |  |                
|Houston - Owned                                                 |  | Texas          |  | 127,000        
|Bladensburg - Leased                                            |  | Maryland       |  | 124,000        
|Statesville - Owned                                             |  | North Carolina |  | 73,829         
|Harrison - Owned                                                |  | Arkansas       |  | 72,881         
|New Paris - Owned                                               |  | Indiana        |  | 72,000         
|Brighton - Leased                                               |  | Michigan       |  | 65,890         
|San Fernando - Leased                                           |  | California     |  | 41,500         
|Tacoma - Leased                                                 |  | Washington     |  | 31,400         
|Whittier - Owned                                                |  | California     |  | 28,910         
|                                                                |  |                |  |                
|Total Fence Manufacturing Plants                                |  |                |  | 637,410        
|                                                                |  |                |  |                
|                                                                |  |                |  |                
|Concrete Construction Products Manufacturing
      Plants       |  | States         |  | Square Feet (1)
|                                                                |  |                |  |                
|Baltimore - Owned                                               |  | Maryland       |  | 235,000        
|Ft. Worth - Owned                                               |  | Texas          |  | 161,520        
|Jacksonville - Owned                                            |  | Florida        |  | 145,846        
|Houston - Owned                                                 |  | Texas          |  | 130,992        
|St. Joseph- Owned                                               |  | Missouri       |  | 111,980        
|Kingman - Owned                                                 |  | Arizona        |  | 109,300        
|Pompano - Owned                                                 |  | Florida        |  | 94,000         
|Oregon - Leased                                                 |  | Ohio           |  | 90,000         
|Hazelton - Leased                                               |  | Pennsylvania   |  | 76,800         
|Converse - Leased                                               |  | Texas          |  | 72,200         
|Tampa - Owned                                                   |  | Florida        |  | 70,142         
|Chicago - Leased                                                |  | Illinois       |  | 69,425         
|Tampa - Owned                                                   |  | Florida        |  | 21,450         
|Brooklyn - Leased                                               |  | New York       |  | 21,400         
|                                                                |  |                |  |                
|Total Concrete Construction Products Manufacturing
      Plants |  |                |  | 1,410,055      
|                                                                |  |                |  |                
|                                                                |  |                |  |                
|Type of Facility                                                |  | States         |  | Square Feet (1)
|                                                                |  |                |  |                
|Fence Distribution Centers (2)                                  |  | 28             |  | 606,526        
|Concrete Construction Products Distribution
      Centers (2)   |  | 10             |  | 132,619        
|Concrete Construction Products Engineering
      Centers        |  | 1              |  | 5,506          

(1) Does not include square footage of outside storage and other
  outdoor areas.
  (2) The majority of distribution centers are leased properties.

9

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Item 3. Legal Proceedings

MMI is involved in various claims and lawsuits incidental to its business.
  MMI does not believe that these claims and lawsuits in the aggregate will have
  a material adverse affect on MMI's business, financial condition and results
  of operations.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Not applicable.

10

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Item 6. Selected Financial Data

The following table sets forth selected historical financial data derived from
  MMI's audited consolidated financial statements and should be read in conjunction
  with Management's Discussion and Analysis of Financial Condition and Results
  of Operations and the Consolidated Financial Statements and Notes thereto, included
  elsewhere herein.

|                                          |                                      | Fiscal Years
|----------------------------------------- | ------------------------------------ | ------------
|                                          |                                      | 1999        
|                                          |                                      |             
|                                          | (In thousands)                      
|Income Statement Data:                    |                                      |             
|Net sales                                 | $                                    | 480,605     
|Gross Profit                              |                                      | 92,875      
|Nonrecurring expenses (1)                 |                                      | 2,441       
|Net income                                |                                      | 18,600      
|Balance Sheet Data                        |                                      |             
|(at period end):                          |                                      |             
|Working capital                           | $                                    | 79,182      
|Total assets                              |                                      | 243,483     
|Total long-term debt and capital          |                                      |             
|                                          | leases, including current maturities |             
|Stockholder's equity (deficit)            |                                      | 8,306       
|Cash Flow Data:                           |                                      |             
|Net cash provided by operating activities | $                                    | 18,747      
|Net cash used in investing activities     |                                      | (22,347)    
|Net cash provided by financing activities |                                      | 4,051       
|                                          |                                      |             
|EBITDA (2)                                | $                                    | 62,453      
|Cash dividends (3)                        |                                      | -           

(1) In fiscal year 1996, MMI recorded non-recurring expenses
  resulting from the modification of stock options granted in previous years as
  part of the 1996 Recapitalization of MMI and Merchants Metals Holding Company
  ("MMHC"). In 1999 all outstanding stock options were redeemed in connection
  with the 1999 Recapitalization of MMHC resulting in a non-recurring compensation
  charge for MMI employees. See Note 2 to the audited consolidated financial statements
  included elsewhere herein. 
  (2) EBITDA is defined as the sum of income before interest expense, income taxes,
  depreciation and amortization, and certain non-recurring expenses (see note
  (1) above). EBITDA is presented because it is a widely accepted financial indicator
  of a company's ability to service and incur debt. EBITDA should not be considered
  in isolation from or as a substitute for net income or cash flow measures prepared
  in accordance with generally accepted accounting principles or as a measure
  of a company's profitability or liquidity.
  (3) In fiscal year 1997, $57.1 million was distributed to MMHC for the redemption
  by MMHC of certain of its equity interests. In fiscal year 1998, $1.3 million
  was distributed to MMHC to finalize the 1997 redemption of certain of its equity
  interests.

11

---

Item 7. Management's Discussion and Analysis of Financial Condition and Results
  of Operations

The following is an analysis of the financial condition and results of operations
  of MMI. This analysis should be read in conjunction with MMI's Consolidated
  Financial Statements and Notes thereto, appearing elsewhere herein.

General

MMI is a leading manufacturer and distributor of products used in the commercial,
  infrastructure and residential construction industries. Earnings were as follows:

|                                                | Fiscal Years  
|----------------------------------------------- | --------------
|                                                |               
|                                                | 1999          
|                                                |               
|                                                | (In thousands)
|Fence segment earnings                          | $             
|Concrete Construction Products segment earnings |               
|Corporate (1)                                   |               
|                                                |               
|Earnings before interest and income taxes       |               
|Interest expense                                |               
|                                                |               
|Earnings before income taxes                    |               
|Income taxes                                    |               
|                                                |               
|Net income                                      | $             
|                                                |               

(1) Corporate represents only amortization of intangible assets
  and non-recurring charges. Corporate general and administrative expenses are
  allocated to the segments based upon proportional net sales.

Acquisitions increased consolidated earnings before interest and income taxes
  $4.5 million, $5.0 million, and $2.1 million in 1999, 1998, and 1997, respectively.

Consolidated MMI net income increased 70.2% in 1999 and 41.3% in 1998. These
  increases are predominately the result of increased sales activity and lower
  raw material costs at the business segments.

Corporate costs have increased $2.9 million in 1999 and $.4 million in 1998.
  The majority of the 1999 increase was a $2.4 million non-recurring expense for
  the redemption of incentive stock options. These options were redeemed as part
  of a recapitalization of MMHC in November 1999. See Note 2 to the consolidated
  audited financial statements. The remaining increase in 1999 and all of the
  1998 increase is due to goodwill amortization resulting from recent acquisitions.
  Goodwill amortization increased $.4 million in both 1999 and 1998.

Interest expense increased $2.1 million in 1999 and $4.3 million in 1998. Interest
  expense increased in 1998 due to a full twelve months of interest on the $120
  million issuance of senior subordinated debentures in April 1997 and higher
  levels of senior borrowings to accommodate the 1998 acquisitions of The Burke
  Group LLC (the "Burke Group") and Security Fence. In 1999 interest
  expense increased primarily due to the additional issuance of $30 million senior
  subordinated debentures. The higher level of borrowings to finance acquisitions
  and the increased mix of the "high-yield" debentures (11.25% coupon)
  in MMI's debt structure both contributed to the increase in interest expense.

The effective income tax rate has increased slightly in 1999 and 1998 primarily
  as a result of non-deductible goodwill associated with recent acquisitions.

12

---



Fence Segment

|                                          | Fiscal Years  
|----------------------------------------- | --------------
|                                          |               
|                                          | 1999          
|                                          |               
|                                          | (In thousands)
|Net sales                                 | $             
|Gross profit                              |               
|Gross profit margin                       |               
|SG&A and other expense                    | $             
|Earnings before interest and income taxes |               
|EBITDA                                    |               

Net Sales. Net sales increased 30.1% in 1999 and 17.2% in 1998. These
  increases are primarily due to acquisitions and the opening of new distribution
  centers. The National Wholesale Fence acquisition in second quarter 1999 contributed
  net sales of $13.1 million in 1999. The Security Fence acquisition in fourth
  quarter 1998 contributed net sales of $32.8 million and $7.3 million in 1999
  and 1998, respectively. New distribution centers generally take up to two years
  to become established in their regional areas. As such, "new distribution
  centers" represent openings or small acquisitions over the last two years.
  New centers in 1999 and 1998 increased net sales $10.5 million and $8.9 million,
  respectively.

Gross Profit. The fence segment's gross profit margin percentage increased
  .8% in 1999 and .5% in 1998. These increases were primarily due to higher margin
  products introduced from the Security Fence and National Wholesale Fence acquisitions.
  In addition, 1999 benefited from lower steel rod and tubing costs partially
  offset by higher zinc costs.

SG&A and other expense. SG&A and other expense ("SG&A")
  increased 35.7% in 1999 and 18.9% in 1998. SG&A as a percentage of sales
  was 8.4%, 8.1%, and 8.0% for 1999, 1998, and 1997, respectively. The increase
  in expense in 1999 and 1998 was principally due to business acquisitions and
  the opening of distribution centers. In 1999 SG&A, as a percentage of sales,
  increased primarily due to higher bad debt expense resulting from a number of
  customers experiencing financial difficulties and bankruptcy.

13

---



Concrete Construction Products Segment

|                                          | Fiscal Years  
|----------------------------------------- | --------------
|                                          |               
|                                          | 1999          
|                                          |               
|                                          | (In thousands)
|Net sales                                 | $             
|Gross profit                              |               
|Gross profit margin                       |               
|SG&A and other expense                    | $             
|Earnings before interest and income taxes |               
|EBITDA                                    |               

Net Sales. Net sales remained flat in 1999 and increased 24.2% in 1998.
  Sales stabilized in 1999 primarily due to no new acquisitions during the year
  and the plants working at capacity to meet the current demands. In 1998, the
  Burke Group acquisition contributed $23.9 million, a 14.1% increase in net sales.
  Also impacting 1998 was increased sales to the segment's largest customer, a
  company which had also grown through acquisitions.

Gross Profit. Gross profit increased 38.5% in 1999 and 43.5% in 1998.
  Gross profit margin percentage increased to 24.1% in 1999 from 17.4% in 1998.
  The increase in 1999 was primarily the result of lower raw material costs. The
  1998 increase in gross profit was primarily due to the increase in mix of higher
  margin concrete accessories.

SG&A and other expense. SG&A expenses increased 8.5% in 1999
  and 35.6% in 1998. As a percentage of sales, SG&A expense was 7.3%, 6.7%
  and 6.2% in 1999, 1998, and 1997, respectively. SG&A expense increased in
  1999 as a result of three infrequent events. Bad debt expense increased $.5
  million due to a number of customers with large balances having financial difficulties,
  some of which were caused by the customers' loss of large contracts. Also in
  1999 there were increased writedowns of fixed assets ($.4 million) and a casualty
  loss at a manufacturing facility ($.2 million). The increase in SG&A expenses
  in 1998 was primarily due to the growth in sales and higher selling costs related
  to the Burke Group acquisition. SG&A expense as a percentage of sales increased
  in 1999 and 1998 as a result of the infrequent events in 1999 and higher selling
  costs for Burke Group concrete accessories in 1998.

Liquidity and Capital Resources

Operating activities including the payment of interest and income taxes and
  changes in working capital generated $18.7 million of cash in 1999 compared
  with $15.2 million and $2.4 million in 1998 and 1997, respectively. Net income,
  adjusted for non-cash items, such as depreciation, amortization, and other non-cash
  charges provided $31.6 million, $18.6 million and $16.2 million in 1999, 1998,
  and 1997, respectively. Excluding working capital increases resulting from a
  particular year's business acquisitions, MMI utilized $12.9 million, $3.4 million,
  and $13.8 million of cash in 1999, 1998, and 1997, respectively to grow its
  working capital as the volume of its sales increased. The working capital increase
  was smaller in 1998 as MMI's conversion to a new accounts payable software encountered
  problems which caused a delay in year-end payments. In 1999, these delayed payments
  were made and accounts payable balances declined to more normal levels.

Investing activities utilized $22.3 million, $47.9 million and $5.0 million
  in 1999, 1998 and 1997, respectively. In 1999 and 1998 the majority of this
  cash was used for acquisitions. Acquisitions utilized $15.8 million and $37.7
  million in 1999 and 1998, respectively. Capital expenditures for expansion,
  improvement and replacement of property plant and equipment was $6.6 million,
  $10.2 million and $4.6 million in 1999, 1998 and 1997, respectively. Capital
  expenditures in 1998 included $3.2 million for a wire mesh plant facility which
  replaced a previously leased building, and $1.9 million for rental equipment,
  a new product line resulting from the Burke acquisition.

Financing activities provided $4.1 million in 1999 compared to $31.2 million
  and $5.9 million in 1998 and 1997, respectively. In 1999 cash flow from financing
  was relatively flat compared to prior years, due to growth in operating cash
  flow and the need to fund only one significant acquisition, National Wholesale
  Fence. The increase in 1998 was due primarily to the funding the Burke Group
  and Security Fence acquisitions.

14

---



Although EBITDA should not be considered in isolation from or as a substitute
  for cash flow measures prepared in accordance with generally accepted accounting
  principles or as a measure of a company's liquidity, it is a widely accepted
  financial indicator of a company's ability to incur and service debt. EBITDA
  is defined as the sum of income before interest expense, income taxes, depreciation
  and amortization, and non-recurring expenses. EBITDA was $62.5 million, $42.8
  million and $31.4 million in 1999, 1998, and 1997, respectively. The increase
  in EBITDA is primarily from the result of net sales and gross profit resulting
  from acquisitions and other changes as discussed in the segment analysis above.

Senior Subordinated Notes. On February 12, 1999, MMI issued $30 million
  of a new series of the 11.25% Senior Subordinated Notes in a private offering.
  The net proceeds of approximately $31.1 million, including original issuance
  premium, after fees and expenses, were used to reduce its borrowings under the
  revolving credit facility. The effective interest rate of the Notes is 10.5%.
  Interest expense in 1999 was $2.8 million higher than in the previous year due
  to this issue.

On April 30, 1999, MMI exchanged the $30 million Senior Subordinated Notes
  issued on February 12, 1999 for Registered Senior Subordinated Notes. These
  notes have the same form and terms as the February 12, 1999 notes and the $120
  million Registered Senior Subordinated Notes issued on April 16, 1997.

On April 16, 1997, MMI issued $120 million of 11.25% senior subordinated notes
  due 2007 (the "Senior Subordinated Notes"). The net proceeds of $116.0
  million, after fees and expenses, were used (i) to distribute $57.1 million
  to MMHC for the redemption by MMHC of certain of its equity interests, (ii)
  to repay the entire $10 million principal amount, plus accrued interest, on
  a senior subordinated secured note payable, (iii) to repay MMI's remaining indebtedness
  under a term loan facility of $11.4 million and (iv) to reduce MMI's indebtedness
  under the revolving credit facility.

Credit Facility. MMI's revolving credit facility provides for maximum
  borrowings of $75.0 million, due December 2001. The revolver balance fluctuates
  throughout the year based on sales and purchasing volume, capital expenditures,
  and acquisitions. Borrowing availability is subject to a borrowing base calculation.
  The weighted average balance outstanding under this credit facility was $20.3
  million and $26.2 million in 1999 and 1998, respectively. Borrowings under the
  credit facility bear interest, at the option of MMI, at either the bank's base
  rate plus 0.25 percent or Eurodollar plus 1.5 percent. Borrowings bearing interest
  at a Eurodollar rate plus 1.5 percent are denominated in short-term obligations
  of U.S. LIBOR with 30 to 180 day maturities. On January 1, 2000 the portion
  of the outstanding borrowings under U.S. LIBOR was approximately $4.0 million
  which would mature on January 18, 2000.

On February 3, 2000 the revolving credit facility was increased from $48.5
  million to $75 million. The increase was used to fund the acquisition of the
  capital stock of Hallett Wire Products Company, a manufacturer of welded wire
  mesh with plant facilities located in St. Joseph, Missouri and Kingman, Arizona.
  Hallett had net sales of approximately $37 million for the year ended December
  31, 1999. The total acquisition price was $40 million in cash. Subsequent to
  this acquisition, MMI has approximately $19.9 million availability for future
  borrowings under its revolving credit facility.

15

---



MMI's capital expenditure budget for fiscal year 2000 is $9.8 million and will
  be funded by the revolving credit facility.

MMI expects that cash flows from operations and the borrowing availability
  under its bank revolving credit facility will provide sufficient liquidity to
  meet its normal operating requirements, capital expenditure plans, existing
  debt service, and business acquisition strategy over the near term.

MMI has pursued and intends to continue to pursue a strategy of business acquisitions
  that will broaden its distribution network, complement or extend its existing
  product lines or increase its production capacity. The borrowing availability
  under its bank revolving credit facility is also expected to be available to
  finance such acquisitions. It is possible that, depending upon MMI's future
  operating cash flows and the size of potential acquisitions, MMI will seek additional
  sources of financing subject to limitations set forth in its senior subordinated
  notes indenture.

Effect of Inflation

The impact of inflation on MMI's operations has not been significant in recent
  years. There can be no assurance, however, that a high rate of inflation in
  the future will not have an adverse effect on MMI's operating results.

Impact of Year 2000

In prior years, MMI discussed the nature and progress of its plans to become
  Year 2000 ready. In late 1999, MMI completed its remediation and testing of
  systems. As a result of those planning and implementation efforts, MMI experienced
  no significant disruptions in mission critical information technology and non-information
  technology systems and believes those systems successfully responded to Year
  2000 date change. MMI expensed approximately $81,500 during 1999 in connection
  with remediating its systems. MMI is not aware of any material problems resulting
  from Year 2000 issues, either with our products, or internal systems, or the
  products and services of third parties. MMI will continue to monitor its mission
  critical computer applications and those of its suppliers and vendors throughout
  the year 2000 to ensure that any latent Year 2000 matters that may arise are
  addressed promptly.

16

---



Forward Looking Information

The statements contained in this report which are not historical facts, including,
  but not limited to, statements found under the caption "Management's Discussion
  and Analysis of Financial Condition and Results of Operations" above, are
  forward looking statements that involve a number of risks and uncertainties.
  The actual results of the future events described in such forward looking statements
  in this report could differ materially from those contemplated by such forward
  looking statements. Among the factors that could cause actual results to differ
  materially are the risks and uncertainties discussed in the report, including
  without limitations, the portions of such statements under the caption referenced
  above, and the uncertainties set forth from time to time in MMI's other public
  reports and filings and public statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

MMI is subject to market risk exposure related to changes in interest rates
  on its revolving credit facility and its senior subordinated notes. Borrowings
  under the credit facility bear interest, at the option of MMI, at either the
  bank's base rate plus 0.25 percent or Eurodollar rate plus 1.5 percent. For
  fiscal year 1999, the weighted average balance outstanding under this credit
  facility was $20.3 million. Based on this balance, a one percent change in the
  interest rate would cause a change in interest expense of approximately $203,000.
  MMI is exposed to changes in the fair value of its $150 million in 1999 and
  $120 million in 1998 11.25% fixed rate senior subordinated notes. At January
  1, 2000, the fair value of the notes was approximately 103% of par, or $154.5
  million. At January 2, 1999, the fair value of the notes was approximately 108%
  of par, or $129.6 million. The variation in fair value is a function of market
  interest rate changes and the investor perception of the investment quality
  of the senior subordinated notes.

MMI also has exposure to price fluctuations associated with steel rod, its
  primary raw material. MMI negotiates purchase commitments from one to nine months
  in advance to limit its exposure to price fluctuation and ensure availability
  of the materials. Generally, 50% to 60% of steel rod is purchased from foreign
  sources.

17

---

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|Consolidated Financial Statements and Notes                                                          | Page   
|---------------------------------------------------------------------------------------------------- | -------
|                                                                                                     |        
|Report of Independent Auditors                                                                       | 19     
|Consolidated Balance Sheet at fiscal
      year end 1999 and 1998                                    | 20     
|Consolidated Statement
      of Income for fiscal years 1999, 1998, and 1997                         | 21     
|Consolidated Statement of Stockholder's
      Equity (Deficit) for fiscal years 1999, 1998, and 1997 | 22     
|Consolidated Statement of Cash Flows
      for fiscal years 1999, 1998, and 1997                     | 23     
|Notes to Consolidated Financial Statements                                                           | 24 - 38

18

---



REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Stockholder of
  MMI Products, Inc.

We have audited the accompanying consolidated balance sheets of MMI Products,
  Inc. as of January 1, 2000 and January 2, 1999, and the related consolidated
  statements of income, stockholder's equity (deficit) and cash flows for each
  of the three fiscal years in the period ended January 1, 2000. Our audits also
  included the financial statement schedule listed in the Index at Item 14(a).
  These financial statements and schedule are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
  in the United States. Those standards require that we plan and perform the audit
  to obtain reasonable assurance about whether the financial statements are free
  of material misstatement. An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements. An audit
  also includes assessing the accounting principles used and significant estimates
  made by management, as well as evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the consolidated financial position of MMI Products,
  Inc. at January 1, 2000 and January 2, 1999, and the consolidated results of
  its operations and its cash flows for each of the three fiscal years in the
  period ended January 1, 2000, in conformity with accounting principles generally
  accepted in the United States. Also, in our opinion, the related financial statement
  schedule, when considered in relation to the basic financial statements taken
  as a whole, presents fairly in all material respects the information set forth
  therein.

/s/ ERNST & YOUNG LLP

Houston, Texas
  February 25, 2000



19





---



MMI PRODUCTS, INC.

CONSOLIDATED BALANCE SHEET

|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |        |         |     |         |  
|------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------ | -------------------------------------- | ------------------------------------------------------------ | ------ | --- | ------- | ------ | ------- | --- | ------- | -
|                                                              |                                                                                                        |                                                        |                                        |                                                             
|                                                              |                                                                                                        | January 1,                                             |                                        | January 2,                                                  
|                                                              |                                                                                                        | 2000                                                   |                                        | 1999                                                        
|                                                              |                                                                                                        |                                                        |                                        |                                                             
|                                                              |                                                                                                        |                                                       
|                                                              |                                                                                                        | (In thousands)                                        
|ASSETS                                                       
|                                                             
|                                                             
|                                                             
|                                                             
|Current assets:                                               |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Cash and cash
        equivalents                                                                      |                                                        | $                                      | 2,430                                                        |        |     | $       | 1,979  |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Accounts receivable,
        net of allowance for doubtful accounts of $2,667 and $1,926, respectively |                                                        |                                        | 62,309                                                       |        |     |         | 58,633 |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Inventories                                                                                            |                                                        |                                        | 71,776                                                       |        |     |         | 62,347 |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Deferred income
        taxes                                                                          |                                                        |                                        | 2,384                                                        |        |     |         | 1,495  |        
|                                                              | Prepaid expenses                                                                                       |                                                        |                                        | 1,203                                                        |        |     |         | 1,443  |        
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                              |                                                                                                        |                                                        |                                        | Total current assets                                         |        |     | 140,102 |        |         |     | 125,897 |  
|Property, plant
        and equipment:                        |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Land                                                                                                   |                                                        |                                        | 5,509                                                        |        |     |         | 4,814  |        
|                                                              | Buildings and improvements                                                                             |                                                        |                                        | 20,518                                                       |        |     |         | 17,890 |        
|                                                              | Machinery and equipment                                                                                |                                                        |                                        | 77,595                                                       |        |     |         | 69,669 |        
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |        |        
|                                                              |                                                                                                        |                                                        |                                        | 103,622                                                      |        |     |         | 92,373 |        
|                                                              | Less accumulated
        depreciation                                                                  |                                                        |                                        | 37,857                                                       |        |     |         | 31,456 |        
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |        |         |     |         |  
|                                                              |                                                                                                        |                                                        |                                        | Property, plant and equipment,
        net                   |        |     | 65,765  |        |         |     | 60,917  |  
|Intangible assets                                             |                                                                                                        |                                                        | 32,826                                 |                                                              |        |     | 29,123  |       
|                                                             
|                                                             
|                                                             
|                                                             
|Deferred charges
        and other assets                     |                                                                                                        |                                                        | 4,790                                  |                                                              |        |     | 4,289   |       
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                              |                                                                                                        |                                                        |                                        | Total assets                                                 |        | $   | 243,483 |        |         | $   | 220,226 |  
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                             
|                                                             
|                                                             
|                                                             
|LIABILITIES
        AND STOCKHOLDER'S EQUITY (DEFICIT)       
|                                                             
|                                                             
|                                                             
|                                                             
|Current liabilities:                                          |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Accounts
        payable                                                                               |                                                        | $                                      | 38,549                                                       |        |     | $       | 50,328 |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Accrued interest                                                                                       |                                                        |                                        | 3,718                                                        |        |     |         | 3,238  |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Accrued liabilities                                                                                    |                                                        |                                        | 15,237                                                       |        |     |         | 11,254 |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Income taxes payable                                                                                   |                                                        |                                        | 696                                                          |        |     |         | 672    |        
|                                                              | Due to/(from) MMHC,
        net                                                                        |                                                        |                                        | 744                                                          |        |     |         | (79    | )      
|                                                              | Current maturities
        of long-term obligations                                                    |                                                        |                                        | 1,976                                                        |        |     |         | 1,630  |        
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|Long-term obligations                                         |                                                                                                        |                                                        | 166,358                                |                                                              |        |     | 158,807 |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|Deferred income
        taxes and other long-term liabilities |                                                                                                        |                                                        | 7,899                                  |                                                              |        |     | 7,383   |       
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                              |                                                                                                        |                                                        |                                        | Total liabilities                                            |        |     | 235,177 |        |         |     | 233,233 |  
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|Stockholder's
        equity (deficit):                       |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Common stock:                                                                                          |                                                        |                                        |                                                              |        |     |         |        |        
|                                                              |                                                                                                        | Authorized 500,000
        shares, par value $1,       |                                        |                                                              |        |     |         |        |         |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                        |                                                        | 252,000 issued
        and outstanding |                                                              |        | 252 |         |        |         | 252 |        
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                        | Additional paid-in
        capital                     |                                        |                                                              | 15,450 |     |         |        | 13,009  |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                                                                                        | Accumulated other
        comprehensive income, net of |                                        |                                                              |        |     |         |        |         |    
|                                                              |                                                                                                        | tax of $(34) and $148, respectively                    |                                        |                                                              | 51     |     |         |        | (221    | )  
|                                                              |                                                                                                        | Retained deficit                                       |                                        |                                                              | (7,447 | )   |         |        | (26,047 | )  
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |        |         |     |         |  
|                                                              |                                                                                                        |                                                        |                                        | Total stockholder's equity
        (deficit)                 |        |     | 8,306   |        |         |     | (13,007 | )
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       
|                                                              |                                                                                                        |                                                        |                                        | Total liabilities and stockholder's
        equity (deficit) |        | $   | 243,483 |        |         | $   | 220,226 |  
|                                                              |                                                                                                        |                                                        |                                        |                                                              |        |     |         |       



The accompanying notes are an integral part
  of the consolidated financial statements.


20



---



MMI PRODUCTS, INC.

CONSOLIDATED STATEMENT OF INCOME

|                                                           |                |            |                    |                    |      |   |        
|---------------------------------------------------------- | -------------- | ---------- | ------------------ | ------------------ | ---- | - | -------
|                                                           |               
|                                                           |                |            |                    | Fiscal Years Ended
|                                                           |                |            |                    |                   
|                                                           |                |            | January
        3,
|                                                          
|                                                           |                | January 1, |                    | January 2,        
|                                                           |                |            | 2000               |                    | 1999 |   | 1998   
|                                                           |               
|                                                           |               
|                                                           | (In thousands)
|                                                          
|                                                          
|                                                          
|                                                          
|Net sales                                                  |                | $          | 480,605            |                    |      | $ | 418,355
|                                                          
|                                                          
|                                                          
|                                                          
|Cost of Sales                                              |                |            | 387,730            |                    |      |   | 350,961
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                |            |                    |                    |      |   |        
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Gross Profit   |            |                    | 92,875             |      |   |        
|                                                          
|                                                          
|                                                          
|                                                          
|Selling, general, and administrative expense               |                |            | 38,826             |                    |      |   | 31,874 
|Non-recurring expense- stock compensation
        (Note 2) |                |            | 2,441              |                    |      |   | -      
|Other (income) expense, net                                |                |            | 629                |                    |      |   | (74)   
|                                                           |                |            |                    |                    |      |   |        
|Income before interest
        and income taxes            |                |            | 50,979             |                    |      |   | 35,594 
|                                                          
|                                                          
|                                                          
|                                                          
|Interest expense                                           |                |            | 19,453             |                    |      |   | 17,320 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                |            |                    |                    |      |   |        
|Income before
        income taxes                         |                |            | 31,526             |                    |      |   | 18,274 
|                                                          
|                                                          
|                                                          
|                                                          
|Provision for
        income taxes                         |                |            | 12,926             |                    |      |   | 7,344  
|                                                           |                |            |                    |                    |      |   |        
|Net income                                                 |                | $          | 18,600             |                    |      | $ | 10,930 
|                                                           |                |            |                    |                    |      |   |        



The accompanying notes are an integral part
  of the consolidated financial statements.

21



---



MMI PRODUCTS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)

|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |   | Total  
|--------------------------------------------------------- | ----------------------- | ------ | - | ------- | - | ---------- | ----- | ------------- | - | --------- | - | ------------- | - | ---- | - |  | - | -------
|                                                          |                         |        |   |         |   | Additional |       | Retained      |   | Other     |   | Stockholder's
|                                                          |                         | Common |   | Paid-In |   | Earnings   |       | Comprehensive |   | Equity   
|                                                          |                         | Stock  |   | Capital |   | (Deficit)  |       | Income        |   | (Deficit)
|                                                          |                         |        |   |         |   |            |       |               |   |          
|                                                          | (In thousands)         
|Balance at December 28, 1996                              | $                       | 252    |   |         | $ | 14,599     |       |               | $ | 13,683    |   |               | $ | -    |   |  | $ | 28,534 
|Net income                                                |                         | -      |   |         |   | -          |       |               |   | 7,737     |   |               |   | -    |   |  |   | 7,737  
|Additional minimum pension liability                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | (151 | ) |  |   | (151   
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Comprehensive income                                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | -    |   |  |   | 7,586  
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Contribution of capital                                   |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |   |        
|                                                          | -stock options          |        | - |         |   |            | 112   |               |   |           | - |               |   |      | - |  |   |        
|Distribution to MMHC                                      |                         | -      |   |         |   | -          |       |               |   | (57,105   | ) |               |   | -    |   |  |   | (57,105
|                                                          |                         |        |   |         |   |            |       |               |   |          
|Balance at January 3, 1998                                |                         | 252    |   |         |   | 14,711     |       |               |   | (35,685   | ) |               |   | (151 | ) |  |   | (20,873
|Net income                                                |                         | -      |   |         |   | -          |       |               |   | 10,930    |   |               |   | -    |   |  |   | 10,930 
|Additional minimum pension liability                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | (70  | ) |  |   | (70    
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Comprehensive income                                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | -    |   |  |   | 10,860 
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Adjustment to 1996 Contribution of capital
      (Note 1) |                         | -      |   |         |   | (1,702     | )     |               |   | -         |   |               |   | -    |   |  |   | (1,702 
|Dividend to MMHC (Note 1)                                 |                         | -      |   |         |   | -          |       |               |   | (1,292    | ) |               |   | -    |   |  |   | (1,292 
|                                                          |                         |        |   |         |   |            |       |               |   |          
|Balance at January 2, 1999                                |                         | 252    |   |         |   | 13,009     |       |               |   | (26,047   | ) |               |   | (221 | ) |  |   | (13,007
|Net income                                                |                         | -      |   |         |   | -          |       |               |   | 18,600    |   |               |   | -    |   |  |   | 18,600 
|Additional minimum pension liability                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | 272  |   |  |   | 272    
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Comprehensive income                                      |                         | -      |   |         |   | -          |       |               |   | -         |   |               |   | -    |   |  |   | 18,872 
|                                                          |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |  
|Contribution of capital                                   |                         |        |   |         |   |            |       |               |   |           |   |               |   |      |   |  |   |        
|                                                          | -stock options (Note 2) |        | - |         |   |            | 2,441 |               |   |           | - |               |   |      | - |  |   |        
|                                                          |                         |        |   |         |   |            |       |               |   |          
|Balance at January 1, 2000                                | $                       | 252    |   |         | $ | 15,450     |       |               | $ | (7,447    | ) |               | $ | 51   |   |  | $ | 8,306  
|                                                          |                         |        |   |         |   |            |       |               |   |          

The accompanying notes are an integral part of
  the consolidated financial statements.

22

---



MMI PRODUCTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                                                          |                                                                       |            |                    |            |      |   |         
|----------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ---------- | ------------------ | ---------- | ---- | - | --------
|                                                                                          |                                                                      
|                                                                                          |                                                                       |            | Fiscal Years Ended
|                                                                                          |                                                                       |            |                    |           
|                                                                                          |                                                                       |            | January
      3,  
|                                                                                         
|                                                                                          |                                                                       | January 1, |                    | January 2,
|                                                                                          |                                                                       |            | 2000               |            | 1999 |   | 1998    
|                                                                                          |                                                                      
|                                                                                          |                                                                      
|                                                                                          | (In thousands)                                                       
|Operating activities:                                                                     |                                                                      
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Net income                                                                                |                                                                       | $          | 18,600             |            |      | $ | 10,930  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Adjustments to reconcile
      net income to net cash provided by operating activities:   |                                                                       |            |                    |            |      |   |         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Depreciation and amortization                                         |            |                    | 9,033      |      |   |         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Amortization of bond
      premium                                    |            |                    | (234)      |      |   |         
|                                                                                          | Nonrecurring expenses-
      stock compensation                       |            |                    | 2,441      |      |   |         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Provision for losses on accounts receivable                           |            |                    | 1,471      |      |   |         
|                                                                                          | Deferred income taxes                                                 |            |                    | 92         |      |   |         
|                                                                                          | (Gain) loss on sale of equipment                                      |            |                    | 225        |      |   |         
|                                                                                          | Other                                                                 |            |                    | -          |      |   |         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Changes in operating assets and liabilities,
      net of effects of acquired businesses: |                                                                       |            |                    |            |      |   |         
|                                                                                          | Increase in accounts receivable                                       |            |                    | (633)      |      |   |         
|                                                                                          | Increase in inventories                                               |            |                    | (5,193)    |      |   |         
|                                                                                          | Decrease in prepaid
      expenses and other assets                   |            |                    | 526        |      |   |         
|                                                                                          | Increase (decrease)
      in accounts payable and accrued liabilities |            |                    | (8,428)    |      |   |         
|                                                                                          | Increase (decrease)
      in income taxes payable                     |            |                    | 24         |      |   |         
|                                                                                          | Increase (decrease)
      in due to MMHC                              |            |                    | 823        |      |   |         
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Net cash provided
      by operating activities                                           |                                                                       |            | 18,747             |            |      |   | 15,161  
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Investing activities:                                                                     |                                                                       |            |                    |            |      |   |         
|                                                                                          | Capital expenditures                                                  |            |                    | (6,631)    |      |   |         
|                                                                                          | Proceeds from sale
      of equipment                                 |            |                    | 48         |      |   |         
|                                                                                          | Acquisitions, net
      of cash acquired                              |            |                    | (15,764)   |      |   |         
|                                                                                          | Other                                                                 |            |                    | -          |      |   |         
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Net cash used in
      investing activities                                               |                                                                       |            | (22,347)           |            |      |   | (47,886)
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Financing activities:                                                                     |                                                                       |            |                    |            |      |   |         
|                                                                                          | Proceeds from long-term
      obligations                             |            |                    | 174,008    |      |   |         
|                                                                                          | Payments on long-term
      obligations                               |            |                    | (168,892)  |      |   |         
|                                                                                          | Adjustment to 1996
      contribution of capital from MMHC            |            |                    | -          |      |   |         
|                                                                                          | Dividend to MMHC                                                      |            |                    | -          |      |   |         
|                                                                                          | Distribution to MMHC                                                  |            |                    | -          |      |   |         
|                                                                                          | Debt offering costs                                                   |            |                    | (1,065)    |      |   |         
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Net cash provided
      by financing activities                                           |                                                                       |            | 4,051              |            |      |   | 31,195  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Net change in cash and
      cash equivalents                                             |                                                                       |            | 451                |            |      |   | (1,530) 
|Cash and cash equivalents,
      beginning of period                                      |                                                                       |            | 1,979              |            |      |   | 3,509   
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Cash and cash equivalents, end of period                                                  |                                                                       | $          | 2,430              |            |      | $ | 1,979   
|                                                                                          |                                                                       |            |                    |            |      |   |         
|                                                                                          |                                                                       |            |                    |            |      |   |         
|Supplemental Cash Flow Information:                                                       |                                                                       |            |                    |            |      |   |         
|                                                                                          | Supplemental disclosure of noncash investing
      activities         |            |                    |            |      |   |         
|                                                                                          | Issuance of capital lease obligations for capital
      expenditures  |            | $                  | 2,790      |      |   | $       
|                                                                                          | Cash paid for interest                                                |            | $                  | 18,625     |      |   | $       
|                                                                                          | Cash paid for income taxes                                            |            | $                  | 13,075     |      |   | $       
|                                                                                          |                                                                       |            |                    |            |      |   |         

The accompanying notes are an integral part
  of the consolidated financial statements.

23



---



MMI PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

January 1, 2000


1. Description of Business and Significant Accounting Policies Description of Business The consolidated financial statements include the accounts of
    MMI Products, Inc. and its wholly owned subsidiary, Security Fence Supply
    Co. Inc. (since its acquisition on October 6, 1998) (collectively, "MMI").
    MMI Products, Inc. is a wholly owned subsidiary of Merchants Metals Holding
    Company ("MMHC"). MMI is a manufacturer and distributor of products
    used in the residential, commercial and infrastructure construction industries
    within the United States. The manufactured products in each of MMI's product
    lines are produced primarily from the same raw material, steel rod. MMI's
    customers include contractors, fence wholesalers, industrial manufacturers,
    highway construction contractors and fabricators of reinforcing bar. On November 12, 1999, MMHC completed a recapitalization transaction
    (the "1999 Recapitalization") in which (i) MMHC entered into a $69.2
    million subordinated credit facility due in 2007 (the "MMHC Credit Facility")
    with an investment fund managed by an affiliate of MMHC's majority economic
    owner, (ii) MMHC redeemed its existing equity interests, including stock options
    granted to certain employees and a director of MMI, and (iii) certain MMHC
    stockholders and new stockholders invested in new common and preferred stock
    of MMHC. Interest at a rate of 14% per annum on the MMHC Credit Facility is
    payable semi-annually in cash or in kind at the option of MMHC. In connection
    with any prepayment or repayment of the facility, MMHC will pay a premium
    on the principal such that the internal rate of return is equal to (i) 18%
    per annum if such prepayment or repayment occurs prior to November 11, 2002
    or (ii) 20% per annum if such prepayment or repayment occurs on or after November
    11, 2002. The MMHC preferred shares have a stated value of $64.8 million and
    accrue cumulative preferred dividends at a rate of 12% per annum. Cash payment
    of dividends on MMHC's common and preferred stock is not permitted while the
    MMHC Credit Facility is outstanding. Availability of cash at MMHC to pay the MMHC Credit Facility
    interest and cumulative preferred dividends is principally dependent upon
    MMI's cash flows. MMI's Revolving Credit Facility agreement and senior subordinated
    notes indenture require MMI to meet certain restricted payment tests before
    any dividends can be distributed to MMHC. As a result of the 1999 Recapitalization, MMI recognized a non-cash
    stock compensation charge of $2.4 million ($1.4 million net of tax) related
    to the redemption of MMHC's stock options granted in previous years to certain
    employees of MMI. On December 13, 1996, MMI and MMHC completed a recapitalization
    transaction (the "1996 Recapitalization"). Pursuant to the 1996
    Recapitalization, (i) MMHC made an additional capital contribution to MMI
    of approximately $3.5 million in cash and loaned MMI approximately $5.8 million,
    (ii) MMI borrowed an additional $5.0 million in senior subordinated secured
    notes payable from a supplier and an additional $1.0 million in other long-term
    debt, and (iii) MMI repaid the full amount of subordinated notes payable to
    affiliates of $14.8 million plus accrued interest. 24  A former stockholder of MMHC exercised its appraisal rights
    and filed a lawsuit against MMHC with respect to the value of the common and
    preferred stock redeemed in connection 
    with the 1996 Recapitalization. In January 1997, MMHC paid the stockholder
    $2.2 million with respect to the value of the preferred stock, the original
    value offered in the 1996 Recapitalization. In October 1998, MMHC paid $6.45
    million, including accrued interest of $1.04 million, to settle the value
    of the common stock redeemed. The $1.7 million increase in the original value
    offered in the 1996 Recapitalization has been charged to Additional Paid-in-Capital
    to reflect the finalization of the December 1996 change in capital contributions
    by MMHC. MMI declared a dividend of $1.3 million to MMHC during the fourth
    quarter of 1998 to settle the interest and legal expenses paid on MMHC's behalf
    by MMI. The $6.45 million settlement was funded by MMI's revolving credit
    facility and had no effect on the operating results of MMI. Fiscal Year MMI follows a 52-53 week fiscal year ending on the Saturday
    closest to December 31. The 1999, 1998, and 1997 fiscal years refer to the
    fifty-two week periods ended January 1, 2000, and January 2, 1999, and the
    fifty-three week period ended January 3, 1998, respectively. Revenue Recognition MMI records sales when its products are shipped. Use of Estimates The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and assumptions
    that affect the reported amounts of assets and liabilities and disclosure
    of contingent assets and liabilities at the date of the financial statements
    and the reported amounts of revenues and expenses during the reporting period.
    Actual results could differ from those estimates. Cash and Cash Equivalents MMI considers all demand deposits and time deposits with original
    maturities of three months or less when purchased to be cash equivalents. Inventories Inventories are valued at the lower of average cost or market. 25  Property, Plant and Equipment Property, plant and equipment are stated at historical cost,
    except for assets acquired in business combinations which are recorded at
    fair market value at the date of acquisition. Depreciation is computed using
    the straight-line method based on the estimated useful lives of the related
    assets. Estimated useful lives are as follows:  Building and improvements
      10 to 31 yearsMachinery and equipment
      2 to 20 years Depreciation expense was $7,834,000, $6,423,000 and $5,153,000
    for fiscal years 1999, 1998 and 1997, respectively. Major capital upgrades are capitalized. Maintenance, repairs
    and minor upgrades are expensed as incurred. Gains and losses from dispositions
    are included in the results from operations. MMI leases certain machinery and equipment under capital leases.
    Assets recorded under capital leases are amortized over the period of the
    respective leases with the related amortization included in depreciation expense.
    Assets under these obligations, totaling $4,994,000 and $3,574,000 (net of
    accumulated amortization of $4,685,000 and $3,560,000) at January 1, 2000
    and January 2, 1999, respectively, are included in property, plant and equipment
    in the accompanying consolidated balance sheets. Goodwill Goodwill represents the excess cost of companies acquired over
    the fair value of their net identifiable assets. Goodwill is being amortized
    on a straight-line basis over periods ranging from 10 to 40 years. The carrying
    value of goodwill, as well as the related amortization periods, is periodically
    evaluated to determine whether adjustments to the carrying value or related
    lives are required. This evaluation is based on MMI's projection of undiscounted
    cash flows of the acquired operations over the remaining amortization period.
    To the extent such projections indicate that future undiscounted cash flows
    are not sufficient to recover the carrying amounts of the related goodwill,
    the underlying assets are written down by charges to expense so that the carrying
    amount is equal to fair value, primarily determined based on future discounted
    cash flows. Impairment of Long-Lived Assets The carrying values of long-lived assets, principally identifiable
    intangibles, property, plant and equipment and any related goodwill, are reviewed
    for potential impairment when events or changes in circumstances indicate
    that the carrying amount of such assets may not be recoverable, as determined
    based on the estimated future undiscounted cash flows. If such assets are considered to be impaired, the carrying value
    of the related assets would be reduced to their estimated fair value. 26   Concentration of Credit Risk Financial instruments that could potentially subject MMI to
    concentrations of credit risk are accounts receivable. MMI continuously evaluates
    the creditworthiness of its customers and generally does not require collateral.
    No customer accounted for 10% or more of consolidated revenues for fiscal
    years 1999, 1998 and 1997. Fair Value of Financial Instruments MMI considers the recorded value of its monetary assets and
    liabilities, which consist primarily of cash and cash equivalents, accounts
    receivable, and accounts payable, to approximate their respective fair values
    at January 1, 2000 and January 2, 1999. The carrying value of MMI's senior
    subordinated debt is approximately $150.0 million and $120.0 million versus
    its estimated fair value of approximately $154.5 million and $129.6 million
    at January 1, 2000 and January 2, 1999, respectively. The estimated fair values
    are based on the quoted market price. The fair value of the revolving credit
    facility approximated the carrying amount. Reclassifications Certain reclassifications have been made to the 1997 and 1998
    financial statements in order to conform to the 1999 presentation. 2. Nonrecurring Expenses - Stock Compensation Effective November 12, 1999 in connection with the 1999 Recapitalization,
    MMI incurred nonrecurring charges related to MMHC's stock options granted
    in previous years to certain employees of MMI. The aggregate effect of these
    expenses was $2.4 million for fiscal year 1999 ($1.4 million, net of tax). 3. Acquisitions of Businesses During fiscal year 1999, MMI completed the acquisitions set
    forth below, each of which has been accounted for using the purchase method
    of accounting. The accompanying consolidated financial statements include
    the operating results of each of the acquired businesses from the date of
    the acquisition. On June 7, 1999, MMI purchased certain assets of the wholesale
    fence division of National Wholesale Fence Supply, Inc. ("National Wholesale")
    for cash of approximately $13.2 million, which was funded by the revolving
    credit facility. The operations acquired include a manufacturer of ornamental
    iron fence products in San Fernando, California and distributors of fence
    products in California. MMI entered into subleases for the ornamental iron
    fence manufacturing plant and the four distribution locations. The excess
    of the purchase price over the preliminary estimate of the fair value of the
    assets acquired of $2.9 million is being amortized over 20 years. On December 30, 1999, MMI purchased certain assets of Reforce
    Steel and Wire Corporation for cash of approximately $3.4 million which was
    funded by the revolving credit facility. The operations acquired include a
    manufacturer of concrete accessories in Brooklyn, New York. The excess of
    the purchase price over the preliminary estimate of the fair value of the
    assets acquired of $1.7 million is being amortized over 10 years. 27  4. Inventories Inventories consisted of the following:


|                |  |                 |        |                
|--------------- |  | --------------- | ------ | ---------------
|                |  | January 1, 2000 |        | January 2, 1999
|                |  |                
|               
|               
|               
|               
|                |  |                 |        |                
|               
|               
|               
|               
|                |  | (In thousands) 
|Raw Materials   |  | $               | 17,089 |                
|               
|               
|               
|               
|Work-in-process |  |                 | 1,480  |                
|               
|               
|               
|               
|Finished goods  |  |                 | 53,207 |                
|               
|               
|               
|               
|                |  |                 |        |                
|                |  | $               | 71,776 |                
|                |  |                 |        |                

5. Intangible Assets

Intangible assets consisted of the following:

|                                    |  |                 |        |                 |  |                 |        |  |  |  |             | 
|----------------------------------- |  | --------------- | ------ | --------------- |  | --------------- | ------ |  |  |  | ----------- | 
|                                    |  | January 1, 2000 |        | January 2, 1999 |  | Estimated Lives
|                                    |  |                 |        |                
|                                    |  |                 |        |                
|                                    |  |                 |        |                
|                                    |  |                 |        |                
|                                    |  |                 |        |                 |  |                
|                                    |  | (In thousands)  |        |                 |  |                
|Goodwill                            |  | $               | 34,637 |                 |  | $               | 29,997 |  |  |  | 10-40 years | 
|Customer
      lists and other      |  |                 | 2,713  |                 |  |                 | 2,451  |  |  |  | 3-20 years  | 
|                                    |  |                 |        |                 |  |                 |        | 
|                                    |  |                 | 37,350 |                 |  |                 | 32,448 |  |  |  |             | 
|Less accumulated
      amortization |  |                 | 4,524  |                 |  |                 | 3,325  |  |  |  |             | 
|                                    |  |                 |        |                 |  |                 |        | 
|                                    |  | $               | 32,826 |                 |  | $               | 29,123 |  |  |  |             | 
|                                    |  |                 |        |                 |  |                 |        | 

Intangible assets are amortized on a straight-line basis over their respective
  estimated lives (the period when benefits are expected to be derived). Total
  amortization expense for fiscal years 1999, 1998 and 1997 was $1,199,000, $764,000
  and $354,000, respectively.



6. Accrued Liabilities

Accrued liabilities consisted of the following:

|                                  |  |                 |                |                 |  |   |        | 
|--------------------------------- |  | --------------- | -------------- | --------------- |  | - | ------ | 
|                                  |  | January 1, 2000 |                | January 2, 1999
|                                  |  |                
|                                 
|                                 
|                                 
|                                 
|                                  |  |                 |                |                
|                                 
|                                 
|                                 
|                                 
|                                  |  |                 | (In thousands) |                
|Accrued compensation              |  | $               | 5,654          |                 |  | $ | 5,114  | 
|                                 
|                                 
|                                 
|                                 
|Accrued insurance                 |  |                 | 2,364          |                 |  |   | 1,606  | 
|Accrued retirement
      benefits |  |                 | 1,371          |                 |  |   | 1,356  | 
|                                 
|                                 
|                                 
|                                 
|Other accrued liabilities         |  |                 | 5,848          |                 |  |   | 3,178  | 
|                                 
|                                 
|                                 
|                                 
|                                  |  |                 |                |                 |  |   |        | 
|                                  |  | $               | 15,237         |                 |  | $ | 11,254 | 
|                                  |  |                 |                |                 |  |   |        | 



28

---

7. Long-Term Obligations

Long-term debt, including capital lease obligations, consisted of the following:

|                                                                                                                                                           |  |                       |         |                       |  |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | --------------------- |  | - | ------- | 
|                                                                                                                                                           |  | January
      1, 2000 |         | January
      2, 1999
|                                                                                                                                                           |  |                       |         |                      
|                                                                                                                                                           |  | (In thousands)       
|Revolving credit facility                                                                                                                                  |  | $                     | 10,446  |                       |  | $ | 35,422  | 
|11.25% Senior subordinated notes, due 2007,
      interest payable semi-annually in arrears on April 15 and October 15 (including
      premium of $1,903) |  |                       | 151,903 |                       |  |   | 120,000 | 
|Capital lease obligations                                                                                                                                  |  |                       | 5,318   |                       |  |   | 4,019   | 
|Other notes payable                                                                                                                                        |  |                       | 667     |                       |  |   | 996     | 
|                                                                                                                                                           |  |                       |         |                      
|                                                                                                                                                           |  |                       | 168,334 |                       |  |   | 160,437 | 
|Less current maturities                                                                                                                                    |  |                       | 1,976   |                       |  |   | 1,630   | 
|                                                                                                                                                           |  |                       |         |                      
|Long-term obligations                                                                                                                                      |  | $                     | 166,358 |                       |  | $ | 158,807 | 
|                                                                                                                                                           |  |                       |         |                      

Revolving Credit Facility

MMI's revolving credit facility provides for maximum borrowings of $75.0 million
  (due December 2001) with interest payable at the bank's base rate plus 0.25
  percent or Eurodollar rate plus 1.5 percent. Borrowings bearing interest at
  a Eurodollar rate plus 1.5 percent are denominated in short-term obligations
  of U.S. LIBOR with 30 to 180 day maturities. On January 1, 2000 the portion
  of the outstanding borrowings under U.S. LIBOR was approximately $4.0 million
  which would mature on January 18, 2000. As of January 1, 2000, the average interest
  rate was 7.01 percent. MMI is required to pay a commitment fee of 1⁄2 of
  1.0 percent of the unused portion of the credit facility on a monthly basis.
  The revolving credit facility is secured by all the assets and stock of MMI
  and guaranteed by MMHC. Borrowing availability under the revolving credit facility
  at January 1, 2000, after taking into account borrowing base restrictions and
  outstanding letters of credit, was approximately $35.3 million. The borrowing
  availability at year-end was based on a maximum borrowing limit of $48.5 million.
  The maximum borrowing limit was increased to $75.0 million on February 3, 2000
  in connection with the funding of the Hallett Wire Products Company acquisition.
  See Note 14. MMI had outstanding letters of credit (which cannot exceed $20
  million) totaling $2.6 million and $2.4 million at January 1, 2000 and January
  2, 1999, respectively.

The terms of the revolving credit facility contain, among other provisions,
  affirmative and negative covenants that require MMI to maintain certain financial
  ratios, limit the amount of additional indebtedness, limit the creation or existence
  of liens and set certain restrictions on acquisitions, mergers and sales of
  assets. MMI's distribution of dividends to MMHC is only permitted under the
  revolving credit facility if certain tests as set forth in the loan agreement
  are met.

29

---

11.25% Senior Subordinated Notes

On April 16, 1997, MMI issued $120 million of senior subordinated notes due
  2007. The net proceeds of $116.0 million, after fees and expenses, were used
  to (i) distribute $57.1 million to MMHC for the redemption by MMHC of certain
  of its equity interests, (ii) repay the entire $10.0 million principal amount,
  plus accrued interest, on a senior subordinated secured note payable, (iii)
  repay MMI's remaining indebtedness under a term loan facility of $11.4 million
  and (iv) reduce MMI's indebtedness under the revolving credit facility. The
  senior subordinated notes are general unsecured obligations of MMI and are subordinated
  to MMI's revolving credit facility.

On February 12, 1999, MMI issued $30 million of 11.25% senior subordinated
  notes due 2007 in a private offering. The net proceeds of approximately $31.1
  million, which include the original issuance premium, after fees and expenses,
  were used to reduce the borrowings under the revolving credit facility. The
  effective interest rate of these notes is 10.5%.

On April 30, 1999, MMI exchanged the $30 million Senior Subordinated Notes
  issued on February 12, 1999 for Registered Senior Subordinated Notes. These
  notes have the same form and terms as the February 12, 1999 notes and the $120
  million Registered Senior Subordinated Notes issued on April 16, 1997.

On or prior to April 15, 2000, MMI may, at its option, redeem
  at any time or from time to time up to 35% of the aggregate original principal
  amount of the senior subordinated notes issued at a redemption price equal to
  111.25% of the principal amount thereof, plus accrued and unpaid interest and
  liquidated damages, if any, thereon to the redemption date, with the net cash
  proceeds of one or more public equity offerings; provided, however, that at
  least $78.0 million in aggregate principal amount of the senior subordinated
  notes remain outstanding following each such redemption and such redemption
  shall occur not later than 60 days after the date of the closing of any such
  public equity offering.

The senior subordinated notes may be redeemable at the option
  of MMI, in whole or in part, at any time on or after April 15, 2002 at the redemption
  prices (expressed as percentages of principal amount) set forth below plus accrued
  and unpaid interest and liquidated damages, if any, thereon to the applicable
  redemption date, if redeemed during the twelve-month period beginning on April
  15 of the years indicated below:



Year
      
      Percentage2002
      
      105.625%2003
      
      103.750%2004
      
      101.875%2005 and thereafter
      
      100.000%  30


Scheduled maturities of long-term debt, including capital lease obligations,
  are as follows:

|                                  |  |                      |         |                      |  |   |       | 
|--------------------------------- |  | -------------------- | ------- | -------------------- |  | - | ----- | 
|                                  |  | Long-Term
      Debt |         | Capital
      Leases
|                                  |  |                      |         |                     
|                                  |  | (In thousands)      
|2000                              |  | $                    | 339     |                      |  | $ | 1,923 | 
|2001                              |  |                      | 10,799  |                      |  |   | 1,725 | 
|2002                              |  |                      | -       |                      |  |   | 1,231 | 
|2003                              |  |                      | -       |                      |  |   | 764   | 
|2004 and thereafter               |  |                      | 150,000 |                      |  |   | 272   | 
|                                  |  |                      |         |                     
|                                  |  |                      | 161,138 |                      |  |   | 5,915 | 
|Less amount representing interest |  |                      | -       |                      |  |   | 622   | 
|                                  |  |                      |         |                     
|                                  |  | $                    | 161,138 |                      |  | $ | 5,293 | 
|                                  |  |                      |         |                     

8. Operating Leases

MMI leases warehouse and office space and certain machinery and equipment under
  operating leases. Future minimum lease payments on noncancelable operating leases
  with remaining terms of one or more years consisted of the following at January
  1, 2000 (in thousands):



2000
      
      2,8982001
      
      1,9252002
      
      1,0542003
      
      5152004
      
      2792005 and thereafter
      
      159Total
      $
      6,830




Total rental expense for fiscal years 1999, 1998 and 1997 was $5,846,000, $5,103,000
  and $4,225,000, respectively.

9. Employee Benefit Plans

Defined Contribution Plans

401(k) Plan. MMI maintains the MMI Products, Inc. 401(k) Savings Plan
  (the "401(k) Plan"). All Company employees are eligible to participate
  in the 401(k) Plan after one year of employment. In some instances amendments
  are made to the 401(k) Plan for immediate eligibility of employees of an acquired
  company. Employees may elect to make pre-tax contributions up to the applicable
  statutory maximum limits to the 401(k) Plan. MMI makes matching contributions
  (subject to statutory limits) in an amount equal to 25% of the employee's contributions
  on the first 2% of the employee's compensation. In addition, MMI may make additional
  contributions in such amounts as it may elect. Company contributions vest over
  four years at a rate of 25% for each year of service completed.

31

---

Pension Plan. MMI maintains the MMI Products, Inc. Pension Plan (the
  "Pension Plan"), which is a money purchase defined contribution plan.
  Employees of MMI (other than employees covered by a collective bargaining agreement)
  generally are eligible to participate in the Pension Plan after one year of
  employment.

MMI makes annual contributions to the Pension Plan for each eligible employee
  in accordance with a formula that is based on the participant's age and level
  of compensation. The Pension Plan provides for 100% vesting after five years
  of service.

MMI's contributions to the 401(k) Plan and the Pension Plan for fiscal years
  1999, 1998, and 1997 were $1,789,000, $1,385,000 and $1,285,000, respectively.

Defined Benefit Plans

MMI maintains a retirement plan which covers certain employees under a collective
  bargaining agreement. Plan benefits are based primarily on years of service.
  It is the policy of MMI to fund this plan currently based upon actuarial determinations
  and applicable tax regulations.





|                                               |  |                |       |      |  |   |       |   |  |  |  | 
|---------------------------------------------- |  | -------------- | ----- | ---- |  | - | ----- | - |  |  |  | 
|                                               |  |                |       |     
|                                               |  | Fiscal Years  
|                                               |  | 1999           |       | 1998
|                                               |  |                |       |     
|                                               |  |               
|                                               |  | (In thousands)
|                                              
|                                              
|                                              
|                                              
|Reconciliation
      of benefit obligation:    |  |                |       |      |  |   |       |  
|                                              
|                                              
|                                              
|                                              
|Obligation at beginning of year                |  | $              | 2,233 |      |  | $ | 2,142 |  
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Service cost                                   |  |                | 73    |      |  |   | 65    |  
|                                              
|                                              
|                                              
|                                              
|Interest cost                                  |  |                | 153   |      |  |   | 157   |  
|                                              
|                                              
|                                              
|                                              
|Actuarial gain (loss)                          |  |                | (104  | )    |  |   | 387   |  
|Benefit payments                               |  |                | (98   | )    |  |   | (329  | )
|Settlements                                    |  |                | -     |      |  |   | (189  | )
|                                               |  |                |       |     
|Obligation at end of year                      |  | $              | 2,257 |      |  | $ | 2,233 |  
|                                               |  |                |       |     
|                                              
|                                              
|                                              
|                                              
|                                               |  |                |       |      |  |   |       |  
|Reconciliation of fair value of plan assets:   |  |                |       |      |  |   |       |  
|Fair value of plan assets at beginning of year |  |                | 1,692 |      |  |   | 1,437 |  
|Actual return on plan
      assets             |  |                | 160   |      |  |   | 137   |  
|Employer contributions                         |  |                | 421   |      |  |   | 407   |  
|Actuarial gain                                 |  |                | 117   |      |  |   | 286   |  
|Benefit payments                               |  |                | (98   | )    |  |   | (329  | )
|Settlements                                    |  |                | -     |      |  |   | (246  | )
|                                               |  |                |       |     
|Fair value of plan assets at end of year (1)   |  | $              | 2,292 |      |  | $ | 1,692 |  
|                                               |  |                |       |     
|                                              
|                                              
|                                              
|                                              
|                                               |  |                |       |      |  |   |       |  
|Funded status:                                 |  |                |       |      |  |   |       |  
|Funded status at end of year                   |  |                | 35    |      |  |   | (541  | )
|Unrecognized prior-service cost                |  |                | 86    |      |  |   | 96    |  
|Unrecognized loss                              |  |                | 133   |      |  |   | 369   |  
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|                                               |  |                |       |     
|Net amount recognized                          |  | $              | 254   |      |  | $ | (76   | )
|                                              
|                                              
|                                              
|                                              
|                                               |  |                |       |     
|                                              
|                                              
|                                              
|                                              

(1) Plan assets are comprised of various equity,
  debt and government securities.

32

---

The following table provides the amounts recognized in the statement of financial
  position:



|                                       |  |                 |     |                 |  |   |       |  |  |  |  | 
|-------------------------------------- |  | --------------- | --- | --------------- |  | - | ----- |  |  |  |  | 
|                                       |  | January 1, 2000 |     | January 2, 1999
|                                       |  |                 |     |                
|                                       |  |                
|                                       |  | (In thousands) 
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|Accrued benefit asset (liability)      |  | $               | 35  |                 |  | $ | (541) | 
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|                                      
|Intangible asset                       |  |                 | 86  |                 |  |   | 96    | 
|                                      
|                                      
|                                      
|                                      
|Accumulated other comprehensive income |  |                 | 133 |                 |  |   | 369   | 
|                                      
|                                      
|                                      
|                                      
|                                       |  |                 |     |                
|Net amount recognized                  |  | $               | 254 |                 |  | $ | (76)  | 
|                                       |  |                 |     |                

The plan's accumulated benefit obligation was $2,257,000 and $2,233,000 for
  fiscal years 1999 and 1998, respectively.

|                                         |  | Fiscal Years  
|---------------------------------------- |  | --------------
|                                         |  | 1999          
|                                         |  |               
|                                         |  |               
|                                         |  |               
|                                         |  |               
|                                         |  |               
|                                         |  | (In thousands)
|Service Cost                             |  | $             
|Interest
      Cost                      |  |               
|Expected
      return on plan assets     |  |               
|Amortization
      of prior-service cost |  |               
|Amortization
      of net (gain) loss    |  |               
|                                         |  |               
|Net periodic benefit
      cost          |  | $             
|                                         |  |               

The amount included within other comprehensive income arising from changes
  in the additional minimum pension liability was $272,000 in fiscal year 1999
  and a charge of $70,000 for fiscal year 1998.

The prior-service costs are amortized on a straight-line basis over the average
  remaining working lifetime of participants. Gains and losses in excess of 10%
  of the greater of benefit obligation and the market-related value of assets
  are amortized over the average remaining working lifetime of participants expected
  to receive benefits.



|                              |                                             |              |  |       |  |  |  |       |  |  |  | 
|----------------------------- | ------------------------------------------- | ------------ |  | ----- |  |  |  | ----- |  |  |  | 
|                              |                                             |              |  |      
|                              |                                             | Fiscal Years
|                              |                                             | 1999         |  | 1998 
|                              |                                             |              |  |      
|                              |                                             |             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Weighted average assumptions: |                                             |              |  |       |  |  |  |      
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                              | Discount rate                               |              |  | 7.75% |  |  |  | 7.00% | 
|                             
|                             
|                             
|                             
|                              | Expected long-term rate of return on assets |              |  | 8.50% |  |  |  | 8.50% | 
|                             
|                             
|                             
|                             
|                              |                                             |              |  |      

MMI also contributes to certain multi-employer, defined benefit plans covering
  certain employees under other collective bargaining agreements. Total expenses
  for these plans were $345,000, $280,000 and $245,000 for fiscal years 1999,
  1998 and 1997, respectively.

33

---

Stock Options

On November 12, 1999 options for 15,660 shares of MMHC Class A Common Stock
  were redeemed at a price of $1.00 per share in connection with the 1999 Recapitalization
  transaction. All outstanding stock options were redeemed in this transaction
  and subsequently the plan was terminated. In 1999 and 1998, no options were
  issued or exercised.

On June 27, 1997, MMHC issued noncompensatory options for 1,000 shares of MMHC
  common stock to a director of MMI, exercisable for $1 per share, the fair value
  of the common stock at the date of grant. These options vest over a four-year
  period and expire five years from the date of grant. During 1997, MMHC issued
  3,230 shares of common stock pursuant to exercises of stock options.

Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation
  (SFAS 123) establishes alternative methods of accounting and disclosure for
  employee stock-based compensation arrangements. MMI uses the intrinsic value
  method of accounting as prescribed by Accounting Principles Board Opinion No.
  25, Accounting for Stock Issued to Employees, for MMHC's stock options granted
  to MMI's employees. This method does not result in the recognition of compensation
  expense when employee stock options are granted if the exercise price of the
  option equals or exceeds the fair market value of the stock at the date of grant.

If the provisions of SFAS 123 had been used in fiscal years 1999, 1998, and
  1997 earnings would not have been materially different than reported.

10. Income Taxes

Significant components of the provision for income taxes are as follows:

|          |                 |                |        |        |  |      |       |       |  |   |       |      
|--------- | --------------- | -------------- | ------ | ------ |  | ---- | ----- | ----- |  | - | ----- | -----
|          |                 | Fiscal Years  
|          |                
|          |                 | 1999           |        | 1998   |  | 1997
|          |                 |                |        |       
|          |                 |                |        |       
|          |                 |                |        |       
|          |                 |                |        |       
|          |                 |                |        |        |  |     
|          |                 | (In thousands)
|Current:  |                 |                |        |        |  |      |       |       |  |   |       |      
|          | Federal         |                | $      | 10,482 |  |      | $     | 5,759 |  |   | $     | 1,871
|          | State and local |                |        | 2,352  |  |      |       | 1,245 |  |   |       | 404  
|          |                 |                |        |        |  |     
|          |                 |                | 12,834 |        |  |      | 7,004 |       |  |   | 2,275 |      
|Deferred: |                 |                |        |        |  |      |       |       |  |   |       |      
|          | Federal         |                |        | 76     |  |      |       | 280   |  |   |       | 2,412
|          | State and local |                |        | 16     |  |      |       | 60    |  |   |       | 474  
|          |                 |                |        |        |  |     
|          |                 |                | 92     |        |  |      | 340   |       |  |   | 2,886 |      
|          |                 |                |        |        |  |     
|          |                 | $              | 12,926 |        |  | $    | 7,344 |       |  | $ | 5,161 |      
|          |                 |                |        |        |  |     

34

---

Deferred income taxes reflect the net tax effects of temporary differences
  between the carrying amounts of assets and liabilities for financial reporting
  purposes and the amounts used for income tax purposes. Significant components
  of MMI's deferred tax liabilities and assets are as follows:

|                               |                                 |                              |       |                 |   |       |       | 
|------------------------------ | ------------------------------- | ---------------------------- | ----- | --------------- | - | ----- | ----- | 
|                               |                                 | January 1, 2000              |       | January 2, 1999
|                               |                                 |                              |       |                
|                               |                                 |                             
|                               |                                 | (In thousands)              
|Deferred tax liability:        |                                 |                              |       |                 |   |       |       | 
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                               | Property, plant and equipment   | $                            | 4,925 |                 |   | $     | 5,049 | 
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                               | Trade receivables valuation     |                              | 558   |                 |   |       | 837   | 
|                               | Other                           |                              | 3,040 |                 |   |       | 2,107 | 
|                               |                                 |                              |       |                
|Total deferred tax liabilities |                                 |                              | 8,523 |                 |   |       | 7,993 | 
|Deferred tax assets:           |                                 |                              |       |                 |   |       |       | 
|                               | Inventory valuation             |                              | 1,065 |                 |   |       | 771   | 
|                               | Allowance for doubtful accounts |                              | 732   |                 |   |       | 715   | 
|                               | Self-insurance accruals         |                              | 684   |                 |   |       | 667   | 
|                               | Other                           |                              | 527   |                 |   |       | 417   | 
|                               |                                 |                              |       |                
|Total deferred tax assets      |                                 |                              | 3,008 |                 |   |       | 2,570 | 
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                               |                                 |                              |       |                
|                               |                                 | Net deferred tax liabilities |       |                 | $ | 5,515 |       | 
|                               |                                 |                              |       |                

The reconciliation of income tax computed at the U.S. federal statutory tax
  rate to income tax expense is as follows for fiscal years 1999, 1998, and 1997:

|                         |                                                              |                |        |       |  |      |       |     |  |   |       |    
|------------------------ | ------------------------------------------------------------ | -------------- | ------ | ----- |  | ---- | ----- | --- |  | - | ----- | ---
|                         |                                                              | Fiscal Years  
|                         |                                                             
|                         |                                                              | 1999           |        | 1998  |  | 1997
|                         |                                                              |                |        |      
|                         |                                                              |                |        |      
|                         |                                                              |                |        |      
|                         |                                                              |                |        |      
|                         |                                                              |                |        |       |  |     
|                         |                                                              | (In thousands)
|Tax at US statutory rate |                                                              | $              | 11,034 |       |  | $    | 6,396 |     |  | $ | 4,514 |    
|                         | State and local income taxes, net of federal
        benefit |                |        | 1,587 |  |      |       | 844 |  |   |       | 572
|                         | Other, net                                                   |                |        | 305   |  |      |       | 104 |  |   |       | 75 
|                         |                                                              |                |        |       |  |     
|Total                    |                                                              | $              | 12,926 |       |  | $    | 7,344 |     |  | $ | 5,161 |    
|                         |                                                              |                |        |       |  |     

11. Contingencies

MMI is involved in a number of legal actions arising in the ordinary course
  of business. MMI believes that the various asserted claims and litigation in
  which it is involved will not materially affect its financial position or future
  operating results, although no assurance can be given with respect to the ultimate
  outcome of any such claim or litigation.

35

---

12. Segment Reporting

MMI has five operating units that are aggregated into two reportable segments;
  Fence and Concrete Construction Products. The Fence Segment has three operating
  units that offer similar products and services. The Concrete Construction Products
  Segment has two operating units that offer complimentary products and services
  within the concrete construction industry.

Fence Segment. The Fence Segment manufactures chain link fence fabric,
  a full line of aluminum die cast and galvanized pressed steel fittings, ornamental
  iron products, PVC color coated wire and vinyl coated color pipe, tubing and
  fittings. In addition, the segment also distributes a variety of fence products
  including pipe, tubing, wood, vinyl, aluminum, and ornamental iron fence products,
  gates, hardware, and other related products. The fence products are used in
  a variety of residential and commercial applications.

Concrete Construction Products Segment. The Concrete Construction Products
  Segment manufactures wire mesh and a variety of concrete accessories. Concrete
  accessories include supports for steel reinforcing bars and wire mesh, form
  ties, basket assemblies, anchors and inserts. The concrete construction products
  are used in the construction of roads, bridges and other heavy construction
  projects including commercial buildings.

The accounting policies of the reportable segments are the same as those described
  in Note 1. MMI evaluates the performance of its operating segments based upon
  income before interest expense, income taxes, depreciation, amortization and
  nonrecurring items.

36

---

Summarized financial information concerning the reportable segments is shown
  in the following table. The Corporate column for earnings before interest and
  income taxes represents only amortization of intangibles and nonrecurring items.
  Corporate general and administrative expenses are allocated to the segments
  based upon proportional net sales.

Fiscal Year 1999ConcreteFence
      Construction
      Corporate
      Total(In thousands)External sales
      $
      270,714
      
      $
      209,891
      
      $
      -
      
      $
      480,605Nonrecurring expenses (1)
      
      -
      
      
      -
      
      
      2,441
      
      
      2,441Earnings before interest and income taxes
      
      19,456
      
      
      35,165
      
      
      (3,642
      )
      
      50,979Interest expense
      
      -
      
      
      -
      
      
      19,453
      
      
      19,453Income taxes
      
      -
      
      
      -
      
      
      12,926
      
      
      12,926Net income
      
      19,456
      
      
      35,165
      
      
      (36,021
      )
      
      18,600Depreciation
      
      3,647
      
      
      4,187
      
      
      -
      
      
      7,834EBITDA (2)
      
      23,101
      
      
      39,352
      
      
      -
      
      
      62,453Segment assets (3)
      
      107,219
      
      
      94,791
      
      
      41,473
      
      
      243,483Capital expenditures
      
      2,153
      
      
      4,385
      
      
      93
      
      
      6,631Fiscal Year 1998ConcreteFence
      Construction
      Corporate
      Total(In thousands)External sales
      $
      208,117
      
      $
      210,238
      
      $
      -
      
      $
      418,355Earnings before interest and income taxes
      
      14,043
      
      
      22,315
      
      
      (764
      )
      
      35,594Interest expense
      
      -
      
      
      -
      
      
      17,320
      
      
      17,320Income taxes
      
      -
      
      
      -
      
      
      7,344
      
      
      7,344Net income
      
      14,043
      
      
      22,315
      
      
      (25,428
      )
      
      10,930Depreciation
      
      2,919
      
      
      3,504
      
      
      -
      
      
      6,423EBITDA (2)
      
      16,962
      
      
      25,819
      
      
      -
      
      
      42,781Segment assets (3)
      
      89,304
      
      
      92,700
      
      
      38,222
      
      
      220,226Capital expenditures
      
      1,606
      
      
      8,325
      
      
      295
      
      
      10,226Fiscal Year 1997ConcreteFence
      Construction
      Corporate
      Total(In thousands)External sales
      $
      177,640
      
      $
      169,265
      
      $
      -
      
      $
      346,905Earnings before interest and income taxes
      
      11,290
      
      
      14,980
      
      
      (354
      )
      
      25,916Interest expense
      
      -
      
      
      -
      
      
      13,018
      
      
      13,018Income taxes
      
      -
      
      
      -
      
      
      5,161
      
      
      5,161Net income
      
      11,290
      
      
      14,980
      
      
      (18,533
      )
      
      7,737Depreciation
      
      2,432
      
      
      2,721
      
      
      -
      
      
      5,153EBITDA (2)
      
      13,722
      
      
      17,701
      
      
      -
      
      
      31,423Segment assets (3)
      
      63,200
      
      
      69,683
      
      
      19,935
      
      
      152,818Capital expenditures
      
      1,277
      
      
      3,126
      
      
      157
      
      
      4,560






(1) Nonrecurring stock compensation expense resulting
    from the exercise of stock options as part of the 1999 Recapitalization of
    MMHC.
    (2) EBITDA is defined as the sum of income before interest expense, income
    taxes, depreciation and amortization, and certain nonrecurring expenses (see
    note (1) above). EBITDA is presented because it is a widely accepted financial
    indicator of a company's ability to service and incur debt. EBITDA should
    not be considered in isolation from or as a substitute for net income or cash
    flow measures prepared in accordance with generally accepted accounting principles
    or as a measure of a company's profitability or liquidity.
    (3) Segment assets include accounts receivable, inventory and property, plant
    and equipment. Corporate assets include all other components of total consolidated
    assets.

37

---



13. Quarterly Financial Data (Unaudited)

|(In thousands) | 1999 (by fiscal quarter)
|-------------- | ------------------------
|               |                         
|               | 1                       
|               |                         
|Net sales      | $                       
|Gross profit   |                         
|Net income     |                         
|               |                         
|               | 1998 (by fiscal quarter)
|               |                         
|               | 1                       
|               |                         
|Net sales      | $                       
|Gross profit   |                         
|Net income     |                         
|               |                         



14. Subsequent Events

On January 10, 2000, Security Fence Supply Co. Inc. a wholly
    owned subsidiary was merged into MMI.

On February 3, 2000, MMI purchased all of the issued and outstanding capital
    stock of Hallett Wire Products Company, a Minnesota corporation ("Hallett").
    Hallett manufactured welded wire mesh at plant facilities located in St. Joseph,
    Missouri and Kingman, Arizona. Hallett had net sales of approximately $37
    million for the year ended December 31, 1999. The total acquisition price
    was $40 million in cash and was funded by MMI's revolving credit facility.



Item 9. Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

None.

38

---

PART III

Item 10. Directors and Executive Officers of the Registrant

The following table sets forth certain information regarding
    MMI's directors and executive officers, including their respective ages.



|Name                 |  | Age |  | Position                                                       
|-------------------- |  | --- |  | ---------------------------------------------------------------
|                     |  |     |  |                                                                
|Julius S. Burns      |  | 67  |  | President and Chief Executive Officer; Director                
|Thomas F. McWilliams |  | 57  |  | Director                                                       
|Carl L. Blonkvist    |  | 63  |  | Director                                                       
|Stuyvesant Comfort   |  | 28  |  | Director                                                       
|John Sexton          |  | 57  |  | Director                                                       
|Robert N. Tenczar    |  | 50  |  | Vice President, Chief Financial Officer and
        Secretary  
|James M. McCall      |  | 57  |  | Vice President - General Manager - Mesh                        
|Davy J. Wilkes       |  | 62  |  | Vice President - General Manager - Concrete
        Accessories
|Mike W. Weaver       |  | 52  |  | Vice President - General Manager - Fence                       
|                     |  |     |  |                                                                

Julius S. Burns has been President and Chief Executive Officer
    and a director of MMI since February 1989. Prior to February 1989, Mr. Burns
    served as President and General Manager of Ivy Steel & Wire Company, Inc.,
    a predecessor to MMI, for 13 years. Mr. Burns has 34 years of related industry
    experience.

Thomas F. McWilliams has been a director of MMI since 1992.
    Mr. McWilliams is Managing Director of Citicorp Venture Capital, Ltd., a small
    business investment company ("CVC"), and has been affiliated with
    CVC since 1983. Mr. McWilliams is a member of CVC's three-person investment
    committee. Mr. McWilliams is a director of Chase Brass Industries, Inc., a
    metals processing company, Ergo Science Corporation, a pharmaceutical product
    development company and various other private companies.

Carl L. Blonkvist has been a director of MMI since April 1997.
    Mr. Blonkvist is Senior Vice President of Operations for the Brinkmann Corporation,
    and has been affiliated with the Brinkmann Corporation since June 1996. Mr.
    Blonkvist was Senior Vice President of Coca-Cola Foods from January 1994 to
    April 1996, and was a Senior Partner of Computer Science Corporation, a consulting
    firm, from 1991 to 1994. In 1984, Mr. Blonkvist formed Paragon Consulting
    Group, a consulting firm specializing in operations strategy, which was purchased
    by Computer Science Corporation in 1991.

Stuyvesant Comfort has been a director of MMI since December
    1999. Mr. Comfort was an executive at Alchemy Partners, a U.K. based private
    equity advisor, and has been affiliated with Alchemy Partners from February
    1999 to February 2000. Mr. Comfort previously served in the strategic investments
    and acquisitions group of Microsoft Corporation from March 1996 to December
    1998.

John Sexton has been a director of MMI since December 1999.
    Mr. Sexton is a Professor of Law and Dean at New York University School of
    Law. Mr. Sexton has been with New York University School of Law since 1981.
    Mr. Sexton was a law clerk for the U.S. Court of Appeals and U.S. Supreme
    Court from 1979 to 1981. Currently Mr. Sexton is a director of Fund for Modern
    Courts and was a director for National Association of Securities Dealers Regulations,
    Inc.

39

---



Robert N. Tenczar has been Vice President, Chief Financial Officer
    and Secretary of MMI since May 1993. From 1985 to 1993, Mr. Tenczar was employed
    by Baker Hughes Incorporated, Houston, Texas, his last assignment as Vice
    President - Finance of its EnviroTech Controls division.

James M. McCall has been employed with MMI and its predecessors
    in various management positions of increasing responsibility since 1975, most
    recently as MMI's Vice President - General Manager - Mesh since 1989. Mr.
    McCall has 36 years of related industry experience.

Davy J. Wilkes has been employed by MMI and its predecessors
    since 1974, most recently as MMI's Vice President - General Manager - Concrete
    Accessories since November 1992. Mr. Wilkes has 40 years of related industry
    experience.

Mike W. Weaver has been employed by MMI and its predecessors
    since 1971, most recently as MMI's Vice President - General Manager - Fence
    since September 1998. Mr. Weaver has 29 years of related industry experience.

Each director holds office until the next annual meeting of
    stockholders of MMI or until their successor is duly elected and qualified.
    All officers are elected annually and serve at the direction of the Board
    of Directors. In 1999 the Board of Directors approved a resolution to increase
    the number of members to five. Directors of MMI are reimbursed for all expenses
    actually incurred for each Board meeting which they attend. One member of
    the Board of Directors receives a fee of $2,000 per meeting he attends. The
    other members of the Board of Directors do not receive a fee for any meetings
    they attend. The executive officers of MMI are elected by the Board of Directors
    to serve at the discretion of the Board.

Indemnification of Directors

MMI has entered into Indemnification Agreements with certain
    of its directors and executive officers pursuant to which it will indemnify
    such persons against expenses (including attorney's fees), judgments, fines
    and amounts paid in settlement incurred as a result of the fact that such
    person in his or her capacity as a director or officer, is made or threatened
    to be made a party to any suit or proceeding. Such persons will be indemnified
    to the fullest extent now or hereafter permitted by the General Corporation
    Law of the State of Delaware.

The Indemnification Agreements also provide for the advancement
    of certain expenses to such directors and officers in connection with any
    such suit or proceeding.

40

---



Item 11. Executive Compensation

The following table sets forth the compensation for fiscal years
    1999, 1998, and 1997 awarded to or earned by the chief executive officer of
    MMI and the four other most highly compensated executive officers of MMI who
    were serving as executive officers at January 1, 2000.



|Summary Compensation Table
|--------------------------
|                          
|                          
|                          

|Name and Principal Position (1)        |  |      |  |   | Salary  |  |   | Bonus     |  |   | 401 (k) |  |   | Pension | 
|-------------------------------------- |  | ---- |  | - | ------- |  | - | --------- |  | - | ------- |  | - | ------- | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|Julius S. Burns - President and Chief  |  | 1999 |  | $ | 275,040 |  | $ | 969,198   |  | $ | -       |  | $ | 30,000  | 
|Executive Officer; Director            |  | 1998 |  |   | 275,040 |  |   | 1,230,726 |  |   | -       |  |   | 28,399  | 
|                                       |  | 1997 |  |   | 250,020 |  |   | 450,000   |  |   | 1,344   |  |   | 26,295  | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|James M. McCall - Vice President -     |  | 1999 |  |   | 169,320 |  |   | 101,592   |  |   | 1,116   |  |   | 12,429  | 
|General Manager - Mesh                 |  | 1998 |  |   | 160,500 |  |   | 90,652    |  |   | 1,089   |  |   | 11,548  | 
|                                       |  | 1997 |  |   | 150,000 |  |   | 90,000    |  |   | 794     |  |   | 9,965   | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|Mike W. Weaver - Vice President -      |  | 1999 |  |   | 156,720 |  |   | 94,032    |  |   | 1,101   |  |   | 8,767   | 
|General Manager - Fence                |  | 1998 |  |   | 131,090 |  |   | 55,710    |  |   | 842     |  |   | 6,619   | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|Davy J. Wilkes - Vice President -      |  | 1999 |  |   | 156,000 |  |   | 93,600    |  |   | 1,085   |  |   | 19,822  | 
|General Manager - Concrete Accessories |  | 1998 |  |   | 132,850 |  |   | 77,652    |  |   | 1,003   |  |   | 15,375  | 
|                                       |  | 1997 |  |   | 124,170 |  |   | 68,040    |  |   | 928     |  |   | 13,215  | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|Robert N. Tenczar - Vice President,    |  | 1999 |  |   | 144,160 |  |   | 84,240    |  |   | 1,102   |  |   | 6,761   | 
|Chief Financial Officer and Secretary  |  | 1998 |  |   | 136,940 |  |   | 78,012    |  |   | 1,029   |  |   | 5,927   | 
|                                       |  | 1997 |  |   | 125,480 |  |   | 69,840    |  |   | 763     |  |   | 4,970   | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 
|                                       |  |      |  |   |         |  |   |           |  |   |         |  |   |         | 



(1) The named executive officers did not receive
    annual compensation not properly categorized as salary or bonus, except for
    certain perquisites and other personal benefits which are not shown because
    the aggregate amount of such compensation for each of the named executive
    officers during the fiscal year did not exceed the lesser of $50,000 or 10%
    of total salary and bonus reported for such executive officer.

None of the executive officers named in the Summary Compensation
    table were granted options to purchase any capital stock of MMHC during fiscal
    years 1999 or 1998.

401(k) Plan

MMI maintains the MMI Products, Inc. 401(k) Savings Plan (the
    "401(k) Plan"). All MMI employees are eligible to participate in
    the 401(k) Plan after one year of employment. Employees may elect to make
    pre-tax contributions up to the applicable statutory maximum limits to the
    401(k) Plan. MMI makes matching contributions (subject to statutory limits)
    in an amount equal to 25% of the employee's contributions up to 2% of the
    employee's compensation. In addition, MMI may make additional contributions
    in such amounts as it may elect. Company contributions are vested at a rate
    of 25% for each year of service.

41

---

Pension Plan

MMI maintains the MMI Products, Inc. Pension Plan (the "Pension
    Plan"), which is a money purchase defined contribution plan. Employees
    of MMI (other than employees covered by a collective bargaining agreement)
    generally are eligible to participate in the Pension Plan after one year of
    employment. MMI makes annual contributions to the Pension Plan for each eligible
    employee in accordance with a formula that is based on the participant's age
    and level of compensation. The Pension Plan provides for 100% vesting after
    five years of service.

Compensation of Directors

See Item 10, which is incorporated heren by reference, for a
    description of compensation of directors.

Employment Agreement

Julius S. Burns, MMI's President and Chief executive Officer,
    has entered into an employment agreement with MMI that will expire (unless
    renewed) on December 31, 2003. The agreement provides for a base salary of
    $275,000 per year, which may be increased annually in the discretion of the
    Board of directors, and a discretionary annual bonus based on performance
    criteria established from time to time by the Board of Directors.

If Mr. Burns' employment is terminated as a result of his death
    or total disability, then Mr. Burns (or his estate in the event of his death)
    shall be entitled to receive Mr. Burns' base salary accrued through the date
    of termination of employment plus bonus payment prorated to the date of termination
    based on Mr. Burns' bonus for the previous year.

If Mr. Burns' employment is terminated by MMI for Cause (as
    defined therein), Mr. Burns will be entitled to receive only his base salary
    accrued through the date of termination of employment. If Mr. Burns' employment
    is terminated by MMI other than for Cause, Mr. Burns will be entitled to receive,
    as a lump sum payment, the amounts to which he (or his estate) would have
    been entitled in the event of his death or total disability, plus monthly
    severance equal to his base salary for the lesser of twelve months or the
    remaining term of the employment agreement.

If Mr. Burns' employment is terminated by MMI within one year
    following a "change of control," then, in addition to the compensation
    to which Mr. Burns would be entitled in the event of termination other than
    for Cause (and in lieu of any other bonus payment), Mr. Burns will be entitled
    to receive a bonus payment prorated for the lesser of twelve months or the
    remaining term of the Employment Agreement.

Non-Compete in Employment Agreement

Mr. Burn's employment agreement also contains a non-competition
    provision under which he has agreed not to: (i) disclose, during or after
    the term of his employment, any of the confidential information of MMI to
    any person or entity for any reason or purpose whatsoever, (ii) solicit or
    induce for a period of two years following termination any person employed
    by, or the agent of, MMI to terminate his contract of employment or agency
    with MMI and (iii) compete with MMI in any business in which MMI is engaged
    in at the date of termination in any state in the United States of America
    in which MMI has made sales during the twelve months immediately preceding
    termination for a period of two years following termination. If Mr. Burns
    is terminated by the Board of Directors of MMI by written or oral notice,
    Mr. Burns' non-competition restriction will apply only for a period of one
    year, plus the number of months MMI elects to pay monthly severance payments
    to Mr. Burns after the expiration of such one year period.

42

---



Compensation Committee Interlocks and Insider Participation

The Board of Directors of MMI is responsible for determining
    executive officer compensation. Julius S. Burns currently serves as both a
    director and the President and Chief Executive Officer of MMI.

Item 12. Security Ownership of Certain Beneficial Owners
    and Management

MMI is a wholly owned subsidiary of MMHC. The following table
    sets forth certain information regarding the beneficial ownership of MMHC's
    capital stock as of March 21, 2000, by (1) each person who is known to MMI
    to beneficially own more than five percent (5%) of any class of voting securities
    of MMHC, (2) each of our directors and executive officers and (3) all directors
    and officers as a group. MMHC has three classes of Common Stock. MMHC's Class
    A Common Stock, par value $0.01 per share (the "Class A Common Stock"),
    Class B Common Stock, par value $0.01 per share (the "Class B Common
    Stock") and Class C Common Stock, par value $0.01 per share (the "Class
    C Common Stock") vote together as a single class. The Class A Common
    Stock is the class into which all other classes of Common Stock are convertible
    under certain circumstances, and until all classes are converted, has 17%
    of the combined voting power of all three classes of Common Stock. Each share
    of Class A Common Stock has voting power equal to its pro rata share of such
    17.0% vote. The only outstanding shares of Class A Common Stock are held by
    Carl Blonkvist. The Class B Common Stock has 49.5% of the combined voting
    power of the three classes of Common Stock and is held by CVC and its affiliates
    and associates. All of the Class B Common Stock shares will be voted in accordance
    with a majority of interest vote of such class, which is held by CVC. The
    Class C Common Stock has 33.5% of the combined voting power of the three classes
    of Common Stock and is held by management of MMHC. Class B Common Stock is
    convertible into Class A Common Stock upon the first to occur of the date
    on which the outstanding number of shares of Class B Common Stock represents
    less than 45% of the outstanding Common Stock and upon a vote of the holders
    of a majority in interest of the Class B Common Stock to convert their shares
    of Class B Common Stock into Class A Common Stock. In addition, any holder
    of the Class B Common Stock, other than CVC may convert his or its shares
    to Class A Common Stock at such time that such person is no longer affiliated
    or associated with CVC. The Class C Common Stock automatically converts into
    Class A Common Stock upon an initial public offering, if required by the underwriters,
    or at such time that no shares of Class B Common Stock are still outstanding.
    As of March 21, 2000, 2,000 shares of Class A Common Stock, 818,164 shares
    of Class B Common Stock and 126,536 shares of Class C Common Stock, were outstanding.

43

---



|                                                         |                            |            |         |               |  |  |       |   |  |  |  | 
|-------------------------------------------------------- | -------------------------- | ---------- | ------- | ------------- |  |  | ----- | - |  |  |  | 
|                                                         |                            |            |         | Percentage of
|                                                         |                            | Number of  |         | Total Voting 
|                                                         |                            | Shares (1) |         | Power (2)    
|                                                         |                            |            |         |              
|                                                         |                            |           
|5% Shareholders                                         
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|Citicorp Venture Capital, Ltd.                           |                            |            | 538,170 |               |  |  | 56.85 | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 399 Park Avenue            |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 14th Floor, Zone 4         |            |         |               |  |  |       |   | 
|                                                         | New York, New York 10043   |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |                            |            |         |               |  |  |       |  
|CCT Partners III, L.P. (3) (4)                           |                            |            | 188,233 |               |  |  | 19.88 | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |                            |            |         |               |  |  |       |  
|Julius S. Burns (5)                                      |                            |            | 56,000  |               |  |  | 5.91  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 8506 Tranquil Park Drive   |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Spring, Texas 77379        |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|Directors and Executive Officers                         |                            |            |         |               |  |  |       |  
|Carl Blonkvist                                           |                            |            | 2,000   |               |  |  | 0.21  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 5121 Tanbark Drive         |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Dallas, Texas 75229        |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|Thomas P. McWilliams (3)                                 |                            |            | 27,891  |               |  |  | 2.95  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         |                            |            |         |               |  |  |       |  
|Robert N. Tenczar                                        |                            |            | 7,016   |               |  |  | 0.74  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 14807 Bramblewood Drive    |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Houston, Texas 77079       |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|James M. McCall                                          |                            |            | 12,939  |               |  |  | 1.37  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 2014 Crystal Springs Drive |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Kingwood, Texas 77339      |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|Davy J. Wilkes                                           |                            |            | 3,500   |               |  |  | 0.37  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 5214 Jules Verne Court     |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Tampa, Florida 33611       |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|Michael W. Weaver                                        |                            |            | 8,428   |               |  |  | 0.89  | %
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 3407 Cedar Mill Court      |            |         |               |  |  |       |   | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Kingwood, Texas 77339      |            |         |               |  |  |       |   | 
|                                                         |                            |            |         |               |  |  |       |  
|All directors and officers as
        a group (1 person) |                            |            | 126,536 |               |  |  | 13.37 | %

(1) On March 6, 2000, the Board of Directors
    authorized the issuance of additional Class C Common Stock to Julius S. Burns,
    Robert N. Tenczar, James M. McCall, and Michael W. Weaver. MMHC has not yet
    entered into agreements with these officers and director for the issuance
    of such shares.
    (2) Percentage given on a basis as if all shares of Class B Common Stock and
    Class C Common Stock were converted into shares of Class A Common Stock.
    (3) Address is: c/o Citicorp Venture Capital, Ltd., 300 Park Avenue, 14th
    Floor, Zone 4, New York, New York, 10043
    (4) Thomas P. McWilliams has a 26.2% indirect interest, and William T. Comfort
    has a 20% indirect interest, in CCT Partners III, L.P.'s investment in MMHC.
    (5) Julius S. Burns is also a Director and Chief Executive Officer of MMHC.

44

---



Item 13. Certain Relationships and Related Transactions

Recapitalization

On November 12, 1999, MMHC completed a recapitalization transaction
    (the "1999 Recapitalization") in which (i) MMHC entered into a $69.2
    million subordinated credit facility due in 2007 (the "MMHC Credit Facility")
    with an investment fund managed by an affiliate of MMHC's majority economic
    owner, (ii) MMHC redeemed its existing equity interests including stock options
    granted to certain employees and a director of MMI, and (iii) certain MMHC
    stockholders and new stockholders invested in new common and preferred stock
    of MMHC. Interest at a rate of 14% per annum on the MMHC Credit Facility is
    payable semi-annually in cash or in kind at the option of MMHC. In connection
    with the MMHC Credit Facility, MMHC also issued a warrant to such lender to
    purchase its Class B Common Stock. The warrant is not exercisable until September
    30, 2007. The MMHC preferred shares have a stated value of $64.8 million and
    accrue cumulative preferred dividends at a rate of 12% per annum. Cash payment
    of dividends on MMHC's common and preferred stock is not permitted while the
    MMHC Credit Facility is outstanding.

Availability of cash at MMHC to pay the MMHC Credit Facility
    interest and cumulative preferred dividends is principally dependent upon
    MMI's cash flows. MMI's revolving credit facility agreement and senior subordinated
    notes indenture require MMI to meet certain restricted payment tests before
    distribution of any dividends to MMHC.

As a result of the MMHC 1999 Recapitalization, MMI recognized
    a non-cash compensation charge of $2.4 million ($1.4 million net of tax) relating
    to the redemption of MMHC's stock options granted in previous years to certain
    employees.

45

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PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports
    on Form 8-K

(a) 1. Financial Statements
    Included in Part II of this report:
    Report of Independent Auditors 
    Consolidated Balance Sheets at fiscal year end 1999 and 1998

Consolidated Statements of Operations for fiscal years 1999,
    1998 and 1997

Consolidated Statements of Changes in Stockholder's Equity
    for fiscal years 1999, 1998 and 1997

Consolidated Statements of Cash Flows for fiscal years 1999,
    1998 and 1997

Notes to Consolidated Financial Statements

2. Financial Statement Schedule
    Included in Part IV of this report:

Schedule II - Valuation and Qualifying Accounts

Other schedules are omitted because of the absence of conditions
    under which they are required or because the required information is given
    in the financial statements or notes thereto.

46

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Exhibits

3.1 Restated Certificate of Incorporation of MMI Products, Inc.
    (1)
    3.2 Amended and Restated By-laws of MMI Products, Inc. (1)
    4.1 Indenture dated as of April 16, 1997 between MMI Products, Inc. and U.S.
    Trust Company of Texas, N.A. (1)
    10.1 Registration Rights Agreement dated as of April 16, 1997 among MMI Products,
    Inc. and Bear, Stearns & Co. Inc. (1)
    10.2 Registration Rights Agreement dated as of February 12, 1999 among MMI
    Products, Inc. and Bear, Stearns & Co. Inc. (2)
    10.3 Loan and Security Agreement dated as of December 13, 1996 among MMI Products,
    Inc., Fleet Capital Corporation, as a lender and collateral agent, and Transamerica
    Business Credit Corporation, as amended. (1)
    10.4 Employment Agreement dated as of January 1, 2000 by and among MMI Products,
    Inc. and Julius S. Burns. (3)
    10.5 Amendment No. 4 to the MMI Products, Inc. Pension Plan. (5)
    10.6 Amendment to the MMI Products, Inc. Pension Plan. (3)
    10.7 Procurement Agreement dated as of December 13, 1996 between MMI Products,
    Inc. and Mannesmann Pipe & Steel Corporation, as amended. (1)
    10.8 The Merchants Metals Holding Company 1988 Stock Option Plan dated as
    of December 12, 1988, as amended. (1)
    10.9 The MMI Products, Inc. 401(k) Savings Plan, as amended. (1)
    10.10 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and Julius S. Burns. (1)
    10.11 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and Carl L. Blonkvist. (1)
    10.12 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and Thomas F. McWilliams. (1)
    10.13 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and James M. McCall. (1)
    10.14 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and Davy J. Wilkes. (1)
    10.15 Indemnification Agreement dated as of April 16, 1997 between MMI Products,
    Inc. and Robert N. Tenczar. (1)
    10.16 Purchase Agreement dated as of April 11, 1997 among MMI Products, Inc.
    and Bear, Stearns & Co. Inc. (1)
    10.17 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and Julius S. Burns. (3)
    10.18 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and Robert N. Tenczar. (3)
    10.19 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and James M. McCall. (3)
    10.20 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and Davy J. Wilkes. (3)
    10.21 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and Michael Weaver. (3)
    10.22 Stock Repurchase Agreement dated as of November 12, 1999 between Merchants
    Metals Holding Company and Carl Blonkvist. (3)
    10.23 Asset Purchase Agreement by and between MMI Products, Inc. and Atlantic
    Steel Industries, Inc., dated as of June 10, 1996. (4)
    10.24 Asset Purchase Agreement by and between MMI Products, Inc. and The Burke
    Group, L.L.C., dated as of December 12, 1997. (4)
    10.25 Asset Purchase Agreement by and between MMI Products, Inc. and National
    Wholesale Fence, dated as of June 7, 1999. (3)
    10.26 Purchase Agreement dated as of February 9, 1999 among MMI Products,
    Inc. and Bear, Stearns & Co. Inc. (5)
    21.1 Security Fence Supply Co., Inc., a Maryland corporation. This subsidiary
    was merged with and into the registrant on January 10, 2000. (3)
    24 Power of Attorney (3)
    27 Financial Data Schedule (3)

(1) Incorporated by reference to the Exhibits filed with MMI
    Products, Inc.'s Registration Statement on Form S-4 (Registration No. 333-29141)
    (2) Incorporated by reference to the Exhibits filed with MMI Products, Inc.'s
    Registration Statement on Form S-4 (Registration No. 333-76971)
    (3) Filed herewith
    (4) Incorporated by reference to the Exhibits filed with MMI Products, Inc.'s
    Form 10-K for 1997.
    (5) Incorporated by reference to the Exhibits filed with MMI Products, Inc.'s
    Form 10-K for 1998.

(b) Reports on Form 8-K
    None



47

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SIGNATURES

Pursuant to the requirements of Section 13 and 15(d) of the
    Securities Exchange Act of 1934, the Registrant has duly caused this report
    to be signed on its behalf by the undersigned, thereunto duly authorized.

MMI PRODUCTS, INC.

By: /s/ Robert N. Tenczar
    Robert N. Tenczar, Vice President
    and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
    report is signed below by the following persons on behalf of the Registrant
    and in the capacities and on the dates indicated.

> Date: March 6, 2000 By: /s/ Julius S. Burns
>           Julius S. Burns, President
>           and Chief Executive Officer
>           (principal executive officer and director)

Date: March 6, 2000 By: /s/ Robert N. Tenczar
    Robert N. Tenczar, Vice President
    and Chief Financial Officer
    (principal financial and accounting officer)

Date: March 6, 2000 By: ___________*____________
    Thomas F. McWilliams, Director

Date: March 6, 2000 By: ___________*____________ 
    Carl L. Blonkvist, Director





* By: /s/ Robert N. Tenczar
    Robert N. Tenczar 
    Attorney-in-fact

48

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Schedule II

MMI Products, Inc.
    Valuation and Qualifying Accounts



|                                   |                                               |            |       |            |   |            |     |        |           |     |   |       | 
|---------------------------------- | --------------------------------------------- | ---------- | ----- | ---------- | - | ---------- | --- | ------ | --------- | --- | - | ----- | 
|                                   |                                               | Balance at |       | Charged to |   |            |     |        | Balance   |    
|                                   |                                               | Beginning  |       | Costs and  |   |            |     |        | at End of |    
|                                   |                                               | of Period  |       | Expenses   |   | Deductions |     | Period |          
|                                   |                                               |            |       |            |   |            |     |        |          
|                                   | (In thousands)                               
|Fiscal Year Ended January 1, 2000: |                                               |            |       |            |   |            |     |        |           |     |   |      
|                                   | Allowance for Doubtful Accounts               | $          | 1,926 |            | $ | 1,471      |     | $      | 730       | (1) | $ | 2,667 | 
|                                   | Reserve for damaged and slow-moving inventory |            | 634   |            |   | 270        |     |        | 115       | (2) |   | 789   | 
|                                   |                                               |            |       |            |   |            |     |        |           |     |   |       | 
|Fiscal Year Ended January 2, 1999: |                                               |            |       |            |   |            |     |        |           |     |   |      
|                                   | Allowance for Doubtful Accounts               | $          | 1,876 |            | $ | 234        |     | $      | 184       | (1) | $ | 1,926 | 
|                                   | Reserve for damaged and slow-moving inventory |            | 946   |            |   | 103        |     |        | 415       | (2) |   | 634   | 
|                                   |                                               |            |       |            |   |            |     |        |           |     |   |       | 
|Fiscal Year Ended January 3, 1998: |                                               |            |       |            |   |            |     |        |           |     |   |      
|                                   | Allowance for Doubtful Accounts               | $          | 1,701 |            | $ | -          |     | $      | (175)     | (1) | $ | 1,876 | 
|                                   | Reserve for damaged and slow-moving inventory |            | 1,833 |            |   | (620)      | (3) |        | 267       | (2) |   | 946   | 
|                                   |                                               |            |       |            |   |            |     |        |           |     |   |       | 

(1) Uncollectible accounts written off, net of
    recoveries.
    (2) Write off of inventory.
    (3) Reversal of reserves due to changes in estimates.

49

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Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is made
    and entered into as of January 1, 2000, by MMI Products, Inc., a Delaware
    corporation (the "Company"), and Julius S. Burns, a resident of
    Texas (the "Employee").
    W I T N E S S E T H:
    WHEREAS, the Company desires to employ the Employee, and the Employee desires
    to accept such employment, on the terms and conditions set forth in this Agreement;
    and
    WHEREAS, in connection with the Employee's employment by the Company, the
    Employee entered into a Stock Repurchase Agreement with Merchants Metals Holding
    Company, a Delaware corporation and parent of the Company ("Holding"),
    dated as of November 12, 1999 ( the "Stock Repurchase Agreement");
    THEREFORE, in consideration of the premises and the covenants contained in
    this Agreement, and other good and valuable consideration, the receipt and
    sufficiency of which are hereby acknowledged, the Company and the Employee
    hereby agree as follows:

1. Employment. The Company hereby employs the Employee as its President and
    Chief Executive Officer, and the Employee hereby accepts such employment,
    upon the terms and conditions set forth in this Agreement.

2. Duties of the Employee. During the term of this Agreement, the Employee
    shall, under the direction of the Board of Directors of the Company, perform
    such executive, management, consulting, business development and other duties
    that the Board of Directors of the Company may from time to time assign, which
    are usual and customary for such positions described in Section 1. The Employee
    shall devote all of his business time, attention and energy to the Company;
    provided that the foregoing does not prohibit the Employee from making investments
    or performing charitable functions, that do not unreasonably interfere with
    the performance of his duties with the Company or otherwise violate the terms
    of this Agreement.

3. Compensation.
    (a) The Employee shall receive as compensation for his services hereunder
    an annual salary of $275,000, which sum shall be payable in equal semi?monthly
    installments (the "Base Compensation"). The Employee's Base Compensation
    shall be reviewed at least annually by the Board of Directors, and the Employee
    shall be entitled to such increases in his Base Compensation as the Board
    of Directors may determine.
    (b) The Employee will also be entitled to participate in the senior management
    incentive plan to be established by the Company that will afford the Employee
    the opportunity to earn incentive compensation as approved by the Company's
    Board of Directors. The amount payable to the Employee under such incentive
    plan will be based on the Company's earnings and return on investment, according
    to objectives determined by the Board of Directors.

4. Other Benefits. The Employee shall be entitled to participate in any health
    insurance, life insurance or other benefits that are generally extended, from
    time to time, to the employees of the Company (or to executives of the Company,
    if different from those provided to employees generally). The Employee shall
    be entitled to reasonable vacations, consistent with the Company's policies
    and Employee's position. Upon the submission of properly documented expense
    account reports, the Company shall reimburse the Employee for all reasonable
    travel and entertainment expenses incurred by the Employee in the course of
    his employment. The Company will also provide the Employee a car allowance
    in accordance with Company policy.

5. Term. The term of employment hereunder shall commence upon the date hereof
    and continue until December 31, 2003, unless sooner terminated in accordance
    with the provisions hereof.

6. Termination.
    6.1 Death or Disability. The employment of the Employee shall terminate automatically
    upon the death or total disability of the Employee. For the purpose of this
    Agreement, "total disability" shall be deemed to have occurred if
    in the sole judgment of the Board of Directors the Employee shall have been
    unable to perform the duties of his employment due to his mental or physical
    condition for a period of 180 days.
    6.2 Cause. The Company may terminate the employment of the Employee under
    this Agreement for Cause. For purposes of this Agreement, "Cause"
    means conduct of the Employee (i) resulting in the conviction of, or plea
    of nolo contendre to, a felony, (ii) which constitutes a material breach of,
    or continued gross neglect of his duties or responsibilities under, this Agreement,
    (iii) which constitutes fraud, dishonesty in connection with his employment,
    competition with the Company, Holdings or any of their respective subsidiaries,
    or unauthorized use of Confidential Information (as defined below), or (iv)
    which constitutes his failure to properly perform his duties in the reasonable
    good faith judgment of the Board of Directors of the Company; provided, however,
    the Company shall give Employee written notice of any actions alleged to constitute
    Cause under clause (ii) or (iv) above, and the Employee shall have a reasonable
    opportunity (as specified by the Board of Directors) to cure any such alleged
    Cause.
    6.3 Notice. The Board of Directors of the Company may terminate the employment
    of the Employee upon notice, written or oral, given or delivered to the Employee.

7. Compensation Upon Termination.
    7.1 Death or Disability. If the employment of the Employee is terminated pursuant
    to the provisions of Section 6.1, all rights of the Employee under this Agreement
    shall terminate, and no further compensation shall be payable to the Employee
    except as specifically provided herein; provided, however, that the Employee
    or the Employee's estate, heirs and beneficiaries, as applicable, shall be
    entitled to receive in a lump sum cash payment promptly after termination
    of the Employee's employment (a) Base Compensation accrued through the date
    of termination, as well as any reimbursable expenses incurred pursuant to
    Section 4 of this Agreement; (b) incentive compensation payable to the Employee
    pursuant to Section 3(b), prorated to the date of termination based upon the
    incentive compensation paid or payable to the Employee pursuant to Section
    3(b) in respect of the Company's preceding fiscal year; and (c) any other
    benefits specifically provided to the Employee under any benefit plan.
    7.2 Cause. If the employment of the Employee is terminated pursuant to the
    provisions of Section 6.2 herein, all rights of the Employee under this Agreement
    shall terminate, and no further compensation shall be paid to the Employee,
    other than Base Compensation accrued through the date of termination as well
    as any reimbursable expenses incurred pursuant to Section 4 of this Agreement.
    7.3 Termination of Employment. If the employment of the Employee under this
    Agreement is terminated pursuant to the provisions of Section 6.3 (other than
    as described in Section 7.4 below), all rights of the Employee under this
    Agreement shall terminate, and no further compensation shall be payable to
    the Employee except as specifically provided herein; provided, however, that
    the Employee shall be entitled to receive in a lump sum cash payment the amount
    determined under Section 7.1, plus monthly severance payments equal to his
    monthly Base Compensation for the lesser of (a) the number of months remaining
    under the term of this Agreement, or (b) 12 months.
    7.4 Change in Control. If the employment of the Employee under this, Agreement
    is terminated pursuant to the provisions of Section 6.3 within one year of
    a Change in Control (as defined below), all rights of Employee under this
    Agreement shall terminate and no further compensation shall be payable to
    the Employee except as specifically provided herein; provided, however, the
    Employee shall be entitled to receive in a lump sum cash payment the amount
    determined under Section 7.1 plus monthly severance payments in accordance
    with Section 7.3 plus incentive compensation pursuant to Section 3(b) pro
    rated for the period from the date of termination through the lesser of (a)
    the number of months remaining under the terms of this Agreement, or (b) 12
    months, in either case based upon the incentive compensation paid or payable
    to the Employee pursuant to Section 3(b) in respect of the Company's preceding
    fiscal year. As used herein, the term "Change in Control" shall
    mean (a) the sale, lease or other transfer of all or substantially all of
    the assets of the Company to any person or group (as such term is used in
    Section 13(d)(3) of the Securities Exchange Act of 1934, as amended); (b)
    the adoption by the stockholders of the Company of a plan relating to the
    liquidation or dissolution of the Company; (c) the merger or consolidation
    of the Company or Holding with or into another entity or the merger of another
    entity into the Company or Holding or any subsidiary thereof with the effect
    that immediately after such transaction the stockholders of the Company or
    Holding, as the case may be, immediately prior to such transaction (or their
    Related Parties (as defined below)) directly and indirectly hold (i) less
    than fifty percent (50%) of the common stock or other form of common equity
    and (ii) less than fifty percent (50%) of the stockholder voting power, of
    the entity surviving such merger or consolidation; or (d) the acquisition
    by any person or group, other than the current stockholders or their Related
    Parties, of (i) more than fifty percent (50%) of the common stock and (ii)
    more than fifty percent (50%) of the stockholder voting power, of the Company
    or Holding, as the case may be. Furthermore, as used herein, the term "Related
    Parties" shall mean with respect to any person (x) the spouse and lineal
    ascendants and descendants of such person, and any sibling of any of such
    persons and (y) any trust, corporation, partnership or other entity, the beneficiaries,
    stockholders, partners, owners or persons beneficially holding an eighty percent
    (80%) or more controlling interest of which consist of such person or the
    persons referred to in subsection (x) above.

8. Confidential Information and Agreement Not to Compete
    8.1 Disclosure of Information. The Employee will not, during or after the
    term of his employment, disclose any trade secrets or confidential information
    of the Company, Holding or any of their respective subsidiaries (such trade
    secrets and confidential information being "Confidential Information")
    to any person or entity for any reason or purpose whatsoever, except as may
    be required by law
    8.2 Agreement Not to Compete. Following the termination of his employment
    with the Company pursuant to Section 6, the Employee agrees that for a period
    of two years neither he nor any affiliate shall, either in his own behalf
    or as a partner, officer, director, employee, agent or shareholder (other
    than as the holder of less than 5% of the outstanding voting capital stock
    of any corporation with a class of equity security registered under the Securities
    Act of 1934, as amended) engage in, invest in or render services to any person
    or entity engaged in any businesses in which the Company is engaged at the
    date of termination and situated within any states of the United States of
    America in which the Company has made sales during the 12 months immediately
    preceding termination (a "Competitive Business"); provided that
    if the Employee is terminated pursuant to Section 6.3 of the Employment Agreement,
    the foregoing restriction will apply only for a period of one year, plus the
    number of months that the Company elects at its sole option (which may be
    zero but in no event greater than 12 months) to pay monthly severance payments
    equal to the Employee's monthly Base Compensation to the Employee after the
    expiration of such one?year period. Nothing contained in this Section shall
    be construed as restricting the Employee's right to sell or otherwise dispose
    of any business or investments owned or operated by the Employee as of the
    date of termination.
    8.3 Agreement Not to Solicit Employees. Following the, termination of his
    employment with the Company, the Employee agrees that for a period of two?years
    neither he nor any affiliate shall, either alone or on behalf of any business
    engaged in a Competitive Business, solicit or induce, or in any manner attempt
    to solicit or induce, any person employed by, or any agent of, the Company
    or any of its subsidiaries to terminate his contract of employment or agency,
    as the case may be, with the Company or any of its subsidiaries.
    8.4 Injunctive Relief. The parties agree that the remedy at law for the breach
    of any provision of this Section 8 will be inadequate and that, in addition
    to any other remedies it may have in the event, of breach, the Company shall
    be entitled to temporary and permanent injunctive relief to prevent the Employee's
    continued breach of such provisions without the necessity of proving actual
    damage. The covenants in this Section 8 are independent, and the existence
    of any claim or cause of action of the Employee or any of his affiliates against
    the Company, whether predicated on this Agreement or otherwise, shall not
    constitute a defense to the enforcement of this Agreement by the Company.

9. Notice. Any notice required or permitted hereunder shall be deemed sufficiently
    given if in writing and either personally delivered or sent by registered,
    certified, or first class mail, postage prepaid, addressed to the part at
    the address set forth below, or at such other address as the party may subsequently
    designate:

If to the Employee, to: (a) Julius S. Burns
    515 West Greens Road, #710
    Houston, Texas 77067
    If to the Company, to: (b) MMI Products, Inc.
    515 West Greens Road, #710
    Houston, Texas 77067
    Attn: Thomas F. McWilliams
    Copy to: Citicorp Venture Capital Ltd.
    399 Park Avenue
    Floor 14/Zone 4
    New York, New York 10022
    Attn: Thomas F. McWilliams

10. Amendment; Waiver. No modification or amendment hereof shall be valid
    and binding, unless it be in writing and signed by the parties hereto. The
    waiver of any provision hereof shall be effective only in the specific instance
    and for the particular purpose for which it was given. No failure to exercise,
    and no delay in exercising, any right or power hereunder shall operate as
    a waiver thereof.

11. Benefit. This Agreement shall inure to the benefit of and shall be binding
    upon the Employee, his heirs and personal representatives, and the Company,
    its successors and assigns. Neither this Agreement, nor the rights and obligations
    created hereunder, may be assigned by either party without the consent of
    the other party.

12. Invalid Provisions. If any provision of this Agreement is held to be illegal,
    invalid, or unenforceable under present or future laws effective during the
    term hereof, such provision shall be fully severable; this Agreement shall
    be construed and enforced as if such illegal, invalid, or unenforceable provisions
    had never comprised a part hereof; and the remaining provisions shall remain
    in full force and effect and shall not be affected by the illegal, invalid,
    or unenforceable provision or by its severance from this Agreement. Furthermore,
    in lieu of such illegal, invalid, or unenforceable provision, there shall
    be added automatically as a part of this Agreement a provision as similar
    in terms to such illegal, invalid, or unenforceable provision as may be possible
    and be legal, valid and enforceable.

13. Headings. The headings of the paragraphs of this Agreement have been inserted
    for convenience of reference only and shall in no way restrict or modify any
    of the terms or provisions hereof.

14. Attorney's Fees. If any action at law or in equity is necessary to enforce
    or interpret the terms of this Agreement, the prevailing party shall be entitled
    to reasonable attorney's fees, costs and necessary disbursements in addition
    to any other relief to which he or it may be entitled.

15. Entire Agreement; Modification. This Agreement and the Stock Repurchase
    Agreement contain the entire agreement among the parties and Holding and supersede
    all prior agreements and understandings, oral or written, with respect to
    the transactions contemplated herein and the Stock Repurchase Agreement, including
    any and all severance pay agreements between the Company or its predecessors
    and the Employee.

16. Governing Law. This Agreement has been entered into the State of Texas
    and shall be construed in accordance with, and governed by, the laws, excluding
    the conflicts of law rules, of the State of Texas.
    IN WITNESS WHEREOF, the parties have duly executed this Agreement, as of the
    date and year first above written.
    EMPLOYER;
    MMI PRODUCTS, INC.

By: ____________________________
    Thomas F. McWilliams,
    Director

EMPLOYEE:____________________
    Julius S. Burns



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Exhibit 10.6

RESOLUTION OF
    MMI PRODUCTS, INC.
    RESOLUTION - BOARD OF DIRECTORS
    Relating to the Amendment of MMI Products, Inc. Pension Plan
    April 30, 1999

WHEREAS, MMI Products, Inc. (hereinafter, "the Company")
    has heretofore adopted the MMI Products, Inc. Pension Plan (hereinafter, the
    "Plan"), which was adopted effective as of January 1, 1989, and
    subsequently amended; and
    WHEREAS, several entities have been and are anticipated to be acquired by
    the Company, and it is desired to provide service credited for various purposes
    under the Plan for employees of such acquired companies that become employees
    of the Company; and
    WHEREAS, the attached document constituting Amendment No. Four is presented
    to this Board for its approval with regard to such service credit;

NOW, THEREFORE, BE IT RESOLVED THAT:
    (1) Employees of the Company who, immediately preceding February 18, 1998,
    were employed (other than as employees subject to collective bargaining) by
    The Burke Group, LLC (the "Burke Predecessor Company"), will enter
    the Plan in accordance with its normal provisions and shall receive credit
    for vesting service under the terms of the Plan, for such prior service with
    the Burke Predecessor Company.
    (2) Employees of the Company who, immediately preceding March 2, 1998, were
    employed (other than as employees subject to collective bargaining) by Wholesale
    Fencing Supply, Inc., Midstate Fence Supply, and Wholesale Fence, Inc. (the
    "Wholesale Fencing Predecessor Company"), and who would meet the
    eligibility requirements of the Plan as of March 2, 1998, based on prior service
    with the Wholesale Fencing Predecessor Company, shall immediately participate
    under the Plan as of March 2, 1998. All other employees of the Company who,
    on or prior to March 2, 1998, had performed service for the Wholesale Fencing
    Predecessor Company, will receive credit for eligibility under the Plan, with
    entry under the Plan in accordance with its normal provisions. In addition,
    any employee of the Company who, immediately preceding March 2, 1998, was
    employed by the Wholesale Fencing Predecessor Company shall receive credit
    for vesting service under the terms of the Plan, for such prior service with
    the Wholesale Fencing Predecessor Company.
    (3) The proper officers of MMI Products, Inc. be and they are hereby authorized
    to do all acts and things necessary and proper to carry out the purpose of
    said Plan and to make such amendments and changes, if any, as may be necessary
    to ensure that the Plan remains qualified under Section 401(a) of the Internal
    Revenue Code of 1986.
    (4) Announcement shall be made to all affected employees covered by the Plan
    concerning the amendment of said Plan and the provisions thereof.
    RESOLVED FURTHER, that all acts/deeds previously performed by any of the officers
    of the Company prior to the date of these resolutions that are within the
    authority conferred by the foregoing resolutions are hereby approved, ratified
    and confirmed as the authorized acts and deeds of the Company.

___________________________ 
    Julius S. Burns 
    ___________________________ 
    Thomas F. McWilliams
    ___________________________
    Carl Blonkvist

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Exhibit 10.17

STOCK REPURCHASE AGREEMENT
    Julius S. Burns

This Stock Repurchase Agreement (the "Agreement") is made and entered
    into as of the 12th day of November, 1999, by and between Merchants Metals
    Holding Company, a Delaware corporation (the "Company"), and the
    person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class C Common
    Stock, par value $.01 per share, of the Company, as designated on the signature
    page hereto (the "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    fourth anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be employed by the Company
    or one or more of its subsidiaries for the reasons described in Section 2
    (a "Termination Event"), then the Company (or its designee) shall
    have the option (the "Repurchase Option") to purchase all or a portion
    of the Repurchase Shares in accordance with the provisions of Section 2 of
    this Agreement. If the Company (or its designee) desires to exercise the Repurchase
    Option, it shall give written notice of such exercise (the "Exercise
    Notice") to the Stockholder (or his personal representative in the event
    of his death) within 180 days following the occurrence of the Termination
    Event. The Exercise Notice shall indicate the number of the Repurchase Shares
    to be repurchased by the Company. The Exercise Notice also shall indicate
    the repurchase price, as calculated in accordance with Section 2 of this Agreement,
    to be paid for the Repurchase Shares to be repurchased and shall indicate
    the date (the "Repurchase Date") (which shall not be later than
    60 days following the date of the Exercise Notice, but may be extended for
    a period necessary for an appraiser to determine Fair Market Value as set
    forth in Section 2) on which the Repurchase Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Repurchase
    Shares to which the Exercise Notice relates, at the repurchase price calculated
    in accordance with Section 2 of this Agreement. The Repurchase Option shall
    expire 180 days following the occurrence of a Termination Event for any Repurchase
    Shares with respect to which an Exercise Notice has not been delivered by
    such date.

2. Repurchase Price and Vesting. Unless otherwise accelerated pursuant to
    this Section 2, ownership in the following Repurchase Shares shall vest with
    the Stockholder in the portions and on the dates as follows:
    (1) 1/4 of the Repurchase Shares on the day after the first anniversary of
    the Issuance Date;
    (2) an additional 1/4 of the Repurchase Shares on the day after the second
    anniversary of the Issuance Date;
    (3) an additional 1/4 of the Repurchase Shares on the day after the third
    anniversary of the Issuance Date; and 
    (4) an additional 1/4 of the Repurchase Shares on the day after the fourth
    anniversary of the Issuance Date (defined below).
    If the Stockholder's employment is terminated on or before the fourth anniversary
    of the Issuance Date (i) by the Stockholder, or (ii) by the Company for Cause,
    the Company may repurchase the Vested Shares for the Fair Market Value thereof
    and the Unvested Shares for a price of $1.00 per share.
    If the Stockholder's employment is terminated on or before the fourth anniversary
    of the Issuance Date (i) due to the Stockholder's death or disability, or
    (ii) by the Company without Cause, all of the Repurchase Shares shall become
    Vested Shares upon such event and the Company may repurchase the Vested Shares
    for the Fair Market Value thereof.
    As used in this Agreement, (i) "Cause" means conduct by the Stockholder
    (A) resulting in a conviction of, or plea of nolo contendre to, a felony,
    (B) constituting material breach of, or continued gross neglect of his duties
    or responsibilities under, the terms of his employment with the Company or
    any of its Subsidiaries, (C) constituting fraud, dishonesty in connection
    with his employment, competition with the Company or any of its subsidiaries,
    or unauthorized use of any trade secret or other confidential information
    of the Company or any of its subsidiaries, or (D) constituting the failure
    to properly perform his duties in the reasonable good faith judgment of the
    Board of Directors of the Company; provided, however, the Company shall give
    Stockholder written notice of any actions alleged to constitute Cause under
    clause (B) or (D) above, and the Stockholder shall have a reasonable opportunity
    (as specified by the Board of Directors) to cure any such alleged Cause, (ii)
    "Issuance Date" means the date of the purchase of the Repurchase
    Shares by the Stockholder, (iii) "Unvested Shares" means the shares
    of Repurchase Stock not vested pursuant to this Section 2 by the date of the
    Termination Event, and (iv) "Vested Shares" means the shares of
    Repurchase Stock vested pursuant to this Section 2 on or by the date of the
    Termination Event. 
    Also, as used in this Agreement, "Fair Market Value" of Vested Shares
    means the fair market value of such Vested Shares as determined by mutual
    agreement of the Board of Directors of the Company and the Stockholder. If
    within 15 days after the date of the Exercise Notice, such parties are unable
    to agree on such Fair Market Value, the Fair Market Value shall be determined
    by an independent appraiser mutually selected by the Board of Directors of
    the Company and the Stockholder. If such parties are unable to agree upon
    an appraiser within 30 days after the date of the Exercise Notice, the Board
    of Directors of the Company, on the one hand, and the Stockholder, on the
    other hand, shall each select an independent appraiser. Those two appraisers
    shall then select a third independent appraiser. That third independent appraiser
    shall determine the Fair Market Value, and such determination shall be binding
    upon the parties hereto.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Repurchase Shares, except by will or by the laws
    of descent and distribution at any time prior to the fourth anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Repurchase Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons,
    not affiliated with the then existing stockholders of the Company, of the
    capital stock of the Company which results in the holder(s) thereof becoming
    entitled to elect a majority of the members of the Board of Directors of the
    Company, (iv) in connection with a public offering of the Company's capital
    stock in which the Stockholder is permitted to participate by the Company
    or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing, the
    Stockholder may effect a Transfer of the Repurchase Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one `and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Thomas F. McWilliams 
    Thomas F. McWilliams
    Director

STOCKHOLDER:
    /s/ Julius S. Burns 
    Julius S. Burns

Purchased Common Stock: 56,000 shares of Class C Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 56,000 shares of Purchased Common Stock

---

Exhibit 10.18

STOCK REPURCHASE AGREEMENT

This Stock Repurchase Agreement (the "Agreement") is made and entered
    into as of the 12th day of November, 1999, by and between Merchants Metals
    Holding Company, a Delaware corporation (the "Company"), and the
    person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class A Common
    Stock, par value $.01 per share, or Class C Common Stock, par value $.01 per
    share, each of the Company, as designated on the signature page hereto (the
    "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    fifth anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be a director, officer or
    employee of the Company or one or more of its subsidiaries for the reasons
    described in Section 2 (a "Termination Event"), then the Company
    (or its designee) shall have the option (the "Repurchase Option")
    to purchase all or a portion of the Unvested Shares (as defined in Section
    2) in accordance with the provisions of Section 2 of this Agreement. If the
    Company (or its designee) desires to exercise the Repurchase Option, it shall
    give written notice of such exercise (the "Exercise Notice") to
    the Stockholder (or his personal representative in the event of his death)
    within 30 days following the occurrence of the Termination Event. The Exercise
    Notice shall indicate the number of the Unvested Shares to be repurchased
    by the Company. The Exercise Notice also shall indicate the repurchase price,
    as calculated in accordance with Section 2 of this Agreement, to be paid for
    the Unvested Shares to be repurchased and shall indicate the date (the "Repurchase
    Date") (which shall not be later than 60 days following the date of the
    Exercise Notice) on which the Unvested Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Unvested Shares
    to which the Exercise Notice relates, at the repurchase price calculated in
    accordance with Section 2 of this Agreement. The Repurchase Option shall expire
    30 days following the occurrence of a Termination Event for any Unvested Shares
    with respect to which an Exercise Notice has not been delivered by such date.

2. Repurchase Price and Vesting. Ownership in the following Repurchase Shares
    shall vest with the Stockholder in the portions and on the dates as follows:
    (1) 1/3 of the Repurchase Shares on the day after the third anniversary of
    the Issuance Date;
    (2) an additional 1/3 of the Repurchase Shares on the day after the fourth
    anniversary of the Issuance Date; and
    (3) an additional 1/3 of the Repurchase Shares on the day after the fifth
    anniversary of the Issuance Date.
    If the Stockholder's employment (and directorship, if applicable) is (are)
    terminated (i) by the Stockholder, (ii) by the Company (and a vote of the
    stockholders, in the case of a directorship) for any reason, or (iii) due
    to the Stockholder's death or disability, the Company may repurchase the Unvested
    Shares for a price of $1.00 per share.
    As used in this Agreement, (i) "Issuance Date" means the date of
    the purchase of the Repurchase Shares by the Stockholder, and (ii) "Unvested
    Shares" means the shares of Repurchase Stock not vested pursuant to this
    Section 2 by the date of the Termination Event.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Unvested Shares, except by will or by the laws
    of descent and distribution at any time prior to the fifth anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Unvested Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons
    of the capital stock of the Company which results in the holder(s) thereof
    becoming entitled to elect a majority of the members of the Board of Directors
    of the Company, (iv) in connection with a public offering of the Company's
    capital stock in which the Stockholder is permitted to participate by the
    Company or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing,
    the Stockholder may effect a Transfer of the Unvested Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Julius S. Burns 
    Name: Julius S. Burns
    Title: President

STOCKHOLDER:
    /s/ Robert N. Tenczar 
    Robert N. Tenczar

Purchased Common Stock: 7,016 shares of Class C Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 3,800 shares of Purchased Common Stock

---

Exhibit 10.19



STOCK REPURCHASE AGREEMENT

This Stock Repurchase Agreement (the "Agreement") is made and entered
    into as of the 12th day of November, 1999, by and between Merchants Metals
    Holding Company, a Delaware corporation (the "Company"), and the
    person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class A Common
    Stock, par value $.01 per share, or Class C Common Stock, par value $.01 per
    share, each of the Company, as designated on the signature page hereto (the
    "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    fifth anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be a director, officer or
    employee of the Company or one or more of its subsidiaries for the reasons
    described in Section 2 (a "Termination Event"), then the Company
    (or its designee) shall have the option (the "Repurchase Option")
    to purchase all or a portion of the Unvested Shares (as defined in Section
    2) in accordance with the provisions of Section 2 of this Agreement. If the
    Company (or its designee) desires to exercise the Repurchase Option, it shall
    give written notice of such exercise (the "Exercise Notice") to
    the Stockholder (or his personal representative in the event of his death)
    within 30 days following the occurrence of the Termination Event. The Exercise
    Notice shall indicate the number of the Unvested Shares to be repurchased
    by the Company. The Exercise Notice also shall indicate the repurchase price,
    as calculated in accordance with Section 2 of this Agreement, to be paid for
    the Unvested Shares to be repurchased and shall indicate the date (the "Repurchase
    Date") (which shall not be later than 60 days following the date of the
    Exercise Notice) on which the Unvested Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Unvested Shares
    to which the Exercise Notice relates, at the repurchase price calculated in
    accordance with Section 2 of this Agreement. The Repurchase Option shall expire
    30 days following the occurrence of a Termination Event for any Unvested Shares
    with respect to which an Exercise Notice has not been delivered by such date.

2. Repurchase Price and Vesting. Ownership in the following Repurchase Shares
    shall vest with the Stockholder in the portions and on the dates as follows:
    (1) 1/3 of the Repurchase Shares on the day after the third anniversary of
    the Issuance Date;
    (2) an additional 1/3 of the Repurchase Shares on the day after the fourth
    anniversary of the Issuance Date; and
    (3) an additional 1/3 of the Repurchase Shares on the day after the fifth
    anniversary of the Issuance Date.
    If the Stockholder's employment (and directorship, if applicable) is (are)
    terminated (i) by the Stockholder, (ii) by the Company (and a vote of the
    stockholders, in the case of a directorship) for any reason, or (iii) due
    to the Stockholder's death or disability, the Company may repurchase the Unvested
    Shares for a price of $1.00 per share.
    As used in this Agreement, (i) "Issuance Date" means the date of
    the purchase of the Repurchase Shares by the Stockholder, and (ii) "Unvested
    Shares" means the shares of Repurchase Stock not vested pursuant to this
    Section 2 by the date of the Termination Event.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Unvested Shares, except by will or by the laws
    of descent and distribution at any time prior to the fifth anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Unvested Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons
    of the capital stock of the Company which results in the holder(s) thereof
    becoming entitled to elect a majority of the members of the Board of Directors
    of the Company, (iv) in connection with a public offering of the Company's
    capital stock in which the Stockholder is permitted to participate by the
    Company or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing,
    the Stockholder may effect a Transfer of the Unvested Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Robert N. Tenczar 
    Name: Robert N. Tenczar
    Title: Vice President - Finance

STOCKHOLDER:
    /s/ James M. McCall 
    James M. McCall

Purchased Common Stock: 12,939 shares of Class C Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 7,000 shares of Purchased Common Stock



---

Exhibit 10.20

STOCK REPURCHASE AGREEMENT
    Davy J. Wilkes

This Stock Repurchase Agreement (the "Agreement")
    is made and entered into as of the 12th day of November, 1999, by and between
    Merchants Metals Holding Company, a Delaware corporation (the "Company"),
    and the person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class A Common
    Stock, par value $.01 per share, or Class C Common Stock, par value $.01 per
    share, each of the Company, as designated on the signature page hereto (the
    "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    third anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be a director, officer or
    employee of the Company or one or more of its subsidiaries for the reasons
    described in Section 2 (a "Termination Event"), then the Company
    (or its designee) shall have the option (the "Repurchase Option")
    to purchase all or a portion of the Unvested Shares (as defined in Section
    2) in accordance with the provisions of Section 2 of this Agreement. If the
    Company (or its designee) desires to exercise the Repurchase Option, it shall
    give written notice of such exercise (the "Exercise Notice") to
    the Stockholder (or his personal representative in the event of his death)
    within 30 days following the occurrence of the Termination Event. The Exercise
    Notice shall indicate the number of the Unvested Shares to be repurchased
    by the Company. The Exercise Notice also shall indicate the repurchase price,
    as calculated in accordance with Section 2 of this Agreement, to be paid for
    the Unvested Shares to be repurchased and shall indicate the date (the "Repurchase
    Date") (which shall not be later than 60 days following the date of the
    Exercise Notice) on which the Unvested Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Unvested Shares
    to which the Exercise Notice relates, at the repurchase price calculated in
    accordance with Section 2 of this Agreement. The Repurchase Option shall expire
    30 days following the occurrence of a Termination Event for any Unvested Shares
    with respect to which an Exercise Notice has not been delivered by such date.

2. Repurchase Price and Vesting. Ownership in the following Repurchase Shares
    shall vest with the Stockholder in the portions and on the dates as follows:
    (1) 1/3 of the Repurchase Shares on the day after the first anniversary of
    the Issuance Date;
    (2) an additional 1/3 of the Repurchase Shares on the day after the second
    anniversary of the Issuance Date; and
    (3) an additional 1/3 of the Repurchase Shares on the day after the third
    anniversary of the Issuance Date.
    If the Stockholder's employment (and directorship, if applicable) is (are)
    terminated (i) by the Stockholder, (ii) by the Company (and a vote of the
    stockholders, in the case of a directorship) for any reason, or (iii) due
    to the Stockholder's death or disability, the Company may repurchase the Unvested
    Shares for a price of $1.00 per share.
    As used in this Agreement, (i) "Issuance Date" means the date of
    the purchase of the Repurchase Shares by the Stockholder, and (ii) "Unvested
    Shares" means the shares of Repurchase Stock not vested pursuant to this
    Section 2 by the date of the Termination Event.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Unvested Shares, except by will or by the laws
    of descent and distribution at any time prior to the third anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Unvested Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons
    of the capital stock of the Company which results in the holder(s) thereof
    becoming entitled to elect a majority of the members of the Board of Directors
    of the Company, (iv) in connection with a public offering of the Company's
    capital stock in which the Stockholder is permitted to participate by the
    Company or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing,
    the Stockholder may effect a Transfer of the Unvested Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Robert N. Tenczar 
    Name: Robert N. Tenczar
    Title: Vice President

STOCKHOLDER:
    /s/ Davy J. Wilkes 
    Davy J. Wilkes

Purchased Common Stock: 3,500 shares of Class C Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 3,500 shares of Purchased Common Stock



---

Exhibit 10.21



STOCK REPURCHASE AGREEMENT

This Stock Repurchase Agreement (the "Agreement") is made and entered
    into as of the 12th day of November, 1999, by and between Merchants Metals
    Holding Company, a Delaware corporation (the "Company"), and the
    person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class A Common
    Stock, par value $.01 per share, or Class C Common Stock, par value $.01 per
    share, each of the Company, as designated on the signature page hereto (the
    "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    fifth anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be a director, officer or
    employee of the Company or one or more of its subsidiaries for the reasons
    described in Section 2 (a "Termination Event"), then the Company
    (or its designee) shall have the option (the "Repurchase Option")
    to purchase all or a portion of the Unvested Shares (as defined in Section
    2) in accordance with the provisions of Section 2 of this Agreement. If the
    Company (or its designee) desires to exercise the Repurchase Option, it shall
    give written notice of such exercise (the "Exercise Notice") to
    the Stockholder (or his personal representative in the event of his death)
    within 30 days following the occurrence of the Termination Event. The Exercise
    Notice shall indicate the number of the Unvested Shares to be repurchased
    by the Company. The Exercise Notice also shall indicate the repurchase price,
    as calculated in accordance with Section 2 of this Agreement, to be paid for
    the Unvested Shares to be repurchased and shall indicate the date (the "Repurchase
    Date") (which shall not be later than 60 days following the date of the
    Exercise Notice) on which the Unvested Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Unvested Shares
    to which the Exercise Notice relates, at the repurchase price calculated in
    accordance with Section 2 of this Agreement. The Repurchase Option shall expire
    30 days following the occurrence of a Termination Event for any Unvested Shares
    with respect to which an Exercise Notice has not been delivered by such date.

2. Repurchase Price and Vesting. Ownership in the following Repurchase Shares
    shall vest with the Stockholder in the portions and on the dates as follows:
    (1) 1/3 of the Repurchase Shares on the day after the third anniversary of
    the Issuance Date;
    (2) an additional 1/3 of the Repurchase Shares on the day after the fourth
    anniversary of the Issuance Date; and
    (3) an additional 1/3 of the Repurchase Shares on the day after the fifth
    anniversary of the Issuance Date.
    If the Stockholder's employment (and directorship, if applicable) is (are)
    terminated (i) by the Stockholder, (ii) by the Company (and a vote of the
    stockholders, in the case of a directorship) for any reason, or (iii) due
    to the Stockholder's death or disability, the Company may repurchase the Unvested
    Shares for a price of $1.00 per share.
    As used in this Agreement, (i) "Issuance Date" means the date of
    the purchase of the Repurchase Shares by the Stockholder, and (ii) "Unvested
    Shares" means the shares of Repurchase Stock not vested pursuant to this
    Section 2 by the date of the Termination Event.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Unvested Shares, except by will or by the laws
    of descent and distribution at any time prior to the fifth anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Unvested Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons
    of the capital stock of the Company which results in the holder(s) thereof
    becoming entitled to elect a majority of the members of the Board of Directors
    of the Company, (iv) in connection with a public offering of the Company's
    capital stock in which the Stockholder is permitted to participate by the
    Company or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing,
    the Stockholder may effect a Transfer of the Unvested Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Robert N. Tenczar 
    Name: Robert N. Tenczar
    Title: Vice President - Finance

STOCKHOLDER:
    /s/ Michael W. Weaver 
    Michael W. Weaver

Purchased Common Stock: 8,428 shares of Class C Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 4,500 shares of Purchased Common Stock

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Exhibit 10.22



STOCK REPURCHASE AGREEMENT

This Stock Repurchase Agreement (the "Agreement") is made and entered
    into as of the 12th day of November, 1999, by and between Merchants Metals
    Holding Company, a Delaware corporation (the "Company"), and the
    person named on the signature page hereto (the "Stockholder").
    WHEREAS, the Stockholder has agreed to purchase the shares of Class A Common
    Stock, par value $.01 per share, or Class C Common Stock, par value $.01 per
    share, each of the Company, as designated on the signature page hereto (the
    "Purchased Common Stock"); and
    WHEREAS, as a condition to its agreement to sell the Purchased Common Stock
    to the Stockholder, the Company is requiring the Stockholder to execute and
    deliver this Agreement, whereby the number of shares of the Purchased Common
    Stock designated on the signature page hereto (the "Repurchase Shares")
    are subject to this Agreement;
    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
    of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Grant of Repurchase Option to the Company. The Stockholder hereby grants
    to the Company (or its designee) the right to repurchase the Repurchase Shares
    on the terms and subject to the conditions described in this Agreement. Except
    as otherwise provided in this Section 1, if, at any time on or prior to the
    fifth anniversary of the date of the issuance of the Repurchase Shares to
    the Stockholder, the Stockholder shall cease to be a director, officer or
    employee of the Company or one or more of its subsidiaries for the reasons
    described in Section 2 (a "Termination Event"), then the Company
    (or its designee) shall have the option (the "Repurchase Option")
    to purchase all or a portion of the Unvested Shares (as defined in Section
    2) in accordance with the provisions of Section 2 of this Agreement. If the
    Company (or its designee) desires to exercise the Repurchase Option, it shall
    give written notice of such exercise (the "Exercise Notice") to
    the Stockholder (or his personal representative in the event of his death)
    within 30 days following the occurrence of the Termination Event. The Exercise
    Notice shall indicate the number of the Unvested Shares to be repurchased
    by the Company. The Exercise Notice also shall indicate the repurchase price,
    as calculated in accordance with Section 2 of this Agreement, to be paid for
    the Unvested Shares to be repurchased and shall indicate the date (the "Repurchase
    Date") (which shall not be later than 60 days following the date of the
    Exercise Notice) on which the Unvested Shares identified in such Exercise
    Notice will be repurchased. On the Repurchase Date, the Stockholder (or his
    personal representative in the event of his death) will be obligated to sell,
    and the Company (or its designee) will be obligated to purchase (subject,
    in the case of the Company, to the receipt of any applicable lender approvals
    and subject to the availability of adequate legal surplus), the Unvested Shares
    to which the Exercise Notice relates, at the repurchase price calculated in
    accordance with Section 2 of this Agreement. The Repurchase Option shall expire
    30 days following the occurrence of a Termination Event for any Unvested Shares
    with respect to which an Exercise Notice has not been delivered by such date.

2. Repurchase Price and Vesting. Ownership in the following Repurchase Shares
    shall vest with the Stockholder in the portions and on the dates as follows:
    (1) 1/3 of the Repurchase Shares on the day after the third anniversary of
    the Issuance Date;
    (2) an additional 1/3 of the Repurchase Shares on the day after the fourth
    anniversary of the Issuance Date; and
    (3) an additional 1/3 of the Repurchase Shares on the day after the fifth
    anniversary of the Issuance Date.
    If the Stockholder's employment (and directorship, if applicable) is (are)
    terminated (i) by the Stockholder, (ii) by the Company (and a vote of the
    stockholders, in the case of a directorship) for any reason, or (iii) due
    to the Stockholder's death or disability, the Company may repurchase the Unvested
    Shares for a price of $1.00 per share.
    As used in this Agreement, (i) "Issuance Date" means the date of
    the purchase of the Repurchase Shares by the Stockholder, and (ii) "Unvested
    Shares" means the shares of Repurchase Stock not vested pursuant to this
    Section 2 by the date of the Termination Event.

3. Restrictions on Transfer. The Stockholder agrees not to sell, assign, transfer,
    pledge hypothecate, make gifts of or in any manner whatsoever dispose of or
    encumber (any such transfer or disposition being hereinafter referred to as
    a "Transfer") the Unvested Shares, except by will or by the laws
    of descent and distribution at any time prior to the fifth anniversary of
    the Issuance Date, unless such Transfer is in accordance with the terms and
    provisions of this Agreement. The Stockholder may not effect a Transfer of
    any of the Unvested Shares other than (i) with the consent of the Company
    (as evidenced by a resolution duly adopted by at least a majority of the members
    of the Board of Directors of the Company), (ii) in connection with a business
    combination transaction approved by the Board of Directors of the Company,
    (iii) in connection with a "change in control" transaction involving
    a transfer or series of transfers to any person or group of related persons
    of the capital stock of the Company which results in the holder(s) thereof
    becoming entitled to elect a majority of the members of the Board of Directors
    of the Company, (iv) in connection with a public offering of the Company's
    capital stock in which the Stockholder is permitted to participate by the
    Company or (v) pursuant to the Repurchase Option. Notwithstanding the foregoing,
    the Stockholder may effect a Transfer of the Unvested Shares if the Repurchase
    Option has expired according to its terms. Any purported Transfer in violation
    of this Agreement shall be null and void and of no force and effect.

4. Certificate Legend; Transferees Bound. The Stockholder agrees that the
    certificate(s) representing the Repurchase Shares will bear a legend indicating
    that the Repurchase Shares are subject to this Agreement. Any transferee(s)
    of the Repurchase Shares will be fully bound by the provisions of this Agreement,
    and the Repurchase Shares, in the hands of any such transferee(s), will be
    subject to the Repurchase Option provided herein.

5. Governing Law. This Agreement shall be governed by the internal laws of
    the State of Delaware (without giving effect to principles of conflict of
    laws).

6. Counterparts. This Agreement may be executed in multiple counterparts,
    each of which shall be deemed an original but all of which together shall
    constitute one and the same instrument.
    IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
    as of the date first above written.

MERCHANTS METALS HOLDING COMPANY
    By: /s/ Robert N. Tenczar 
    Name: Robert N. Tenczar
    Title: Vice President - Finance

STOCKHOLDER:
    /s/ Carl Blonkvist 
    Carl Blonkvist

Purchased Common Stock: 2,000 shares of Class A Common Stock, par value $0.01
    per share, of the Company
    Repurchase Shares: 2,000 shares of Purchased Common Stock

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Exhibit 10.25

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this "Agreement") is
    made and entered into as of June 7, 1999, between MMI Products, Inc., a Delaware
    corporation ("Purchaser"), and National Wholesale Fence Supply,
    Inc., a California corporation ("Seller").
    RECITALS:
    WHEREAS, Seller presently operates a business of manufacturing ornamental
    iron products, chain link fabrics, chain link gates and wholesaling chain
    link and ornamental iron products and other fencing products primarily to
    fencing installers and home center stores (such operations, together with
    all activities of Seller relating thereto, being referred to herein as the
    "Business");
    WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the Acquired
    Assets (as hereinafter defined), on the terms and subject to the conditions
    set forth in this Agreement; and
    WHEREAS, Seller wishes to delegate to Purchaser, and Purchaser is willing
    to assume, specified Assumed Liabilities (as hereinafter defined), on the
    terms and subject to the conditions set forth in this Agreement; 
    NOW, THEREFORE, in consideration of the premises, the terms and provisions
    set forth herein, the mutual benefits to be gained by the performance thereof
    and other good and valuable consideration, the receipt and sufficiency of
    which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
    SALE AND PURCHASE OF ASSETS

1.1 Agreement to Sell and Purchase. Subject to the provisions of this Agreement,
    Seller hereby agrees to sell to Purchaser and Purchaser hereby agrees to purchase
    from Seller, all the assets and properties of every kind and nature, personal,
    tangible or intangible, wherever situated, of Seller, including all machinery,
    tooling, furniture, vehicles, equipment, tools, inventory, accounts receivable,
    raw materials, work in process, finished goods, supplies, pre?paid expenses
    (other than those associated with insurance coverages that Purchaser elects
    to terminate), indemnification rights, technology, know?how, patents, trademarks,
    trade names, proprietary information, trade secrets, computer programs, copyrights,
    customer lists, goodwill and other intangible property rights of any kind
    whatsoever, licensing agreements and other contractual rights, and all of
    Seller's books and records relating exclusively to the operations of the Business,
    as each of the foregoing exists as of the Closing Date (as hereinafter defined)
    (such assets being sold being collectively referred to as the "Acquired
    Assets"); excluding, however, Real Property (as hereinafter defined),
    cash, cash equivalents, income tax refunds, accrued interest receivables,
    the inventory jointly determined by Seller and Purchaser to be either obsolete
    or slow-moving, and the other assets listed on Schedule 1.1 (collectively,
    the "Excluded Assets"). The Acquired Assets shall be sold and transferred
    to Purchaser free and clear of all liens, pledges, mortgages, charges, burdens,
    options or other rights to acquire the same, security interests, easements,
    restrictive covenants and other restrictions on use, adverse claims, or other
    encumbrances of any character whatsoever ("Encumbrances"), other
    than Permitted Encumbrances (as hereinafter defined) and Encumbrances created
    by Purchaser or any of its affiliates. 
    1.2 Purchase Price; Assumed Liabilities, Etc.
    (a) In consideration for the sale of the Acquired Assets to Purchaser, and
    in consideration of the other agreements related thereto or entered into in
    connection therewith, Purchaser hereby agrees (a) to pay to Seller an amount
    equal to $13,250,000 (the "Purchase Price"); and (b) to assume at
    the Closing the payment, performance and discharge of the Assumed Liabilities.
    The Purchase Price shall be payable in cash or immediately available funds
    to an account designated by Seller at least two business days prior to the
    Closing; provided, however, that a portion of the Purchase Price equal to
    the Indemnification Fund (as defined in Section 1.3 hereof) will be paid by
    Purchaser into escrow and applied as described in Section 1.3 hereof.
    "Assumed Liabilities" means the specific liabilities of Seller under
    the contracts, purchase commitments, sales orders and arrangements listed
    on Schedule 1.2 hereof to the extent such obligations are for goods and services
    received and leased property used or occupied on and/or after the Closing
    Date regardless of when first used or occupied; provided, however, that "Assumed
    Liabilities" shall not include any liabilities for which assumption by
    Purchaser would be prohibited under the terms of such contracts or arrangements.
    Subject to the provisions of Article V of this Agreement, Purchaser does not
    and shall not agree to pay, assume, perform, or discharge any of Seller's
    debts, obligations, or liabilities (whether known or unknown, direct or indirect,
    absolute or contingent, matured or unmatured, or otherwise), whether the same
    currently exist or come to exist in the future, except the Assumed Liabilities.
    Without limiting the foregoing and except as provided for in Section 3.2.2,
    Purchaser shall assume no liability or obligation with respect to the payment
    of salary or severance or provision of benefits, including but not limited
    to the benefits payable under any Employee Benefit Plan (as hereinafter defined)
    with respect to the employment by Seller of any employee or independent contractor
    of Seller or of any former employee of Seller, and any liabilities or obligations
    of Seller arising out of or resulting from any Employee Benefit Plan or any
    other employee benefit agreement, arrangement, understanding, program or practice,
    including any liabilities or obligations arising under section 4980B of the
    Internal Revenue Code of 1986, as amended (the "Code"). Seller shall
    be responsible for compliance with the COBRA notice and continuation coverage
    requirements under Part 6 of Title I of the Employment Retirement Income Security
    Act of 1974, as amended ("ERISA"), with respect to all employees
    (and their beneficiaries) experiencing a qualifying event (as defined in Section
    603 of ERISA) on account of the transactions contemplated by this Agreement
    or occurring prior to the Closing. Additionally, without limiting the foregoing,
    Assumed Liabilities shall not include any of (a) Seller's liabilities for
    borrowed money or for interest on such borrowed money, (b) Seller's liabilities
    or obligations for federal, state or local income taxes or for interest on
    such taxes, (c) Seller's liabilities or obligations under contracts relating
    to Seller's equity or Seller's equityholders, (d) Seller's liabilities or
    obligations with respect to goods and services received by Seller prior to
    the Closing Date, (e) Seller's obligations for sales and other taxes attributable
    to the operation of the Business prior to the Closing Date, (f) Seller's liabilities
    or obligations with respect to any litigation or other claims (including,
    but not limited to, product liability litigation or claims) arising in connection
    with pre-Closing operations of any of the Acquired Assets or the Business
    and (g) Seller's liabilities or obligations arising out of Environmental Laws
    (as hereinafter defined) arising in connection with pre-Closing operations
    of any of the Acquired Assets or the Business (including, without limitation,
    any off-site disposal activities) or the Real Property (as hereinafter defined)
    or any other real property (including previously-owned real property) owned,
    leased or operated by Seller or any predecessor of Seller or any prior owner
    of all or part of its business or assets.
    1.3 Escrowed Funds. To provide a fund (the "Indemnification Fund")
    for certain of Seller's potential indemnification obligations hereunder, a
    portion of the Purchase Price in the amount of $250,000 shall be delivered
    to Chase Bank of Texas, N.A., as escrow agent (the "Escrow Agent"),
    to be held after the Closing Date in accordance with the terms of the Escrow
    Agreement to be executed by Seller and Purchaser substantially in the form
    of Exhibit A hereto (the "Escrow Agreement"), subject to any changes
    (reasonably acceptable to Purchaser and Seller) which may be requested by
    the Escrow Agent. The Indemnification Fund shall be held and disposed of in
    accordance with the terms of the Escrow Agreement. All interest and other
    income on the Indemnification Fund shall be the property of, and shall be
    paid to, Seller upon final release of all funds held in escrow pursuant to
    the Escrow Agreement; provided, however, that if Purchaser is entitled to
    any portion of the Indemnification Fund, Purchaser shall be entitled to any
    interest or other income attributable thereto.
    1.4 Prorations. Utility charges, ad valorem taxes and property taxes and personal
    property taxes on the Acquired Assets and rents and other charges payable
    with respect to leases and other contracts assumed by Purchaser will be prorated
    between Seller and Purchaser as of 12:01 a.m. on the Closing Date. Rent for
    any leasehold estate also shall be prorated. Security deposits shall be assigned
    to Purchaser with respect to contracts assigned to and assumed by Purchaser.
    To the extent practicable, all such prorations and payments will be made on
    the Closing Date, with the balance to be made as soon as practicable following
    the Closing Date in one or more payments.
    1.5 Allocation of Consideration. As used herein, the term "Consideration"
    shall mean the sum of (i) the cash amounts paid by Purchaser pursuant to Section
    1.2(a), plus (ii) the Assumed Liabilities as defined in Section 1.2(b). The
    parties hereto agree that the Consideration will be allocated among the Acquired
    Assets and the covenants not to compete of Seller in accordance with a schedule
    to be agreed upon by the parties within 60 days following the Closing Date;
    provided, however, that if the parties are unable to agree upon an allocation
    of the Consideration among the Acquired Assets, the parties shall submit such
    dispute to a mutually agreeable qualified independent appraiser with experience
    in valuing such assets (the "Appraiser"). The Appraiser's determination
    shall be final and binding upon the parties. The costs and expenses of the
    Appraiser shall be split equally between Purchaser and Seller. Prior to the
    Closing, the parties will arrive at an estimate of such allocation. All tax
    returns, reports and other similar filings will be prepared and timely filed
    by each of Seller and Purchaser consistently with one another with respect
    to the final allocation of the Consideration and strictly in accordance with
    such allocation.
    1.6 Post-Closing Adjustment
    (a) Within 30 days after the Closing Date, representatives of Seller and Purchaser
    shall determine the sum of the accounts receivable and inventories of Seller
    as of the Closing Date, valuing the inventories at the actual cost of such
    inventories as reflected in the books and records of Seller on the Closing
    Date (the "Final Computation"). If the Final Computation is less
    than the sum of the accounts receivable and inventories of Seller as of December
    31, 1998 (the "December Computation"), then Seller agrees to pay
    to Purchaser the amount by which the December Computation exceeds the Final
    Computation (the "Purchase Price Decrease"). If the Final Computation
    is greater than the December Computation, then Purchaser agrees to pay to
    Seller the amount by which the Final Computation exceeds the December Computation
    (the "Purchase Price Increase"). The Final Computation and the December
    Computation shall reflect, as applicable, reasonable allowances for uncollectible
    accounts receivable and excess or slow-moving inventory.
    (b) In the event Seller and Purchaser are unable to agree upon the Final Computation
    within 30 days after the Closing Date, Seller and Purchaser shall submit to
    (i) three neutral arbitrators (the "Arbitrators") in a proceeding
    in Los Angeles, California to be administered by the Los Angeles office of
    the American Arbitration Association and conducted under the Commercial Arbitration
    Rules or (ii) such other arbitration forum and procedures as the parties shall
    mutually agree (the "Alternative Arbitrator"), any and all matters
    arising under this Section which remain in dispute. The Arbitrators or the
    Alternative Arbitrator shall be provided with all books, records, working
    papers or other information, and access to authorized representatives of Purchaser
    and Seller, as are reasonably necessary for a review and resolution of such
    matters in dispute. The Arbitrators or the Alternative Arbitrator shall render
    a decision resolving each of the matters submitted to the Arbitrators or the
    Alternative Arbitrator, as applicable, within 30 days following submission
    thereto (or as soon thereafter as reasonably practicable). All fees and expenses
    of the Arbitrators or the Alternative Arbitrator pursuant to this Agreement
    with respect to such dispute shall be borne by the party who the Arbitrators
    or the Alternative Arbitrator determine was not the one closer in the aggregate
    to being correct with respect to the matters being disputed. All determinations
    made by the Arbitrators or the Alternative Arbitrator pursuant to this Section
    1.6 shall be set forth in writing and shall be final, conclusive and binding
    on the parties hereto and shall not be subject to any judicial review.
    (c) Within ten days after the Final Computation becomes final and binding
    upon the parties, Seller or Purchaser, as the case may be, shall pay the Purchase
    Price Decrease or the Purchase Price Increase, as applicable. All payments
    pursuant to this Section 1.6 shall be by wire transfer of immediately available
    funds to an account designated by the recipient at least two business days
    prior to the date of payment.
    1.7 Uncollectible Accounts. Purchaser shall use commercially reasonable efforts
    to collect the trade and other receivables of Seller that are included in
    the Acquired Assets; provided, however, that Purchaser shall not be required
    to threaten or institute legal proceedings or to employ a collection agency
    to collect such receivables. Promptly following the expiration of the six?month
    period following the Closing Date, Purchaser shall deliver to Seller a written
    notice setting forth the aggregate amount of such trade and other receivables
    of Seller, less the recorded allowance for collection losses as of the Closing
    Date, that were not paid in full prior to the expiration of such six?month
    period (the "Receivable Amount"), together with an itemized list
    thereof; provided, however, with respect to accounts that are identified as
    having collection problems, before the expiration of such six-month period,
    Purchaser shall provide such notice of such accounts promptly after such collection
    problems are identified. Any accounts for which Purchaser gives credit to
    a customer due to an adjustment or inaccuracy made by Seller shall be deemed
    included in the Receivable Amount to the extent such credit is given. Furthermore,
    in the event the Purchaser provides credit or a refund for merchandise previously
    sold by Seller and for which Seller has collected payment or assigned a receivable
    to Purchaser, the net amount of such refund or credit less the estimated resale
    value of the item returned shall be included in the Receivable Amount. In
    each case that such refund or credit is given, Purchaser shall provide notice
    to Seller (i) of such event, (ii) the amount credited or refunded, (iii) the
    estimated resale value of the item returned, and (iv) the net amount to be
    added to the Receivable Amount. Seller agrees to pay the Receivable Amount
    to Purchaser in cash or immediately available funds within three business
    days following the delivery by Purchaser of such notices described above with
    regard to the Receivable Amount to Seller. Upon receipt of the Receivable
    Amount by Purchaser, Purchaser shall assign to Seller the uncollected receivables
    in respect of which the Receivable Amount was paid and shall provide such
    records Seller may reasonably request from time to time in connection with
    its collection of such uncollected receivables. Conversely, if the Receivable
    Amount is a negative amount, Purchaser will pay such negative amount to Seller
    within three business days following the delivery of such notice. Any payment
    that is received by Purchaser after the Closing from a customer which is not
    specifically designated as applying to a particular invoice of Seller will
    be applied first to account balances of such customer generated from and after
    the Closing Date; provided, that, Purchaser shall use commercially reasonable
    efforts to request in writing that such customer designate an invoice for
    the application of such payment. Purchaser agrees to (i) advise the Seller
    at a monthly meeting to be held every 30 days of the status of customer accounts
    which were part of the Acquired Assets, particularly those which the customer
    has not responded to the request for designation or has made payments on invoices
    relating to sales after the Closing Date when invoices relating to sales prior
    to the Closing Date remain unpaid, and (ii) accrue service charges with respect
    to late customer payments in accordance with Purchaser's service charge policy
    at one and one half of one percent (1 1/2%) per month with respect to receivables
    arising prior to the Closing Date, unless the terms of such receivables provide
    otherwise.

ARTICLE II
    REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of Seller. Seller represents and warrants
    to Purchaser as set forth in this Section 2.1:
    2.1.1 Organization. Seller is a corporation duly organized, validly existing
    and in good standing under the laws of the State of California and has the
    requisite corporate power and authority to own, lease or otherwise hold the
    Acquired Assets owned, leased or otherwise held by it and to carry on the
    Business as presently conducted by it. Except as set forth in Section 2.1.1,
    Seller is in good standing and duly qualified to conduct business as a foreign
    entity in every jurisdiction in which its ownership or lease of property or
    conduct of the business makes such qualification necessary, except where the
    failure to be so qualified (individually or in the aggregate) has not had
    and would not reasonably be expected to have a Material Adverse Effect. As
    used herein, the term "Material Adverse Effect" means any material
    adverse effect on the operations, assets, properties, prospects or condition
    (financial or otherwise) of the Business. All of the jurisdictions in which
    Seller is in good standing and duly qualified to conduct business as a foreign
    entity are listed on Schedule 2.1.1.
    2.1.2 Authorization and Effect of Agreement. Seller has the requisite corporate
    power and authority to execute, deliver and perform its obligations under
    each of the Transaction Documents (as hereinafter defined). The execution,
    delivery and performance by Seller of each of the Transaction Documents has
    been duly authorized by all requisite corporate action by Seller. This Agreement
    has been duly executed and delivered by Seller. This Agreement constitutes,
    and except as set forth on Schedule 2.1.2, each of the other Transaction Documents
    will constitute, the valid and binding obligation of Seller enforceable against
    Seller in accordance with its terms, subject to applicable bankruptcy, insolvency,
    fraudulent conveyance, reorganization, moratorium and similar Laws (as hereinafter
    defined) affecting creditors' rights and remedies generally and subject, as
    to enforceability, to general principles of equity, including principles of
    commercial reasonableness, good faith and fair dealing (regardless of whether
    enforcement is sought in a proceeding at law or in equity). As used herein,
    the term "Transaction Documents" refers collectively to this Agreement,
    the Bill of Sale and Assignment to be executed by Seller in the form of Exhibit
    B hereto (the "Bill of Sale"), the Assumption Agreement to be executed
    by Purchaser and Seller in the form of Exhibit C hereto (the "Assumption
    Agreement"), hereto the Noncompetition Agreement to be executed by Purchaser,
    Seller and the executive officers and directors of Seller in the form of Exhibit
    D hereto (the "Noncompetition Agreement"), the Escrow Agreement,
    the Chain-Link Supply Agreement in the form of Exhibit G hereto, the Lease
    Agreement in the form of Exhibit H hereto, the Square Tube Supply Agreement
    on substantially the terms set forth on Exhibit I hereto and any other documents
    executed and delivered by Seller pursuant to this Agreement.
    2.1.3 Conflicts. Neither the execution, delivery nor performance by Seller
    of any Transaction Document will (i) violate any material Law applicable to
    Seller or any of its respective properties, (ii) assuming the receipt of third
    party consents referred to in Section 2.1.4 below, violate, conflict with,
    permit the cancellation or acceleration of, or give rise to a loss of any
    benefit under, any material agreement or commitment to which Seller is a party
    or by which any of its properties are bound and which is being assumed by
    or transferred to Buyer, or (iii) violate or conflict with any provision of
    the articles of incorporation or bylaws, each as amended to date, of Seller.
    Except as set forth in Schedule 2.1.3, Seller has not entered into, and is
    not aware of, any agreement pursuant to which any person or entity has obtained
    the right to acquire the Acquired Assets or the Business or engage in any
    transaction similar to the transactions contemplated by this Agreement whereby
    any person or entity can acquire all or a portion of the Acquired Assets or
    ownership interests in Seller. As used herein "Law" means any domestic
    or foreign statute, law, ordinance, rule, regulation, standards or guidelines.
    2.1.4 Consents. Except as listed on Schedule 2.1.4, no actions, consents,
    or approvals of, or filings with, any governmental authorities or any third
    parties are required in connection with the execution, delivery or performance
    by Seller of the Transaction Documents; provided, however, that Seller makes
    no representations or warranties in this Section 2.1.4 as to the transferability
    of any business or operating permit used in connection with the Business.
    2.1.5 Financial Statements.
    (a) Seller has delivered to Purchaser true and complete copies of unaudited
    consolidating income statements of Seller for each of the 12 months from January
    1, 1998 through December 31, 1998 and a balance sheet as of December 31, 1998
    and January 31, 1999, all of which have been prepared in accordance with GAAP
    (as defined below). The Balance Sheet (as defined below) fairly presents in
    all material respects the financial position, assets and liabilities (whether
    accrued, absolute, contingent or otherwise) of Seller at the date indicated
    and such statements of income fairly present in all material respects the
    results of operations of Seller for the periods indicated, in each case in
    accordance with GAAP. Such unaudited financial statements contain all adjustments,
    which are solely of a normal recurring nature, necessary to present fairly
    in all material respects the financial position and results at the dates and
    for the periods then ended. As used herein, the term "Balance Sheet"
    refers to the unaudited balance sheet of Seller at December 31, 1998 and the
    term "Balance Sheet Date" refers to December 31, 1998. Also as used
    herein, the term "GAAP" means generally accepted accounting principles
    consistently applied; provided, however, with regard to financial statements
    other than for year end, "GAAP" shall not require the inclusion
    of footnotes therein.
    (b) Seller shall deliver to Purchaser true and complete copies of monthly
    balance sheets and statements of income as soon as they are available, but
    in no event more than 30 days after the end of each month. Upon delivery thereof,
    such balance sheet will fairly present in all material respects the financial
    position, assets and liabilities (whether accrued, absolute, contingent or
    otherwise) of Seller at the date indicated and such statements of income will
    fairly present in all material respects the results of operations of Seller
    for the period indicated.
    (c) All of the financial statements referred to in this Section 2.1.5 are
    sometimes referred to herein collectively as the "Financial Statements."
    The Financial Statements have been prepared in accordance with the books and
    records and accounting methods of Seller. Except as set forth on Schedule
    2.1.5, since December 31, 1997, there has been no material change in any financial
    reporting or accounting methods, practices or policies or in any method of
    calculating any bad debt, contingency or other reserve for financial reporting
    purposes or for any other accounting purposes.
    2.1.6 Absence of Certain Changes and Events. Except as set forth on Schedule
    2.1.6, since December 31, 1998, Seller has not conducted the Business other
    than in the ordinary course, consistent with past practice. Except as set
    forth on Schedule 2.1.6, since December 31, 1998, there has not been any material
    adverse change in the Business or the financial condition, results of operations,
    or prospects of the Business, nor to Seller's knowledge has there been any
    event or circumstance which would be reasonably likely to cause such a material
    adverse change.
    2.1.7 Inventory. All inventory of Seller reflected on the Balance Sheet and
    all inventory of Seller included in the Acquired Assets was acquired and has
    been obtained in the ordinary course of the Business and consistent with prior
    practice; is of good and merchantable quality; and consists of a quality,
    quantity and condition usable or saleable in the ordinary course of the Business.
    Except as set forth on Schedule 2.1.7, Seller is not under any obligation
    with respect to returns or allowances relating to any goods in the possession
    of wholesalers, retailers or other customers. Except as set forth on Schedule
    2.1.7, Seller has no obsolete inventory in excess of its recorded reserve
    for such obsolescence as of the Closing Date. Except as set forth on Schedule
    2.1.7, there has been no material change in the following components of standard
    cost of finished goods used in costing inventory since December 31, 1998:
    (i) raw material quantity, (ii) direct labor hours and rates and (iii) overhead
    rates.
    2.1.8 Real Property.
    (a) Schedule 2.1.8A sets forth a true and complete list of each lease or other
    agreement (the "Real Property Leases") under which Seller leases,
    or otherwise occupies or uses any real property in connection with the Business
    (the "Real Property") and copies of all title insurance policies
    issued to Seller or in Seller's possession relating thereto. Seller has valid
    and enforceable leasehold interests, and upon the Closing Purchaser will have
    valid and enforceable sub-leasehold interests, in the Real Property, free
    and clear of all Encumbrances, other than Permitted Encumbrances. As used
    in this Agreement, "Permitted Encumbrances" means liens for ad valorem
    taxes and assessments not yet due and payable and mechanics liens incurred
    in the ordinary course of the Business consistent with past practice. Seller
    owns no real property.
    (b) Except as set forth on Schedule 2.1.8B, the Real Property constitutes
    all real property used in connection with the Business. Except as set forth
    on Schedule 2.1.8B, the Real Property, any improvements thereon, and the use
    by Seller thereof conform, in all material respects, to (i) all applicable
    Laws, including but not limited to zoning requirements and the Americans With
    Disabilities Act, and (ii) all restrictive covenants, if any. There are no
    eminent domain proceedings pending, or to Seller's knowledge, threatened against
    the Real Property. The Real Property has adequate water supply, sewage and
    waste disposal facilities, and ingress or egress to public streets and highways.
    
    (c) The Real Property is connected to and is served by water, solid waste
    and sewage disposal, drainage, telephone, gas, electricity and other utility
    equipment facilities and services necessary for the operation or use of the
    Real Property in the Business or to Seller's knowledge required by Law. Such
    facilities and services are adequate for the present use and operation of
    the Real Property on a fully occupied basis, and are installed and connected
    pursuant to valid permits and are in material compliance with all governmental
    regulations. To Seller's knowledge, no fact or condition exists which would
    result in the termination or impairment in the furnishing of utility services
    to the Real Property. With respect to the prior three sentences, Seller has
    not received any written notice to the contrary.
    (d) All material improvements on the Real Property (i) have, to Seller's knowledge,
    been constructed in a good and workmanlike manner, free from defects in workmanship
    and material; and (ii) have been constructed, occupied, maintained and operated
    in material compliance with all applicable Laws, insurance requirements, contracts,
    leases, permits, licenses, ordinances, restrictions, building set-back lines,
    covenants, reservations, and easements, and Seller has received no notice,
    written or verbal, claiming any material violation of any of the same or requesting
    or requiring the performance of any material repairs, alterations or other
    work in order to so comply. The heating, air conditioning, plumbing, ventilating,
    utility, sprinkler and other mechanical and electrical systems, apparatus
    and appliances located on the Real Property or in the improvements are in
    good operating condition (ordinary wear and tear excepted), free from material
    defects in workmanship and material. 
    (e) The Real Property has not been materially damaged by fire or other casualty
    except for such damage which has been fully repaired and restored prior to
    the date of this Agreement.
    (f) Except as set forth in Schedule 2.1.8C, there has not been (i) any threatened
    cancellation of any Real Property Leases, (ii) any outstanding disputes, of
    a material nature, under any Real Property Leases or (iii) to Seller's knowledge,
    any bases for any claim of breach or default thereunder. Seller has no reason
    to believe that any of the Real Property Leases that are renewable will not
    be renewed by the other party on reasonable terms.
    Except as set forth in Schedule 2.1.8D, the improvements on the Real Property
    are in reasonable condition and, to Seller's knowledge, are not in need of
    major repair or renovation.
    2.1.9 Physical Assets and Properties.
    (a) Set forth on Schedule 2.1.9A is a listing of all physical assets and properties,
    other than Real Property, owned by Seller as of the date hereof and included
    in the Acquired Assets. Seller has (and, upon the Closing Purchaser will have)
    good title to all tangible assets and properties, whether personal or mixed,
    purported to be owned by Seller and included in the Acquired Assets (the "Owned
    Tangible Property"), free and clear of all Encumbrances, other than Permitted
    Encumbrances. Schedule 2.1.9B sets forth a true and complete list of each
    lease or other agreement under which Seller leases, licenses, holds, or operates
    any item of physical property, other than the Owned Tangible Property, that
    is included in the Acquired Assets (such leased tangible property being referred
    to herein as the "Leased Tangible Property"). Seller has valid and
    enforceable leasehold interests in the Leased Tangible Property, free and
    clear of all Encumbrances, other than Permitted Encumbrances. 
    (b) Except as set forth on Schedule 2.1.9B, the Owned Tangible Property and
    Leased Tangible Property, taken as a whole, and each material item of Owned
    Tangible Property and Leased Tangible Property, is in good condition and repair
    (normal wear and tear excepted), is fit for the purposes for which it was
    intended to be used, is sufficient and adequate to carry on the Business as
    now conducted, and complies in all material respects with all applicable material
    Laws.
    2.1.10 Intangible Assets and Properties. Set forth on Schedule 2.1.10A is
    a true and complete listing of all intangible assets and properties, including,
    without limitation, all registered patents, copyrights, trademarks and service
    marks, owned by Seller as of the date hereof and used in connection with the
    Business (the "Owned Intangible Properties"). Set forth on Schedule
    2.1.10B is a true and complete listing of all intangible assets and properties,
    including, without limitation, all patents, copyrights, trademarks and service
    marks, which Seller uses in the Business and licenses from third parties (the
    "Licensed Intangible Properties") other than shrink-wrapped software
    which may be purchased on a consumer retail basis, the lack of which would
    not have a Material Adverse Effect on the Business. The Owned Intangible Properties
    and the Licensed Intangible Properties constitute all intangible assets and
    properties used in connection with the operation of the Business. Except as
    disclosed on Schedule 2.1.10A, Seller has (and, as of the Closing Purchaser
    will have) good and marketable title to the Owned Intangible Properties, free
    and clear of all Encumbrances. Except as disclosed on Schedule 2.1.10B, Seller
    has (and, as of the Closing Purchaser will have) the valid and enforceable
    right to use the Licensed Intangible Properties in the manner in which the
    Licensed Intangible Properties are used in connection with the Business as
    currently conducted, without the requirement for any payment therefor and
    free and clear of all Encumbrances. To Seller's knowledge, the operations
    of the Business do not infringe on the intellectual property rights of any
    other person or entity, except where such infringement, or combination of
    infringements in the aggregate, would not have a Material Adverse Effect on
    the Business.
    2.1.11 Contracts. Set forth on Schedule 2.1.11 is a list of each agreement
    (whether written or oral), arrangement, commitment, guarantee, or other instrument
    (i) to which Seller is a party or by which Seller or its assets or the Business
    may be bound or affected, and (ii) that is included in the Acquired Assets;
    provided, however, Seller shall not be required to list the leases or other
    agreements relating to the Real Property and the Leased Tangible Property
    as set forth on Schedules 2.1.8B and 2.1.9B, respectively, and shall not be
    required to list any agreement that is not related to the Business. All such
    agreements, arrangements, commitments, guarantees and other instruments are
    legal, valid and binding obligations of the respective parties thereto, enforceable
    in accordance with their terms, except where enforceability would not have
    a Material Adverse Effect on the Business or enforceability is limited by
    applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
    moratorium and similar laws affecting creditors' rights and remedies and general
    principles of equity; all payments required to be made thereunder have been
    made by the parties required to do so, except to the extent that any payments
    are being contested in good faith and are listed as such on Schedule 2.1.11;
    and no defenses, offsets or counterclaims thereto have been asserted in writing,
    or, to Seller's knowledge, may be made by any party thereto other than Seller,
    nor has Seller waived any substantial rights thereunder.
    2.1.12 Contract Defaults. Except as disclosed on Schedule 2.1.12, Seller has
    not, since January 1, 1998, received written notice of any default, and Seller
    is not in default, under any material agreement, arrangement, commitment,
    guarantee or other instrument relating to, binding, or affecting Seller or
    the assets used in the conduct of the Business to which Seller is a party
    or by which Seller or such assets, Business, or operations may be bound or
    affected, and there has not occurred any event which, with the lapse of time
    or giving of notice, or both, would constitute a default under any such material
    agreement. There has not been (i) any threatened cancellation of any contract
    set forth on Schedule 2.1.11, (ii) any outstanding dispute under such contracts
    listed on Schedule 2.1.11 or (iii) to Seller's knowledge, any bases for any
    claim of breach or default thereunder. The execution, delivery and performance
    of this Agreement will not entitle any other party to a contract specified
    on Schedule 2.1.11 to cancel, suspend or terminate such contract or cause
    a diminution of Seller's rights thereunder. Except as set forth on Schedule
    2.1.11, in the case of any such contracts (specified on Schedule 2.1.11) to
    which Seller was not an original party, Seller's rights thereunder have been
    duly assigned to Seller by written instrument, and where required, such assignment
    has been consented to in writing by the other party or parties thereto, and
    Seller has furnished Purchaser with true and complete copies of all such assignments
    and consents. Seller has no reason to believe that any of the contracts specified
    on Schedule 2.1.11 that are renewable will not be renewed by the other party
    on reasonable terms.
    2.1.13 Sufficiency of Acquired Assets. Except as set forth on Schedule 2.1.13,
    the Acquired Assets constitute all properties and assets used by Seller in
    the conduct of the Business as currently conducted.
    2.1.14 Compliance With Laws. Except as set forth in Schedule 2.1.14, Seller
    is not in violation of, nor, since January 1, 1997, has Seller received any
    written notice of any alleged violation of, any Law in the conduct of the
    Business. Seller is not in default of or in violation with respect to any
    judgment, order, injunction or decree of any court, administrative agency
    or other governmental authority.
    2.1.15 Environmental Matters. 
    (a) Except as set forth in Schedule 2.1.15A, Seller has not received notice
    alleging violation of any applicable federal, state, or local statutes, codes,
    rules, regulations, licenses or permits relating to the environment, natural
    resources or public or employee health or safety ("Environmental Laws")
    and none of the Real Property is in violation of any applicable Environmental
    Laws, to the extent that any violation of the Environmental Laws would, individually
    or in the aggregate, reasonably be expected to have a Material Adverse Effect.
    
    (b) Except as set forth on Schedule 2.1.15B, there are no facts or circumstances
    or conditions relating to, arising from, associated with or attributable to
    the Real Property or the facilities or operations thereon that will give rise
    to an environmental claim, an obligation, current or contingent, to clean
    up or remediate contamination or result in Environmental Costs and Liabilities.
    "Environmental Costs and Liabilities" shall mean any and all losses,
    liabilities, obligations, damages, fines, penalties, judgments, actions, claims,
    costs and expenses (including fees, disbursements and expenses of legal counsel,
    experts, engineers and consultants and the costs of investigation and feasibility
    studies, remedial or removal actions and cleanup activities) arising from
    or under any Environmental Law now in effect, order or agreement now in effect
    with any governmental authority or other person in connection with any action
    or inaction by Seller prior to the Closing.
    (c) Except as set forth on Schedule 2.1.15C, (i) there is no asbestos contained
    in or forming a part of any building, building component, structure or office
    space included in the Real Property, (ii) no polychlorinated biphenyls or
    related compounds are used or stored on any Real Property, (iii) there are
    no underground storage tanks or surface impoundments located on, under or
    at any Real Property, and (iv) Seller in operating the Business, has not generated,
    stored, treated or disposed of any Hazardous Wastes (as defined under 40 C.F.R.
    Parts 260-270 or analogous state Law) nor, to the knowledge of Seller, has
    any predecessor done so on any Real Property.
    (d) Except as disclosed on Schedule 2.1.15D, none of the operations of the
    Business is subject to any judicial or administrative civil or criminal proceeding
    (including potentially responsible party notices or information requests issued
    pursuant to the federal Superfund Law or any analogs pursuant to Environmental
    Laws) nor, to the knowledge of Seller, has such a proceeding been threatened.
    (e) Without limiting the generality or effect of the foregoing subsections,
    Schedule 2.1.15E contains a true and correct list of (i) all on-site and off-site
    locations where Seller or, to the knowledge of Seller, any predecessor or
    affiliate thereof has stored, disposed or arranged for the disposal of any
    hazardous wastes relating to the Business, including all chemicals, pollutants,
    contaminants, wastes, toxic substances, petroleum and petroleum products,
    and (ii) all material environmental permits, variances, authorizations or
    approvals issued to Seller and necessary for the continued operation of the
    Business.
    2.1.16 Insurance. The assets, properties and operations of Seller are insured
    under various policies of general liability and other forms of insurance listed
    on Schedule 2.1.16, which policies are, in full force and effect on the date
    hereof, valid and enforceable in accordance with their terms and in amounts
    which are adequate in relation to the business and assets of Seller.
    2.1.17 Litigation; Decrees. Except as disclosed on Schedule 2.1.17, there
    are no lawsuits, claims or administrative or other proceedings or investigations
    pending or, to Seller's knowledge, threatened by, against or affecting Seller
    and relating to the Acquired Assets, the Business, this Agreement or the transactions
    contemplated hereby. Seller is not a party to or subject to the provisions
    of any judgment, order, writ, injunction, decree or award of any court, arbitrator
    or governmental or regulatory official, body or authority relating to the
    Acquired Assets or the Business.
    2.1.18 Employee Matters.
    (a) Schedule 2.1.18 sets forth each "employee benefit plan," as
    defined in section 3(3) of ERISA, and all other employee compensation and
    benefit arrangements or payroll practices, including, without limitation,
    all severance pay, sick leave, vacation pay, salary continuation for disability,
    consulting or other compensation agreements, retirement, deferred compensation,
    bonus, long?term incentive, stock option, stock purchase, hospitalization,
    medical insurance, life insurance, and scholarship plans or programs maintained
    by Seller or to which Seller contributes or is obligated to contribute (all
    such plans or arrangements being hereinafter referred to as the "Employee
    Benefit Plans") on account of any person presently employed by Seller
    (an "Employee") or formerly employed by Seller (a "Former Employee"),
    or under which any Employee or Former Employee participates or has accrued
    any rights by reason of such employment. The terms Employee and Former Employee
    will include, where applicable, the beneficiaries and dependents of an Employee
    or Former Employee. Except as disclosed on Schedule 2.1.18, neither Seller
    nor any ERISA Affiliate has ever contributed to any plan subject to section
    413 of the Code or to any multiple employer welfare arrangement, as defined
    in section 3(40) of ERISA. Seller has no commitment or obligation to establish
    or adopt any new or additional Employee Benefit Plans or to materially increase
    the benefits under any existing Employee Benefit Plan.
    (b) No Employee or Former Employee of Seller will be entitled to any additional
    benefit or any acceleration of the time of payment or vesting of any benefit
    under any of the Employee Benefit Plans set forth on Schedule 2.1.18 as a
    result of the transactions contemplated by this Agreement.
    2.1.19 Labor Matters. Except as listed and described on Schedule 2.1.19, Seller,
    with respect to Employees and Former Employees, (i) has no written personnel
    policy applicable to such Employees, (ii) is and has been, in all material
    respects, in compliance since January 1, 1996 with all applicable Laws regarding
    employment and employment practices, terms and conditions of employment, wages
    and hours, occupational safety and health and workers' compensation and is
    not engaged in any unfair labor practices, (iii) has no grievances pending
    or, to Seller's knowledge, threatened against it and (iv) has no charges or
    complaints pending or, to Seller's knowledge, threatened against it before
    the National Labor Relations Board, the Equal Employment Opportunity Commission
    or any other federal, state or local agency responsible for the prevention
    of unlawful employment practices. There is no labor strike, slowdown, work
    stoppage or lockout actually pending or, to Seller's knowledge, threatened
    against or affecting the Business. Except as described on Schedule 2.1.19,
    Seller is not a party to any collective bargaining agreement, no such agreement
    determines the terms and conditions of any Employee or Former Employee, and
    no collective bargaining agent has been certified as a representative of any
    of the Employees or Former Employees. Except as described on Schedule 2.1.19,
    to Seller's knowledge, no union organizational campaign is currently pending
    with respect to any of the Employees or Former Employees.
    2.1.20 Customers and Suppliers. Schedule 2.1.20 sets forth a true and complete
    list of (i) the 10 largest customers of the Business based on revenues during
    the year ended December 31, 1998 and the three months ended March 31, 1999,
    respectively, showing the approximate total sales by Seller with respect to
    the Business to each such customer during the year ended December 31, 1998
    and the three months ended March 31, 1999, respectively, and (ii) the 10 largest
    suppliers of the Business based on Seller's purchases during the year ended
    December 31, 1998 and the three months ended March 31, 1999, respectively,
    showing the approximate total purchases by Seller with respect to the Business
    from each such supplier during the year ended December 31, 1998 and the three
    months ended March 31, 1999, respectively. Except as described on Schedule
    2.1.20, since January 1, 1998, no customer or supplier listed on Schedule
    2.1.20 has informed Seller that it will materially change its business relationship
    with Seller and to Seller's knowledge there are not any circumstances which
    are likely to cause such a material change. Except as described on Schedule
    2.1.20, Seller has no reason to believe that, following the Closing, any particular
    customer or supplier will fail to do business with Purchaser substantially
    as such customer or supplier currently does business with Seller.
    2.1.21 Warranty and Product Liability Claims. Except as set forth on Schedule
    2.1.21, Seller has not made any express warranties or guarantees with respect
    to any products manufactured or sold or services rendered in the operation
    of the Business. Except as described on Schedule 2.1.21, no claims have been
    asserted during the past two years that any product of Seller was defective
    or caused any injury or harm to any person, including all such claims and
    allegations relating to returns, express or implied warranty violations, failure
    to warn or similar matters. To Seller's knowledge, no basis exists for any
    person to make any such claim, except as described on Schedule 2.1.21.
    2.1.22 Licenses, Permits, Etc. Schedule 2.1.22 sets forth all material governmental
    licenses, franchises, permits and other authorizations held by Seller (other
    than those listed on Schedule 2.1.15). To the extent transferable, all such
    governmental licenses, franchises, permits and other authorizations (including
    those listed on Schedule 2.1.15) will be assigned to Purchaser at the Closing.
    Such government licenses, franchises, permits and other authorizations constitute
    all material government licenses, franchises, permits and other authorizations
    necessary in the conduct of the Business.
    2.1.23 Employees and Consultants. Seller has supplied Purchaser with a true
    and complete list of each person employed by Seller in connection with the
    Business (an "Employee") and the total current compensation and
    benefits of each such person. Schedule 2.1.23 sets forth a true and complete
    list of all employment agreements between Seller and any Employee. Schedule
    2.1.23 also sets forth a true and complete list of all consulting, service
    or commission agreements to which Seller is a party or otherwise relating
    to the Business.
    2.1.24 Disclosure. No representation or warranty by Seller contained in this
    Agreement, and no statement contained in any document (including the Financial
    Statements and the schedules hereto) furnished or to be furnished by or on
    behalf of Seller or any affiliate thereof to Purchaser or any of Purchaser's
    representatives in connection with the transactions contemplated hereby, contains
    or will contain any untrue statement of a material fact, or omits or will
    omit to state any material fact necessary, in light of the circumstances under
    which it was or will be made, in order to make the statements herein or therein
    not misleading. Seller has not failed to disclose to Purchaser any fact which
    would reasonably be expected to have a Material Adverse Effect on the business,
    financial condition, results of operations or prospects of the Business, or
    which is otherwise material to the Business or the Acquired Assets.
    2.1.25 Taxes.
    (a) All Tax Returns (as defined in subsection (g) below) that are required
    to be filed on or before the execution of this Agreement by Seller have been
    duly filed on a timely basis under the statutes, rules and regulations of
    each jurisdiction in which such Tax Returns are required to be filed and Seller
    will file or will cause to be duly filed, all Tax Returns required to be filed
    by Seller as of the Closing Date and with respect to any taxable period prior
    to or which includes the Closing Date. All such Tax Returns are (or will be)
    complete and accurate in all respects. Except as set forth on Schedule 2.1.25,
    all Taxes, whether or not reflected on the Tax Returns, which are due with
    respect to Seller and any affiliates of Seller have been timely paid by Seller,
    and/or any such affiliates, whether or not such Taxes are disputed.
    (b) No claim for assessment or collection of Taxes has been asserted against
    Seller or any of its affiliates. Neither Seller nor its affiliates are a party
    to any pending audit, action, proceeding or investigation by any governmental
    authority for the assessment or collection of Taxes nor do Seller or any of
    its affiliates have knowledge of any threatened audit, action, proceeding
    or investigation.
    (c) Neither Seller nor its affiliates have waived or extended any statutes
    of limitation for the assessment or collection of Taxes. No claim has ever
    been made by a governmental authority in a jurisdiction where Seller or any
    of its affiliates do not currently file Tax Returns that it is or may be subject
    to taxation by that jurisdiction nor is Seller or any of its affiliates aware
    that any such assertion of jurisdiction is pending or threatened. No Encumbrances,
    other than Permitted Encumbrances (whether filed or arising by operation of
    law), have been imposed upon or asserted against any of the Acquired Assets
    as a result of or in connection with any failure, or alleged failure to pay
    any Tax.
    (d) Seller has withheld and paid all Taxes required to be withheld in connection
    with any amounts paid or owing to any employee, creditor, independent contractor
    or other third party.
    (e) Seller is not a foreign person within the meaning of Section 1445 of the
    Code.
    (f) None of the Acquired Assets is (i) "tax-exempt use" property
    within the meaning of Section 168(h) of the Code, (ii) required to be treated
    as owned by another person pursuant to the provisions of Section 168(f)(8)
    of the Internal Revenue Code of 1954, as amended and in effect immediately
    prior to the enactment of the Tax Reform Act of 1986, (iii) "tax exempt
    bond financed property" within the meaning of Section 168(g) of the Code
    or (iv) "limited use property" (as that term is used in Rev. Proc.
    76-30).
    (g) For purposes of this Agreement, the terms "Tax" and "Taxes"
    shall mean all federal, state, local, or foreign taxes, assessments, duties,
    levies or similar charges of any kind including, without limitation, all income,
    payroll, Medicare, withholding, unemployment insurance, social security, sales,
    use, service, service use, leasing, leasing use, excise, franchise, gross
    receipts, value added, alternative or add?on minimum, estimated, occupation,
    real and personal property, stamp, duty, transfer, workers' compensation,
    severance, windfall profits, environmental (including Taxes under Section
    59A of the Code), other Tax, charge, fee, levy or assessment of the same or
    of a similar nature, including any interest, penalty, or addition thereto'
    whether disputed or not. The term "Tax Return" means any return,
    declaration, report, claim for refund, or information return or statement
    relating to Taxes or any amendment thereto, and including any schedule or
    attachment thereto.
    2.1.26 Accounts Receivable. The accounts receivable of Seller as set forth
    on the Balance Sheet or arising since the date thereof are valid and genuine
    and have arisen solely out of bona fide sales and deliveries of goods, performance
    of services and other business transactions in the ordinary course of the
    Business consistent with past practices and are not subject to valid defenses,
    set-offs or counterclaims. The allowance for collection losses on the Balance
    Sheet has been determined in accordance with GAAP consistent with past practice.
    
    2.1.27 Interest in Competitors, Suppliers, Customers, Etc. Except as set forth
    in Schedule 2.1.27, neither Seller nor any entity in which Seller has any
    interest, has any direct or indirect ownership interest (other than ownership
    of less than 5% of a class of equity securities of a publicly held company)
    in any competitor, supplier, contractor or customer of the Business or any
    property used in the operation of the Business.
    2.1.28 Finders. Neither Seller nor any other affiliate of Seller has made
    any agreement with any person or taken any action which would cause any person
    to become entitled to an agent's, broker's, or finder's fee or commission
    in connection with the transactions contemplated hereby.
    2.1.29 Books of Account. Seller has not engaged in any transaction, maintained
    any bank account or used any of the funds of Seller except for transactions,
    bank accounts and funds which have been and are reflected in the normally
    maintained books and records of the Business.
    2.2 Representations and Warranties of Purchaser. Purchaser represents and
    warrants to Seller as follows:
    2.2.1 Corporate Organization. Purchaser is a corporation duly organized, validly
    existing and in good standing under the Laws of the State of Delaware.
    2.2.2 Authorization and Effect of Agreement. Purchaser has the requisite corporate
    power and authority to execute, deliver and perform its obligations under
    each of the Transaction Documents executed or to be executed by Purchaser.
    The execution, delivery and performance by Purchaser of each of the Transaction
    Documents executed or to be executed by Purchaser has been duly authorized
    by all requisite corporate action. This Agreement has been duly executed and
    delivered by Purchaser. This Agreement constitutes, and each of the other
    Transaction Documents to be executed by Purchaser will constitute, the valid
    and binding obligation of Purchaser, enforceable against Purchaser in accordance
    with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
    reorganization, moratorium and similar Laws affecting creditors' rights and
    remedies generally and subject, as to enforceability, to general principles
    of equity, including principles of commercial reasonableness, good faith and
    fair dealing (regardless of whether enforcement is sought in a proceeding
    at Law or in equity).
    2.2.3 Conflicts. Neither the execution, delivery, nor performance of any Transaction
    Document executed or to be executed by Purchaser will (i) violate any material
    Law applicable to Purchaser, (ii) assuming receipt of the third party consents
    referred to in Section 2.2.4, violate, conflict with, permit the cancellation
    or acceleration of, or give rise to a loss of any benefit under, any material
    agreement or commitment to which Purchaser is a party or by which any of its
    properties are bound, or (iii) violate or conflict with any provision of the
    certificate of incorporation or bylaws, each as amended to date, of Purchaser.
    2.2.4 Consents. Except as listed on Schedule 2.2.4, no actions, consents,
    or approvals of, or filings with, any governmental authorities or any third
    parties are required in connection with the execution, delivery or performance
    by Purchaser of the Transaction Documents executed or to be executed by Purchaser.
    Litigation. There are no lawsuits, claims or administrative or other proceedings
    or investigations pending or, to Purchaser's knowledge, threatened by, against
    or affecting Purchaser relating to the transactions contemplated hereby.
    Disclosure. No representation or warranty by Purchaser contained in this Agreement,
    and no statement contained in any document furnished or to be furnished by
    or on behalf of Purchaser or any affiliate thereof to Seller or any of Seller's
    representatives in connection with the transactions contemplated hereby, contains
    or will contain any untrue statement of material fact, or omits or will omit
    to state any material fact necessary, in light of the circumstances under
    which it was or will be made, in order to make the statements herein or therein
    not misleading.

ARTICLE III
    COVENANTS

3.1 Covenants of Seller. Seller covenants and agrees that, pending the Closing
    and except as otherwise agreed to in writing by Purchaser:
    3.1.1 Employees and Business Relations. Seller shall use all commercially
    reasonable efforts to keep available the services of the present Employees
    (except normal separations of employees other than officers in the ordinary
    course of the Business and consistent with past practice), agents and consultants
    of the Business and to maintain the relations and goodwill with the suppliers,
    customers, distributors and any others having business relations with the
    Business.
    3.1.2 Update Representations and Warranties. Seller shall promptly disclose
    to Purchaser any information contained in its representations and warranties
    herein or the schedules hereto which, because of an event occurring after
    the date hereof, makes said representations and warranties or schedules incomplete
    or incorrect as of any time after the date hereof until the Closing Date;
    provided, however, that none of such disclosures shall be deemed to modify,
    amend or supplement the representations and warranties of Seller herein or
    the schedules hereto for any purposes of this Agreement.
    3.1.3 Satisfaction of Conditions. Seller shall use all commercially reasonable
    efforts to conduct the Business in such a manner that on the Closing Date
    the representations and warranties of Seller contained in this Agreement shall
    be true in all material respects as though such representations and warranties
    were made on and as of such date. Furthermore, Seller shall cooperate with
    Purchaser and use all commercially reasonable efforts to satisfy promptly
    all conditions required hereby to be satisfied by Seller in order to expedite
    the consummation of the transactions contemplated hereby.
    3.1.4 Sale of Acquired Assets; Negotiations. Seller shall not, and Seller
    shall not cause or permit its respective affiliates, directors, officers,
    employees, agents, representatives, legal counsel, and financial advisors
    to, (i) solicit, initiate, accept, consider, entertain or encourage the submission
    of proposals or offers from any person or entity with respect to the acquisition
    contemplated by this Agreement or any similar transaction wherein such person
    or entity would acquire all or any portion of the Acquired Assets or ownership
    interests in Seller, or any merger, consolidation, or business combination,
    directly or indirectly, with or for Seller or all or substantially all of
    the Business, or (ii) participate in any negotiations regarding, or, except
    as required by legal process (including pursuant to discovery or agreements
    existing on the date hereof), furnish to any person or entity (other than
    Purchaser) information with respect to, or otherwise cooperate in any way
    with, or assist or participate in, facilitate, or encourage, any effort or
    attempt by any person or entity (other than Purchaser) to do or seek any of
    the foregoing. Seller shall not enter into any agreement or consummate any
    transactions that would interfere with the consummation of the transactions
    contemplated by this Agreement. Seller shall promptly notify Purchaser if
    it receives any written inquiry, proposal or offer described in this Section
    3.1.4 or any verbal inquiry, proposal or offer described in this Section 3.1.4
    that is competitive with the terms of the transactions contemplated by this
    Agreement, and Seller shall inform such inquiring person or entity of the
    existence of this Agreement and make such inquiring person or entity aware
    of Seller's obligations under this Section 3.1.4. The notification under this
    Section 3.1.4 shall include the identity of the person or entity making such
    inquiry, offer, or other proposal, the terms thereof, and any other information
    with respect thereto as Purchaser may reasonably request. Seller shall not
    provide any confidential information concerning the Business or its properties
    or assets to any third party other than in the ordinary course of the Business
    and consistent with prior practice. Seller has ceased and caused to be terminated
    any existing activities, discussions or negotiations with any person or entity
    conducted heretofore with respect to any of the foregoing.
    3.1.5 Access. Seller shall give to Purchaser's officers, employees, counsel,
    accountants and other representatives free and full access to and the right
    to inspect, during normal business hours and at such other times as may be
    agreed upon in advance with the officers and representatives of Seller, all
    of the premises, properties, plants, assets, books, records, contracts and
    other documents relating to the Business and shall permit them to consult
    with the officers, employees, accountants, auditors, counsel and agents of
    Seller for the purpose of making such investigation of the Business, as Purchaser
    shall desire to make, provided that such investigation shall not unreasonably
    interfere with Seller's business operations, and shall permit them to consult
    with any customers or suppliers of Seller regarding the Business, provided
    that such consultation shall not unreasonably interfere with Seller's or such
    customer's or supplier's business operations. Furthermore, Seller shall furnish
    to Purchaser all such documents and copies of documents and records and information
    with respect to the affairs of the Business and copies of any working papers
    relating thereto as Purchaser shall from time to time reasonably request and
    shall permit Purchaser and its agents to make such physical inventories and
    inspections of the Acquired Assets as Purchaser may request from time to time.
    3.1.6 Operation of the Business. Seller will (unless the prior written consent
    of Purchaser is obtained, which consent shall not be unreasonably withheld
    or delayed):
    (a) Not take or permit to be taken or do or suffer to be done anything other
    than in the ordinary course of business as presently conducted, not move from
    its current location, sell or otherwise dispose of any asset of Seller relating
    to the Business (other than Excluded Assets and other than inventory or equipment
    sold in the ordinary course of the Business and consistent with past practice)
    and will use commercially reasonable efforts to keep the Business intact.
    (b) Maintain the Acquired Assets in at least as good condition as they were
    being maintained as of the date hereof, normal wear and tear excepted.
    (c) Not declare or pay any distribution in respect of Seller's equity interests
    or make any other payment, repurchase or distribution in respect of Seller's
    equity interests other than in cash.
    (d) Not make, or commit to make, any capital expenditures greater than $20,000
    in the aggregate.
    (e) Not create or amend any Employee Benefit Plan except as required by Law.
    (f) Not grant any increases in officer compensation or, except in the ordinary
    course of the Business and consistent with past practice, in the compensation
    of any other Employees. 
    (g) Not make any write?downs or write?offs of assets outside the ordinary
    course of the Business consistent with past practice.
    (h) Operate the Business in material compliance with all applicable Laws.
    
    (i) Not enter into any new contract or arrangement outside the ordinary course
    of the Business, consistent with past practice, with aggregate payments due
    to or from Seller of $20,000 or more or modify or terminate any existing contract
    or arrangement with aggregate payments due to or from Seller of $20,000 or
    more.
    (j) In connection with any contract or arrangement that expires pursuant to
    its terms between the date hereof and the Closing Date, not renew such contract
    or arrangement or enter into new terms (the "Renewal Contract")
    with respect to such contract or arrangement without the prior written consent
    of Purchaser. Notwithstanding the foregoing, if Purchaser so requests, Seller
    shall enter into a contract or arrangement with another third party for the
    same services or goods to be provided under the Renewal Contract, provided
    that the terms of such contract or arrangement are individually the same or
    better than the terms of the Renewal Contract.
    (k) Maintain insurance covering the Acquired Assets on a basis consistent
    with past practice.
    (l) Pay all debts and obligations incurred by it in the operation of the Business
    in the ordinary course of the Business consistent with past practice.
    3.1.7 WARN Act Compliance. Through the Closing Date, Seller shall take all
    necessary actions to comply with the Federal Workers Adjustment and Retraining
    Notification Act to the extent applicable. Purchaser shall not have any disclosure
    or announcement obligations under such act with respect to any Employees or
    Former Employees of Seller other than such obligations arising out of events
    occurring after the Closing Date with respect to Employees or Former Employees
    hired by Purchaser.
    3.1.8 Environmental Inspections. Seller agrees to cooperate with any reasonable
    request of Purchaser for a site assessment or site review concerning any environmental
    matter, including the making available of such personnel of Seller as Purchaser
    may reasonably request, so long as such activities do not unreasonably interfere
    with the conduct of Seller's business. At the discretion of Purchaser, Purchaser
    may arrange, at its sole expense, for one or more independent contractors
    to conduct tests of the Real Property, including tests of air, soil (including
    surface and subsurface materials), surface water and ground water, or any
    equipment or facilities located thereon, in order to identify any present
    or past release or threatened release of any hazardous substances. Such tests
    may be done at any time, or from time to time, upon reasonable notice and
    under reasonable conditions, which do not impede the performance of such tests.
    3.1.9 Employees. Seller acknowledges that notwithstanding any benefits which
    Purchaser may offer or provide to any Employee to whom Purchaser has extended
    an offer of employment, Seller has certain obligations with respect to Seller's
    Employees under Section 4980B of the Code and Section 601 et seq. of ERISA
    and agrees to comply with those obligations. Seller shall be responsible for
    and shall cause to be discharged and satisfied in full all amounts owed to
    any Employee or Former Employee, including wages, salaries, accrued vacation,
    any employment, incentive, compensation or bonus agreements or other benefits
    or payments on account of termination of employment prior to Closing by Seller.
    3.1.10 [Intentionally Omitted.]
    3.1.11 Physical Inventory. Purchaser may conduct a physical inventory on or
    immediately prior to the Closing Date, but as close to the Closing Date as
    possible, under the supervision of Seller and each of the parties' respective
    accounting firms. Any adjustment to the value of the inventory to be acquired
    by Purchaser resulting from such physical inventory shall be reflected in
    the Final Computation in accordance with Section 1.6.
    3.2 Covenants of Purchaser. Purchaser covenants and agrees that, pending the
    Closing and except as otherwise agreed to in writing by Seller:
    3.2.1 Closing. Purchaser will cooperate with Seller and use commercially reasonable
    efforts to satisfy promptly all conditions required hereby to be satisfied
    by Purchaser in order to expedite the consummation of the transactions contemplated
    hereby.
    3.2.2 Employees. Within five business days prior to Closing, Purchaser will
    provide Seller with a list (the "Employee List") of all Employees
    to whom Purchaser intends to make offers of employment. Purchaser will offer
    employment as of the Closing to all Employees on such Employee List, on terms
    of employment and conditions substantially similar to those in effect immediately
    prior to Closing for other comparably situated employees of Purchaser; provided,
    however, that nothing herein shall limit the ability of Purchaser to change
    the level of compensation and other terms and conditions of employment after
    the Closing Date.

ARTICLE IV
    CLOSING

4.1 Closing. Unless this Agreement is first terminated as provided in Section
    7.1 hereof, and subject to the satisfaction or waiver of all conditions to
    the consummation of the transactions contemplated hereby, the closing of the
    transactions contemplated hereby (the "Closing") shall take place
    at the offices of Jeffer, Mangels, Butler & Marmaro LLP, in Los Angeles,
    California, beginning at 8:00 a.m. (local time) on June 7, 1999 or, if later,
    on the third business day after each of the conditions specified in Section
    4.2 has been fulfilled (or waived by the party entitled to waive that condition).
    The date on which the Closing occurs is referred to herein as the "Closing
    Date." The Closing shall not be deemed to have been completed until the
    last of the conditions to be satisfied pursuant to this Agreement has been
    satisfied or waived.
    4.2 Conditions to Closing.
    (a) The obligations of Purchaser to effect the Closing are subject to the
    fulfillment, satisfaction or waiver of each of the following conditions precedent
    prior to the Closing; provided, however, if Purchaser consummates the Closing
    without the satisfaction of the conditions set forth in clauses (vii), (viii),
    (ix), (xi), and (xiii) below, such unsatisfied condition shall be deemed waived
    by Purchaser:
    (i) The representations and warranties of Seller contained in this Agreement
    or in any schedule, certificate or document delivered by Seller to Purchaser
    pursuant to the provisions hereof shall have been true in all material respects
    (except that any representations and warranties of Seller which contain materiality
    qualifiers shall have been true in all respects) on the date hereof and shall
    be true in all material respects (except that any representations and warranties
    of Seller which contain materiality qualifiers shall be true in all respects)
    on the Closing Date with the same effect as though such representations and
    warranties were made as of such date.
    (ii) Seller shall have performed and complied in all material respects with
    all agreements, covenants and conditions required by this Agreement to be
    performed or complied with by it prior to or at the Closing.
    (iii) Seller shall have executed and delivered to Purchaser the Bill of Sale
    and such other instruments of conveyance, all containing a general warranty
    of title, as shall in Purchaser's reasonable opinion be necessary or appropriate
    to convey to Purchaser all of the Acquired Assets free and clear of all Encumbrances,
    other than Permitted Encumbrances.
    (iv) Seller shall have executed and delivered to Purchaser a Limited Power
    of Attorney in the form of Exhibit E hereto.
    (v) Seller shall have executed and delivered to Purchaser the Escrow Agreement.
    (vi) Seller and its executive officers and directors shall have executed and
    delivered to Purchaser the Noncompetition Agreement.
    (vii) All consents or approvals listed (or required to be listed) on Schedule
    2.1.4 shall have been obtained, including, without limitation, consents or
    approvals required by Seller's lenders.
    (viii) Purchaser shall have obtained from Seller evidence satisfactory to
    Purchaser of the payment or release of any and all Encumbrances against any
    of the Acquired Assets (other than Permitted Encumbrances).
    (ix) Seller shall have (A) furnished to Purchaser (x) copies certified by
    the appropriate governmental official of the State of California as of a date
    not more than ten (10) days prior to the Closing Date, of Seller's articles
    of incorporation and all amendments thereto and (y) copies, certified by the
    Secretary or an Assistant Secretary of Seller, as of the Closing Date, of
    Seller's bylaws; (B) furnished to Purchaser a certificate of good standing
    issued with respect to Seller by the appropriate governmental official of
    the State of California as of a date not more than ten (10) days prior to
    the Closing Date; and (C) executed and delivered all such other documents,
    including a secretary's certificate relating to incumbency and corporate proceedings,
    and taken all such other actions as reasonably requested by Purchaser in connection
    with the consummation of the transactions contemplated hereby.
    (x) Jeffer, Mangels, Butler & Marmaro LLP, counsel for Seller, shall have
    delivered to Purchaser a written opinion, dated the Closing Date, in substantially
    the form of Exhibit F hereto.
    (xi) No inquiry, action, claim, or proceeding which, in the reasonable opinion
    of Purchaser, is material shall have been asserted, threatened or instituted
    against Purchaser to restrain or prohibit the consummation by Purchaser of
    the transactions contemplated by this Agreement or to challenge the validity
    of such transactions or any part thereof or seeking damages on account or
    as a result thereof.
    (xii) [Intentionally Omitted.]
    (xiii) There shall have been no material adverse change in the Business or
    the Acquired Assets since the date of this Agreement. 
    (xiv) [Intentionally Omitted.] 
    Seller, or an affiliate(s) thereof, shall have executed and delivered a supply
    agreement in substantially the form of Exhibit G hereto relating to Seller's,
    or such affiliate('s)(s'), purchase from Purchaser of Seller's, or such affiliate('s)(s'),
    chain-link fabric requirements for Seller's, or such affiliate('s)(s'), rent-a-fence
    business (the "Chain-link Supply Agreement").
    Seller shall have executed and delivered a lease agreement or agreements in
    substantially the form of Exhibit H hereto relating to Purchaser's lease from
    Seller or its affiliates of all real property owned by Seller or its affiliates
    and used in the operation of Seller's ornamental fencing plant in San Fernando,
    California (the "Ornamental Plant") and the four fence service centers
    located in California (the "Sub-lease").
    Purchaser and Seller shall have reached agreement on substantially the terms
    set forth on Exhibit I hereto for Purchaser to purchase from National Tube
    & Steel Purchaser's requirements for square tube to be used in the fabrication
    operations at the Ornamental Plant (the "Square Tube Supply Agreement").
    (b) The obligations of Seller to effect the Closing are subject to the fulfillment,
    satisfaction or waiver of each of the following conditions precedent prior
    to the Closing; provided, however, if Seller consummates the Closing without
    the satisfaction of the conditions set forth in clause (vii) below, such unsatisfied
    condition shall be deemed waived by Seller:
    (i) The representations and warranties of Purchaser contained in this Agreement
    or in any schedule, certificate or document delivered by Purchaser to Seller
    pursuant to the provisions hereof shall have been true in all material respects
    (except that any representations and warranties of Purchaser which contain
    materiality qualifiers shall have been true in all respects) on the date hereof
    and shall be true in all material respects (except that any representations
    and warranties of Purchaser which contain materiality qualifiers shall be
    true in all respects) on the Closing Date with the same effect as though such
    representations and warranties were made as of such date.
    (ii) Purchaser shall have performed and complied in all material respects
    with all agreements, covenants and conditions required by this Agreement to
    be performed or complied with by Purchaser prior to or at the Closing.
    (iii) Purchaser shall have executed and delivered to Seller the Assumption
    Agreement.
    (iv) Purchaser shall have executed and delivered to Seller the Noncompetition
    Agreement.
    (v) [Intentionally Omitted.]
    (vi) [Intentionally Omitted.] 
    (vii) All consents or approvals listed (or required to be listed) on Schedule
    2.2.4 shall have been obtained.
    (viii) Purchaser shall have executed and delivered to Seller the Chain-link
    Supply Agreement.
    (ix) Purchaser shall have executed and delivered to Seller the Sub-lease.
    (x) Purchaser shall have executed and delivered to National Tube & Steel
    the Square Tube Supply Agreement.

ARTICLE V
    SURVIVAL AND INDEMNIFICATION

5.1 Survival of Representations, Warranties and Covenants.
    (a) Each of the representations and warranties contained in this Agreement
    or in any document delivered in connection herewith will survive the Closing
    and remain in full force and effect thereafter until the second anniversary
    of the Closing Date, regardless of any investigation at any time made by or
    on behalf of Purchaser or Seller, except that the representations and warranties
    set forth in Sections 2.1.8 (as to title to assets only), 2.1.9 (as to title
    to assets only), 2.1.10 (as to title to assets only), 2.1.14, 2.1.15, 2.1.18
    and 2.1.25 will survive the Closing and remain in full force and effect thereafter
    until 30 days following the expiration of any applicable statutes of limitation
    (including any extensions); provided, however, that with respect to a claim
    of actual fraud, each of such representations and warranties shall survive
    until the applicable statutes of limitations for actual fraud have expired.
    (b) Unless a specified period is set forth in this Agreement (in which event
    such specified period will control), the covenants contained in this Agreement
    will survive the Closing and remain in effect indefinitely.
    5.2 Indemnification by Seller. Seller shall indemnify and hold harmless each
    Purchaser Party (as hereinafter defined) in respect of any and all Damages
    (as hereinafter defined) resulting from or relating to:
    (a) any and all liabilities and obligations of Seller of any nature whatsoever,
    except for the Assumed Liabilities;
    (b) any and all actions, suits, claims, or legal, administrative, arbitration,
    governmental or other proceedings or investigations against any Purchaser
    Party that relate to Seller, the Business, the Acquired Assets or any affiliate
    of Seller in which the principal event giving rise thereto occurred prior
    to the Closing or which result from or arise out of any action or inaction
    prior to the Closing of Seller, or any director, officer, employee, agent,
    representative or subcontractor of Seller;
    (c) nonperformance or breach of any representation or warranty on the part
    of Seller under this Agreement or any other Transaction Document, or any misrepresentation
    in or omission from any certificate furnished to Purchaser pursuant hereto;
    (d) nonfulfillment of any covenant or agreement on the part of Seller under
    this Agreement or any other Transaction Document;
    (e) any failure of Seller or Purchaser to comply with any bulk sales or transfer
    Law (including the bulk sales provisions of the Uniform Commercial Code in
    any jurisdiction) of any jurisdiction applicable to the sale and transfer
    of the Acquired Assets contemplated hereby;
    (f) subject to Section 7.2 hereof, all sales and transfer taxes in respect
    of real or personal property which may be due as a result of the sale taking
    place pursuant to this Agreement; 
    (g) any and all liabilities and obligations of Seller arising out of Environmental
    Laws arising in connection with pre-Closing operations of (i) the Acquired
    Assets, (ii) the Business (including, without limitation, any off-site disposal
    activities), or (iii) the Real Property or any other real property (including
    previously-owned real property) owned, leased or operated by Seller or any
    predecessor of Seller or any prior owner of all or part of its business or
    assets; or
    (h) all actions, suits, proceedings, demands, assessments, judgments, reasonable
    attorneys' fees, costs and expenses incident to any of the foregoing.
    "Purchaser Party" shall mean Purchaser, any affiliate of Purchaser,
    including, without limitation, the owners of Purchaser, and any officer, director,
    or employee of Purchaser or of any affiliate of Purchaser, including, without
    limitation, the owners of Purchaser. "Damages" shall mean any and
    all damages, liabilities, fines, fees, penalties, interest obligations, deficiencies,
    losses and expenses (including but not limited to reasonable attorneys' fees
    and expenses).
    5.3 Indemnification by Purchaser. Purchaser shall indemnify and hold harmless
    each Seller Party (as hereinafter defined) in respect of any and all Damages
    resulting from or relating to:
    (a) any and all Assumed Liabilities;
    (b) nonperformance or breach of any representation or warranty on the part
    of Purchaser under this Agreement or any other Transaction Document, or any
    misrepresentation in or omission from any certificate furnished to Seller
    pursuant hereto;
    (c) nonfulfillment of any covenant or agreement on the part of Purchaser under
    this Agreement or any other Transaction Document; or
    (d) except as such relate to a breach by Seller of any representation, warranty
    or covenant contained in this Agreement or any other Transaction Document,
    any and all actions, suits, claims, or legal, administrative, arbitration,
    governmental or other proceedings or investigations against any Seller Party
    that relate to Purchaser, the Acquired Assets or any affiliate of Purchaser
    which result from or arise out of any action or inaction after the Closing
    of Purchaser or any director, officer, employee, agent, representative or
    subcontractor of Purchaser.
    "Seller Party" shall mean Seller, any affiliate of Seller, including,
    without limitation, the owners of Seller, or any officer, director, or employee
    of Seller or of any affiliate of Seller, including, without limitation, the
    owners of Seller.
    5.4 Indemnification Procedures.
    5.4.1 If an indemnity becomes aware of any matter that it believes is indefinable
    pursuant to Section 5.2 or 5.3 and such matter involves (i) any claim made
    against the indemnitee by any person or entity other than a Purchaser Party
    or a Seller Party or (ii) the commencement of any action, suit, investigation,
    arbitration, or similar proceeding against the indemnitee by any person other
    than a Purchaser Party or a Seller Party, the indemnitee will give the indemnifying
    party prompt written notice of such claim or the commencement of such action,
    suit, investigation, arbitration, or similar proceeding. Such notice will
    (A) provide (with reasonable specificity) the basis on which indemnification
    is being asserted, (B) set forth the actual or estimated amount of Damages
    for which indemnification is being asserted, if known, and (C) be accompanied
    by copies of all relevant pleadings, demands, and other papers served on the
    indemnitee. Failure of the indemnitee to give prompt notice pursuant to this
    Section 5.4.1 shall not relieve the indemnifying party of its obligations,
    except to the extent that the indemnifying party is actually prejudiced by
    such failure to give prompt notice.
    5.4.2 The indemnifying party will have a period of 30 days after the delivery
    of each notice required by Section 5.4.1 hereof during which to respond to
    such notice. If the indemnifying party elects to defend the claim described
    in such notice, the indemnifying party will be obligated to compromise or
    defend (and will control the defense of) such claim, at its own expense and
    by counsel chosen by the indemnifying party and reasonably satisfactory to
    the indemnitee. The indemnitee will cooperate with the indemnifying party
    and counsel for the indemnifying party in the defense against any such claim,
    and the indemnitee will have the right to participate at its own expense in
    the defense of any such claim. If the indemnifying party does not respond
    within such 30?day period or responds during such 30?day period but elects
    not to defend such claim, the indemnitee will be free, without prejudice to
    any of the indemnitee's rights hereunder, at the indemnifying party's expense,
    to compromise or defend (and control the defense of) such claim and to pursue
    such remedies as may be available to the indemnitee under applicable Law.
    5.4.3 If the indemnifying party controls the defense of any claim, any compromise
    or settlement of such claim will require the prior written consent of the
    indemnitee, which will not be unreasonably withheld. 
    5.4.4 If an indemnitee becomes aware of any matter that it believes is indemnifiable
    pursuant to Section 5.2 or 5.3 other than any matter described in Section
    5.4.1 hereof, the indemnitee will give the indemnifying party prompt written
    notice of such claim. Such notice will (i) provide (with reasonable specificity)
    the bases for which indemnification is being asserted and (ii) set forth the
    actual or estimated amount of Damages for which indemnification is being asserted.
    Failure of the indemnitee to give prompt notice pursuant to this Section 5.4.4
    shall not relieve the indemnifying party of its obligations, except to the
    extent that the indemnifying party is materially prejudiced by such failure
    to give prompt notice. The indemnifying party will have a period of 30 days
    after the delivery of each notice required by this Section 5.4.4 during which
    to respond to such notice. If the indemnifying party accepts (in writing)
    full responsibility for the claim described in such notice, the actual or
    estimated amount of Damages reflected in such notice will be conclusively
    deemed a liability that the indemnifying party owes, and will pay (in cash)
    upon demand, to the indemnitee. If the indemnifying party has disputed such
    claim or does not respond within such 30?day period, the indemnifying party
    and the indemnitee agree to proceed in good faith to negotiate a resolution
    of such dispute. If all such disputes are not resolved through negotiations
    within 30 days after such negotiations begin, either the indemnifying party
    or the indemnitee may initiate litigation to resolve such disputes. If the
    indemnifying party does not respond within 30 days after delivery of any claim
    notice required by this Section 5.4.4, the indemnitee may initiate litigation
    to resolve such claim.
    5.5 Remedies Cumulative. The remedies provided herein shall be cumulative
    and shall not preclude the assertion by any party hereto of any other rights
    or the seeking of any other remedies against the other party hereto; provided,
    however, indemnification under Article V shall be the sole remedy for breaches
    of representations and warranties for reasons other than fraud.
    5.6 Adjustment to Purchase Price. Seller and Purchaser agree that any indemnity
    payment made to Seller or Purchaser under this Article V will be treated by
    the parties on their tax returns as an adjustment to the purchase price for
    the Acquired Assets.
    5.7 Limitation on Liability. Notwithstanding any other provision hereof or
    of any applicable Law, no party will be entitled to make a claim against an
    indemnifying party in respect of any breaches of a representation or warranty
    under Section 5.2(c) or 5.3(b) unless and until the aggregate amount of claims
    in respect of breaches or representations and warranties asserted for Damages
    under Section 5.2(c) or 5.3(b), as applicable, exceeds $25,000, in which event
    such party will be entitled to make a claim against such indemnifying party
    to the full amount of such Damages.

ARTICLE VI
    POST CLOSING COVENANTS

6.1 Payment Received. Seller and Purchaser each agrees that after the Closing
    it will hold and will promptly transfer and deliver to the appropriate party,
    from time to time as and when received by it, any cash, checks with appropriate
    endorsements (using its best efforts not to convert such checks into cash),
    or other property that it may receive on or after the Closing which properly
    belongs to another party, including any insurance proceeds, and will account
    to the appropriate party for all such receipts. From and after the Closing,
    Purchaser shall have the right and authority to endorse the name of Seller
    (which endorsement of the name of Seller shall include the words "without
    recourse") on any check or any other evidences of indebtedness received
    by Purchaser on account of the Business and the Acquired Assets transferred
    to Purchaser hereunder; provided, however, that Purchaser shall provide Seller
    written notice of such endorsement within five (5) business days following
    such event. 
    6.2 Copies of Records. From and after the Closing Date and until the second
    anniversary of the Closing Date, Purchaser shall allow Seller to make copies,
    for legitimate business uses, of the books and records of Seller which are
    transferred to Purchaser at Closing relating to time periods prior to and
    including the Closing Date. Such copies may be made only upon reasonable notice
    to Purchaser and shall be made at Seller's expense.
    6.3 Use of Name. From and after the Closing Date, Seller agrees that Purchaser
    shall have a limited license to use the name "National Wholesale Fence
    Supply, Inc." and variants thereof for the limited time of eighteen (18)
    months after the Closing Date for the limited purpose of selling inventory
    and packaging purchased pursuant to this Agreement that already contains such
    name. From and after the Closing Date, Seller shall not itself use the name
    "National Wholesale Fence Supply, Inc." or any similar names or
    variants thereof in a manner that indicates that it is in the wholesale fence
    business.
    6.4 Further Assurances. From time to time at or after the Closing, at the
    request of Purchaser, Seller will execute and deliver such other instruments
    of conveyance, assignment, transfer and delivery and take such other action
    as Purchaser reasonably may request in order to consummate the transactions
    contemplated hereby, including the execution and delivery of such instruments
    and agreements as may be necessary or advisable to fully effect the transfer
    to Purchaser of the Acquired Assets.

ARTICLE VII
    MISCELLANEOUS PROVISIONS

7.1 Termination.
    (a) Anything herein or elsewhere to the contrary notwithstanding, this Agreement
    may be terminated by written notice of termination at any time before the
    Closing only as follows:
    (i) by mutual consent of Seller and Purchaser;
    (ii) by Purchaser or Seller in writing if the Closing shall not have occurred
    on or before June 30, 1999, unless extended by the mutual agreement of Purchaser
    and Seller;
    (iii) by Purchaser if Seller is in breach of any representation, warranty
    or covenant set forth in this Agreement and such breach has not been cured
    to the reasonable satisfaction of Purchaser within ten days following the
    delivery of notice to Seller of such breach;
    (iv) by Seller if Purchaser is in breach of any representation, warranty or
    covenant set forth in this Agreement and such breach has not been cured to
    the reasonable satisfaction of Seller within ten days following the delivery
    of notice to Purchaser of such breach;
    (v) by Purchaser or Seller if uninsured damages in excess of $200,000 (based
    on replacement cost) in the aggregate occurs to any of the Acquired Assets;
    or
    by Purchaser or Seller if any remediation costs necessary to bring the Real
    Property into compliance with applicable Environmental Laws and any related
    fines, penalties or other similar costs (including but not limited to any
    such costs disclosed to Purchaser prior to the date hereof) equals an amount
    in excess of an aggregate of $200,000.
    (b) In the event of the termination hereof pursuant to the provisions of this
    Section 7.1, no party shall have any liability under this Agreement other
    than for its breach, prior to such termination, of any representation, warranty,
    agreement or covenant contained herein. Additionally, nothing contained herein
    shall be construed to limit any party's right of specific performance of this
    Agreement, if applicable.
    7.2 Transfer Taxes. Seller shall bear responsibility for, and timely pay,
    all applicable transfer and sales taxes, if any, due as a result of the transfer
    of the Acquired Assets in accordance herewith; provided, however, that Purchaser
    shall reimburse Seller for all such taxes upon Seller's filing of any such
    tax return.
    7.3 Expenses. Except as otherwise provided in this Agreement, each party hereto
    shall pay its own expenses (including legal, accounting and investment banking
    fees and expenses) incidental to the preparation and negotiation of this Agreement,
    the carrying out of the provisions of this Agreement and the consummation
    of the transactions contemplated hereby.
    7.4 Contents of Agreement; Parties in Interest; etc. This Agreement sets forth
    the entire understanding of the parties hereto with respect to the transactions
    contemplated hereby. It shall not be amended or modified except by written
    instrument duly executed by each of the parties hereto. Any and all previous
    agreements and understandings between or among the parties regarding the subject
    matter hereof, whether written or oral, are superseded by this Agreement.
    7.5 Assignment and Binding Effect. This Agreement may not be assigned prior
    to the Closing by any party hereto without the prior written consent of the
    other parties; provided, however, that this Agreement may be (i) assigned
    by Purchaser to an affiliate of Purchaser, and (ii) collaterally assigned
    to Purchaser's lenders; provided, further, that such assignment shall not
    relieve Purchaser of its obligations hereunder. Subject to the foregoing,
    all of the terms and provisions of this Agreement shall be binding upon and
    inure to the benefit of and be enforceable by the successors and permitted
    assigns of Seller and Purchaser.
    7.6 Waiver. Any term or provision of this Agreement may be waived at any time
    by the party entitled to the benefit thereof by a written instrument duly
    executed by such party.
    7.7 Non-Assignable Contracts. Nothing contained in this Agreement shall be
    construed as an assignment or an attempted assignment of any contract which
    is in Law non-assignable without the consent of the other party or parties
    thereto, unless such consent shall be given.
    7.8 Notices. Any notice, request, demand, waiver, consent, approval or other
    communication which is required or permitted hereunder shall be in writing
    and (a) delivered personally; (b) sent by telex or telecopy; (c) delivered
    by overnight express (charges prepaid); or (d) sent by first class registered
    mail or certified mail, postage prepaid, as follows:

If to Purchaser, to:
    MMI Products, Inc.
    515 W. Greens Road
    Suite 710
    Houston, Texas 77067
    Attention: Mr. Julius S. Burns
    Facsimile: (228) 876-1648
    With required copy to:
    Weil, Gotshal & Manges LLP
    100 Crescent Court
    Suite 1300
    Dallas, Texas 75201
    Attention: Michael A. Saslaw
    Facsimile: 214-746-7777
    If to Seller, to:
    National Wholesale Fence Supply, Inc.
    15319 Chatsworth Street
    Mission Hills, California 91345
    Attention: Mr. Michael Adams
    Facsimile: 818-221-6087
    With required copy to:
    Jeffer, Mangels, Butler & Marmaro LLP
    2121 Avenue of the Stars, Tenth Floor
    Los Angeles, California 90067-5010
    Attention: Robert Steinberg
    Facsimile: (310) 203-0567

or to such other address as the addressee may have specified
    in a notice duly given to the sender as provided herein. Notices sent by hand
    delivery shall be deemed to have been given when received; notices mailed
    in accordance with the foregoing shall be deemed to have been given three
    days following the date so mailed; notices sent by telex or telecopy shall
    be deemed to have been given when electronically confirmed; and notices sent
    by overnight courier shall be deemed to have been given on the next business
    day following the date so sent.
    7.9 Governing Law. This Agreement shall be governed by and interpreted and
    enforced in accordance with the Laws of the State of California without giving
    effect to any choice of Laws rules that may require the application of the
    Laws of any other jurisdiction.
    7.10 Confidentiality and Press Release.
    (a) In connection with the transactions contemplated by this Agreement, any
    information furnished to, or obtained by, Purchaser from Seller or by Seller
    from Purchaser, as the case may be, or any of their respective officers, employees,
    attorneys, accountants, or authorized representatives, as a result of investigations
    by such parties or otherwise furnished by one party to the others in connection
    with the transactions contemplated by this Agreement, shall be treated as
    confidential information and kept confidential (unless otherwise having become
    publicly available through no breach of this Agreement or as otherwise required
    by Law) and, in the event that the transactions contemplated by this Agreement
    are not consummated, Seller, on the one hand, and Purchaser, on the other
    hand, each agrees, upon such request, to return to the other parties all written
    information and copies thereof furnished by the other parties to such party,
    and each such party agrees to preserve and protect the confidential information
    and not to use such confidential information for itself, or permit any such
    confidential information to be made available to third parties, except to
    the extent contemplated hereby or as otherwise required by Law; provided,
    however, that Purchaser shall be entitled to disclose confidential information
    to Purchaser's representatives who reasonably need to have such information
    in order to consummate the transactions contemplated hereby, including, without
    limitation, Purchaser's financing sources. Following the Closing, neither
    Seller nor any other affiliate of Seller will use or disclose any confidential
    documents or information relating to the Business. All information and documents
    relating to the Business will be deemed to be confidential unless such documents
    or information can be shown to have been in the public domain prior to such
    use or disclosure other than as a result of information disclosed by Seller
    or any other affiliate of Seller in violation of this Agreement.
    (b) Seller, on the one hand, and Purchaser, on the other hand, hereby acknowledges
    and agrees that the portion of any proposed press release by such party pertaining
    to the transactions contemplated hereby which references either such transactions
    or other parties hereto by name shall be coordinated with, and agreed upon,
    prior to the release or publication of such press release by Purchaser, on
    the one hand, and Seller, on the other hand.
    7.11 No Benefit to Others. The representations, warranties, covenants and
    agreements contained in this Agreement are for the sole benefit of the parties
    hereto and, in the case of Article V hereof, the other indemnified parties,
    and their heirs, executors, administrators, legal representatives, successors
    and assigns, and they shall not be construed as conferring any rights on any
    other persons.
    7.12 Headings; Gender; Certain Terms. All section headings contained in this
    Agreement are for convenience of reference only, do not from a part of this
    Agreement and shall not affect in any way the meaning or interpretation of
    this Agreement. Words used herein, regardless of the number and gender specifically
    used, shall be deemed and construed to include any other number, singular
    or plural, and any other gender, masculine, feminine, or neuter, as the context
    requires. Any reference to a "person" herein shall include an individual,
    firm, corporation, partnership, trust, governmental authority or body, association,
    unincorporated organization or any other entity. Any reference to "including"
    herein shall mean "including but not limited to." The conjunction
    "or" shall denote any one or more, or any combination or all, of
    the specified items or matters involved in the applicable list.
    7.13 Schedules and Exhibits. All exhibits and schedules referred to herein
    are intended to be and hereby are specifically made a part of this Agreement.
    7.14 Risk of Loss and Casualty Damage. The risk of loss or damage by fire
    or other casualty to the Acquired Assets or to the Business shall be upon
    Seller until Closing pursuant to this Agreement.
    7.15 Severability. Any provision of this Agreement which is invalid or unenforceable
    in any jurisdiction shall be ineffective to the extent of such invalidity
    or unenforceability without invalidating or rendering unenforceable the remaining
    provisions hereof, and any such invalidity or unenforceability in any jurisdiction
    shall not invalidate or render unenforceable such provision in any other jurisdiction.
    Furthermore, in lieu of such invalid or unenforceable provision, there shall
    be added automatically as a part of this Agreement a provision as similar
    in terms to such invalid or unenforceable provision as may be possible and
    be valid and enforceable.
    7.16 Counterparts. This Agreement may be executed in any number of counterparts
    and any party hereto may execute any such counterpart, each of which when
    executed and delivered shall be deemed to be an original and all of which
    counterparts taken together shall constitute but one and the same instrument.
    This Agreement shall become binding when one or more counterparts taken together
    shall have been executed and delivered by the parties. It shall not be necessary
    in making proof of this Agreement or any counterpart hereof to produce or
    account for any of the other counterparts.
    7.17 Attorneys' Fees. In the event any party hereto initiates any legal action
    arising out of or in connection with this Agreement, the prevailing party
    shall be entitled to recover from the other party all reasonable attorneys'
    fees and costs.
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
    day and year first above written.

PURCHASER:

MMI PRODUCTS, INC.



By: /s/ Robert N. Tenczar 
    Name: Robert N. Tenczar
    Title: Vice President - Finance

SELLER:

NATIONAL WHOLESALE FENCE SUPPLY, INC.



By: /s/ Michael Adams 
    Name: Michael Adams
    Title: President 
    ASSET PURCHASE AGREEMENT

Dated as of June 7, 1999,
    Between
    MMI PRODUCTS, INC. ("PURCHASER")
    and
    NATIONAL WHOLESALE FENCE SUPPLY, INC. ("SELLER")

ARTICLE I SALE AND PURCHASE OF ASSETS 1
    1.1 Agreement to Sell and Purchase 1
    1.2 Purchase Price; Assumed Liabilities, Etc. 2
    1.3 Escrowed Funds 3
    1.4 Prorations 3
    1.5 Allocation of Consideration 3
    1.6 Post-Closing Adjustment 4
    1.7 Uncollectible Accounts 5

ARTICLE II REPRESENTATIONS AND WARRANTIES 6
    2.1 Representations and Warranties of Seller 6
    2.1.1 Organization 6
    2.1.2 Authorization and Effect of Agreement 6
    2.1.3 Conflicts 6
    2.1.4 Consents 7
    2.1.5 Financial Statements 7
    2.1.6 Absence of Certain Changes and Events 8
    2.1.7 Inventory 8
    2.1.8 Real Property 8
    2.1.10 Intangible Assets and Properties 10
    2.1.11 Contracts 10
    2.1.12 Contract Defaults 11
    2.1.13 Sufficiency of Acquired Assets 11
    2.1.14 Compliance With Laws 11
    2.1.15 Environmental Matters 11
    2.1.16 Insurance 12
    2.1.17 Litigation; Decrees 13
    2.1.18 Employee Matters 13
    2.1.19 Labor Matters 13
    2.1.20 Customers and Suppliers 14
    2.1.21 Warranty and Product Liability Claims 14
    2.1.22 Licenses, Permits, Etc. 14
    2.1.23 Employees and Consultants 15
    2.1.24 Disclosure 15
    2.1.25 Taxes 15
    2.1.26 Accounts Receivable 16
    2.1.27 Interest in Competitors, Suppliers, Customers, Etc. 16
    2.1.28 Finders 16
    2.1.29 Books of Account 17
    2.2 Representations and Warranties of Purchaser 17
    2.2.1 Corporate Organization 17
    2.2.2 Authorization and Effect of Agreement 17
    2.2.3 Conflicts 17
    2.2.4 Consents 17
    2.2.5 Litigation 17
    2.2.6 Disclosure 18

ARTICLE III COVENANTS 18
    3.1 Covenants of Seller 18
    3.1.1 Employees and Business Relations 18
    3.1.2 Update Representations and Warranties 18
    3.1.3 Satisfaction of Conditions 18
    3.1.4 Sale of Acquired Assets;Negotiations 18
    3.1.5 Access 19
    3.1.6 Operation of the Business 19
    3.1.7 WARN Act Compliance 20
    3.1.8 Environmental Inspections 21
    3.1.9 Employees 21
    3.1.10 [Intentionally Omitted.] 21
    3.1.11 Physical Inventory 21
    3.2 Covenants of Purchaser 21
    3.2.1 Closing 21
    3.2.2 Employees 21

ARTICLE IV CLOSING 22
    4.1 Closing 22
    4.2 Conditions to Closing 22

ARTICLE V SURVIVAL AND INDEMNIFICATION 25
    5.1 Survival of Representations, Warranties and Covenants 25
    5.2 Indemnification by Seller 26
    5.3 Indemnification by Purchaser 27
    5.4 Indemnification Procedures 27
    5.5 Remedies Cumulative 29
    5.6 Adjustment to Purchase Price 29
    5.7 Limitation on Liability 29

ARTICLE VI POST CLOSING COVENANTS 29
    6.1 Payment Received 29
    6.2 Copies of Records 29
    6.3 Use of Name 29
    6.4 Further Assurances 30

ARTICLE VII MISCELLANEOUS PROVISIONS 30
    7.1 Termination 30
    7.2 Transfer Taxes 31
    7.3 Expenses 31
    7.4 Contents of Agreement; Parties in Interest; etc. 31
    7.5 Assignment and Binding Effect 31
    7.6 Waiver 31
    7.7 Non-Assignable Contracts 31
    7.8 Notices 31
    7.9 Governing Law 32
    7.10 Confidentiality and Press Release 33
    7.11 No Benefit to Others 33
    7.12 Headings; Gender; Certain Terms 33
    7.13 Schedules and Exhibits 34
    7.14 Risk of Loss and Casualty Damage 34
    7.15 Severability 34
    7.16 Counterparts 34

LIST OF SCHEDULES

LIST OF EXHIBITS
    LIST OF SCHEDULES

Schedule 1.1 Excluded Assets
    Schedule 1.2 Certain Assumed Liabilities
    Schedule 2.1.1 Jurisdictions of Qualification
    Schedule 2.1.4 Consents
    Schedule 2.1.6 Certain Changes and Events
    Schedule 2.1.7 Inventory
    Schedule 2.1.8A Real Property Leases
    Schedule 2.1.8B Additional Real Property
    Schedule 2.1.8C Real Property Disputes
    Schedule 2.1.8D Real Property Improvements
    Schedule 2.1.9A Physical Assets and Properties
    Schedule 2.1.9B Leases
    Schedule 2.1.10A Owned Intangible Properties
    Schedule 2.1.10B Licensed Intangible Properties
    Schedule 2.1.11 Contracts
    Schedule 2.1.12 Contract Defaults
    Schedule 2.1.13 Other Assets
    Schedule 2.1.14 Legal Matters
    Schedule 2.1.15A Environmental Matters
    Schedule 2.1.15B Environmental Circumstances
    Schedule 2.1.15C Certain Environmental Concerns
    Schedule 2.1.15D Environmental Proceedings
    Schedule 2.1.15E Hazardous Waste Matters; Permits
    Schedule 2.1.16 Insurance Policies
    Schedule 2.1.17 Litigation; Decrees
    Schedule 2.1.18 Employee Plans
    Schedule 2.1.19 Labor Matters
    Schedule 2.1.20 Customers and Suppliers
    Schedule 2.1.21 Warranty and Product Liability Claims
    Schedule 2.1.22 Licenses and Permits
    Schedule 2.1.23 Employment and Consulting Agreements
    Schedule 2.1.25 Taxes
    Schedule 2.1.27 Interest in Competitors, Suppliers, Customers
    Schedule 2.2.4 ConsentsLIST OF EXHIBITS

Exhibit A Form of Escrow Agreement
    Exhibit B Form of Bill of Sale and Assignment
    Exhibit C Form of Assumption Agreement
    Exhibit D Form of Noncompetition Agreement
    Exhibit E Form of Limited Power of Attorney
    Exhibit F Form of Opinion of Counsel of Seller
    Exhibit G Form of Chain-Link Supply Agreement
    Exhibit H Form of Lease Agreement
    Exhibit I Terms of Square Tube Supply Agreement

EXHIBIT A
    (Not Attached)
    EXHIBIT B
    (Not Attached)
    EXHIBIT C
    (Not Attached)
    EXHIBIT D
    (Not Attached)
    EXHIBIT E
    (Not Attached)
    EXHIBIT F
    (Not Attached)
    EXHIBIT G
    (Not Attached)
    EXHIBIT H
    (Not Attached)
    EXHIBIT I
    (Not Attached)

Schedule 2.2.4
    to
    Asset Purchase Agreement

1. The consent of Purchaser's lenders, Fleet Capital Corporation and Transamerica
    Business Credit Corporation, is required for Seller to consummate the transactions
    contemplated by the Asset Purchase Agreement.



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Exhibit 21.1

Subsidiaries



Security Fence Supply Co., Inc., a Maryland corporation. This
    subsidiary was merged with and into the registrant on January 10, 2000.



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Exhibit 24

POWER OF ATTORNEY

Know all those by these presents, that each person whose signature appears
    below constitutes and appoints Robert N. Tenczar, his true and lawful attorney-in-fact
    and agent, with full power of substitution and resubstitution, for such person
    and in his name, place and stead, in any and all capacities, in connection
    with the Form 10K for the fiscal year ending January 1, 2000 of MMI Products,
    Inc. under the Exchange Act of 1934, including, without limiting the generality
    of the foregoing, to sign the Form 10K in the name and on behalf of the undersigned
    as a director of MMI Products, Inc., and any and all amendments or supplements
    to the Form 10K. The undersigned further grants unto said attorney-in-fact
    and agent, acting alone, full power and authority to do and perform each and
    every act and thing requisite and necessary to be done in and about the premises,
    as fully to all intents and purposes as he might or could do in person, and
    hereby ratifies and confirms all that said attorney-in-fact and agent, or
    his substitutes or substitute, may lawfully do or cause to be done by virtue
    hereof.

SIGNATURE TITLE
    ______________________ 
    Director
    Thomas F. McWilliams

______________________
    Director
    Carl L. Blonkvist









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