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                                                                  Exhibit 10.4
 
                            ASSET PURCHASE AGREEMENT
                             
                                 by and among
 
                            TEXAS METAL WORKS, INC.,
 
                                    and
 
                          CONSOLIDATED STAINLESS, INC.
 
                    for the purchase of certain assets of its
 
                            FLOW COMPONENTS DIVISION
 
                            As of November 5, 1997


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                          ASSET PURCHASE AGREEMENT
 
    THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of November 5, 
1997 (the "Execution Date"), is made and entered into by and among TEXAS 
METAL WORKS, INC., a Texas corporation ("Purchaser"), and CONSOLIDATED 
STAINLESS, INC., a Delaware corporation ("Seller"), Purchaser, and Seller are 
each sometimes referred to in this Agreement as a "Party" and collectively 
referred to as "Parties."
 
                               RECITALS:
 
    1. The Parties desire to enter into this Agreement pursuant to which 
Seller proposes to sell to Purchaser, and Purchaser proposes to purchase from 
Seller, effective as of 12:01 a.m. local time on November 1, 1997 (the 
"Effective Date"), certain assets, properties and facilities of the Flow 
Components division (the "Company") of Seller and pursuant to which Seller 
proposes to assign certain contract rights to Purchaser and Purchaser 
proposes to assume certain obligations of Seller with respect to such 
contracts (the "Acquisition").
 
    2. The Company is in the business of manufacturing and distributing 
stainless steel flanges and stainless steel fittings (the "Business").
 
    3. The Parties desire to make certain representations, warranties and 
agreements in connection with the Acquisition.
 
    NOW, THEREFORE, in consideration of the premises and mutual covenants and 
agreements set forth in this Agreement, the Parties agree as follows:
 
0.                         PURCHASE AND SALE
 
0.  Agreement to Purchase and Sell. Subject to the terms and conditions of 
this Agreement, at the Closing (as defined in Section 7.1) and except as 
otherwise specifically provided in this Article 1, Seller will grant, sell, 
assign, transfer and deliver to Purchaser, and Purchaser will purchase and 
acquire from Seller, in each case effective as of the Effective Date, all of 
the following assets, properties and rights of the Company (which assets, 
properties and rights are collectively referred to in this Agreement as the 
"Assets"), free and clear of all mortgages, liens, pledges, security 
interests, charges, claims, restrictions and encumbrances of any nature 
whatsoever, except Permitted Liens (as defined in Section 3.5) and Assumed 
Liabilities (as defined in Section 1.4(b)).
 
1.  Assets. Except as otherwise expressly set forth in Section 1.3, the
Assets will include, without limitation, the following assets, properties and
rights of the Company as of the Effective Date (as defined in Section 7.1):

                                       
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    ( ) all production equipment (excluding two Fahr Hoang nipple threaders 
serial numbers 1636 and 1635 and the Fuji Universal Automatic Chucker 
Machines, Serial Numbers 3047 and 1870), tools, furniture and fixtures and 
office equipment located at the Company's premises at 5301 Polk Street, 
Buildings 8 and 10, Houston, Texas (the "Premises"), including, without 
limitation, the production equipment, tools, furniture and fixtures and 
office equipment described on Schedule 1.2(a) to this Agreement 
(collectively, the "Fixed Assets");
 
    (a) all inventories, including raw materials, work in process and 
finished goods, spare parts, stores and supplies, office supplies and other 
inventory items related to the Business and located at the Premises on the 
Effective Date (the "Inventory");
 
    (b) all right, title and interest of the Company in (i) all outstanding 
purchase orders related to the Business, including, without limitation, the 
purchase orders described on Schedule 1.2(c) to this Agreement and (ii) the 
personal property leases and contracts described on Schedule 3.8 to this 
Agreement (collectively, the "Assumed Contracts"); provided, however, that 
the Assumed Contracts shall include outstanding purchase orders not disclosed 
on Schedule 1.2(c) only to the extent that the Seller's obligations pursuant 
to such non-disclosed purchase orders does not exceed $5,000 in the aggregate;
 
    (c) all goodwill, patents, copyrights, methods, know-how, software, 
technical documentation, trade secrets, trademarks and trade names, including 
the name of the Company (and all rights thereto and applications therefor) 
that relate to the Business (the "Intangible Assets");
 
    (d) all rights to causes of action, lawsuits, judgments, claims and 
demands of any nature available to or being pursued by the Seller, whether 
arising by way of counterclaim or otherwise, to the extent related to the 
Assets, including, without limitation, all rights of the Seller to receive 
payments of principal and interest with respect to the loans made by the 
Seller to employees of the Company as described on Schedule 3.10 and all 
rights described on Schedule 1.2(e);
 
    (e) all guarantees, warranties, indemnities and similar rights in favor 
of the Seller, to the extent related to the Business or the Assets;
 
    (f) all governmental permits, licenses or similar rights relating to the 
Businesses or to the Assets;
 
    (g) all deposits, advances, prepaid expenses and credits related to the 
Assumed Contracts, as listed on Schedule 1.2(h);

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    (h) all information, files, correspondence, records, data, plans, 
contracts and recorded knowledge, including customer and supplier lists and 
all accounting or other books and records of the Seller, to the extent 
related to the Business or the Assets;
 
    (i) all unfilled customer orders of the Business and files and records 
relating thereto, as of the Effective Date;
 
    (j) the accounts receivable of the Seller related to the Business 
generated by or otherwise attributable to the operation of the Business from 
and after the Effective Date; and
 
    (k) the cash, cash equivalents and marketable securities of the Seller 
generated by or otherwise attributable to the operations of the Business from 
and after the Effective Date.
 
2.  Excluded Assets. Notwithstanding anything to the contrary set forth in 
this Agreement, the Assets will not include the following assets, properties 
and rights of the Company (collectively, the "Excluded Assets"): 

    ( ) any governmental permit, license or similar right that does not 
relate to the Business or Assets or that by its terms is not transferable to 
Purchaser, which permits, licenses and similar rights are set forth on 
Schedule 1.3;
 
    (a) the rights that accrue to Seller under this Agreement;
 
    (b) the rights to any federal, state, local or foreign income tax refunds;
 
    (c) the cash, cash equivalents and marketable securities of the Seller as 
of the close of business on October 31, 1997;
 
    (d) any accounts, notes and other receivables, other than those listed on 
Schedule 3.10 or Schedule 1.2(e) and those referred to in Section 1.2(k).
 
    (e) the two Fahr Hoang nipple threaders serial numbers 1636 and 1635 
located on the Premises and the Fuji Universal Automatic Chucker Machines, 
Serial Numbers 3047 and 1870;
 
    (f) any right, title and interest of the Seller in any contract or 
agreement other than the Assumed Contracts, including, without limitation, 
outstanding purchase orders not disclosed on Schedule 1.2(c) to the extent 
that the Seller's obligations pursuant to such non-disclosed purchase orders 
exceed $5,000 in the aggregate;

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    (g) all rights to causes of action, lawsuits, judgments, claims and 
demands of any nature available to or being pursued by the Seller, whether 
arising by way of counterclaim or otherwise, other than to the extent related 
to the Assets;
 
    (h) any guarantees, warranties, indemnities and similar rights in favor 
of the Company, other than to the extent related to the Assets; and
 
    (i) any deposits, advances, prepaid expenses and credits, other than 
those listed on Schedule 1.2(h).
 
3.  Assumption of Assumed Liabilities. 


    ( ) Except to the extent specified in Section 1.4(b), Purchaser will not 
assume, in connection with the transactions contemplated by this Agreement, 
any liability or obligation of the Seller whatsoever, and the Seller will 
retain responsibility for all liabilities and obligations accrued as of or on 
the Closing Date and all liabilities and obligations arising from the 
Company's operations prior to or on the Closing Date, whether or not accrued 
and whether or not disclosed.
 
    (a) As the sole exception to the provisions in Section 1.4(a), effective as
of the close of business on the Closing Date, Purchaser will assume and agree to
pay, discharge or perform, as appropriate, the following liabilities and
obligations of Seller existing as of or on the Closing Date and arising out of
the conduct of the Business prior to or on the Closing Date (collectively, the
"Assumed Liabilities"):

         ( ) obligations of the Seller under the Assumed Contracts to the 
extent such obligations accrue after the Effective Date, are not required to 
be performed prior to the Effective Date and are disclosed on the face of 
such Assumed Contracts;
 
         (i) obligations of the Seller to refund amounts or issue credits to 
customers of the Company with respect to returned or defective products 
related to the Business, shipped prior to the Effective Date or discrepancies 
in invoices rendered prior to the Effective Date, to the extent that such 
obligations do not exceed $5,000 in the aggregate;
 
         (ii) obligations of the Seller under the unfilled customer orders of 
the Business as of the Effective Date;
 
         (iii) obligations of Seller with respect to accounts payable with 
respect to the Business generated by or otherwise attributable to the 
operations of the Business from and after the Effective Date; and
 
         (iv) to the extent set forth in Section 5.8, the obligations of the 
Seller with respect to the employees of the Business from and after the 
Effective Date.

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4.  Excluded Liabilities. Specifically, and without in any way limiting the 
generality of Section 1.4(a), the Assumed Liabilities will not include, and 
in no event will Purchaser assume, agree to pay, discharge or perform or 
incur any liability or obligation under this Agreement or otherwise become 
responsible in respect of, the following (together with all other liabilities 
of the Seller that are not Assumed Liabilities, the "Excluded Liabilities"):

    ( ) any trade accounts payable of Seller, including, without limitation, 
outstanding purchase orders not disclosed on Schedule 1.2(c) to the extent 
that the Seller's obligations pursuant to such non-disclosed purchase orders 
exceed $5,000 in the aggregate, other than the Assumed Contracts;
 
    (a) any liability or obligation of Seller, including, without limitation, 
any accounts payable, of or owed to any Affiliate (as defined in Section 
3.16) of Seller (other than the Assumed Liabilities);
 
    (b) any liability or obligation of the Seller relating to or arising from 
the breach of, default under or failure to comply with, at any time prior to 
or on the Closing Date, any Assumed Contract or the failure to timely pay or 
perform any other liability or obligation;
 
    (c) any liability or obligation of the Seller arising out of or incurred 
in connection with (i) the operation and administration of any employee 
benefit plan, policy or program of any kind or description whatsoever 
currently or previously maintained or sponsored by the Seller or to which the 
Seller was obligated (through collective bargaining or otherwise) to make 
contributions, including, without limitation, any plan or contract providing 
for deferred compensation or health or death benefits, any multi-employer 
plan or any plan subject to Title IV of the Employee Retirement Income 
Security Act ("ERISA") or (ii) any contract or agreement relating to any such 
employee benefit plan, policy or program;
 
    (d) any liability or obligation arising out of or with respect to any 
third party or governmental claim pending on the Effective Date or thereafter 
initiated based on or arising out of the operations of the Company or the 
Business prior to or on the Effective Date;
 
    (e) any liability or obligation of Seller arising or incurred in 
connection with the negotiation, preparation and execution of this Agreement 
and the transactions contemplated by this Agreement and any fees and expenses 
of counsel, accountants, brokers, financial advisors or other experts of 
Seller;
 
    (f) accrued but unpaid vacation time, sick pay, bonuses and other 
compensation owed to employees of the Company, to the extent that the Seller 
has agreed to pay (or make provision for paying) same pursuant to Section 5.8;

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    (g) accrued and unpaid salaries, wages, commissions, fees and bonuses of 
the Company owed to employees of the Company or to sales agents or 
manufacturer's representatives of the Company, to the extent that the Seller 
has agreed to pay (or make provision for paying) same pursuant to Section 5.8;
 
    (h) obligations under the Company's lease of the Premises; and
 
    (i) any and all other liabilities of the Company or Seller which are not
expressly listed or referred to in this Section 1.5 or that are not expressly
listed in Section 1.4(b) as Assumed Liabilities.
 
1.                    PURCHASE PRICE; ALLOCATIONS
 
0.  Purchase Price. The purchase price for the Assets will be, subject to 
adjustment pursuant to this Article 2, (i) Five Million Seven Hundred Fifty 
Thousand Dollars ($5,750,000) plus (ii) the assumption by Purchaser of the 
Assumed Liabilities (collectively, the "Purchase Price"). The Purchase Price 
will be payable as provided in Section 2.2.
 
1.  Payment of Purchase Price. The Purchase Price will be paid as follows:
 
    (a) Purchaser will pay for the account of Seller the amounts owed by 
Seller to those entities listed on Schedule 2.2(a)(i) to this Agreement and 
the demurrage charges for containers in port listed on Schedule 2.2(a)(ii);
 
    (b) Purchaser will pay to Seller on the Closing Date an amount equal to 
the difference between (i) Five Million Five Hundred Thousand Dollars 
($5,500,000), as adjusted pursuant to Section 2.3, and (ii) the total of the 
amounts paid by the Purchaser for the account of Seller pursuant to Section 
2.2(a) above, such amount to be paid by wire transfer of immediately 
available federal funds to an account to be designated in writing to 
Purchaser by Seller at least two business days prior to the Closing Date; and
 
    (c) Purchaser will issue to Seller an unsecured promissory note (the 
"Note") payable in the principal amount of Two Hundred Fifty Thousand Dollars 
($250,000), substantially in the form attached to this Agreement as Exhibit 
2.2(c).
 
2.  Adjustments to Purchase Price
 
    (a) The portion of the Purchase Price specified in Section 2.2(b)(i) will 
be adjusted by the following amounts, if any:

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         (i) The difference between $2,540,000 and the "Effective Date 
Inventory Valuation", which shall be the book value of the inventory on hand 
at the Company at the close of business on the business day prior to the 
Effective Date, computed using a "conversion factor" of 49.25%;
 
         (ii) The difference between $1,860,440, which represents the 
appraised fair market value of the assets described on Schedule 1.2(a) as set 
forth in the July 1, 1997 appraisal of such assets and which includes the 
value of the two Fahr Hoang nipple threaders serial numbers 1636 and 1635 and 
the Fuji Universal Automatic Chucker Machines, Serial Numbers 3047 and 1870), 
and the "Effective Date Fixed Asset Valuation", which shall be the appraised 
fair market value of such assets present at the Premises at the close of 
business on the business day prior to the Effective Date, but without 
deduction for the July 1, 1997 appraised value of such Fahr Hoang nipple 
threaders and Fuji Universal Automatic Chucker Machines; and
 
         (iii) An amount equal to the total of the deposits, advances, 
prepaid expenses and credits listed on Schedule 1.2(h) and the accounts 
receivable related to the loans made by Seller to employees of the Seller as 
listed on Schedule 1.2(e).
 
    (b) The Effective Date Inventory Valuation will be determined from the 
books and records of the Seller as of the close of business on the business 
day prior to the Effective Date. The Effective Date Fixed Asset Valuation 
will be determined as of the close of business on the business day prior to 
the Effective Date by a physical inventory conducted by the Purchaser. The 
Purchaser and Seller shall negotiate in good faith to resolve any 
disagreements regarding the inventory by the commencement of business on the 
Closing Date; provided, however, that if the Purchaser and the Seller are 
unable to resolve any such differences, the Closing Date shall be postponed 
by either Party (the "Postponement") for such period of time as may be 
necessary to obtain an independent valuation of the Inventory by a public 
accounting firm to be selected by Purchaser and Seller, which valuation will 
be final and binding on all parties as to the Effective Date Fixed Asset 
Valuation. The Parties shall use their best efforts to obtain such valuation 
within five business days of the date of the Postponement.
 
    (c) The Purchase Price shall be adjusted with respect to the amounts 
computed pursuant to the subparagraphs of Section 2.3(a) as follows: the 
Purchase Price shall be (i) increased if the Effective Date Inventory 
Valuation exceeds $2,540,000; (ii) decreased if the Effective Date Inventory 
Valuation is less than such amount; (iii) increased if the Effective Date 
Fixed Asset Valuation exceeds $1,860,440 (without deduction for the July 1, 
1997 appraised value of such Fahr Hoang nipple threaders and Fuji Universal 
Automatic Chucker Machines); (iv) decreased if the Effective Date Fixed Asset 
Valuation is less than $1,860,440 (without deduction for the July 1, 1997 
appraised value of such Fahr Hoang nipple threaders and Fuji Universal 
Automatic Chucker Machines); and (v) increased by the total of the amounts 
identified in subparagraph (iii) of Section 2.3(a). The Purchase Price shall 
also be decreased by the amount of

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any cash, cash equivalents, or marketable securities generated by or 
otherwise attributable to the operations of the Business from and after the 
Effective Date that is paid to Seller and is not remitted by Seller to 
Purchaser.
 
3.  Allocation of Certain Items. With respect to certain expenses incurred in 
the operation of the Company, the following allocations will be made between 
Purchaser and Seller:

    (a) Taxes. All federal, state, local and foreign taxes (other than taxes 
levied on the income or receipts of the Seller, as to which the Purchaser 
shall have no liability) will be apportioned at the Closing as of the 
Effective Date based upon current tax bills if available; and if not 
available, such apportionment will be based on the most recent tax bills 
available, with appropriate subsequent adjustment when bills for 1997 are 
received.
 
    (b) Utilities. Utilities, water, sewer and other service or utility 
charges will be apportioned based upon the number of operating days occurring 
before and after the Effective Date during the billing period for each such 
charge.
 
    (c) Workers' Compensation. Pursuant to the provisions of this Agreement, 
Seller will be responsible for and pay any and all workers' compensation and 
other similar claims asserted by or with respect to any employee or former 
employee of the Company in respect of any injury or other compensable event 
or occupational illness or disease which occurred or is attributable to any 
event, state of facts or condition which existed or occurred in whole prior 
to or on the Effective Date. Purchaser is responsible for and will pay any 
and all workers' compensation and other similar claims asserted by or with 
respect to any employee of Purchaser in respect of any injury or other 
compensable event or occupational illness or disease which occurred or is 
attributable to any event, state of facts or condition which existed or 
occurred in whole after the Effective Date. If any such injury or other 
compensable event or occupational illness or disease of a person who was 
employed both by Seller prior to or on the Effective Date and by Purchaser 
after the Effective Date is attributable in part to causes occurring prior to 
or on the Effective Date and in part to causes occurring subsequent to the 
Effective Date and is the basis of a workers' compensation or other similar 
claim asserted after the Execution Date, then liability for any such claim 
will be determined in accordance with the workers' compensation laws of the 
State of Texas.
 
    (d) Insurance. Insurance premiums will be apportioned based on the number 
of days occurring before and after the Effective Date during the last premium 
period.
 
    Appropriate cash payments by Seller or Purchaser, as the case may 
require, will be made under this Agreement from time to time, as soon as 
practicable after the facts giving rise to the obligation for such payments 
are known to and accepted by Seller and Purchaser, in the amounts necessary 
to give effect to the allocations provided for in this Section 2.4.

 
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2.                    REPRESENTATIONS AND WARRANTIES OF SELLER
 
    Seller hereby represents and warrants to Purchaser as follows:
 
0.  Organization. Seller is a corporation duly organized, validly existing 
and in good standing under the laws of its jurisdiction of incorporation and 
has all requisite power and authority (corporate and other) to own, lease and 
operate its properties and to carry on its business as now being conducted. 
Seller is duly qualified to transact business and is in good standing as a 
foreign corporation in each jurisdiction where the character of its 
activities requires such qualification. Seller has heretofore made available 
to Purchaser true, correct and complete copies of its articles or certificate 
of incorporation (as the case may be) and bylaws as currently in effect and 
its minute books. Schedule 3.1 contains a true and correct list of the 
jurisdictions in which Seller is qualified to do business as a foreign 
corporation. The Company is not a corporation, partnership or other legal 
entity.
 
1.  Authorization. Seller has the full corporate power and authority to 
execute and deliver this Agreement and any other certificate, agreement, 
document or other instrument to be executed and delivered by it in connection 
with the transactions contemplated by this Agreement (collectively, the 
"Seller Ancillary Documents") and to perform its obligations under this 
Agreement and the Seller Ancillary Documents and to consummate the 
transactions contemplated by this Agreement and by the Seller Ancillary 
Documents. The execution and delivery of this Agreement and the Seller 
Ancillary Documents by Seller and the performance by the Seller of its 
obligations under this Agreement and under  the Seller Ancillary Documents 
and the consummation of the transactions provided for in this Agreement and 
in the Seller Ancillary Documents have been duly and validly authorized by 
all necessary corporate action on the part of Seller. The board of directors 
of Seller have approved the execution, delivery and performance of this 
Agreement and Seller Ancillary Documents and the consummation of the 
transactions contemplated by this Agreement and by the Seller Ancillary 
Documents. No approval of the shareholders of the Seller is required in 
connection with the execution, delivery and performance of this Agreement and 
the Seller Ancillary Documents and the consummation of the transactions 
contemplated by this Agreement and by the Seller Ancillary Documents by the 
Seller. This Agreement has been, and the applicable Seller Ancillary 
Documents will be as of the Closing Date, duly executed and delivered by 
Seller and do or will, as the case may be, constitute the valid and binding 
agreements of Seller, enforceable against Seller in accordance with their 
respective terms, subject to applicable bankruptcy, insolvency and other 
similar laws affecting the enforceability of creditors' rights generally, 
general equitable principles and the discretion of courts in granting 
equitable remedies.
 
2.  Absence of Restrictions and Conflicts. Except as set forth on Schedule
3.3, the execution, delivery and performance of this Agreement and the Seller
Ancillary Documents, the

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consummation of the transactions contemplated by this Agreement and the 
Seller Ancillary Documents and the fulfillment of and compliance with the 
terms and conditions of this Agreement and the Seller Ancillary Documents do 
not or will not (as the case may be), with the passing of time or the giving 
of notice or both, violate or conflict with, constitute a breach of or 
default under, result in the loss of any benefit under, or permit the 
acceleration of any obligation under, (a) any term or provision of the 
articles or certificate of incorporation (as the case may be) or bylaws of 
the Seller, (b) any Assumed Contract or any other material contract or 
agreement of Seller; (c) any judgment, decree or order of any court or 
governmental authority or agency to which the Seller is a party or by which 
Seller or any of its properties is bound or (d) any statute, law, rule or 
regulation applicable to Seller. No consent, approval, order or authorization 
of, or registration, declaration or filing with, any governmental agency or 
public or regulatory unit, agency, body or authority with respect to Seller 
is required in connection with the execution, delivery or performance of this 
Agreement or the Seller Ancillary Documents by Seller or the consummation of 
the transactions contemplated by this Agreement or the Seller Ancillary 
Documents by Seller.
 
3. Ownership of Assets and Related Matters.

    ( ) Real Property. The Seller does not own any real property that is used 
in connection with the Business. Schedule 3.4(a) sets forth a true, correct 
and complete list and legal description of all of the real property leased by 
the Seller and used with respect to the Business (the "Real Property"). 
Except as set forth in Schedule 3.4(a), and other than the terms of the lease 
of the Premises, the Seller has a good and valid leasehold interest in the 
Real Property, free and clear of all liens, pledges, security interests, 
charges, claims, tenancies, restrictions and encumbrances of any nature 
whatsoever other than (i) liens for taxes not yet due and payable, (ii) 
statutory liens of landlords and liens of carriers, warehousemen, mechanics, 
materialmen and repairmen incurred in the ordinary course of business and not 
yet delinquent, and (iii) zoning, building or other restrictions, variances, 
covenants, rights-of-way, encumbrances, easements and other minor 
irregularities in title, none of which, individually or in the aggregate, (A) 
interfere with the present use or occupancy of any of the Real Property by 
the Seller, (B) have more than an insignificant effect on the value of any of 
the Real Property or its use or (C) would impair the ability of Purchaser to 
sell its leasehold interest in any such Real Property for its present use 
(collectively, "Permitted Liens"). The Seller is in possession of all of the 
Real Property and all buildings, structures, fixtures and improvements 
located on such Real Property, and the Seller has adequate rights of ingress 
and egress with respect to such Real Property and the buildings, structures, 
fixtures and improvements located on such Real Property. To the knowledge of 
the Seller, there are no condemnation or appropriation proceedings pending or 
threatened against any of the Real Property or the improvements thereon.
 
    (a) Title to Assets. Except as set forth in Schedule 3.4(b), Seller has 
(and will convey to Purchaser at the Closing) good and marketable title to 
the Assets, free and clear of all liens, pledges, security interests,  
charges, claims, restrictions and encumbrances of any nature

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whatsoever. All equipment and other items of tangible property and assets 
included in the Assets are in good operating condition and in a state of good 
maintenance and repair, ordinary wear and tear excepted, are usable in the 
regular and ordinary course of business and conform in all material respects 
to all applicable laws, ordinances, codes, rules and regulations applicable 
thereto. No entity other than the Seller owns any equipment or other tangible 
assets or properties situated on the premises of the Seller used with respect 
to the Business which are necessary to the operation of the Business, except 
for the leased items that are subject to the personal property leases listed 
on Schedule 3.8. Except as set forth in Schedule 3.4(b), since September 11, 
1997, the Seller has not sold, transferred or disposed of any assets other 
than sales of inventory in the ordinary course of business.
 
    (b) Inventories. The inventories of the Seller with respect to the 
Business (i) are sufficient for the operation of the Business in the ordinary 
course consistent with past practice, (ii) consist of items which are good 
and merchantable within normal trade tolerances, (iii) are of a quality and 
quantity presently usable or saleable in the ordinary course of business of 
the Company (subject to applicable reserves), (iv) are valued on the books 
and records of the Seller at the lower of cost or market, with the cost 
determined on an average-cost basis consistent with past practice and (v) are 
subject to reserves determined in accordance with GAAP, consistently applied. 
To the knowledge of Seller, no previously sold inventory is subject to 
returns in excess of those historically experienced by the Seller with 
respect to the Business.
 
    (c) No Third Party Options. There are no existing agreements, options, 
commitments or rights with, of or to any person to acquire any of the Assets, 
or any interest in such Assets other than this Agreement.
 
    (d) Deposits, etc. Schedule 1.2(h) sets forth a true and correct list of 
all deposits, advances, prepaid expenses and credits applicable to the 
Assets, the Business or any Assumed Contract.
 
    (e) Appraisal. The July 1, 1997 appraisal of the Fixed Assets lists all 
such assets currently being used by the Seller in the operation of the 
Business and does not include any assets other than assets owned by the 
Seller on the date of such appraisal.
 
4. No Undisclosed Liabilities. Except as disclosed in Schedule 3.5, the 
Seller does not have any material liabilities or obligations, contingent or 
otherwise, with respect to the Business that are not adequately reflected or 
provided for in the balance sheet of the Seller at June 30, 1997, included in 
the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997 
(the "Interim Balance Sheet"), except liabilities and obligations incurred 
since the date of the Interim Balance Sheet in the ordinary course of the 
Business. Schedule 3.5 sets forth a true and correct list of all trade 
creditors of the Seller with respect to the Business as of the close of 
business on October 31, 1997, that are known to Seller (collectively, the 
"Trade Creditors") and of all holders of liens, other than Permitted Liens, 
secured by the Assets, both as of the Effective Date.

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Schedule 2.2(a)(ii) sets forth a true and correct list of demurrage charges 
for containers in port as of the Effective Date. Schedule 1.2(c) sets forth a 
true and correct list of all purchase orders of the Seller with respect to 
the Business, pursuant to which Seller has committed to acquire goods or 
services for an expenditure in excess of $2,000, which purchase orders were 
outstanding as of the Effective Date. The amount that Seller is obligated to 
expend with respect to purchase orders with respect to the Business that were 
outstanding on the Effective Date and that are not listed on Schedule 1.2(c) 
will not exceed $5,000 in the aggregate, plus the amount of any such purchase 
orders incurred between the Effective Date and the Closing Date in the 
ordinary course of business.
 
5.  Legal Proceedings. Except as set forth in Schedule 3.6, there are no 
suits, actions, claims, proceedings or investigations pending or threatened 
against, relating to or involving the Seller, with respect to the Business, 
the Company or the Assets before any court, arbitrator or administrative or 
governmental body. None of such suits, actions, claims, proceedings or 
investigations, if finally determined adversely, are likely, individually or 
in the aggregate, to have a material adverse effect on the assets, 
liabilities, results of operations, business or prospects of the Company or 
the Business. The Seller is not subject to any judgment, decree, injunction, 
rule or order of any court. The Seller is not subject to any governmental 
restriction which is likely (a) to have a material adverse effect on the 
assets, liabilities, results of operations, business or prospects of the 
Company or the Business or (b) to cause a limitation on Purchaser's ability 
to operate the Business after the Closing in the same manner as heretofore 
conducted by the Company.
 
6.  Compliance with Law. The Seller has all authorizations, approvals, 
licenses, permits and orders of and from all governmental and regulatory 
officers and bodies necessary to carry on the Business as it is currently 
being conducted, to own or hold under lease the properties and assets it owns 
or holds under lease with respect to the Business and to perform all of its 
obligations under the agreements to which it is a party with respect to the 
Business (collectively, the "Licenses"). The Seller is (and has been since 
the date of its acquisition of the Business) in compliance with all 
applicable laws, regulations and administrative orders relating to the 
Business (including, without limitation, laws relating to employment of labor 
or use or occupancy of properties or any part thereof) of any country, state 
or municipality or of any subdivision thereof to which the Business is 
subject. Schedule 3.7 sets forth a true, correct and complete list of all 
Licenses. Seller has previously delivered to Purchaser all reports and 
filings made or filed by the Seller with respect to the Business pursuant to 
the Occupational Safety and Health Act ("OSHA"). Since the date of its 
acquisition of the Business, the Seller has not materially violated or 
materially failed to comply with, or been the subject of any allegation that 
it has materially violated or materially failed to comply with, OSHA with 
respect to its operation of the Business.
 
    7. Contracts. Schedule 3.8 sets forth a true, correct and complete list of
all Assumed Contracts (including every amendment, modification or supplement to
the foregoing), other than customer purchase orders entered into in the ordinary
course of business. Schedule 3.8 identifies with an asterisk each Assumed
Contract as to which a consent or notice is required to be obtained
 
                                     12
<PAGE>

or given in connection with the Acquisition. True, correct and complete 
copies of all Assumed Contracts have been made available to Purchaser. The 
Assumed Contracts are valid and enforceable in accordance with their 
respective terms with respect to the Seller and each other party to such 
Assumed Contracts. There are no existing material defaults of the Seller 
under any Assumed Contract or of any of the other parties to such Assumed 
Contracts (or events or conditions which with notice or lapse of time or both 
would constitute a material default), and, to the knowledge of Seller, there 
are no such material defaults with respect to any third party to any Assumed 
Contract. Seller has paid all amounts due from it pursuant to the Assumed 
Contracts as of the Effective Date.
 
8.  Taxes. Except as disclosed on Schedule 3.9, since January 1, 1992, no tax 
deficiencies have been asserted against the Seller as a result of any 
examination by the Internal Revenue Service or any other taxing authority. 
There are no pending claims asserted for any federal, state, local or foreign 
taxes of the Seller, or outstanding agreements or waivers extending the 
statutory period of limitation applicable to any tax return of the Seller for 
any period. Except as disclosed on Schedule 3.9, there are no tax liens or 
claims against the Assets.
 
9. Managerial and Other Employees; Sales Agents. Schedule 3.10 contains a 
true and complete list of (a) all of the managerial employees of the Seller 
employed primarily with respect to the Business specifying their office and 
annual rate of compensation; (b) all of the other employees of the Seller 
employed primarily with respect to the Business as of the Effective Date 
specifying their annual salary or hourly wages, together with an appropriate 
notation next to the name of any employee on such list to whom the Seller has 
made any verbal commitments which are binding on the Seller; (c) all sales 
agents or manufacturer's representatives with whom Seller has agency 
relationships with respect to the Business, specifying the amount of fees or 
commission paid to each during 1997 and (d) the terms of any loans made by 
the Seller to managerial or other employees of the Seller employed primarily 
with respect to the Business as of the Effective Date.
 
10. Benefit Plans.
    
    ( ) Seller has furnished to Purchaser a correct, complete and current 
copy of each plan, program, policy or arrangement which is set forth in 
writing and which provides cash or property or other compensation related 
benefits of any kind or description whatsoever to or on behalf of any current 
or former employee of the Seller employed primarily with respect to the 
Business or any of their dependents and a complete description of any such 
plan, program, policy or arrangement which is not set forth in writing 
(collectively, the "Benefit Plans"). Each Benefit Plan is listed on Schedule 
3.11.
 
    (a) Seller has furnished to Purchaser a correct, complete and current 
copy of all employee handbooks currently made available to the Seller's 
employees with respect to the


                                       13
<PAGE>

Business and any other materials which the Seller distributes to such 
employees or any of their dependents with respect to each Benefit Plan 
described in Section 3.11(a).
 
    (b) The Seller is not a party to any employment related contract or 
agreement of any kind whatsoever relating to the Business, any multiemployer 
plan (as defined under Section 3(37) of ERISA), which is, or purports to be, 
binding in any way whatsoever on Purchaser, and there is no provision in any 
employment related contract or agreement or Benefit Plan specifically 
imposing any liability on Purchaser.
 
    (c) The Seller has not made a statement or representation of any kind or 
description whatsoever to the Company's employees with respect to their 
possible employment by Purchaser or, if employed by Purchaser, their possible 
compensation or benefit package from Purchaser.
 
11. Labor Relations. Since January 23, 1996 and, to the knowledge of Seller
(based solely upon inquiry of J. Read Boles and the representations and
warranties made to the Seller in that certain Stock Purchase Agreement, dated as
of September 30, 1995, by and among Seller, Mr. Boles and certain other
individuals), since December 31, 1992, except as set forth in Schedule 3.12, (a)
the employees of the Seller with respect to the Business have not been and are
not represented by a labor organization which was either National Labor
Relations Board ("NLRB") certified or voluntarily recognized; (b) the Seller has
not been and is not a signatory to a collective bargaining agreement with any
labor organization that relates to the Business; (c) no representation election
petition has been filed by employees of the Seller with respect to the Business
or is pending with the NLRB and no union organizing campaign involving employees
of the Seller with respect to the Business has occurred or is in progress; (d)
no NLRB unfair labor practice claims have been filed and/or are presently
pending against the Seller with respect to the Business or any labor
organization representing its employees; (e) no grievance or arbitration demand,
whether or not filed pursuant to a collective bargaining agreement, has been
filed or is pending against the Seller with respect to the Business; (f) no hand
billing, picketing, work stoppage (sympathetic or otherwise), or other
"concerted action" involving the employees of the Business has occurred or is in
progress; (g) no breach of contract and/or denial of fair representation claim
has been filed or is pending against the Seller with respect to the Business
and/or any labor organization representing its employees; (h) no claim for
unpaid wages or overtime or for child labor or record keeping violations has
been filed or is pending under the Fair Labor Standards Act, Davis-Bacon Act,
Walsh-Healey Act, or Service Contract Act or any other federal, state, local or
foreign law, regulation, or ordinance; (i) no discrimination and/or retaliation
claim has been filed or is pending against the Seller with respect to the
Business under the 1866 or 1964 Civil Rights Acts, the Equal Pay Act, the Age
Discrimination in Employment Act, as amended, the Americans with Disabilities
Act, the Family and Medical Leave Act, the Fair Labor Standards Act, ERISA or
any other federal law or any comparable state fair employment practices act or
foreign law regulating discrimination in the workplace; (j) if the Seller is a
federal or state contractor obligated to develop and maintain an affirmative
action plan, no discrimination

                                       14
<PAGE>

claim, show cause notice, conciliation proceeding, sanctions or debarment 
proceeding has been filed or is pending with Office of Federal Contract 
Compliance Programs or any other federal agency or any comparable state or 
foreign agency or court and no desk audit or on-site review is in progress; 
(k) no citation has been issued by OSHA against the Seller with respect to 
the Business and no notice of contest or OSHA administrative enforcement 
proceeding involving the Seller with respect to the Business has been filed 
or is pending; (l) no workers' compensation or retaliation claim has been 
filed or is pending against the Seller with respect to the Business; (m) the 
Seller is in compliance with the provisions of the Immigration Reform and 
Control Act and other federal and foreign immigration laws, to the extent 
such laws relate to the Seller's operation of the Business; (n) the Seller 
has not been and is not obligated, by any collective bargaining agreement or 
other written agreement, to contribute to any multi-employer pension or 
welfare benefit plan covering employees with respect to the Business and/or 
retirees and their beneficiaries; and (o) the Seller has not taken any action 
that would constitute a "mass layoff" or "plant closing" within the meaning 
of the Worker Adjustment and Retraining Notification Act (the "WARN Act") or 
otherwise trigger notice requirements or liability under any local or state 
plant closing notice law. The Seller is in compliance with all federal, state 
and local laws respecting employment and employment practices, terms and 
conditions of employment, wages and hours, and is not engaged in any unfair 
labor or unlawful employment practice.
 
12. Insurance. The Assets have been and are insured by financially sound and 
reputable insurers in such amounts and against such risks as are reasonable 
in relation to the Business, and the Seller will maintain such insurance at 
least through the Closing Date.
 
13. Environmental Matters. Except as set forth in Schedule 3.14:

    ( ) The Seller possesses, and is in full compliance with, all permits, 
licenses and government authorizations and has filed all notices that are 
required under local, state and federal laws and regulations relating to 
protection of the environment, pollution control, product registration and 
Hazardous Materials (as defined below in this Section 3.14) ("Environmental 
Laws") with respect to the Business, except for such failure to possess or 
file and except for such noncompliance as would not result in a material 
adverse affect on the Business or Assets; the Seller is in compliance with 
all applicable limitations, restrictions, conditions, standards, 
prohibitions, requirements, obligations, schedules and timetables contained 
in those laws or contained in any law, regulation, code, plan, order, decree, 
judgment, notice, permit or demand letter issued, entered, promulgated or 
approved thereunder, to the extent the same relate to the Business, except 
for such noncompliance as would not have a material adverse affect on the 
Business or Assets;
 
    (a) The Seller has not received, with respect to the Business, notice of 
actual or threatened liability under the Federal Comprehensive Environmental 
Response, Compensation, and Liability Act ("CERCLA") or any similar state or 
local statute or ordinance from any governmental agency or any third party 
and there are no facts or circumstances known to Seller

                                       15
<PAGE>

with respect to the Business which could form the basis for the assertion of 
any claim against the Seller with respect to the Business under any 
Environmental Laws including, without limitation, CERCLA or any similar 
local, state or foreign law with respect to any on-site or off-site location;
 
    (b) With respect to the Business, the Seller has not entered into or 
agreed to nor does it contemplate entering into any consent decree or order, 
and is not subject to any judgment, decree or judicial or administrative 
order relating to compliance with, or the cleanup of Hazardous Materials 
under, any applicable Environmental Laws related to the Business;
 
    (c) The Seller has not received any notice of violation and has not been 
subject to any administrative or judicial proceeding alleging violation of 
applicable Environmental Laws or regulations related to the Business either 
now or any time since its acquisition of the Business;
 
    (d) The Seller is not subject to any claim, obligation, liability, loss, 
damage or expense of whatever kind or nature, contingent or otherwise, 
incurred or imposed or based upon any provision of any Environmental Law and 
arising out of any act or omission of the Seller, its employees, agents or 
representatives with respect to the Business or arising out of the ownership, 
use, control or operation by the Seller of any plant, facility, site, area or 
property relating to the Business (including, without limitation, any plant, 
facility, site, area or property currently or previously owned or leased by 
the Seller) from which any Hazardous Materials were released into the 
environment, except for any claim, obligation, liability, loss, damage or 
expense that would not, individually or in the aggregate, have a material 
adverse affect on the Business or the Assets (the term "release" meaning any 
spilling, leaking, pumping, pouring, emitting, emptying, discharging, 
injecting, escaping, leaching, dumping or disposing into the environment, and 
the term "environment" meaning any surface or ground water, drinking water 
supply, soil, surface or subsurface strata or medium, or the ambient air);
 
    (e) Seller has provided Purchaser with true, correct and complete copies 
of all documents of the Seller relating to environmental matters with respect 
to the Business (or an opportunity to review such files). The Seller has not 
paid any fines, penalties or assessments with respect to the Business for 
violations of Environmental Laws since the date of its acquisition of the 
Business;
 
    (f) Except as described in Schedule 3.14, neither the Real Property, 
improvements nor equipment included within the Assets contain any 
asbestos-containing material which is or may be friable (other than floor 
tile, roofing material and drywall material), PCBs or underground storage 
tanks; and
 
    (g) The Seller has provided Purchaser with copies of all work place or 
worker exposure measurements made by or on behalf of the Seller in Seller's 
custody or control with respect to the Business, including, without 
limitation, all work place or worker exposure measurements for particulates, 
OSHA hazardous chemicals and Hazardous Materials. At no time

                                       16
<PAGE>

since January 23, 1996 and, to the knowledge of Seller (based solely upon 
inquiry of J. Read Boles and the representations and warranties made to the 
Seller in that certain Stock Purchase Agreement, dated as of September 30, 
1995, by and among Seller, Mr. Boles and certain other individuals), since 
December 31, 1992, have conditions in the work place with respect to the 
Business resulted in an exceedance or a violation of any OSHA permissible 
exposure level for workers of the Company or of any similar state or local 
statute, ordinance or regulation intended to protect workers, which 
exceedance or violation would have a material adverse affect on the Business 
or the Assets. Seller has established and is in full compliance with its OSHA 
Hazard Communication Program with respect to the Business, except for such 
noncompliance as would not result in a material adverse affect on the 
Business or the Assets.
 
    As used in this Section 3.14, the term "Hazardous Materials" means any 
waste, pollutant, hazardous substance, toxic, ignitable, reactive or 
corrosive substance, hazardous waste, special waste, industrial substance, 
by-product, process intermediate product or waste, petroleum or 
petroleum-derived substance or waste, chemical liquids or solids, liquid or 
gaseous products, or any constituent of any such substance or waste, the use, 
handling or disposal of which by the Seller is in any way governed by or 
subject to any applicable law, rule or regulation of any governmental or 
regulatory authority.
 
14. Patents, Trademarks, Trade Names. Schedule 3.15 sets forth a true and 
complete list of: (a) all patents, trademarks, service marks, trade names and 
copyrights (including all federal, state and foreign applications and 
registrations pertaining thereto) owned by the Seller and relating to the 
Business (collectively, the "Proprietary Intellectual Property"); and (b) all 
patents, trademarks, trade names, service marks, copyrights, technology and 
processes used by the Seller with respect to the Business pursuant to a 
license or other right granted by a third party (collectively, the "Licensed 
Intellectual Property", and together with the Proprietary Intellectual 
Property herein referred to as "Intellectual Property"). The Seller owns, or 
has the right to use pursuant to valid and effective agreements set forth in 
Schedule 3.15, all Intellectual Property. No claims are pending against the 
Seller by any person with respect to the use of any Intellectual Property or 
challenging or questioning the validity or effectiveness of any license or 
agreement relating to the same, and the current use by the Seller of the 
Intellectual Property does not infringe on the rights of any third party. 
Schedule 3.15 sets forth a list of all jurisdictions in which the Seller is 
operating the Business under a trade name, and each jurisdiction in which any 
such trade name is registered. Except as set forth on Schedule 3.15, the 
Intellectual Property is not subject to any lien or encumbrance arising 
through or created by the Seller, other than Permitted Liens.
 
15. Transactions with Affiliates. Except as set forth in Schedule 3.16, no
shareholder, officer or director of Seller, or any person with whom any such
shareholder, officer or director has any direct or indirect relation by blood,
marriage or adoption, or any entity in which any such person, owns any
beneficial interest (other than a publicly held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than five percent (5%) of the stock of which is beneficially owned by all
such persons) or any Affiliate of any of the

                                       17
<PAGE>

foregoing or any current or former Affiliate of the Seller has any interest 
in: (a) any contract, arrangement or understanding with, or relating to, the 
Business, the Assets or the Assumed Liabilities; (b) any loan, arrangement, 
understanding, agreement or contract for or relating to the Business or the 
Assets; or (c) any property (real, personal or mixed), tangible or 
intangible, used or currently intended to be used by the Company. For 
purposes of this Agreement, "Affiliate" of any specified Person means any 
other Person directly or indirectly Controlling or Controlled by or under 
direct or indirect common Control with such specified Person. For purposes of 
this definition, "Control", when used with respect to any specified Person, 
means the power to direct the management and policies of such Person, 
directly or indirectly, whether through the ownership of voting securities, 
by contract or otherwise; and the terms "Controlling" and "Controlled" have 
meanings correlative to the foregoing. In addition, for purposes of this 
definition, "Person" means any individual, corporation, partnership, joint 
venture, trust, unincorporated organization or government or any agency or 
political subdivision thereof.
 
16. Nondisclosed Payments. Neither Seller nor any of its officers or 
directors, nor anyone acting on behalf of any of them, has made or received 
any payments not correctly categorized and fully disclosed in the Seller's 
books and records in connection with or in any way relating to or affecting 
the Assets, the Company or the Business.
 
17. Brokers, Finders and Investment Bankers. Neither Seller nor any of its 
officers, directors or employees, has employed any broker, finder or 
investment banker or incurred any liability for any investment banking fees, 
financial advisory fees, brokerage fees or finders' fees in connection with 
the transactions contemplated under this Agreement.
 
18. Disclosure. 

    ( ) No representation, warranty or covenant made by Seller in this 
Agreement, the Schedules or the Exhibits attached to this Agreement contains 
an untrue statement of a material fact or omits to state a material fact 
required to be stated in this Agreement or in the Schedules or Exhibits which 
would be necessary to make the statements contained therein not misleading.


                                       18
<PAGE>

    (a) Prior to the execution of this Agreement, Seller has delivered to 
Purchaser true and complete copies of the Assumed Contracts, documents 
evidencing any of the Intellectual Property, and all security agreements and 
other instruments creating or imposing any security interest, encumbrance or 
material adverse claim on the Assets, and any other documents or instruments 
identified or referred to in the Schedules. Such delivery will not alone 
constitute adequate disclosure of those facts required to be disclosed on any 
Schedule to this Agreement, and notice of their contents (other than by 
express reference on a Schedule) will in no way limit Seller's other 
obligations or Purchaser's other rights under this Agreement.
 
3.               REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
    Purchaser hereby represents and warrants to Seller as follows:
 
0.  Organization. Purchaser is a corporation duly organized, validly existing 
and in good standing under the laws of the State of Texas with all requisite 
power and authority (corporate and other) to own, lease and operate its 
properties and to carry on its business as now being conducted.
 
1.  Authorization. Purchaser has the full corporate power and authority to 
execute and deliver this Agreement and any other certificate, agreement, 
document or other instrument to be executed and delivered by it in connection 
with the transactions contemplated by this Agreement (collectively, the 
"Purchaser Ancillary Documents"), to perform its obligations under this 
Agreement and the Purchaser Ancillary Documents and to consummate the 
transactions contemplated by this Agreement and the Purchaser Ancillary 
Documents. The execution and delivery of this Agreement and the Purchaser 
Ancillary Documents by Purchaser, the performance by Purchaser of its 
obligations under this Agreement and the Purchaser Ancillary Documents, and 
the consummation of the transactions provided for in this Agreement and the 
Purchaser Ancillary Documents have been duly and validly authorized by all 
necessary corporate action on the part of Purchaser. This Agreement has been, 
and the Purchaser Ancillary Documents will be as of the Closing Date, duly 
executed and delivered by Purchaser and do or will, as the case may be, 
constitute the valid and binding agreements of Purchaser, enforceable against 
Purchaser in accordance with their respective terms, subject to applicable 
bankruptcy, insolvency and other similar laws affecting the enforceability of 
creditors' rights generally, general equitable principles and the discretion 
of courts in granting equitable remedies.
 
2.  Absence of Restrictions and Conflicts. The execution, delivery and 
performance of this Agreement and the Purchaser Ancillary Documents, the 
consummation of the transactions contemplated by this Agreement and the 
Purchaser Ancillary Documents and the fulfillment of and compliance with the 
terms and conditions of this Agreement and the Purchaser Ancillary Documents 
do not or will not (as the case may be), with the passing of time or the 
giving of notice or both, violate or conflict with, constitute a breach of or 
default under, result in the loss of

                                       19
<PAGE>

any benefit under, or permit the acceleration of any obligation under, (a) 
any term or provision of the articles of incorporation or bylaws of 
Purchaser, (b) any contract to which Purchaser is a party, (c) any judgment, 
decree or order of any court or governmental authority or agency to which 
Purchaser is a party or by which Purchaser or its properties is bound or (d) 
any statute, law, rule or regulation applicable to Purchaser. No consent, 
approval, order or authorization of, or registration, declaration or filing 
with, any government agency or public or regulatory unit, agency, body or 
authority with respect to Purchaser is required in connection with the 
execution, delivery or performance of this Agreement and the Purchaser 
Ancillary Documents by Purchaser or the consummation of the transactions 
contemplated by this Agreement and the Purchaser Ancillary Documents by 
Purchaser.
 
4.                       CERTAIN COVENANTS AND AGREEMENTS
 
0.  Conduct of Business by the Seller. From the Effective Date until the 
Closing Date, the Seller has, and has caused the Company to, except as 
required in connection with the transactions contemplated by this Agreement 
and except as otherwise consented to in writing by Purchaser:

    ( ) conducted the Business in the ordinary course on a basis consistent 
with past practice and not engage in any new line of business or enter into 
any agreement, transaction or activity or make any commitment with respect to 
the Business or the Assets except those in the ordinary course of business 
and not otherwise prohibited under this Section 5.1;
 
    (a) used its good faith reasonable efforts to preserve intact the 
goodwill and business organization of the Company, keep the officers and 
employees of the Company available to Purchaser and preserve the 
relationships of the Company with customers, suppliers and others having 
business relations with the Company;
 
    (b) not amended or modified its articles or certificate of incorporation 
(as the case may be) or bylaws in any manner that would have an adverse 
effect on its ability to comply with its obligations pursuant to this 
Agreement;
 
    (c) not disposed of or permitted to lapse any rights to the use of any 
patent, trademark, trade name, license or copyright of the Company, 
including, without limitation, any of the Intellectual Property, or disposed 
of or disclosed to any person, any trade secret, formula, process, technology 
or know-how of the Company not heretofore a matter of public knowledge;
 
    (d) not (i) sold any assets, other than finished goods sold in the ordinary
course of business and the two (2) Fuji Universal Automatic Chucker Machines,
Serial Numbers 3047 and 1870 now located on the Premises, (ii) created, incurred
or assumed any indebtedness secured by the Assets, except in the ordinary course
of business consistent with past practice, (iii) granted, created, incurred or
suffered to exist any liens, charges or encumbrances on the Assets which did

                                       20
<PAGE>

not exist on the Effective Date, except for Permitted Liens incurred in the 
ordinary course of business, (iv) incurred any liability or obligation 
(absolute, accrued or contingent) except in the ordinary course of business 
consistent with past practice, (v) written-off any guaranteed checks, notes 
or accounts receivable except in the ordinary course of business consistent 
with past practice, (vi) written-down the value of any asset or investment 
(including, without limitation, any of the Assets) on the books or records of 
the Seller relating to the Business, except for depreciation and amortization 
in the ordinary course of business and consistent with past practice, (vii) 
canceled any debt or waive any claims or right relating to or arising out of 
the Business, except in the ordinary course of business, consistent with past 
practice, (viii) caused or permitted the Company to sell, transfer, assign, 
convey, lend, consign or otherwise ship any finished goods from the Company 
or related to the Business to Seller, other than items of finished goods 
inventory determined by the Purchaser and the Seller to be obsolete; or (ix) 
entered into any material contract or agreement relating to the Business 
without the written consent of Purchaser;
 
    (e) not entered into, modified or extended in any manner the terms of any
employment, severance or similar agreements with officers or employees nor
granted any material increase (other than any increase that was required by law)
in the compensation of officers or employees of the Seller employed primarily
with respect to the Business, whether now or hereafter payable, including any
such increase pursuant to any option, bonus, stock purchase, pension,
profit-sharing, deferred compensation, retirement or other plan, arrangement,
contract or commitment except with respect to that certain Employment
Termination and Option Agreement between Seller and James Read Boles, which
agreement shall be substantially in the form of Exhibit 5.1(f);
 
    (f) maintained supplies and inventory for the Business at levels that 
were in the ordinary course of business and consistent with past practice;
 
    (g) with respect to the Business, continued to extend customers credit, 
collect accounts receivable and pay accounts payable and similar obligations 
in the ordinary course of business consistent with past practice;
 
    (h) neither amended or modified any Benefit Plan applicable to the 
Business nor committed to make any amendment to any such Benefit Plan or 
adopted any new Benefit Plan for the benefit of any employees of the Business;
 
    (i) performed in all material respects all of its obligations under all, 
and not defaulted or suffered to exist any event or condition which with 
notice or lapse of time or both would have constituted a default under any, 
Assumed Contracts (except those being contested in good faith) and not 
entered into, assumed or amended any contract or commitment that is or would 
be an Assumed Contract;

                                       21
<PAGE>

     (j) maintained in full force and effect and in the same amounts policies 
of insurance covering the Assets and the business comparable in amount and 
scope of coverage to that maintained prior to the Effective Date;
 
    (k) prepared and filed all federal, state, local and foreign returns for 
taxes and other tax reports, filings and amendments thereto required to be 
filed by it, and allowed Purchaser, at its request, to review all such 
returns, reports, filings and amendments at the Seller's offices prior to the 
filing thereof;
 
    (l) continued to maintain and service the Assets in the same manner as is 
consistent with past practice;
 
    (m) continued to maintain its books and records relating to the Assets, 
the Company or the Business in accordance with GAAP, consistently applied (to 
the extent applicable), and on a basis consistent with the Seller's past 
practice;
 
    (n) continued its cash management practices with respect to the Business 
in the ordinary course of business consistent with past practice; and
 
    (o) promptly notified Purchaser of any event or occurrence that has had 
or may reasonably be expected to have a material adverse effect on the 
assets, liabilities, results of operations, business or prospects of the 
Company.
 
    In connection with the continued operation of the Business between the 
Effective Date and the Closing Date, Seller conferred in good faith on a 
regular and frequent basis with one or more representatives of Purchaser 
designated in writing regarding operational matters and the general status of 
ongoing operations at the Company. Seller acknowledges that Purchaser did not 
and will not waive any rights it may have under this Agreement as a result of 
such consultations.
 
1.  Inspection and Access to Information. From the Effective Date to the 
Closing Date or until this Agreement is terminated as provided in Article 8, 
Seller will (and will cause its officers, directors, employees, auditors and 
agents to) provide Purchaser, and its accountants, investment bankers, 
counsel, environmental consultants and other authorized representatives full 
access, during reasonable hours and under reasonable circumstances, to any 
and all of its premises, employees (including executive officers), 
properties, contracts, commitments, books, records and other information 
(including tax returns filed and those in preparation) regarding the Company 
and will cause its officers to furnish to Purchaser, and its authorized 
representatives, promptly upon request therefor, any and all financial, 
technical and operating data and other information pertaining to the Company 
and its business, and otherwise fully corporate with the conduct of due 
diligence by Purchaser and its representatives.

                                       22
<PAGE>

2.  Confidentiality. Without the consent of Seller, Purchaser will not 
disclose, and will direct its representatives to not disclose, to retain in 
full confidence and to not use (except in connection with the evaluation of 
the Company and Purchaser's due diligence) any Confidential Information (as 
defined below) with respect to the Company which is or has been furnished by 
either Seller, the Company or its respective representatives to Purchaser or 
its representatives, unless disclosure is otherwise required by law. For 
purposes of this subsection, "Confidential Information" means any information 
concerning the Company stamped "Confidential" or identified in writing as 
such to Purchaser by Seller or the Company promptly following its disclosure, 
unless such information is already known to Purchaser or its representatives 
or to others not bound by a duty of confidentiality or such information 
becomes publicly available through no fault of Purchaser or its 
representatives.
 
3.  No Solicitation of Transactions. Neither Seller nor any of its Affiliates 
will directly or indirectly, through any officer, director, agent or 
otherwise, initiate, solicit or encourage (including by way of furnishing 
non-public information or assistance), or enter into negotiations of any 
type, directly or indirectly, or enter into a confidentiality agreement, 
letter of intent or purchase agreement, merger agreement or other similar 
agreement with any person, firm or corporation other than Purchaser with 
respect to a sale of any of the Assets. Seller will notify Purchaser orally 
(within one business day) and in writing (as promptly as practicable) of all 
relevant terms of any proposals by a third party to do any of the foregoing 
which Seller or any of its Affiliates or any of their respective officers, 
directors, employees, investment bankers, financial advisors, attorneys, 
accounts or other representatives may receive relating to any of such matters 
and, if such proposal is in writing, Seller will deliver to Purchaser a copy 
of such inquiry or proposal.
 
4.  Reasonable Efforts; Further Assurances; Cooperation. Subject to the other 
provisions of this Agreement, the Parties will each use their reasonable, 
good faith efforts to perform their obligations in this Agreement and to 
take, or cause to be taken, or do, or cause to be done, all things necessary, 
proper or advisable under applicable law to obtain all regulatory approvals 
and satisfy all conditions to the obligations of the parties under this 
Agreement and to cause the transactions contemplated in this Agreement to be 
effected on or prior to the Closing Date, in accordance with the terms of 
this Agreement and will cooperate fully with each other and their respective 
officers, directors, employees, agents, counsel, accountants and other 
designees in connection with any steps required to be taken as a part of 
their respective obligations under this Agreement, including, without 
limitation:

    ( ) Each of the Parties promptly will make their respective filings and 
submissions and will take all actions necessary, proper or advisable under 
applicable laws and regulations to obtain any required approval of any 
foreign, federal, state or local governmental agency or regulatory body with 
jurisdiction over the transactions contemplated by this Agreement. Each of 
the Parties will furnish all information required for any application or 
other filing to be

                                       23
<PAGE>

made pursuant to the rules and regulations of any applicable law in 
connection with the transactions contemplated by this Agreement;
 
    (a) In the event any claim, action, suit, investigation or other 
proceeding by any governmental body or other person is commenced which 
questions the validity or legality of the Acquisition or any of the other 
transactions contemplated by this Agreement or seeks damages in connection 
therewith, the Parties agree to cooperate and use all reasonable efforts to 
defend against such claim, action, suit, investigation or other proceeding 
and, if an injunction or other order is issued in any such action, suit or 
other proceeding, to use all reasonable efforts to have such injunction or 
other order lifted, and to cooperate reasonably regarding any other 
impediment to the consummation of the transactions contemplated by this 
Agreement;
 
    (b) Seller will give any notices to third parties, and use its best 
efforts (in consultation with Purchaser) to obtain any third party consents 
(A) necessary, proper or advisable to consummate the transactions 
contemplated in this Agreement, (B) disclosed or required to be disclosed in 
the Schedules to this Agreement, (C) required to avoid a breach of or default 
under any Assumed Contracts in connection with the consummation of the 
transactions contemplated in this Agreement or (D) required to prevent a 
material adverse effect on the assets, liabilities, results of operations, 
business or prospects of the Company from occurring prior to or after the 
Closing Date;
 
    (c) To the extent that third party consents relating to Assumed Contracts 
have not been obtained by Seller as of the Closing, Seller will, during the 
remaining term of such Assumed Contracts (the "Non-Assignable Contracts"), 
use its best efforts to (i) obtain the consent of the applicable third party, 
(ii) make the benefit of such Non-Assignable Contracts available to Purchaser 
so long as Purchaser fully cooperates with the Seller and promptly reimburses 
the Seller for all payments made by the Seller in connection therewith, and 
(iii) enforce at the request of Purchaser and at the expense and for the 
account of Purchaser any rights of the Seller arising from such 
Non-Assignable Contracts against the other party or parties thereto 
(including the right to elect or terminate any such Non-Assignable Contracts 
in accordance with the terms thereof); provided, that Seller shall not be 
obligated to do so if as a result it would incur any loss or liability 
therefrom. The Seller will not take any action or suffer any omission which 
would limit or restrict or terminate in any material respect the benefits to 
Purchaser of such Non-Assignable Contracts unless, in good faith and after 
consultation with and prior written notice to Purchaser, the Seller is 
ordered orally or in writing to do so by a governmental authority of 
competent jurisdiction or the Seller is otherwise required to do so by law; 
provided that if any such order is appealable, the Seller will, at 
Purchaser's cost and expense, take such actions as are requested by Purchaser 
to file and pursue such appeal and to obtain a stay of such order. With 
respect to any such Non-Assignable Contract as to which the necessary 
approval or consent for the assignment or transfer to Purchaser is obtained 
following the Closing, the Seller will transfer such Non-Assignable Contract 
to Purchaser by execution and delivery of an instrument of conveyance 
reasonably satisfactory to Purchaser and Seller promptly following receipt of 
such approval or consent.

                                       24
<PAGE>
 
    (d) Seller and Purchaser will give prompt notice to the other of (i) the 
occurrence, or failure to occur, of any event which occurrence or failure 
would be likely to cause any representation or warranty of Seller or 
Purchaser, as the case may be, contained in this Agreement to be untrue or 
inaccurate at any time from the Closing Date to the Closing Date or that will 
or may result in the failure to satisfy any of the conditions specified in 
Article 6 of this Agreement and (ii) any failure of Seller or Purchaser, as 
the case may be, to comply with or satisfy any covenant, condition or 
agreement to be complied with or satisfied by any of them under this 
Agreement. For purposes of Sections 5.5(d) and (e), a notice shall be 
promptly given if the party with an obligation to give such notice provides 
oral notice to the other party of such event within two business day of 
learning of it, which notice shall be confirmed in writing within five 
business days.
 
5.  Public Announcements. The timing and content of all announcements 
regarding any aspect of this Agreement or the transactions contemplated by 
this Agreement to the financial community, government agencies, employees or 
the general public will be mutually agreed upon in advance by the Parties 
(unless a Party is advised by counsel that any such announcement or other 
disclosure not mutually agreed upon in advance is required to be made by law, 
applicable stock exchange rule or the National Association of Securities 
Dealers, Inc., and then only after making a reasonable attempt to comply with 
the provisions of this Section 5.6). Neither party will unreasonably withhold 
its approval of the timing or content of an announcement by the other party.
 
6.  Supplements to Schedules. From time to time up to the Closing Date, 
Seller will promptly supplement or amend the Schedules which it has delivered 
pursuant to this Agreement with respect to any matter first existing or 
occurring after the Closing Date which, if existing or occurring at or prior 
to the Closing Date, would have been required to be set forth or described in 
such Schedules or which is necessary to correct any information in such 
Schedules which has been rendered inaccurate thereby. No supplement or 
amendment to any Schedule will have any effect for the purpose of determining 
satisfaction of the conditions set forth in Section 6.2 of this Agreement 
unless such supplement or amendment is accepted by Purchaser in writing in 
its absolute and sole discretion.
 
7. Employees. (a) On the Closing Date, the Seller will, except as provided in 
Section 5.8(b), terminate the employment of all of its employees related to 
the Business. Further, with respect to all pay periods commencing prior to 
the Effective Date, the Seller will, on or before the Closing Date, pay (or 
make provisions reasonably satisfactory to the Purchaser for the payment of) 
all amounts due to employees of the Company related to the Business for the 
portion of such pay periods ending on the Effective Date. The Seller shall 
pay (or make provisions reasonably satisfactory to the Purchaser for payment) 
pursuant to the previous sentence, without limitation, all accrued but unpaid 
vacation time, salaries, wages and bonuses attributable to such portion of 
such pay periods. On the Closing Date, the

                                       25
<PAGE>

Seller shall also pay (or make provision satisfactory to the Purchaser for 
the payment of) all commissions or fees and expense reimbursements owed to 
sales agents and manufacturer's representatives representing the Company and 
related to the Business that are attributable to sales occurring prior to the 
Effective Date.
 
    (b) Commencing on the Closing Date, Purchaser will offer employment, on 
an at will basis, to all of the employees of the Seller who are actively at 
work at the Company with respect to the Business on the Closing Date. 
Purchaser will have no obligation of any kind to offer employment or 
otherwise with respect to any employee of the Seller who is not actively at 
work at the Company with respect to the Business on the Closing Date, and 
each such employee will remain an employee of the Seller unless otherwise 
agreed in writing by Purchaser. For the purposes of this Section 5.7, 
"actively at work" will mean (i) reporting to work a minimum of 30 hours per 
week in a permanent position in the last three months prior to the Closing 
Date or (ii) being absent on the Closing Date due to the federal Family and 
Medical Leave Act or the Seller's maternity leave, jury duty or military 
service policies. The time-in-service of the employees of Seller who accept 
the Purchaser's offer of employment will be recognized with respect to 
vesting in, and the accrual of benefits under, the Purchaser's employee 
benefit plans, to the extent applicable.
 
    (c) With respect to all pay periods commencing after the Effective Date, 
the Purchaser will pay all amounts due to employees of the Company who are 
hired by the Purchaser for the portion of such pay periods occurring after 
the Effective Date. The Purchaser shall pay pursuant to the previous 
sentence, without limitation, all accrued but unpaid vacation time, sick pay, 
salaries, wages and bonuses attributable to such portion of such pay periods. 
Purchaser shall pay all commissions or fees and expense reimbursements owed 
to sales agents and manufacturer's representatives representing the Company 
that are attributable to sales occurring after the Effective Date.
 
    (d) Seller shall be responsible for the payment of severance pay, if any, 
pursuant to any applicable employee related contract, agreement or plan 
attributable to the termination of employees described in this Section 5.8.
 
8. Transfer Taxes; Expenses. Any real property transfer or gains taxes, 
recording fees or any other taxes payable as a result of the sale of the 
Assets or any other action contemplated by this Agreement (other than any 
federal, state or local taxes imposed upon Purchaser measured by or based 
upon income or  gains) will be paid by Seller. Purchaser and Seller will 
cooperate in the preparation, execution and filing of all returns, 
questionnaires, applications, or other documents regarding any real property 
transfer or gains, sales, use, transfer, value added, stock transfer and 
stamp taxes, any transfer, recording, registration and other fees, and any 
similar taxes which become payable in connection with the transactions 
contemplated hereby that are required or permitted to be filed on or before 
the Closing. Except as provided above, (a) Purchaser will pay its own fees, 
costs and expenses incurred in connection with this Agreement and the 
transactions

                                       26
<PAGE>

 contemplated by this Agreement, including, the fees, costs and expenses of 
its financial advisors, accountants and counsel and (b) Seller will pay the 
fees, costs and expenses of Seller incurred in connection with this Agreement 
and the transactions contemplated by this Agreement, including, the fees, 
costs and expenses of Seller' financial advisors, accountants and counsel.
 
9.  Insurance. Seller shall in good faith cooperate with Purchaser and take 
all actions reasonably requested by Purchaser that are necessary or desirable 
to permit Purchaser to have available to it following the Closing the 
benefits (whether direct or indirect) of the insurance policies, including, 
without limitation, the group health insurance policies, maintained by the 
Seller with respect to the Business that are currently in force. All costs 
relating to the actions described in this Section shall be borne by Purchaser.
 
10. Returned or Defective Products. Purchaser will ship to Seller, at 
Seller's expense, all returned or defective products referred to in Section 
1.4(b)(ii) to the extent the Purchaser refunded amounts or issued credits to 
customers of the Company in excess of $5,000 in the aggregate and deducted 
such refunds or credits from the Purchase Price as provided in the Note. This 
Section 5.11 shall survive the Closing and shall remain in force and binding 
on the Purchaser until the second anniversary of the Closing Date.
 
11. Allocation of Purchase Price. Purchaser and Seller acknowledge and agree 
that the transactions contemplated by this Agreement must be reported in 
accordance with Section 1060 of the Internal Revenue Code of 1986, as amended 
(the "Code"). Purchaser and Seller agree to report the transactions 
contemplated hereunder for all purposes in accordance with the Purchase Price 
allocation described on Schedule 5.12 annexed hereto. Purchaser and Seller 
agree to share information and to cooperate to the extent necessary to permit 
the transactions to be properly, timely and consistently reported in 
accordance with Section 1060 of the Code and the regulations promulgated 
thereunder.
 
12. Payment of Undisclosed Trade Creditors. Promptly following the Closing 
Date, Seller shall satisfy its obligations to any of its trade creditors with 
respect to the Business for periods ending on or before the Effective Date 
that are not identified in Schedule 2.2(a)(i). This Section 5.13 shall 
survive the Closing and shall remain in force and binding on the Seller until 
the second anniversary of the Closing Date.
 
5.                                CONDITIONS
 
0.  Conditions to Each Party's Obligations. The respective obligations of 
each Party to effect the transactions contemplated by this Agreement will be 
subject to the fulfillment at or prior to the Closing of each of the 
following conditions:

    ( ) Injunction. As of the Closing, there will be no effective injunction, 
writ or preliminary restraining order or any order of any nature issued by a 
court or governmental or

                                       27
<PAGE>

regulatory agency of competent jurisdiction to the effect that the purchase 
and sale of the Assets may not be consummated as provided in this Agreement, 
no proceeding or lawsuit will have been commenced by any court, governmental 
or regulatory agency for the purpose of obtaining any such injunction, writ 
or preliminary restraining order and no written notice will have been 
received from any such court or agency indicating an intent to restrain, 
prevent, materially delay or materially restructure the transactions 
contemplated by this Agreement.
 
    (a) Consents. All consents, approvals, orders or authorizations of, or 
registrations, declarations or filings with, any governmental agency or 
public or regulatory unit, agency, body or authority required in connection 
with the execution, delivery or performance of this Agreement will have been 
obtained or made, except where the failure to have obtained or made any such 
consent, approval, order, authorization, declaration or filing would not 
have a material adverse effect on the assets, liabilities, results of 
operations, business or prospects of Purchaser or the Company prior to or 
after the Closing.
 
1.  Conditions to Obligations of Purchaser. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement will be subject to
the fulfillment at or prior to the Closing of each of the following additional
conditions: 

    ( ) Representations and Warranties. The representations and warranties of 
Seller set forth in Article 3 of this Agreement that are qualified as to 
materiality shall have been true and correct as of the Effective Date and 
shall be true and correct as of the Closing Date as though made on and as of 
the Closing Date. The representations and warranties of Seller set forth in 
Article 3 of this Agreement that are not qualified as to materiality shall 
have been true and correct in all material respects as of the Effective Date 
and shall be true and correct in all material respects as of the Closing Date 
as though made on and as of the Closing Date.
 
    (a) Performance of Obligations of Seller. Seller shall have performed in 
all material respects all covenants and agreements required to be performed 
by it under this Agreement on or prior to the Closing Date.
 
    (b) No Material Adverse Change. Between the Effective Date and the 
Closing Date, there shall not have occurred (nor shall Purchaser have become 
aware of) any material adverse change, or any development likely to result in 
a material adverse change, in or affecting the Assets, the Assumed 
Liabilities or the results of operations, business or prospects of the 
Company.
 
    (c) Certificate. Seller shall have delivered to Purchaser a certificate 
executed by its Executive Vice President and Chief Financial Officer as to 
compliance with the conditions set forth in Sections 6.2(a), (b) and (c).

                                       28
<PAGE>


    (d) Opinion of Seller's Counsel. Purchaser shall have received an opinion 
of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, dated the Closing Date, 
substantially in the form attached as Exhibit 6.2(e) ("Seller's Counsel 
Opinion").
 
    (e) Assumed Contracts. Purchaser shall have received written consents to 
the assignment of all Assumed Contracts or written waivers of the provisions 
of any Assumed Contracts requiring the consents of third parties as set forth 
in Schedule 3.8. All such consents and waivers shall be in full force and 
effect.
 
    (f) Release of Liens. Seller shall have delivered to Purchaser reasonably 
satisfactory evidence that all liens, pledges, security interests, charges, 
claims, restrictions and encumbrances (other than Permitted Liens and those 
relating to the Assumed Liabilities) including, without limitation, those set 
forth in Schedule 3.4(a) and Schedule 3.4(b), affecting the Assets 
(including, without limitation, the Real Property) have been released.
 
    (g) Employment and Non-Competition Agreements. Purchaser shall have 
entered into an employment and noncompetition agreement, substantially in the 
form attached as Exhibit 6.2(h) to this Agreement, with Mr. James Read Boles.
 
    (h) ISO 9000 Certification. Purchaser shall have received confirmation 
from the International Standards Organization that the ISO 9000 Certification 
possessed by the Company will continue following the Closing of the 
Acquisition.
 
    (i) Termination of Restrictions. Purchaser shall have received 
confirmation satisfactory to it that Mr. James Read Boles has been released 
from all non-competition and confidentiality covenants made by him in favor 
of the Seller to the extent the same would prohibit Mr. Boles from performing 
his duties as an executive of Purchaser following the Closing Date.
 
2.  Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement will be subject to
the fulfillment at or prior to the Closing of each of the following additional
conditions: 

     ( ) Representations and Warranties. The representations and warranties 
of Purchaser set forth in Article 4 of this Agreement that are qualified as 
to materiality shall have been true and correct as of the Effective Date and 
shall be true and correct as of the Closing Date as though made on and as of 
the Closing Date. The representations and warranties of Purchaser set forth 
in Article 4 of this Agreement that are not qualified as to materiality shall 
have been true and correct in all material respects as of the Effective Date 
and shall be true and correct in all material respects as of the Closing Date 
as though made on and as of the Closing Date.

                                       29
<PAGE>
 
    (a) Performance of Obligations by Purchaser. Purchaser shall have 
performed in all material respects all covenants and agreements required to 
be performed by it under this Agreement on or prior to the Closing Date.
 
    (b) Certificates. Purchaser shall have delivered to Seller a certificate 
of its Chief Executive Officer as to compliance with the conditions set forth 
in Sections 6.3(a) and (b).
 
    (c) Opinion of Purchaser's Counsel. Seller shall have received an opinion 
of King & Spalding, dated the Closing Date, substantially in the form of 
Exhibit 6.3(d) ("Purchaser's Counsel Opinion").
 
    (d) Liens. Seller shall have received releases of all liens, charges, 
encumbrances and security interests on or with respect to the Assets, other 
than Permitted Liens, on terms reasonably satisfactory to Seller.
 
6.                                  CLOSING
 
0.  The Closing. The consummation of the transactions contemplated by this 
Agreement are referred to in this Agreement as the "Closing." The "Closing 
Date" will be the date on which the Closing occurs. The Closing will take 
place at the offices of King & Spalding, 191 Peachtree Street, Atlanta, 
Georgia, or at such other place as Seller and Purchaser will agree.
 
1.  Documents to be Delivered by Seller. At the Closing, Seller will deliver, 
or cause to be delivered, to Purchaser the following:

     ( ) executed deeds, bills of sale, instruments of assignment, 
certificates of title and other conveyance documents, dated the Closing Date, 
transferring to Purchaser all of Seller's right, title and interest in and to 
the Assets together with possession of the Assets;
 
    (a) documents evidencing the assignment of the Assumed Contracts and the 
assignment of any assignable permits and licenses;
 
    (b) a copy of resolutions of the board of directors of Seller authorizing 
the execution, delivery and performance of this Agreement by Seller and a 
certificate of the secretary or assistant secretary of Seller, dated the 
Closing Date, that such resolutions were duly adopted and are in full force 
and effect;
 
    (c) a certificate, dated the Closing Date, executed by the Executive Vice 
President and Chief Financial Officer of Seller certifying to the fulfillment 
of the conditions specified in Sections 6.2(a), 6.2(b) and 6.2(c);


                                       30
<PAGE>
 
    (d) the Seller's Counsel Opinion;
 
    (e) documents sufficient, in the reasonable judgment of the Purchaser, 
fully to release all liens, pledges, security interests, charges, claims, 
restrictions and encumbrances (other than Permitted Liens and those relating 
to the Assumed Liabilities) including, without limitation, those set forth in 
Schedule 3.4(a) and Schedule 3.4(b), affecting the Assets (including, without 
limitation, the Real Property);
 
    (f) all other documents required to be entered into and delivered by 
Seller, pursuant to this Agreement or reasonably requested by Purchaser to 
convey the Assets to Purchaser or to otherwise consummate the transactions 
contemplated by this Agreement in accordance with the terms hereof; and
 
    (g) checks drawn on Seller in amounts required to pay the Trade Creditors 
in full.
 
2.  Documents to be Delivered by Purchaser. At the Closing, Purchaser will
deliver to Seller the following: 

     ( ) documents evidencing the assumption of the Assumed Contracts, the 
acceptance of assignable permits and licenses, and the assumption of the 
Assumed Liabilities;
 
    (a) a copy of the resolutions of the board of directors of Purchaser and 
of the corporate parent of Purchaser authorizing the execution, delivery and 
performance of this Agreement by Purchaser, and a certificate of its 
secretary or assistant secretary, dated the Closing Date, that such 
resolutions were duly adopted and are in full force and effect;
 
    (b) a certificate, dated the Closing Date executed by the Chief Executive 
Officer of Purchaser certifying to the fulfillment of the conditions 
specified in Section 6.3(a) and 6.3(b);
 
    (c) the Purchaser's Counsel Opinion;
 
    (d) the Note and the Purchase Price; and
 
    (e) all other documents required to be entered into and delivered by 
Purchaser at or prior to the Closing pursuant to this Agreement or reasonably 
requested by Seller in accordance with the terms hereof or to otherwise 
consummate the transactions contemplated by this Agreement in accordance with 
the terms hereof.
 
                                       31
<PAGE>

7.                                 TERMINATION
 
0.  Termination. This Agreement may be terminated at any time at or prior to 
the Closing (the "Termination Date"): 

     ( ) in writing by mutual consent of the Parties;
 
    (a) by written notice from Seller to Purchaser, if Purchaser (i) fails to 
perform in any material respect any of its agreements contained in this 
Agreement required to be performed by it on or prior to the Closing Date or 
(ii) materially breaches any of its representations and warranties contained 
in this Agreement, which failure or breach is not cured within ten days after 
Seller has notified Purchaser of its intent to terminate this Agreement 
pursuant to this subparagraph (b);
 
    (b) by written notice from Purchaser to Seller, if Seller (i) fails to 
perform in any material respect any of its agreements contained in this 
Agreement required to be performed by it on or prior to the Closing Date or 
(ii) materially breaches any of its representations and warranties contained 
in this Agreement, which failure or breach is not cured within ten days after 
Purchaser has notified Seller of its intent to terminate this Agreement 
pursuant to this subparagraph (c); or
 
    (c) by written notice by either Seller to Purchaser or Purchaser to 
Seller, as the case may be, if the Closing has not occurred prior to or on 
November 14, 1997, for any reason other than delay or nonperformance of the 
party seeking such termination (provided that if notice of postponement is 
received on November 14th, the Closing may take place as late as November 
25th as though it were November 14th for purposes of this provision).
 
1.  Specific Performance and Other Remedies. The Parties each acknowledge 
that the rights of each Party to consummate the transactions contemplated by 
this Agreement are special, unique and of extraordinary character, and that, 
in the event that any Party violates or fails or refuses to perform any 
covenant or agreement made by it in this Agreement, the non-breaching Party 
may be without an adequate remedy at law. The Parties each agree, therefore, 
that in the event that either Party violates or fails or refuses to perform 
any covenant or agreement made by such Party in this Agreement, the 
non-breaching Party or Parties may, subject to the terms of this Agreement 
and in addition to any remedies at law for damages or other relief, institute 
and prosecute an action in any court of competent jurisdiction to enforce 
specific performance of such covenant or agreement or seek any other 
equitable relief.
 
    2. Effect of Termination. In the event of termination of this Agreement 
pursuant to this Article 8, this Agreement will forthwith become void and 
there will be no liability on the part of any Party or its respective 
officers, directors or stockholders, except for obligations under Section 5.5 
and this Section, all of which will survive the Termination Date. 
Notwithstanding the

                                       32
<PAGE>

foregoing, nothing contained in this Agreement will relieve any Party from 
liability for any breach of this Agreement.
 
8.                               INDEMNIFICATION
 
0.  Indemnification Obligations of Seller. Seller will indemnify, defend and 
hold harmless Purchaser and its Affiliates, each of their respective 
officers, directors, employees, agents and representatives and each of the 
heirs, executors, successors and assigns of any of the foregoing 
(collectively, the "Purchaser Indemnified Parties") from, against and in 
respect of any and all claims, liabilities, obligations, losses, costs, 
expenses, penalties, fines and judgments (at equity or at law) and damages 
whenever arising or incurred (including, without limitation, amounts paid in 
settlement, costs of investigation and reasonable attorneys' fees and 
expenses) arising out of or relating to: 

     ( ) any liability or obligation of Seller, including, without 
limitation, the Excluded Liabilities, of any nature whatsoever, except the 
Assumed Liabilities;
 
    (a) any liability or obligation of Seller of any nature whatsoever 
arising from events or circumstances occurring or existing on or prior to the 
Effective Date, except for the Assumed Liabilities;
 
    (b) any breach or inaccuracy of any representation or warranty made by 
Seller in this Agreement or in any Seller Ancillary Document;
 
    (c) any breach of any covenant, agreement or undertaking made by Seller 
in this Agreement or in any Seller Ancillary Document;
 
    (d) any fraud or willful misconduct of Seller in connection with this 
Agreement or the Seller Ancillary Documents;
 
    (e) any liability arising following the Closing Date as a result of 
either a "plant closing" or a "mass layoff" (within the meaning of the WARN 
Act), occurring on or before the Closing Date; and
 
    (f) the environmental condition of, or soil or groundwater contamination 
at, the Premises, including any claims of contribution under CERCLA, 
resulting from conduct by Seller or originating in connection with the 
Seller's operations on the Premises prior to the Effective Date or the 
violation of any Environmental Law resulting from conduct by Seller in 
connection with the Seller's operations on the Premises prior to the 
Effective Date.


                                       33
<PAGE>
 
    The claims, liabilities, obligations, losses, costs, expenses, penalties, 
fines and damages of the Purchaser Indemnified Parties described in this 
Section 9.1 as to which the Purchaser Indemnified Parties are entitled to 
indemnification are hereinafter collectively referred to as "Purchaser 
Losses."
 
    If Purchaser incurs a Purchaser Loss with respect to a purchase order 
issued by Seller with respect to the Business that is not an Assumed 
Liability or that is required to be listed on Schedule 1.2(c) of this 
Agreement, but is not so listed, Purchaser shall, promptly following the 
Seller's indemnification of Purchaser for such Purchaser Loss, deliver to 
Seller or its designee any products or other materials subject to such 
purchase order.
 
1.  Indemnification Obligations of Purchaser. Purchaser will indemnify and 
hold harmless Seller and their Affiliates, each of their respective officers, 
directors, employees, agents and representatives and each of the heirs, 
executors, successors and assigns of any of the foregoing (collectively, the 
"Seller Indemnified Parties") from, against and in respect of any and all 
claims, liabilities, obligations, losses, costs, expenses, penalties, fines 
and judgments (at equity or at law) and damages whenever arising or incurred 
(including, without limitation, amounts paid in settlement, costs of 
investigation and reasonable attorneys' fees and expenses) arising out of or 
relating to: 

    ( ) Purchaser's failure to perform, discharge or satisfy the Assumed 
Liabilities;

    (a) any liability or obligation of any nature whatsoever arising from 
events or circumstances occurring or existing subsequent to the Effective 
Date and related to Purchaser's operation of the Business;
 
    (b) any breach or inaccuracy of any representation or warranty made by 
Purchaser in this Agreement or in any Purchaser Ancillary Documents;
 
    (c) any breach of any covenant, agreement or undertaking made by 
Purchaser in this Agreement or in any Purchaser Ancillary Document; and
 
    (d) any fraud or willful misconduct of Purchaser in connection with this 
Agreement or the Purchaser Ancillary Documents.
 
    The claims, liabilities, obligations, losses, costs, expenses, penalties, 
fines and damages of the Seller Indemnified Parties described in this Section 
9.2 as to which the Seller Indemnified Parties are entitled to 
indemnification are hereinafter collectively referred to as "Seller Losses."
 
2.  Indemnification Procedure.

                                       34
<PAGE>


    ( ) Promptly after receipt by a Purchaser Indemnified Party or a Seller 
Indemnified Party (hereinafter collectively referred to as an "Indemnified 
Party") of notice by a third party (including any governmental agency) of any 
complaint or the commencement of any audit, investigation, action or 
proceeding with respect to which such Indemnified Party may be entitled to 
receive payment from the other party for any Purchaser Losses or Seller 
Losses (as the case may be), such Indemnified Party will notify Purchaser or 
Seller, whoever is the appropriate indemnifying party hereunder (the 
"Indemnifying Party"), within 10 days of such complaint or of the 
commencement of such audit, investigation, action or proceeding; provided, 
however, that the failure to so notify the Indemnifying Party will not 
relieve the Indemnifying Party from liability for such claim arising 
otherwise than under this Agreement and such failure to so notify the 
Indemnifying Party will relieve the Indemnifying Party from liability under 
this Agreement with respect to such claim only if, and only to the extent 
that, such failure to notify the Indemnifying Party results in the forfeiture 
by the Indemnifying Party of rights and defenses otherwise available to the 
Indemnifying Party with respect to such claim. The Indemnifying Party will 
have the right, upon written notice delivered to the Indemnified Party within 
20 days thereafter, to assume the defense of such audit, investigation, 
action or proceeding, including the employment of counsel reasonably 
satisfactory to the Indemnified Party and the payment of the fees and 
disbursements of such counsel. In the event, however, that the Indemnifying 
Party declines or fails to assume the defense of the audit, investigation, 
action or proceeding or to employ counsel reasonably satisfactory to the 
Indemnified Party, in either case within such 20-day period, then such 
Indemnified Party may employ counsel to represent or defend it in any such 
audit, investigation, action or proceeding and the Indemnifying Party will 
pay the reasonable fees and disbursements of such counsel as incurred; 
provided, however, that the Indemnifying Party will not be required to pay 
the fees and disbursements of more than one counsel for all Indemnified 
Parties in any jurisdiction in any single audit, investigation, action or 
proceeding. In any audit, investigation, action or proceeding with respect to 
which indemnification is being sought hereunder, the Indemnified Party or the 
Indemnifying Party, whichever is not assuming the defense of such action, 
will have the right to participate in such matter and to retain its own 
counsel at such party's own expense. The Indemnifying Party or the 
Indemnified Party, as the case may be, will at all times use reasonable 
efforts to keep the Indemnifying Party or the Indemnified Party, as the case 
may be, reasonably apprised of the status of the defense of any matter the 
defense of which they are maintaining and to cooperate in good faith with the 
other party with respect to the defense of any such matter.
 
    (a) No Indemnified Party may settle or compromise any claim or consent to 
the entry of any judgment with respect to which indemnification is being 
sought hereunder without the prior written consent of the Indemnifying Party, 
unless (i) the Indemnifying Party fails to assume and maintain the defense of 
such claim pursuant to Section 9.3(a) or (ii) such settlement, compromise or 
consent includes an unconditional release of the Indemnifying Party from all 
liability arising out of such claim. An Indemnifying Party may not, without 
the prior written consent of the Indemnified Party, settle or compromise any 
claim or consent to the entry of any judgment with respect to which 
indemnification is  being sought hereunder unless such

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<PAGE>

settlement, compromise or consent includes an unconditional release of the 
Indemnified Party from all liability arising out of such claim and does not 
contain any equitable order, judgment or term which in any manner materially 
affects, restrains or interferes with the business of the Indemnified Party 
or any of the Indemnified Party's affiliates.
 
    (b) In the event an Indemnified Party will claim a right to payment 
pursuant to this Agreement, such Indemnified Party will send written notice 
of such claim to the appropriate Indemnifying Party. Such notice will specify 
the basis for such claim. As promptly as possible after the Indemnified Party 
has given such notice, such Indemnified Party and the appropriate 
Indemnifying Party will establish the merits and amount of such claim and, 
within five business days of the final determination of the merits and amount 
of such claim, the Indemnifying Party will pay to the Indemnified Party 
immediately available funds in an amount equal to the amount of such claim as 
determined in accordance with this subsection (c). The merits and amount of 
any such claim may be determined by (i) mutual agreement, (ii) binding 
arbitration or (iii) litigation that results in the entry of a final and 
non-appealable order by a court of competent jurisdiction.
 
3.  Claims Period. For purposes of this Agreement, a "Claims Period" shall be
the period after the earlier of the Closing Date or the date of any termination
of this Agreement pursuant to Article 8 during which a claim for indemnification
may be asserted under this Agreement by an Indemnified Party. The Claims Periods
under this Agreement shall terminate as follows:

    ( ) with respect to Purchaser Losses arising under Section 9.1(c) the 
Claims Period with respect to any breach or inaccuracy of any representation 
or warranty in Section 3.2, the first sentence of Section 3.4(b) and Section 
3.18 (collectively, the "Seller Surviving Representations") or under Sections 
9.1(a), 9.1(b), 9.1(d), and 9.1(e) (collectively, the "Seller Surviving 
Obligations"), the Claims Period shall continue indefinitely, except as 
limited by law (including by applicable statutes of limitation) and except 
that the claim period for breach of the representation in the first sentence 
of Section 3.4(b) shall be limited in all instances to five (5) years; and
 
    (a) with respect to Seller Losses arising under Sections 9.2(a), (b), (d) or
(e), the Claims Period shall continue indefinitely, except as limited by law
(including any applicable statutes of limitation); and
 
    (c) with respect to all other Purchaser Losses or Seller Losses arising 
under this Agreement, the Claims Period shall terminate on the date that is 
one year after the Closing Date.
 
    Notwithstanding the foregoing, if prior to the close of business on the last
day of the applicable Claims Period, an Indemnifying Party shall have been
properly notified of a claim for indemnity hereunder and such claim shall not
have been finally resolved or disposed of at such date, such

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<PAGE>

claim shall continue to survive and shall remain a basis for indemnity 
hereunder until such claim is finally resolved or disposed of in accordance 
with the terms hereof.
 
4.  Investigations. The respective representations and warranties of 
Purchaser and Seller contained in this Agreement or in any certificate or 
other document delivered by any Party prior to the Closing and the rights to 
indemnification set forth in Section 9 will not be deemed waived or otherwise 
affected by any investigation made by a Party to this Agreement.
 
5.  GENERAL. EACH OF THE AGREEMENTS TO INDEMNIFY, DEFEND OR HOLD HARMLESS
CONTAINED IN THIS AGREEMENT SHALL APPLY, IN ACCORDANCE WITH ITS TERMS,
IRRESPECTIVE OF WHETHER THE SUBJECT CLAIM IS BASED ON WHOLE OR IN PART UPON THE
SOLE OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR GROSS), BREACH OF
WARRANTY, STRICT LIABILITY, OR BREACH OR VIOLATION OF ANY DUTY IMPOSED BY ANY
LAW OR REGULATION, ON THE PART OF THE BENEFICIARY OF THE AGREEMENT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
 
9.                            NONCOMPETITION
 
0.  Definitions. For the purposes of this Article 10, the following 
definitions will apply:

    ( ) "Activities" will mean the manufacture of forged 
stainless steel flanges and forged stainless steel fittings by Seller or its
 Affiliates.

    (a) "Confidential Information" will mean any data or information of
Seller, other than Trade Secrets, which is valuable to the operation of the
Business and not generally known to competitors.

    (b) "Noncompete Period" will mean, with respect to Seller, the period 
beginning on the Closing Date and continuing for a period of three years from 
the Closing Date.
 
    (c) The term "Territory" as used in this Agreement will mean the United
States of America, the Commonwealth of Canada, the Republic of Mexico and all
other territories currently served by Seller.

    (d) "Trade Secrets" will mean information, including, but not limited to, 
technical or nontechnical data, a formula, pattern, compilation, program, 
including, without limitation, computer software and related source codes, 
device, method, technique, drawing, process, financial data, financial plan, 
product plan, list of actual or potential customers or suppliers, or other 
information similar to any of the foregoing, which derives economic value,

                                       37
<PAGE>

actual or potential, from not being generally known to, and not being readily 
ascertainable by proper means by, other persons who can derive economic value 
from its disclosure or use.
 
1.  Trade Secrets. Seller will, and will cause each of its Affiliates to, 
hold in confidence at all times after the Effective Date all Trade Secrets of 
the Company, and will not, and will not permit any of its Affiliates to, 
disclose, publish or make use of Trade Secrets at any time after the 
Effective Date without the prior written consent of Purchaser. Nothing in 
this Agreement will diminish the rights of Purchaser regarding the protection 
of Trade Secrets and other intellectual property pursuant to applicable law.
 
2.  Confidential Information. Seller hereby agree that, for a period of two 
years following the Closing Date, Seller will, and will cause its Affiliates 
to, hold in confidence all Confidential Information and will not, and will 
not permits any of its Affiliates to, disclose, publish or make use of 
Confidential Information without the prior written consent of Purchaser.
 
3.  Noncompetition. To induce Purchaser to purchase the Assets and goodwill 
of the Business pursuant to this Agreement, Seller acknowledges that the 
protection and maintenance of the related Business constitutes a legitimate 
interest to be protected by the Purchaser by this covenant not to compete. 
Accordingly, 

     ( ) Seller hereby acknowledges that it conducts Activities throughout 
the Territory. Seller acknowledges that to protect adequately the interest of 
Purchaser in the Business, it is essential that any noncompete covenant with 
respect thereto cover all Activities and the entire Territory.
 
    (a) Seller hereby agrees that it will not, and that it will not permit 
any of its Affiliates to, during the Noncompete Period, in any manner, 
directly or indirectly or by assisting others, engage in, have an equity or 
profit interest in, or render services (of an executive, marketing, 
manufacturing, research and development, administrative, financial or 
consulting nature) to any business that conducts any of the Activities in the 
Territory.
 
4.  Nonsolicitation. Seller hereby agrees that, without prior written consent 
of Purchaser, it will not and that it will not permit any of its Affiliates 
to, prior to the second anniversary of the Closing Date, in any manner, 
directly or indirectly or by assisting others, recruit or hire away or 
attempt to recruit or hire away, on their behalf or on behalf of any other 
person, firm or corporation, any employee of Seller who is hired by Purchaser 
pursuant to Section 5.7.
 
5.  Severability. The covenant contained in this Article 10 on the part of
the Seller will be construed as ancillary to and independent of any other
provision of this Agreement. Seller agrees that the limitations contained in
this Article 10 with respect to geographic area, duration and

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<PAGE>

scope of activity are reasonable and do not impose a greater restraint on the 
Seller than is necessary to protect the goodwill and other business interests 
of the Purchaser. If a judicial or arbitral determination is made that any of 
the provisions of this Article 10 constitutes an unreasonable or otherwise 
unenforceable restriction against Seller or any Affiliate of Seller, this 
Article 10 will be rendered void only to the extent that such judicial or 
arbitral determination finds such provisions to be unreasonable or otherwise 
unenforceable with respect to Seller or such Affiliate. In this regard, 
Seller and Purchaser hereby agree that any judicial authority construing this 
Agreement will be empowered to reform any portion of the Territory, any 
prohibited business activity or any time period from the coverage of this 
Article 10 and to enforce the provisions of this Article 10 to the reformed 
portion of the Territory, the reformed business activities and the reformed 
time period. Moreover, notwithstanding the fact that any provision of this 
Article 10 is determined not to be specifically enforceable, Purchaser will 
nevertheless be entitled to recover monetary damages as a result of the 
breach of such provision by Seller. The time period during which the 
prohibitions set forth in this Article 10 will apply will be tolled and 
suspended for a period equal to the aggregate time during which Seller 
violates such prohibitions in any respect.
 
6.  Injunctive Relief. Seller hereby agrees that any remedy at law for any 
breach of the provisions contained this Article 10 will be inadequate and 
that Purchaser will be entitled to injunctive relief in addition to any other 
remedy Purchaser might have under this Agreement.
 
10.                      MISCELLANEOUS PROVISIONS
 
0.  Notices. All notices, communications and deliveries under this 
Agreement will be made in writing signed by or on behalf of the Party making 
the same, will specify the Section under this Agreement pursuant to which it 
is given or being made, and will be delivered personally or by telecopy 
transmission or sent by registered or certified mail (return receipt 
requested) or by any national overnight courier service (with evidence of 
delivery and postage and other fees prepaid) as follows:
 
    To Purchaser:     Texas Metal Works, Inc.
                      937 Pine Street
                      P.O. Box 3067
                      Beaumont, Texas 77704 
                      Attn: G. Perry Culp, President
                      Telecopy No.: (409) 833-9101

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<PAGE>

    with a copy to:   King & Spalding
                      1100 Louisiana, Suite 3300
                      Houston, Texas 77002-5219
                      Attn: Chris LaFollette
                      Telecopy No.: (713) 751-3290
 
    To Seller:        Consolidated Stainless, Inc.
                      1601 East Amelia Street 
                      Orlando, Florida 32803
                      Attn: Burton R. Chasnov
                      Telecopy No.: (407) 895-8811

    with a copy to:   Greenberg Traurig Hoffman Lipoff Rosen & Quentel
                      153 E. 53rd Street
                      New York, NY 10022
                      Attn: Peter W. Rothberg
                      Telecopy No.: (212) 223-7161

or to such other representative or at such other address of a Party as such   
Party may furnish to the other Parties in writing. Any such notice, 
communication or delivery will be deemed given or made (a) on the date of    
delivery if delivered in person, (b) on the first business day after 
delivery to a national overnight courier service, (c) upon transmission by    
facsimile if receipt is confirmed by telephone or (d) on the fifth day after 
it is mailed by registered or certified mail.
 
1.  Schedules and Exhibits. The Schedules and Exhibits to this Agreement are 
hereby incorporated into this Agreement and are hereby made a part of this 
Agreement as if set out in full in this Agreement.
 
2.  Assignment; Successors in Interest. No assignment or transfer by 
Purchaser or Seller, of its rights and obligations under this Agreement will 
be made except with the prior written consent of the other Parties to this 
Agreement; provided that Purchaser will be entitled to assign all or any part 
of its rights and obligations under this Agreement to one or more direct or 
indirect wholly owned subsidiaries of Purchaser so long as Purchaser remains 
directly liable for the performance of its obligations under this Agreement. 
This Agreement will be binding upon and will inure to the benefit of the 
Parties and their successors and permitted assigns, and any reference to a 
Party will also be a reference to a successor or permitted assign.
 
3.  Number; Gender. Whenever the context so requires, the singular number 
will include the plural and the plural will include the singular, and the 
gender of any pronoun will include the other genders.
 
                                       40
<PAGE>

4.  Captions. The titles, captions and table of contents contained in this 
Agreement are inserted in this Agreement only as a matter of convenience and 
for reference and in no way define, limit, extend or describe the scope of 
this Agreement or the intent of any provision of this Agreement. Unless 
otherwise specified to the contrary, all references to Articles and Sections 
are references to Articles and Sections of this Agreement and all references 
to Schedules or Exhibits are references to Schedules and Exhibits, 
respectively, to this Agreement.
 
5.  Controlling Law; Amendment. This Agreement will be governed by and 
construed and enforced in accordance with the internal laws of the State of 
Texas without reference to Texas choice of law rules. This Agreement may not 
be amended, modified or supplemented except by written agreement of all of 
the Parties.
 
6.  Severability. Any provision of this Agreement which is prohibited or 
unenforceable in any jurisdiction will, as to such jurisdiction, be 
ineffective to the extent of such prohibition or unenforceability without 
invalidating the remaining provisions of this Agreement, and any such 
prohibition or unenforceability in any jurisdiction will not invalidate or 
render unenforceable such provision in any other jurisdiction. To the extent 
permitted by law, the Parties waive any provision of law which renders any 
such provision prohibited or unenforceable in any respect.
 
7.  Counterparts. This Agreement may be executed in two or more counterparts, 
each of which will be deemed an original, and it will not be necessary in 
making proof of this Agreement or the terms of this Agreement to produce or 
account for more than one of such counterparts.
 
8.  Enforcement of Certain Rights. Nothing expressed or implied in this 
Agreement is intended, or will be construed, to confer upon or give any 
person, firm or corporation other than the Parties, and their successors or 
permitted assigns, any rights, remedies, obligations or liabilities under or 
by reason of this Agreement, or result in such person, firm or corporation 
being deemed a third party beneficiary of this Agreement.
 
9.  Waiver. Any agreement on the part of a Party to any extension or waiver 
of any provision of this Agreement will be valid only if set forth in an 
instrument in writing signed on behalf of such Party. A waiver by a Party of 
the performance of any covenant, agreement, obligation, condition, 
representation or warranty will not be construed as a waiver of any other 
covenant, agreement, obligation, condition, representation or warranty. A 
waiver by any Party of the performance of any act will not constitute a 
waiver of the performance of any other act or an identical act required to be 
performed at a later time.
 
10. Integration. This Agreement and the documents executed pursuant to this 
Agreement supersede all negotiations, agreements and understandings among the 
Parties with

                                       41
<PAGE>

respect to the subject matter of this Agreement (including, without 
limitation, that certain letter agreement, dated September 11, 1997, between 
the Parties) and constitutes the entire agreement among the Parties.
 
11.  Cooperation Following the Closing; Seller Funds Received by Purchaser. 
Following the Closing, each of the Parties shall deliver to the other such 
further information and documents, shall execute and deliver to the other 
such further instruments and agreements as the other Party shall reasonably 
request and shall otherwise cooperate with one another in order to consummate 
or confirm the transactions provided for in this Agreement, to assist Seller 
in collecting accounts receivables, in complying with the covenant set forth 
in Section 5.13, filing tax returns and other regulatory returns and reports, 
in obtaining audits of financial information related to the Business and 
winding up its relationship with the Company, to accomplish the purpose of 
this Agreement or to assure to the other Party the benefits of this 
Agreement. Such assistance shall be provided to Seller at no cost to Seller; 
provided, however, that Seller shall reimburse Purchaser for its reasonable 
out-of-pocket expenses incurred in connection with providing such assistance. 
Any payment received by the Purchaser after the Closing Date in respect of 
the Business or the Assets to which the Seller is entitled shall be remitted 
to Seller within five business days of receipt by Purchaser; any payment 
received by Seller after the Closing Date in respect to the Business or the 
Asset to which the Purchaser is entitled shall be remitted to the Purchaser 
within five business days of receipt by Seller.
 
    IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly 
executed, as of the date first above written.
 
                                       TEXAS METAL WORKS, INC.
 
                                       By:-----------------------------------
                                            G. Perry Culp, President
 
                                       CONSOLIDATED STAINLESS, INC.
 

                                       By:-----------------------------------
                                             Burton R. Chasnov
                                             Executive Vice President
                                             and Chief Financial Officer
 



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