Document:

<PAGE>   1
                                                               Exhibit (10)(r)

                           FRISCH'S RESTAURANTS, INC.

                          NONDEFERRED CASH BALANCE PLAN

                                                      Original Edition
                                                      Effective January 1, 2000

                         This document prepared by
                         Taft, Stettinius & Hollister LLP
                         1800 Firstar Tower
                         425 Walnut Street
                         Cincinnati, Ohio  45202-3957

<PAGE>   2

                           FRISCH'S RESTAURANTS, INC.
                          NONDEFERRED CASH BALANCE PLAN
                               (Original Edition)

                  Effective January 1, 2000, FRISCH'S RESTAURANTS, INC.,
hereinafter referred to as the "Company", adopts the following Nondeferred Cash
Balance Plan under which current retirement-type benefits will be paid into
trust for the Company's Highly Compensated Employees in lieu of future accruals
of those employees under the Company's Pension Plan for Managers, Office and
Commissary Employees and the Company's Executive Retirement Plan. This Plan
document was written by the law firm of Taft, Stettinius & Hollister LLP.

                                    ARTICLE I
                                   DEFINITIONS

                  For purposes of this Plan and any amendments to it, the
following terms when capitalized shall have the meanings specified below, unless
a different meaning is plainly required by the context:

                  1.1 "Beneficiary" means any person or legal entity designated
by a Highly Compensated Employee to receive distribution of the balance of his
Trust Fund in the event he should die before complete distribution thereof. If
neither the Highly Compensated Employee nor the Trust established by him under
this Plan specifies who is his Beneficiary in the event of his death, or if for
any reason his designation shall be legally ineffective, or if no Beneficiary or
successor Beneficiary named

<PAGE>   3

                                                               Exhibit (10)(r)

by him is living or in existence at the time any amounts are payable under that
Trust, then his Beneficiary shall be deemed to be his surviving spouse, or if
none, his living lawful issue, per stirpes, or if none, the Highly Compensated
Employee's estate.

                  1.2 "Board of Directors" means the FRISCH'S RESTAURANTS, INC.
Board of Directors.

                  1.3 "Code" means the Internal Revenue Code of 1986, as it is
now or may hereafter be amended.

                  1.4 "Continuous Service" means the Highly Compensated
Employee's Continuous Service as determined under the Managers Pension Plan.

                  1.5 "Effective Date" means January 1, 2000.

                  1.6 "Executive Retirement Plan" means the Company's Executive
Retirement Plan, as amended and restated effective December 1, 1994--a
nonqualified, unfunded supplemental retirement plan for employees subject to
Code limitations on compensation counted for them under the Managers Pension
Plan.

                  1.7 "Highly Compensated Employee" means any employee of the
Company who meets the requirements to be a "Highly Compensated Employee" under
the provisions of the ERISA and Subchapter D Rules Governing Qualified Defined
Benefit Pension Plans as in effect under the Company's Managers Pension Plan;
provided, however, that such term shall not include any person whose service
with the Company ended before December 31, 2000.

                  1.8 "Managers Pension Plan" means the Company's Pension Plan
for Managers, Office and Commissary Employees.

                                       2
<PAGE>   4
                                                               Exhibit (10)(r)

                  1.9 "Plan" means the nondeferred cash balance plan as herein
provided and as hereafter amended or revised.

                  1.10 "Plan Year" means the calendar year.

                  1.11 "Trust" means the trust established by a Highly
Compensated Employee under this Plan.

                  1.12 "Trust Fund" means the trust fund held by the Trustee
under a Highly Compensated Employee's Trust.

                  1.13 "Trustee" means the trustee holding and managing a Highly
Compensated Employee's Trust Fund.

                  1.14 Any words in this Plan document (or amendments to it)
which are used in one gender shall be read and construed to mean or include the
other gender wherever they would so apply. Any words in this Plan document (or
amendments to it) which are used in the singular shall be read and construed to
mean or include the plural wherever they would so apply, and vice versa.

                                   ARTICLE II
                                   ELIGIBILITY

                  2.1  Qualifications for Eligibility

                  Each Highly Compensated Employee who would accrue a benefit or
an additional benefit under the Company's Managers Pension Plan and/or under the
Company's Executive Retirement Plan but for being a Highly Compensated Employee
shall be eligible for a Company contribution to his Trust Fund beginning with
Plan Year 2000. The amount of such Company contribution shall be determined in
the manner described in Section 3.1.

                                       3
<PAGE>   5
                                                               Exhibit (10)(r)

                                   ARTICLE III
                           CONTRIBUTIONS TO TRUST FUND

                  3.1  Annual Company Contribution

                  Each Plan Year the actuary acting under the Company's Managers
Pension Plan shall determine with respect to each Highly Compensated Employee
the actuarial present value of the benefits lost by that Highly Compensated
Employee for that Year by virtue of the exclusion of Highly Compensated
Employees from benefit accruals under the Managers Pension Plan after 1999. To
that amount the actuary shall add the actuarial present value of any benefit
lost that Year by the Highly Compensated Employee under the Company's Executive
Retirement Plan by virtue of the Highly Compensated Employee exclusion
(including any lost benefit related to compensation deferrals made under the
Company's Executive Savings Plan). Such actuarial present value determinations
shall be made using the 1983 Group Annuity Mortality Table (weighted 50% male,
50% female), and a 7% per annum interest rate. For each Highly Compensated
Employee having 5 or more years of Continuous Service the Company shall
contribute to his Trust Fund, by the end of that Plan Year, 111% of the sum of
such actuarial present values, less the portion thereof that is required to be
paid by the Company as tax withholdings to the appropriate taxing authorities.
For each other Highly Compensated Employee the actuary shall determine the
manner of the Company's contributing those actuarial present values per Plan
Year so that 111% of them (less the portions

                                       4
<PAGE>   6
                                                               Exhibit (10)(r)

thereof that are required to be paid by the Company as tax withholdings to the
appropriate taxing authorities) will be contributed to the Highly Compensated
Employee's Trust Fund by the end of the respective Plan Years in accordance with
the following schedule:

             Full Years of                     Aggregate Contributions
           Highly Compensated                  and Tax Withholdings on
               Employee's                      111% of that Employee's
           Continuous Service                   Present Value Amounts
           ------------------                  ----------------------
              Fewer than 2                                 0%
                   2                                      25%
                   3                                      50%
                   4                                      75%
               5 or more                                 100%

                  In the event of the death of a Highly Compensated Employee
during a Plan Year the Company shall nevertheless make the contribution and tax
withholding payments described above with respect to that Highly Compensated
Employee for that Year.

                  3.2  Additional Company Contribution

                  At the time a Highly Compensated Employee having 5 or more
years of Continuous Service retires or otherwise separates from service with the
Company the actuary acting under the Company's Managers Pension Plan shall
determine the tax-adjusted actuarial present value of all benefits lost by the
Highly Compensated Employee since 1999 under the Managers Pension Plan and the
Executive Retirement Plan by virtue of the exclusion of Highly Compensated
Employees from benefit accruals under those Plans. The actuarial assumptions
specified in Section 3.1 and

                                       5
<PAGE>   7
                                                               Exhibit (10)(r)

the tax factors approved by the Chief Financial Officer of the Company shall be
used for these determinations. If the tax-adjusted actuarial present value of
all such lost benefits exceeds the tax-adjusted value of the assets held in the
Highly Compensated Employee's Trust Fund at that time (including the
tax-adjusted value of any assets previously withdrawn from his Trust Fund, plus
tax-adjusted imputed earnings thereon), the Company shall contribute the amount
of the excess to his Trust Fund by the end of the Plan Year in which his
retirement or other separation from service with the Company occurs, less the
portion thereof that is required to be paid by the Company as tax withholdings
to the appropriate taxing authorities. No such additional Company contribution
shall be made with respect to a Highly Compensated Employee having less than 5
years of Continuous Service. By April 30 of each year each Highly Compensated
Employee shall furnish to the Company a written account setting forth the dates
and amounts of all investments, receipts, disbursements and other transactions
that occurred with respect to his Trust Fund during the preceding calendar year,
and showing all cash, securities and other property held in the Trust Fund at
the end of such year.

                                       6

<PAGE>   8
                                                               Exhibit (10)(r)

                                   ARTICLE IV
                  RIGHTS OF THE COMPANY TO DISCONTINUE OR AMEND

                  4.1  Rights of Termination Reserved

                  It is the expectation of the Company that it will continue
this Plan and the payment of contributions hereunder indefinitely, but
continuance of the Plan and the payment of its contributions by the Company as
herein provided is not assumed as a contractual obligation by the Company; and
the right is reserved by the Company at any time to terminate this Plan and its
contributions hereunder. However, the termination of the Plan may not cause a
decrease in any benefits accrued under the Plan at the time of such termination.

                  4.2  Amendments

                  The Company by written instrument shall have the right to
amend this Plan at any time to any extent deemed advisable, and upon such
amendment all individuals having any interest under this Plan shall be bound
thereby. However, no amendment to the Plan shall be effective to the extent that
it would result in decreasing any benefits accrued under the Plan before such
amendment.

                  4.3  No Reversion to the Company

                  Under no circumstances, whether by amendment to or termination
of this Plan, may any contributions or tax withholdings made by the Company
under this Plan ever revert to, or be used or enjoyed by, the Company.

                                       7
<PAGE>   9
                                                               Exhibit (10)(r)

                                    ARTICLE V
                            MISCELLANEOUS PROVISIONS

                  5.1  Right to Discharge Participant

                  The establishment of the Plan shall not be construed as
conferring any rights upon any participant or any other person for a
continuation of employment, nor shall it be construed as limiting in any way the
right of the Company to discharge any participant or other employee.

                  5.2  Applicable Law

                  The Plan shall be construed and administered in accordance
with and governed by the laws of the United States and of the State of Ohio.

                  IN WITNESS WHEREOF, FRISCH'S RESTAURANTS, INC. has caused this
instrument to be executed this 15th day of December, 2000.

                                           FRISCH'S RESTAURANTS, INC.

                                           By   /s/ Donald H. Walker
                                              ------------------------------

                                       8
<PAGE>   10

                                                               Exhibit (10)(r)

                             DONALD H. WALKER TRUST

                                    UNDER THE

                           FRISCH'S RESTAURANTS, INC.
                          NONDEFERRED CASH BALANCE PLAN

<PAGE>   11

                             DONALD H. WALKER TRUST
                                    Under the
                           FRISCH'S RESTAURANTS, INC.
                          NONDEFERRED CASH BALANCE PLAN

                  This Trust Agreement made this 29th day of December, 2000, by
and between DONALD H. WALKER (the "Grantor") and FIRSTAR BANK, N.A. (the
"Trustee"), WITNESSETH:

                  (a) WHEREAS, the Grantor is establishing this Trust in
connection with the Nondeferred Cash Balance Plan (hereinafter called the
"Plan") established by Frisch's Restaurants, Inc. (hereinafter called the
"Company") relating to contributions to be made hereto by the Company in lieu of
future accruals under the Company's Pension Plan for Managers, Office and
Commissary Employees and the Company's Executive Retirement Plan; and

                  (b) WHEREAS, it is the intention of the Grantor and the
Company that this Trust shall constitute a fully vested nonqualified funded
arrangement to which after-tax contributions can be made by the Company for
future distribution to the Grantor or his beneficiaries;

                  NOW, THEREFORE, the Grantor and the Trustee do hereby
establish this Trust and agree that the Trust shall be comprised, held and
disposed of as follows:

                  Section 1.  Establishment of Trust

                  (a) The Grantor hereby establishes with the Trustee a general
Trust Fund consisting of such property delivered from time to time to the
Trustee to be held under the terms of this Trust Agreement, and all earnings,
additions and appreciations of

                                       1

<PAGE>   12

                                                               Exhibit (10)(r)

such Trust Fund as may accrue from time to time, less disbursements and
expenses paid therefrom.

                  (b) The Trust hereby established shall be irrevocable.

                  (c) The Trust is intended to be, and to be construed as, a
grantor trust within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, of which the
Grantor is grantor. The Grantor shall be treated as the owner of 100% of the
Trust Fund assets; and the income of the Trust shall be held and accumulated for
distribution to the Grantor or his beneficiaries in accordance with the
provisions of this Trust Agreement, without the approval of any adverse party.
The Grantor (or after his death, his beneficiaries) shall be liable for all
taxes imposed on the Trust Fund or on the income thereof.

                  (d) The Trust Fund principal and all earnings thereon shall be
held exclusively for the uses and purposes of the Grantor and his beneficiaries
pursuant to the terms of this Trust Agreement. In no event shall any of the
Trust Fund principal or any of the earnings thereon be subject to the claims of
the Company or any of its creditors. The Trust created hereunder shall
constitute a spendthrift trust; and to the full extent permitted by law, none of
the Trust Fund assets shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge; and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge shall be utterly void; nor shall any such benefits be subject to the
claims of creditors or others, nor to action in

                                      -2-
<PAGE>   13

                                                               Exhibit (10)(r)

bankruptcy or other legal process, prior to actual payment to the Grantor or
his beneficiaries.

                  (e) The Trustee shall be entitled to receive from the Company
only such amounts as the Company shall pay to the Trustee; and the Trustee shall
not have the right and shall not be subject to any duty to demand or collect
from the Company any other sums of money or other property.

                  Section 2.  Payments from the Trust

                  (a) The Grantor shall be entitled to withdraw any part of the
principal and/or income of the Trust Fund at any time after his retirement or
other separation from service with the Company. In addition, with the consent of
the Company the Grantor may periodically withdraw from the Trust Fund such
amounts as may be required to pay the taxes on the income of the Trust Fund.

                  (b) In the event any amounts remain in the Trust Fund after
the Grantor's death they shall immediately be payable in full (subject to any
required tax withholdings) to his designated beneficiary or beneficiaries. If
the Grantor shall have failed to designate one or more beneficiaries, or if for
any reason his designation shall be legally ineffective, or if no beneficiary or
successor beneficiary named by him is living or in existence at the time any
amounts are payable hereunder, then his beneficiary shall be deemed to be his
surviving spouse, or if none, his living lawful issue, per stirpes, or if none,
the Grantor's estate.

                                      -3-
<PAGE>   14
                                                               Exhibit (10)(r)

                  Section 3.  No Reversion to the Company

                  The Company shall have no right or power to direct the Trustee
to return to the Company or to divert to others any of the Trust Fund assets, or
to grant a security interest in or otherwise encumber any of the assets of the
Trust Fund.

                  Section 4.  Investment Authority

                  (a) To the extent permitted under subsection (b)(1) below, the
Trustee may invest in the common stock of the Company, or rights to acquire such
stock, or obligations issued by the Company. All rights associated with assets
of the Trust Fund shall be exercised by the Trustee or the person designated by
the Trustee, except as provided in subsection (c) of this Section 4.

                  (b) The Trustee shall have the following powers and authority
with respect to the assets of the Trust Fund:

                           (1)      To invest and reinvest the principal and the
                                    income of the Trust Fund in any fund or
                                    funds permitted as investment options to
                                    participants under the Company's Employee
                                    401(k) Savings Plan, without being limited
                                    to what are commonly known as legal
                                    investments for trust funds, or by the
                                    proportion which the investments so made,
                                    either alone or with any other property of
                                    the same or similar character then held or
                                    thereafter acquired, may bear to the entire
                                    amount of the Trust Fund. To the extent that
                                    investments are directed to be made in
                                    interests in registered investment companies
                                    maintained by the Trustee or its affiliates,
                                    the Trustee or its affiliates may receive
                                    compensation from such registered investment
                                    companies for providing investment advisory,
                                    transfer agency, custodial or other
                                    services;

                           (2)      To retain cash in the Trust Fund to meet
                                    contemplated payments, or temporarily
                                    awaiting investment, without liability for
                                    interest thereon; or to invest part or all
                                    of

                                      -4-
<PAGE>   15
                                                               Exhibit (10)(r)

                                    such amounts in bonds, in certificates of
                                    deposit or savings accounts maintained with
                                    any banking department (whether or not
                                    related to a corporate trustee), a
                                    money-market fund, or the like;

                           (3)      To sell any portion of the Trust Fund at any
                                    time at either public or private sale for
                                    cash or on credit at such time or times as
                                    may seem appropriate to the Trustee, and to
                                    exchange such property and grant options for
                                    the purchase or exchange thereof;

                           (4)      To consent to and participate in any plan of
                                    reorganization, consolidation, merger,
                                    combination or other similar plan; to
                                    consent to any contract, lease, mortgage,
                                    purchase, sale or other action by any
                                    corporation pursuant to such plan and to
                                    accept and retain any property issued under
                                    any plan of reorganization;

                           (5)      To exercise all conversion and subscription
                                    rights pertaining to any investment held in
                                    the Trust Fund;

                           (6)      To exercise all voting rights with respect
                                    to any investment held in the Trust Fund and
                                    in connection therewith to grant proxies,
                                    discretionary or otherwise;

                           (7)      To cause any securities or other property
                                    held in the Trust Fund to be registered and
                                    held in the name of one or more nominees, or
                                    retain them unregistered or in form
                                    permitting transfer by delivery, but the
                                    books and records of the Trustee shall at
                                    all times show that all such investments are
                                    part of the Trust Fund; and

                           (8)      Generally to do all such acts, execute and
                                    deliver all such instruments, take all such
                                    proceedings and exercise all such rights and
                                    privileges with relation to Trust Fund
                                    assets as the Trustee may deem necessary or
                                    proper for the purpose of carrying out its
                                    powers and duties hereunder.

                                      -5-
<PAGE>   16
                                                               Exhibit (10)(r)

                  (c) To the limit of the powers granted it under (b) above the
Trustee shall follow any investment directions made by the Grantor. To the
extent the Trustee receives direction from the Grantor with respect to
investments, the Trustee shall not be responsible for the management and control
of those Trust Fund assets other than to serve as custodian thereof.

                  Section 5.  Accounting by Trustee

                  The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
the Grantor and the Trustee. Within thirty (30) days following the close of each
calendar year and within thirty (30) days after the removal or resignation of
the Trustee, the Trustee shall deliver to the Grantor and to the Company a
written account of its administration of the Trust Fund during such year or
during the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, and showing all cash, securities and
other property held in the Trust Fund at the end of such year or as of the date
of such removal or resignation, as the case may be. Upon the expiration of
ninety (90) days from the date of filing any such account or upon the earlier
specific approval thereof by the Grantor and the Company, the Trustee shall be
forever released and discharged from all liability and accountability to the
Grantor and to the Company with respect to any nonfraudulent acts and
transactions shown in such account except to the extent that the Grantor or the
Company, within such 90-day period, files written objections

                                      -6-
<PAGE>   17
                                                               Exhibit (10)(r)

with the Trustee as to specific acts or transactions shown in the account.
Nothing herein contained, however, shall be deemed to preclude the Trustee of
its right to have its accounts judicially settled by a court of competent
jurisdiction; nor shall anything herein contained be deemed to excuse, release
or discharge the Trustee for liability and responsibility with regard to any
fraudulent acts committed by its employees.

                  Section 6.  Responsibility of Trustee

                  (a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken in
accordance with the terms of this Trust Agreement or pursuant to a direction,
request or approval given by the Grantor that is contemplated by, and in
conformity with, the terms of this Trust and is given in writing by the Grantor.

                  (b) The Trustee, at the Grantor's expense, may consult with
legal counsel (who may also be counsel for the Grantor or for the Trustee
generally) with respect to any of its duties or obligations hereunder; and the
Trustee shall have no liability for any action or failure to act in reasonable
reliance upon the advice of such counsel.

                  (c) The Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly

                                      -7-
<PAGE>   18
                                                               Exhibit (10)(r)

provided otherwise herein; provided, however, that if an insurance policy is
held as an asset of the Trust, the Trustee shall have no discretionary authority
or obligation to review, at any time or from time to time, the provisions of
such a policy or the issuer thereof, nor to review such issuer's
creditworthiness, and no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.

                  Section 7.  Compensation and Expenses of the Trustee

                  (a) Prior to the Grantor's retirement or other separation from
service with the Company, the Company shall pay all administrative expenses and
the Trustee's fees and expenses hereunder. After the Grantor's retirement or
other separation from service with the Company, the Grantor shall pay all
administrative expenses and the Trustee's fees and expenses hereunder. If not so
paid, the fees and expenses shall be paid from the Trust Fund.

                  (b) No bond or other security for the faithful performance of
duty shall be required of the Trustee at anytime.

                  Section 8.  Resignation and Removal of Trustee

                  (a) The Trustee may resign at anytime by written notice to the
Grantor, which shall be effective thirty (30) days after receipt of such notice
unless the Grantor and the Trustee agree otherwise.

                                      -8-
<PAGE>   19
                                                               Exhibit (10)(r)

                  (b) Upon 30 days written notice the Trustee may be removed by
joint action of the Company and the Grantor taken in an instrument in writing
delivered to the Trustee.

                  (c) Upon resignation or removal of the Trustee and appointment
of a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within thirty (30) days after
receipt of notice of resignation, removal or transfer, unless the Grantor
extends the time limit.

                  (d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 9 hereof. If no such appointment has been
made, the Trustee may apply to a court of competent jurisdiction for appointment
of a successor or for instructions. All expenses of the Trustee in connection
with the proceeding shall be allowed as administrative expenses of the Trust.

                  Section 9.  Appointment of Successor

                  (a) In case the Trustee shall resign or be removed, or shall
otherwise become incapable of acting hereunder, or in case it shall be taken
under the control of any public officer or officers or of a receiver appointed
by a court, a successor Trustee may be appointed by joint action of the Company
and the Grantor. If for any reason they shall fail to appoint a successor
Trustee within thirty (30) days after such resignation or removal, the Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

                                      -9-
<PAGE>   20
                                                               Exhibit (10)(r)

                  (b) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor and also to the Grantor an instrument
in writing accepting such appointment hereunder, and thereupon such successor
shall become fully vested with all the trusts, powers, rights, obligations,
duties, remedies, immunities and privileges of its predecessor. Every
predecessor Trustee shall deliver the Trust Fund assets held by it as Trustee
hereunder to its successor. Should any instrument in writing from the Company
and/or the Grantor be required by any successor Trustee for more fully and
certainly vesting in such successor the trusts, powers, rights, obligations,
duties, remedies, immunities and privileges hereby vested in the predecessor,
any such instrument shall, on request, be executed, acknowledged and delivered
by the Company and/or the Grantor.

                  (c) Any corporation or association into which the Trustee may
be merged or consolidated, or to which it may sell or transfer its trust
business and assets as a whole or substantially as a whole, or any corporation
or association resulting from any merger, conversion, sale, consolidation or
transfer to which it is a party, shall become successor Trustee hereunder and
shall be vested with all the trusts, powers, rights, obligations, duties,
remedies, immunities and privileges hereunder as was its predecessor, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto.

                                      -10-
<PAGE>   21
                                                               Exhibit (10)(r)

                  Section 10.  Amendment or Termination

                  This Trust Agreement may be amended by a written instrument
executed jointly by the Trustee, the Company and the Grantor.

                  Section 11.  Miscellaneous

                  (a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.

                  (b) This Trust Agreement shall be governed by and construed in
accordance with the laws of Ohio.

                  IN WITNESS WHEREOF, the Grantor, the Company and the Trustee
have caused this Trust Agreement to be executed as of the date first written
above.

                                    GRANTOR:

                                           /s/Donald H. Walker
                                    -----------------------------------
                                             Donald H. Walker

                                    FIRSTAR BANK, N.A.

                                    By:   /s/Stephen Lipps
                                        -------------------------------

                                    FRISCH'S RESTAURANTS, INC.

                                    By:  /s/Michael E. Conner
                                        -------------------------------

                                      -11-<PAGE>   1
                                                                    EXHIBIT 10.1

                              Dated 22 October 2000
                              ---------------------
                                (CONFORMED COPY)

                     THE LAIRD GROUP PUBLIC LIMITED COMPANY

                                     - and -

                                  GENCORP INC.

       ------------------------------------------------------------------

                                    AGREEMENT
                 FOR THE SALE AND PURCHASE OF ALL OF THE ISSUED
                   SHARES OF VARIOUS COMPANIES COMPRISING THE
                  DRAFTEX INTERNATIONAL CAR BODY SEALS DIVISION

       ------------------------------------------------------------------

                              ASHURST MORRIS CRISP
                                 Broadwalk House
                                 5 Appold Street
                                 London EC2A 2HA

                               Tel: 020-7638 1111
                               Fax: 020-7972 7990

                                 RSG/L162.00018

<PAGE>   2

                                    CONTENTS

CLAUSE                                                                   PAGE

1.     INTERPRETATION......................................................1
2.     SALE AND PURCHASE AND ADJUSTMENTS...................................9
3.     CONDITIONS.........................................................11
4.     PERIOD TO COMPLETION...............................................12
5.     COMPLETION.........................................................17
6.     CAPITAL EMPLOYED AND COMPLETION ACCOUNTS...........................22
7.     RELEASE............................................................25
8.     WARRANTIES.........................................................25
9.     PROTECTION OF GOODWILL.............................................26
10.    CONFIDENTIAL INFORMATION...........................................28
11.    PENSIONS...........................................................29
12.    ANNOUNCEMENTS......................................................29
13.    COSTS..............................................................30
14.    EFFECT OF COMPLETION...............................................30
15.    FURTHER ASSURANCES.................................................30
16.    INDEMNITIES........................................................31
17.    ENTIRE AGREEMENT...................................................33
18.    VARIATIONS.........................................................34
19.    WAIVER.............................................................34
20.    INVALIDITY.........................................................34
21.    NOTICES............................................................34
22.    COUNTERPARTS.......................................................35
23.    GOVERNING LAW AND JURISDICTION.....................................35
24.    THIRD PARTY RIGHTS.................................................36
25.    ASSIGNMENT.........................................................36

SCHEDULE 1................................................................38
Target Group Companies....................................................38
SCHEDULE 2................................................................39
Particulars relating to Target Group Companies............................39
SCHEDULE 3................................................................54
The Warranties............................................................54
SCHEDULE 4................................................................79
Vendor Protection Clauses.................................................79
SCHEDULE 5................................................................85
Part 1
The Properties............................................................85
SCHEDULE 5................................................................87
Part 2
The Excluded Properties...................................................87
SCHEDULE 6................................................................88
SCHEDULE 7................................................................89
Pro forma Completion Accounts.............................................89
SCHEDULE 8................................................................92
Accounting Policies and Procedures for The Completion Accounts............92
APPENDIX A................................................................97
Draftex...................................................................97
SCHEDULE 9................................................................99
Allocation of Consideration...............................................99
SCHEDULE 10..............................................................100
SCHEDULE 11..............................................................101

<PAGE>   3

Senior Executives........................................................101

<PAGE>   4

THIS AGREEMENT is made on 22 October 2000

BETWEEN:-

(1)       GENCORP INC. whose principal place of business is at PO Box 537012,
          Sacramento, CA 95853-7012 U.S.A. (the "BUYER"); and

(2)       THE LAIRD GROUP PUBLIC LIMITED COMPANY (No. 55513) whose registered
          office is at 3 St James's Square London SW1Y 4JU (the "SELLER").

THE PARTIES AGREE AS FOLLOWS:-

1.        INTERPRETATION

1.1       In this agreement the following words and expressions and
          abbreviations have the following meanings, unless the context
          otherwise requires:-

          "ACCOUNTS" means the statutory consolidation schedules in the agreed
          terms of the Target Group including the balance sheet of each member
          of the Target Group and the profit and loss account, as at and for the
          financial period ended on the Accounts Date and including the
          adjustments set out in the Vendor Due Diligence Assistance Reports and
          described in the Disclosure Letter;

          "ACCOUNTS DATE" means 31 December 1999;

          "ACCOUNTING POLICIES" means the bases, practices, policies and
          procedures set out or referred to in schedule 8 (in each case applied
          on bases consistent with the application of the bases, practices,
          policies and procedures in the Accounts);

          "ACQUISITION SHARES" means the entire issued share capital of Draftex
          Inc., Draftex Beteiligungsgeschellschaft mbH, Draftex International
          (Pribor) SRO, Draftex International Iberica SA, Slic Corvol SA, Slic
          Gruchet SA and Snappon SA;

          "AGREED CAPITAL EMPLOYED" means (Euro) 232,112,000, being the Capital
          Employed (but as at the Accounts Date) and being the sum of the
          relevant items set out in schedule 7;

          "AGREED RATE" means 2 per cent. above the base rate from time to time
          of National Westminster Bank plc;

          "ATOS SOFTWARE" bears the same meaning as in the IT Transitional
          Services Procurement Agreement;

          "BEIJING DRAFTEX SHARES" means the 60 per cent. equity interest held
          indirectly by the Seller or directly by a member of the Seller's Group
          in the PRC Company;

          "BUSINESS DAY" means a day (excluding Saturdays) on which banks
          generally are open in London, New York and San Francisco for the
          transaction of normal banking business;

          "BUSINESS IP" bears the same meaning as in the Intellectual Property
          Deed;

                                      -1-
<PAGE>   5

          "BUYER'S GROUP" means the Buyer, its holding companies and subsidiary
          companies and subsidiary companies from time to time of such holding
          companies, all of them and each of them as the context admits;

          "BUYER'S SOLICITORS" means Simmons & Simmons of 21 Wilson Street,
          London EC2M 2TX;

          "CAPITAL EMPLOYED" means all assets and liabilities of all of the
          Target Group Companies, excluding all Cash, Intra-Group Debt, Third
          Party Debt, Corporate Tax Assets and shareholders' equity calculated
          using the equivalent corresponding line items used to calculate the
          Agreed Capital Employed as at the close of business on the date of
          Completion;

          "CASH" means the aggregate cash and cash equivalents, as determined in
          accordance with the Accounting Policies, of the Target Group as at the
          close of business on the Completion Date;

          "COMPLETION" means the completion of the sale and purchase of the
          Acquisition Shares in accordance with clause 4.13;

          "COMPLETION DATE" means the date on which Completion occurs;

          "COMPLETION ACCOUNTS" means the aggregated pro forma balance sheet of
          the Target Group as at the Completion Date to be prepared in the
          format set out in schedule 7 in accordance with clause 6 and schedule
          8;

          "CONDITIONS" means the conditions set out in clause 3.1;

          "CONFIDENTIAL INFORMATION" means all information relating to any
          Target Group Company's business, financial or other affairs (including
          Know-How, future plans and targets of any Target Group Company) which
          is not in the public domain;

          "CONSIDERATION" has the meaning ascribed to it in clause 2.4;

          "CORPORATE TAX ASSETS" means the taxation amounts in relation to the
          tax losses totalling (Euro) 12.071m as at the Accounts Date
          (comprising (Euro) 1.419m in respect of Slic Gruchet SA, (Euro)
          9.277m in respect of Draftex Inc., (Euro) 0.11m in respect of Slic
          Corvol SA and (Euro) 1.265m in respect of Snappon SA (and totalling
          (Euro) 7.345m as at 30 June 2000));

          "CZECH COMPANY" means Draftex International (Pribor) SRO (proposed to
          be changed to Draftex International s.r.o.) a limited liability
          company with its registered office at Praha 1, Karoliny Svetle 25,
          Czech Republic, having the Identification Number, 26162148;

          "DATA ROOM INFORMATION" means the materials and information made
          available for inspection by the Buyer and its advisers at the offices
          of the Seller's Solicitors details of which are given in the
          Disclosure Letter;

          "DEFERRED AMOUNT" means an amount in Euro equal to the aggregate of
          the Set Off Amount(s), not exceeding (Euro) 20m, to be apportioned
          amongst the Vendors in accordance with schedule 9;

                                      -2-
<PAGE>   6

          "DISCLOSURE LETTER" means a letter of today's date in the agreed terms
          together with the attachments thereto addressed by the Seller (on
          behalf of the Vendors) to the Buyer;

          "ENCUMBRANCE" means any mortgage, charge (fixed or floating), pledge,
          lien, hypothecation, trust, right of set off or other third party
          right or interest (legal or equitable) including any right of
          pre-emption, assignment by way of security, reservation of title or
          any other security interest of any kind however created or arising or
          any other agreement or arrangement (including a sale and repurchase
          arrangement) having similar effect;

          "ENVIRONMENT" means all, or any, of the following media namely the air
          (including without limitation the air within buildings and the air
          within other natural man-made structures above or below ground),
          surface water, ground water and land (wherever occurring) and any
          living organisms or systems supported by those media;

          "ENVIRONMENTAL LAWS" means all applicable national or local laws or
          regulations arising through statutes, subordinate legislation and
          common law or equivalent in the appropriate jurisdiction and any
          relevant codes of practice or other similar guidance or advice to
          which a competent authority for Environmental Matters is required by
          law to have regard in so far as they relate to or apply to
          Environmental Matters and are in force at the Completion Date;

          "ENVIRONMENTAL ISSUES" means in relation to the activities of the
          Target Group and/or the Properties each and every of the environmental
          issues (whether known or unknown at or before Completion) set out
          below and all damages, losses, liabilities, costs and expenses
          (including without limitation fines, penalties, settlements,
          judgments, awards, statutory or other legally enforceable
          contributions), loss of profits and consequential losses associated
          therewith:

          (a)  all matters governed by and liability (present, future or
               contingent) under Environmental Laws including without limitation
               any environmental prosecutions, regulatory proceedings and third
               party claims for personal injury or property damage arising in
               connection with Environmental Matters;

          (b)  all actions required pursuant to and associated with
               Environmental Permits (whether current or future) or in order to
               obtain, renew, modify, withdraw, amend or comply with any
               Environmental Permit which may be required at or after Completion
               in relation to the current or future operations of any member of
               the Target Group;

          (c)  all issues associated with the operations and/or the state and
               condition of plant, equipment and buildings which lead or are
               likely to lead to contamination or pollution of the Environment
               (including for the avoidance of doubt noise pollution) as may be
               required at any of the Properties or in relation to any of the
               activities of any member of the Target Group (whether under
               Environmental Laws or health and safety laws, as part of
               implementing ISO 14001 certification or as part of general
               corporate practice relating to improvement of environmental
               performance);

          (d)  all issues associated with the historic building at the Property
               at Corvol including without limitation any requirement to rebuild
               or repair the building and any disturbance or other interference
               with the operations at the Property at Corvol;

                                      -3-
<PAGE>   7

          (e)  all issues associated with on or off-site soil, water and
               groundwater contamination and the presence, escape, dispersal,
               release, storage or migration or emission of Hazardous Materials
               and Waste (including without limitation any remediation,
               abatement, treatment, investigation and monitoring associated
               with such issues and related professional and consultancy fees
               and any requirement under any planning or zoning consent or law
               concerning such matters); and

          (f)  all issues referred to and matters and information in the Dames &
               Moore reports prepared for the Buyer and the Enviros Aspinwall
               reports (Ref AS0080001A) and the Disclosure Letter to the extent
               that they relate to Environmental Matters, and compliance with
               Environmental Laws and Environmental Permits,

          and for the purposes of this definition, all references to
          Environmental Laws shall include those in force at, prior to or
          brought into force after Completion and none of the above issues other
          than those referred to in (c) above shall include workers in the
          workplace and for the avoidance of doubt, Environmental Issues shall
          not include claims by workers in relation to exposure to Hazardous
          Materials, Waste or noise or radiation prior to Completion.

          "ENVIRONMENTAL MATTERS" means:-

          (a)  the disposal, release, spillage, deposit, escape, discharge, leak
               or emission of Hazardous Materials or Waste;

          (b)  the exposure of any person to harm or danger including by
               Hazardous Materials or Waste;

          (c)  the creation of any noise, vibration, radiation, chemical
               exposure, common law or statutory nuisance or other adverse
               impact on the Environment save for impact on workers in the
               workplace; and

          (d)  any other matters relating to the condition, protection,
               maintenance, restoration or replacement of the Environment or any
               part of it arising directly or indirectly out of the
               manufacturing, processing, treatment, keeping, handling, use
               (including as a building material), possession, supply, receipt,
               sale, purchase, import, export, transportation or presence of
               Hazardous Materials or Waste;

          "ENVIRONMENTAL PERMIT" means any licenses, approval, authorisation,
          permission, consent, waiver order or exemption issued or granted under
          Environmental Laws;

          "ESTIMATED CASH"  has the meaning ascribed to it in clause 2.5;

          "ESTIMATED CONSIDERATION" has the meaning ascribed to it in clause
          2.5;

          "ESTIMATED INTRA-GROUP DEBT" has the meaning ascribed to it in clause
          2.5 (and which for the avoidance of doubt shall be reduced by the Set
          Off Amount(s) (if any));

          "ESTIMATED THIRD PARTY DEBT" has the meaning ascribed to it in clause
          2.5;

          "EXCLUDED PROPERTY" means the properties set out in part 2 of schedule
          5 or any part or part thereof and "EXCLUDED PROPERTY" shall mean any
          one of them;

                                      -4-
<PAGE>   8

          "FORMER PROPERTIES" means in relation to any member of the Target
          Group any properties formerly owned, used or occupied for the purpose
          of its business activities prior to Completion and not owned, used or
          occupied at Completion;

          "FRENCH TARGET GROUP" means Slic Corvol SA, Slic Gruchet SA and
          Snappon SA and "FRENCH TARGET GROUP COMPANY" means any one of them;

          "HAZARDOUS MATERIALS" means pollutants, contaminants and dangerous,
          toxic or radioactive substances and any substance designated or
          classified as such under any Environmental Laws, whether in fluid,
          liquid, solid, gaseous or other form;

          "INDEMNITIES" means all and any indemnities given by the Seller or any
          member of the Seller's Group to the Buyer or any member of the Buyer's
          Group under this agreement;

          "INFORMATION MEMORANDUM" means the information memorandum on the
          Target Group prepared by Lazard Brothers & Co., Limited dated June
          2000;

          "INTELLECTUAL PROPERTY ASSIGNMENTS" means the documents in agreed
          terms governing the assignment of certain patents, registered designs
          and trademarks;

          "INTELLECTUAL PROPERTY" means patents, trade marks, design rights,
          trade names, copyrights data base rights (whether registered or not
          and any applications to register or rights to apply for registration
          of any of the foregoing), rights in inventions, Know-How, trade
          secrets and other confidential information, and all other intellectual
          property rights of a similar or corresponding character in any part of
          the world;

          "INTELLECTUAL PROPERTY DEED" means the document in the agreed terms
          governing the sale of the Business IP and the licensing of
          Intellectual Property;

          "INTRA-GROUP DEBT" means, as at the close of business on the
          Completion Date, the aggregate of all debts owed by the Target Group
          Companies, on the one hand, to any members of the Seller's Group, on
          the other, less the aggregate of all debts owed by members of the
          Seller's Group, on the one hand, to the Target Group Companies, on the
          other, but in all cases excluding any such debts arising in the
          ordinary course of trading;

          "IT TRANSITIONAL SERVICES PROCUREMENT AGREEMENT" means the agreement
          in the agreed terms between Draftex SA and the Buyer pursuant to which
          Draftex SA agrees to provide or procure the provision of various
          facilities services to certain members of the Target Group;

          "KNOW-HOW" means confidential or proprietary industrial, technical or
          commercial information and techniques in any form (including paper,
          electronically stored data, magnetic media, files and microfilm)
          including, without limitation, drawings, data relating to inventions,
          formulae, test results, reports, research reports, project reports and
          testing procedures, shop practices, instruction and training manuals,
          market forecasts, specifications, quotations, lists and particulars of
          customers and suppliers, marketing methods and procedures, show-how
          and advertising copy;

          "LONDON STOCK EXCHANGE" means the London Stock Exchange PLC;

                                      -5-
<PAGE>   9

          "MANAGEMENT ACCOUNTS" means the aggregated management schedules of the
          Target Group for the period from 1 January 2000 to 30 September 2000
          in the agreed terms;

          "OWNERSHIP INTEREST TRANSFER AGREEMENT" means the agreement of
          transfer of 100 per cent. of the ownership interests in the Czech
          Company;

          "PENSION SCHEMES" means the Draftex Inc. Retirement Savings Plan and
          any pension promises made by Target Group Companies in Germany;

          "PERMIT" means a permit, licence, consent, approval, certificate,
          qualification, specification, registration and other authorisation and
          a filing of a notification report or assessment necessary in any
          jurisdiction for the proper and efficient operation of the Target
          Group business, its ownership, possession, occupation or use of an
          asset or the execution and performance of this agreement;

          "PRC COMPANY" means Beijing Wanyuan - Draftex Sealing Products Company
          Limited, a Target Group Company details of which are included in
          schedule 1 and schedule 2;

          "PROPERTIES" means the properties described in part 1 schedule 5 or
          any part or parts thereof (excluding the Excluded Properties) and
          "PROPERTY" shall mean any one of them;

          "PURCHASE PRICE" shall be (Euro) 243,000,000;

          "RELATED PERSON" means in relation to any party its holding companies
          and the subsidiary companies from time to time of such holding
          companies, all of them and each of them as the context admits;

          "RELEVANT MEMBER" has the meaning ascribed to in clause 2.1;

          "SELLER'S GROUP" means the Seller, its holding companies and its
          subsidiary companies excluding the Target Group;

          "SELLER'S SOLICITORS" means Ashurst Morris Crisp of Broadwalk House, 5
          Appold Street, London EC2A 2HA;

          "SENIOR EXECUTIVE" means any one of the persons listed in schedule 11
          and the employees of the Target Group Companies whose employment may
          be terminated on three months' notice or more;

          "SET OFF AGREEMENT(S)" means the Set Off Agreement(s) in the agreed
          terms reflecting the Set Off Amount(s);

          "SET OFF AMOUNT(S)" means the lesser of the outstanding receivables
          due from Draftex SA ("GROUP TRADE DEBTORS") to the French Target Group
          Companies or the outstanding balance of receivable intra-group debt
          due to Draftex SA ("DRAFTEX SA INTRA-GROUP DEBT") by the French Target
          Group Companies not later than 5 Business Days prior to Completion;

          "SUPPLY AGREEMENTS" means the agreements in the agreed terms relating
          to the supply of car sealing components between Soratech SA and Slic
          Gruchet SA; Soratech and Snappon

                                      -6-
<PAGE>   10

          SA; Vickers and Slic Gruchet SA, and the letter agreement between
          Kaucuk Ve Plastik Sanaya Ve Ticaret SA (Draftex International -
          Europlast, Turkey) and Slic Gruchet SA.

          "TARGET GROUP" means the companies comprising the Draftex
          International Car Body Seals Division which are listed in schedule 1
          (particulars of which are set out in schedule 2) and "TARGET GROUP
          COMPANY" shall mean any one of them;

          "TAX" OR "TAX" all forms of taxation, duties, levies, imposts and
          other similar impositions of any jurisdiction, whether central,
          regional or local including (without limitation) taxes on profits,
          revenues, turnover, sales, purchases, consumption, gains and income,
          customs, import and export duties, stamp duty and other transaction or
          documentary taxes, social security, state pensions contributions,
          taxes arising through ownership or occupation of land or premises,
          taxes levied by reference to ownership, wealth or the use of any
          property or assets, payroll and employment taxes, taxes arising on the
          sale, lease, hire, gift or other disposal of any real or personal
          assets or property, on the change of the control of any company and on
          the death of any person, and any payment made to any person as the
          result of the operation of any enactment or other law relating to any
          taxes and all penalties, fines charges and interest relating to any of
          the foregoing or resulting from failure to comply with the provisions
          of any legislation, enactment or other law relating to any of the
          foregoing but does not include rates or water rates or the equivalent
          in any jurisdiction outside the UK;

          "TAXATION AUTHORITY" means any taxing or other authority (whether
          within or outside the United Kingdom) competent or authorised to
          impose any tax;

          "TAX DEED" means a deed of indemnity in the agreed terms;

          "THIRD PARTY DEBT" means, as at the close of business on the
          Completion Date, the aggregate bank borrowings of each Target Group
          Company plus all other indebtedness of the Target Group including,
          without limitation, any outstanding borrowing or indebtedness in the
          nature of borrowing (from any bank, credit institution or otherwise),
          any indebtedness for moneys borrowed or raised under any acceptance
          credit, bond, note, bill of exchange or commercial paper, trade bills
          (other than those on terms normally obtained), forward sale or
          purchase agreement or conditional sale agreement or other transaction
          having the commercial effect of a borrowing, any finance leases
          (including the finance lease of Slic Gruchet SA described in the
          Disclosure Letter) and hire purchase agreements but excluding for the
          avoidance of doubt any operating leases and operating hire purchase
          agreements;

          "THIRD PARTY SOFTWARE" bears the same meaning as in the IT
          Transitional Services Procurement Agreement;

          "TRANSACTION DOCUMENTS" means the documents so defined in clause
          17(a);

          "UK LISTING AUTHORITY" means the Financial Services Authority in its
          capacity as the competent authority for the purposes of Part IV of the
          Financial Services Act 1986;

          "VAT" means value added tax or other equivalent tax paid under EEC
          Directive 77/388 or any equivalent goods and services or sales tax in
          any jurisdiction;

                                      -7-
<PAGE>   11

          "VAT LEGISLATION" means all enactments relating to VAT in any
          jurisdiction and all regulations, orders, notices, provisions and
          conditions made under those enactments;

          "VENDOR" means the entity (if any) identified as the Vendor of the
          relevant Acquisition Shares as set out in schedule 1 and "VENDORS"
          means all of them;

          "WARRANTIES" means the warranties set out in schedule 3; and

          "WASTE" means any waste including anything which is abandoned,
          unwanted or surplus irrespective of whether it is capable of being
          recovered or has any value.

1.2       In this agreement unless otherwise specified, reference to:-

          (a)  a "HOLDING COMPANY" means a company which in relation to another
               company (its "SUBSIDIARY COMPANY"):

               (i)   holds a majority of the voting rights in it; or

               (ii)  is a member of it and has the right to appoint or remove a
                     majority of its board of directors; or

               (iii) is a member of it and controls alone, pursuant to an
                     agreement with other shareholders or members, a majority of
                     the voting rights in it or is a subsidiary of a company
                     which is itself a subsidiary of that other company;

          (b)  a document in the "AGREED TERMS" is a reference to that document
               in the form approved and for the purposes of identification
               signed by or on behalf of each party;

          (c)  "INCLUDES" and "INCLUDING" shall mean including without
               limitation;

          (d)  a party means a party to this agreement and includes its
               assignees (if any) and/or the successors in title to
               substantially the whole of its undertaking and, in the case of an
               individual, to his or her estate and personal representatives;

          (e)  a person includes any person, individual, company, firm,
               corporation, government, state or agency of a state or any
               undertaking (whether or not having separate legal personality and
               irrespective of the jurisdiction in or under the law of which it
               was incorporated or exists);

          (f)  a statute or statutory instrument or accounting standard or any
               of their provisions is to be construed as a reference to that
               statute or statutory instrument or accounting standard or such
               provision as the same may have been amended or re-enacted before
               the date of this agreement;

          (g)  "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and
               paragraphs of and schedules to this agreement;

                                      -8-
<PAGE>   12

          (h)  "WRITING" includes any methods of representing words in a legible
               form (other than writing on an electronic or visual display
               screen) or other writing in non-transitory form;

          (i)  words denoting the singular shall include the plural and vice
               versa and words denoting any gender shall include all genders;

          (j)  any statute, statutory instrument, regulation, by-law or other
               requirement of English law and to any English legal or other term
               for any titles, action, remedy, method of judicial proceeding,
               legal document, consent, permission, permit, rent review, legal
               status, procedure, court, official or any legal concept or
               doctrine or other expression shall in respect of any jurisdiction
               other than England be deemed to include that which most nearly
               approximates in that jurisdiction to the English term;

          (k)  the time of day is reference to time in London, England.

1.3       The schedules form part of the operative provisions of this agreement
          and references to this agreement shall, unless the context otherwise
          requires, include references to the schedules.

1.4       The index to and the headings and the descriptive notes in brackets
          relating to provisions of taxation statutes in this agreement are for
          information only and are to be ignored in construing the same.

2.        SALE AND PURCHASE AND ADJUSTMENTS

2.1       Upon the terms and subject to the conditions of this agreement, the
          Seller shall sell (or procure that the relevant Vendor shall sell)
          with full title guarantee and the Buyer (or any member or members of
          the Buyer's Group nominated by the Buyer (the "RELEVANT MEMBER"))
          shall purchase the Acquisition Shares (and the entire issued share
          capital of each of Draftex International European Technical Centre
          GmbH and Draftex Verwaltungsgesellschaft mbH) with effect from
          Completion free from any Encumbrance together with all benefits and
          rights now or hereafter attaching thereto save in respect of any
          dividends declared after the Accounts Date in respect of the those
          shares.

2.2       Neither the Seller nor the Buyer shall be obliged to complete the sale
          and purchase of the Acquisition Shares unless the sale and purchase of
          all the Acquisition Shares, (and the entire issued share capital of
          each of Draftex International European Technical Centre GmbH and
          Draftex Verwaltungsgesellschaft) is completed before the close of
          business on the Completion Date.

2.3       The Seller waives or agrees to procure the waiver of any rights or
          restrictions conferred upon it or any other person which may exist in
          relation to the Acquisition Shares under the articles of association
          or other constitutional documents of the Target Group Companies or
          otherwise.

2.4       The consideration for the sale of the Acquisition Shares by the Seller
          (on behalf of the Vendors) shall be the Purchase Price (as adjusted
          pursuant to the provisions of clauses 2 and 6) less an amount equal to
          the sum of Intra-Group Debt and Third Party Debt but plus an amount
          equal to the Cash (as determined following the operation of the
          provisions of clause 6 below), and which shall be subject to
          adjustment in accordance with the provisions of this

                                      -9-
<PAGE>   13

          clause 2 and apportioned between the Acquisition Shares in accordance
          with schedule 9, (the "CONSIDERATION").

2.5       Not later than 5 Business Days prior to the date anticipated for
          Completion, the Seller shall notify the Buyer in writing of its
          estimate (acting reasonably, together with such evidence as it may
          have in support of its calculation) of:-

          (a)  the Intra-Group Debt (the "ESTIMATED INTRA-GROUP DEBT");

          (b)  the Third Party Debt (the "ESTIMATED THIRD PARTY DEBT");

          (c)  the Cash (the "ESTIMATED CASH")

          and the Purchase Price less an amount equal to the sum of Estimated
          Intra-Group Debt and Estimated Third Party Debt but plus an amount
          equal to the Estimated Cash shall be the "ESTIMATED CONSIDERATION" for
          the purposes of this agreement.

2.6       In the event that the Consideration:-

          (a)  is less than the Estimated Consideration then the Seller (on
               behalf of the Vendors) shall pay to the Buyer an amount equal to
               such shortfall;

          (b)  exceeds the Estimated Consideration then the Buyer shall pay to
               the Seller (on behalf of the Vendors) an amount equal to such
               excess.

2.7       All and any adjustments to the Consideration for the Acquisition
          Shares which relate to any differences between the Estimated
          Intra-Group Debt and the Intra Group Debt shall be made as follows:

          (a)  in the event that the Intra-Group Debt is less than the Estimated
               Intra-Group Debt, the Seller shall, as agent for the members of
               the Seller's Group pay or, as the case may be repay (or procure
               that the relevant member of the Seller's Group shall pay or, as
               the case may be, repay) an amount equal to the amount of such
               difference to the Buyer (on behalf of the Target Group Company);
               or

          (b)  in the event that the Intra-Group Debt is greater than the
               Estimated Intra-Group Debt, the Buyer shall (on behalf of the
               relevant Target Group Company) pay or, as the case may be, repay
               an amount equal to the amount of such difference to the Seller
               (on behalf of the relevant member of the Seller's Group).

2.8       In the event that the Capital Employed (as determined pursuant to the
          provisions of clause 6):-

          (a)  is less than the Agreed Capital Employed then the Seller (on
               behalf of the relevant Vendor(s)) shall pay to the Buyer an
               amount equal to such shortfall and the Purchase Price shall be
               thereby reduced by such amount;

          (b)  exceeds the Agreed Capital Employed then the Buyer shall pay to
               the Seller (on behalf of the relevant Vendor(s)) an amount equal
               to such excess and the Purchase Price shall be thereby increased
               by such amount.

                                      -10-
<PAGE>   14

2.9       Following determination of the Capital Employed pursuant to the
          provisions of clause 6, the Buyer shall provide for the transfer by
          CHAPS of an amount in Euro equal to the Deferred Amount to the
          Seller (on behalf of the relevant Vendors) to the bank account of
          the Seller as detailed in clause 5.5(b).

2.10      Any and all sums payable pursuant to clauses 2.6, 2.7, 2.8 and 2.9
          shall be paid (together with interest thereon calculated at the Agreed
          Rate and on a daily basis in respect of the period from Completion to
          the date of actual payment) by electronic transfer for receipt in
          Euro, free of all costs, deductions and charges, to such account as
          the Buyer or, as appropriate the Seller (on behalf of the relevant
          Vendor(s)) shall nominate for this purpose within 5 Business Days of
          the determination of the Intra-Group Debt, Third Party Debt , Cash
          and/or Capital Employed in each case in accordance with clause 6, the
          payment of such sums (before interest) to be treated as :-

          (a)  reducing the Consideration for the Acquisition Shares in the case
               of payments by the Seller (on behalf of the relevant Vendor(s))
               to the Buyer pursuant to clauses 2.6(a) and/or 2.8(a) only; and

          (b)  increasing the Consideration for the Acquisition Shares in the
               case of payments by the Buyer to the Seller (on behalf of the
               relevant Vendor(s)) pursuant to clauses 2.6(b) and/or 2.8(b)
               only.

3.        CONDITIONS

3.1       Completion is conditional upon the fulfilment of each of the
          Conditions as follows:-

          (a)  the Seller obtaining all necessary shareholder approvals for the
               sale of the Target Group;

          (b)  all filings having been made and all or any applicable waiting
               and other time periods (including extensions thereto) under the
               United States Hart-Scott-Rodino Antitrust Improvements Act of
               1976 (as amended) and the regulations thereunder having expired,
               lapsed or been terminated as appropriate in respect of the
               purchase of the Acquisition Shares by the Buyer;

          (c)  the Buyer having received written confirmation from the German
               Cartel Office that the purchase of the Acquisition Shares does
               not constitute a concentration requiring to be notified to such
               office or that, requiring to be so notified, the German Cartel
               Office has decided not to oppose it.

3.2       The Buyer may by notice in writing to the Seller waive any of the
          Conditions contained in paragraphs (b) and (c) of clause 3.1 in whole
          or in part.

3.3       The Seller undertakes to, and will procure that each Vendor will (if
          applicable), use all reasonable endeavours to procure the fulfilment
          of the Conditions set out in paragraphs (a) and (b) of clause 3.1 and
          the Buyer undertakes to use all reasonable endeavours to procure the
          fulfilment of the Conditions set out in paragraphs (b) and (c) of
          clause 3.1;

                                      -11-
<PAGE>   15

3.4       If all of the Conditions (save for those compliance with which has
          been waived in accordance with the terms of this agreement) have not
          been fulfilled on or before the date three months from the date of
          this agreement, this agreement will terminate with effect from that
          date (the "LONG STOP DATE").

3.5       The Seller shall keep the Buyer advised of the progress towards the
          satisfaction of its obligations under clause 3.3 and disclose matters
          of which it becomes aware which will or may prevent any of the
          Conditions from being satisfied (and vice versa).

3.6       If this agreement terminates in accordance with clause 3.4 then the
          obligations of the parties shall automatically terminate save that the
          rights and liabilities of the parties which have accrued prior to
          termination shall continue to subsist including those under clauses
          16, 17 and 21 to 27 (inclusive).

4.       PERIOD TO COMPLETION

4.1       The Seller shall, in addition to and without limiting its obligation
          under clause 4.2, procure that from the date of this agreement until
          Completion:

          (a)  the business of the Target Group Companies is carried on in the
               usual and normal course;

          (b)  the Target Group Companies take all reasonable steps to preserve
               the goodwill of their respective businesses and continue to deal
               with the same in the ordinary course of business and shall do
               nothing which will or would be likely to injure such goodwill;
               and

          (c)  none of the Target Group Companies shall enter into any contract
               or commitment or do anything which, in any such case, is either
               out of the ordinary and usual course of its business or of a
               material nature in the context of the Target Group taken as a
               whole without the prior consent in writing of the Buyer. In
               particular, but without limiting the foregoing, the Seller shall
               procure that from the date of this agreement until Completion,
               save with the prior consent in writing of the Buyer (such consent
               not to be unreasonably withheld), none of the Target Group
               Companies shall:

              (i)    make any alteration to its memorandum or articles of
                     association or any other document or agreement
                     establishing, evidencing or relating to its constitution;
                     or

              (ii)   alter the nature or scope of its business or operations in
                     any material respect; or

              (iii)  manage its business otherwise than in accordance with its
                     business and trading policies and practice currently
                     carried on, except as may be necessary to comply with any
                     legislative changes; or

              (iv)   enter into any agreement or arrangement or permit any
                     action whereby another company becomes its subsidiary or
                     subsidiary undertaking; or

                                      -12-
<PAGE>   16

              (v)    enter into any transaction other than on arms' length terms
                     and for full and proper consideration; or

              (vi)   acquire (whether by one transaction or by a series of
                     transactions) the whole or a substantial or material part
                     of the business, undertaking or assets of any other person;
                     or

              (vii)  dispose of (whether by one transaction or by a series of
                     transaction and whether or not in the ordinary course of
                     business) the whole or any substantial or material part of
                     its business, undertaking or (except in the ordinary course
                     of business) any other of its assets (save as disclosed in
                     the Disclosure Letter); or

              (viii) incur or agree to incur any capital expenditure in excess
                     of (Euro) 100,000 (other than capital expenditure committed
                     and/or forecast as set out in the Disclosure Letter); or

              (ix)   other than in the ordinary course of business and/or
                     pursuant to existing funding arrangements take any loans,
                     borrowings or other form of funding or financial facility
                     or assistance, or enter into any foreign exchange
                     contracts, interest rate swaps, collars, guarantees or
                     agreements or other interest rate instruments or any
                     contracts or arrangements relating to derivatives or
                     differences, or in respect of which the financial outcome
                     is to any extent dependent upon future movements in an
                     index or rate of currency exchange or interest, or in the
                     price of any securities or commodities ; or

              (x)    grant any loans or other financial facilities or assistance
                     to or any guarantees or indemnities for the benefit of any
                     person or create or allow to subsist any mortgage, charge
                     or other Encumbrance over the whole or any part of its
                     undertaking, property or assets (other than any disclosed
                     in the Disclosure Letter or pursuant to an extension of the
                     time period allowed for payment by creditors in respect of
                     sums due in the normal course of business); or

              (xi)   enter into any joint venture, partnership or agreement or
                     arrangement for the sharing of profits or assets outside
                     the ordinary course of business currently carried on; or

              (xii)  enter into any new death, retirement, profit sharing,
                     bonus, share option, share incentive or other scheme for
                     the benefit of any of its officers or employees or make any
                     variation (including, but without limitation, any increase
                     in the rates of contribution) to any such existing scheme
                     or effect any key man insurance (but allowing new members
                     to be added to any existing schemes); or

              (xiii) commence, compromise or discontinue any legal or
                     arbitration proceedings having a value of more than
                     (Euro) 150,000 (other than routine debt collection and/or
                     as set out in the Disclosure Letter); or

              (xiv)  prematurely repay or prepay any loan, borrowings or other
                     financial facilities or assistance made available to it
                     having a value of more than (Euro) 200,000 (other than as
                     set out in the Disclosure Letter); or

                                      -13-
<PAGE>   17

              (xv)    terminate the employment or office of any of its
                      directors, officers, consultants or Senior Executives or
                      appoint any new director, officer or senior employee or
                      consultant or materially alter the terms of employment or
                      engagement of any director, senior employee or consultant
                      with a salary of (Euro) 150,000 or more (other than as
                      set out in the Disclosure Letter); or

              (xvi)   declare, make or pay any dividend or distribution (whether
                      of capital or of profits) other than as set out in the
                      Disclosure Letter; or

              (xvii)  make or permit any material amendment, variation,
                      deletion, addition, renewal or extension to or of, or
                      terminate or give any notice or intimation of termination
                      of, any material contract or arrangement or breach or fail
                      to comply with the terms of any contract or arrangement
                      which is material in the context of the Target Group taken
                      as a whole; or

              (xviii) (other than in the course of conducting the business as
                      currently operated) pay any remuneration, fee or other sum
                      to any Vendor, any person connected with or controlled by
                      any of the Vendors (other than remuneration properly
                      accrued due or reimbursement of business expenses properly
                      incurred, in each case as disclosed in the Disclosure
                      Letter or of a value of (Euro) 150,000 or less, or as
                      disclosed in the Disclosure Letter); or

              (xix)   enter into any agreement relating to or create any
                      encumbrance or third party rights over any of the
                      Properties or any rights appurtenant to any of them; or

              (xx)    grant any right, title or interest in or to the Business
                      IP; or

              (xxi)   maintain and pay all renewal fees in respect of any
                      registered business IP; or

              (xxii)  enter into any agreement or obligation to do anything
                      prohibited by clauses 4.1(c)(i) to 4.1(c)(xxi) inclusive.

4.2       From the date of this agreement the Buyer may nominate senior
          executives (identified by name and agreed by the Seller, such
          agreement not to be unreasonably withheld or delayed) to be permitted
          access, upon reasonable notice, to Senior Executives who will consider
          reasonable requests for access by the approved nominated senior
          executives to the personnel, premises, books and records of the Target
          Group (including, without prejudice to the generality of the
          foregoing, to Business IP and information technology information,
          books and records) and the Seller shall supply or procure the supply
          of information reasonably required by the Buyer relating to the Target
          Group provided that the Purchaser shall give reasonable notice of any
          such required access and information and shall provide such
          confidentiality undertakings as the Seller shall reasonably require.

4.3       For the avoidance of doubt none of the parties shall subject to clause
          4.4 have any right to rescind or terminate this agreement or any other
          Transaction Document for breach of contract (save in respect of any
          right to rescind in respect of fraudulent statements or fraudulent
          concealment made by, or carried out by, any of the parties or their
          Related Persons).

                                      -14-
<PAGE>   18

4.4       If the Seller is in material breach of any of the Warranties (or would
          be if they were to be repeated at Completion) or of any obligation in
          clause 4.1 and such a breach would have a material adverse effect on
          the value of the business of the Target Group taken as a whole, which
          in any such case is incapable of remedy or, if capable of remedy, is
          not remedied by the Seller by the Completion Date or (if earlier)
          within seven days after notice thereof from the Buyer requiring the
          same to be remedied then in any such case only the sole remedy of the
          Buyer shall be to elect by notice in writing to the Seller not to
          complete the purchase of the Acquisition Shares and this agreement
          shall automatically terminate save that the rights and liabilities of
          the parties under clauses 12, 13 and 17 to 23 (inclusive) only shall
          continue to subsist.

4.5       The Seller and the Buyer hereby undertake to use their respective best
          endeavours to comply with all applicable employee representative body
          consultation processes as are required by French law in relation to
          those Target Group Companies which are incorporated in France (the
          "FRENCH COMPANIES") and the Seller and the Buyer shall work together
          with a view to ensuring that all requisite information is provided to,
          and that all necessary meetings are held with, the Works Council of
          each of the French Companies (the "WORKS COUNCILS") to enable each of
          the Works Councils to express their opinions (the "WORKS COUNCILS
          OPINIONS") on this transaction insofar as it affects the French
          Companies as required by French law as soon as practicable after the
          date hereof.

4.6       The Seller shall procure that each of the Vendors as soon as
          reasonably practicable discloses in writing to the Buyer any matter or
          thing which becomes known to the each of the Vendors up to the date
          hereof and before Completion which is inconsistent with any of the
          Warranties in any material respect or which would make any of them
          inaccurate or misleading in any material respect if they were given at
          any and all times from the date hereof down to Completion.

4.7       The Buyer undertakes to co-operate with the reasonable requests of the
          Seller or any member of the Seller's Group in connection with the
          relevant employee consultation process required as a result of this
          agreement, including the provision of information to any relevant work
          council or employee representative body.

4.8

          (a)  To the extent that the Excluded Properties are sold by the
               relevant Target Group Company between the date hereof and the
               Completion Date the net proceeds of any such sale (after allowing
               for deduction of all applicable taxes and costs incurred in
               connection with the sale(s)) will be paid to the Seller's Group
               to the bank account set out in clause 5.5(b) (on behalf of the
               relevant Vendor) and the Buyer hereby confirms it has no right to
               any such sale proceeds and that the Seller or any member of the
               Seller's Group may take such reasonable action as it wishes in
               respect of the sale of the Excluded Properties between the date
               hereof and Completion, so long as such action does not (other
               than by imposing an obligation to transfer the relevant Excluded
               Property) result in the relevant Target Group Company having any
               liability or obligations beyond this which exist as at the date
               hereof.

          (b)  If the Excluded Properties have not been sold by the Completion
               Date then the Buyer hereby agrees to procure the appointment of
               the Seller (or any member of the Seller's Group chosen by the
               Seller) as the agent of the relevant Target Group Company to
               procure the sale of the Excluded Properties on such terms as the
               Seller (or any

                                      -15-
<PAGE>   19

               member of the Seller's Group) shall obtain, and on the basis that
               the net proceeds of any such sale(s) (after allowing for
               deduction of all applicable taxes and costs incurred in
               connection with the sale(s)) shall be paid to the Seller (on
               behalf of the relevant Vendor(s)) as an adjustment to the
               Consideration. The Buyer hereby agrees to procure that the Seller
               (or any member of the Seller's Group) is given reasonable access
               to the Excluded Properties and to the management of the Target
               Group Company in order to facilitate the sale(s) and to procure
               that the Target Group Company (and its members and/or directors
               and officers) will sign such documentation and take such action
               as is reasonably required by the Seller (or any member of the
               Seller's Group) in order to sell the Excluded Properties.

          (c)  Subject to paragraphs 2(c), 2.2, 2.3 and 2.4 of schedule 4 the
               Seller hereby agrees to indemnify and hold harmless the Buyer and
               each relevant Target Group Company (and any member of the Buyer's
               Group) against any and all costs (including without limitation,
               legal costs, and registration or administration costs or fees)
               liabilities, losses, expenses, taxes, outgoings and claims of any
               nature incurred by it or its duly authorised agent which for the
               avoidance of doubt shall include any of the foregoing resulting
               from Environmental Matters arising out of the Excluded Properties
               and/or the Former Properties or relating to them or the sale or
               disposal save both in respect of any such costs, liabilities,
               losses and expenses which arise as a result of a negligent act or
               omission by the Buyer in its operation and/or occupation of the
               Excluded Properties following Completion or in respect of the
               costs incurred by the Buyer's Group in operating the Excluded
               Properties during the ordinary course of business following
               Completion, (it being agreed nonetheless for the avoidance of
               doubt, that neither the Buyer nor any relevant Target Group
               Company shall have any obligation to continue to occupy, operate
               from, manage or to do any other things in relation to any
               Excluded Property).

4.9       The Buyer acknowledges that the Purchase Price fully takes into
          account a price reduction in relation to any and all Environmental
          Issues and accordingly waives on behalf of itself and the Buyer's
          Group and any member of the Target Group any and all rights against
          the Seller and any member of the Seller's Group under this agreement
          (including for the avoidance of doubt under any of the Warranties) or
          otherwise in respect of Environmental Issues save that for the
          avoidance of doubt nothing shall hereby preclude the Buyer from
          claiming under clause 4.8(c).

4.10      The Seller agrees to use its best endeavours to procure that on or
          before the date five Business Days prior to Completion to the maximum
          extent possible members of the Seller's Group enter into the Set Off
          Agreements.

4.11      The Buyer hereby undertakes and warrants that each member of the
          French Target Group shall remain solvent for a period of at least
          eighteen (18) months following the Completion Date and the Buyer
          agrees to indemnify and keep indemnified the Seller and any member of
          the Seller's Group against any repayment of the Set Off Amount(s)
          (together with all and any costs incurred in connection with any
          repayment) which the Seller or any member of the Seller's Group may be
          required to make by operation of law upon the insolvency or
          liquidation of the relevant member of the French Target Group within
          eighteen months of the Completion Date.

                                      -16-
<PAGE>   20

4.12      Following Completion, in the event that the Buyer requests the Seller
          to claim under any relevant insurance policy of the Seller's Group
          which provided cover in respect of the matter forming the subject
          matter of such claim for the period up to Completion, then the Seller
          shall use all reasonable endeavours to pursue such claim in full
          against the relevant policy and upon receipt of any payment from its
          insurers to forthwith pay the amount of such payment (less all
          reasonable costs and expenses incurred in making such claim) to the
          Buyer.

4.13      The parties hereby acknowledge that the terms of the Set Off
          Agreements provide that Draftex SA is and will be the owner of the
          Snappon Receivables, Slic Corvol Receivables and Slic Gruchet
          Receivables as defined in the Set Off Agreements (the "French Target
          Group Receivables") up to a total amount equivalent to the Set Off
          Amounts.

          In the event that any of the French Target Group Receivables have not
          been received by Draftex SA by the due date for payment thereof in
          accordance with past practices (such amount being hereinafter referred
          to as the "Unpaid Receivable") then the Buyer shall or shall procure
          that on a weekly basis the relevant French Target Group Company shall
          forthwith purchase the Unpaid Receivable from Draftex SA and pay
          Draftex SA in cash the full amount of the Unpaid Receivable and if,
          following any such payment, Draftex SA shall subsequently receive
          payment of any Unpaid Receivable from any customer then the Seller
          shall procure Draftex SA to forthwith pay such amount to the relevant
          French Target Group Company.

5.        COMPLETION

5.1       Completion shall take place at the offices of the Buyer's Solicitors:

          (a)  on a date to be mutually agreed by the Seller and the Buyer; and

          (b)  failing such agreement on the date of the Target Group's
               accounting period end date immediately following the date when
               the Works Councils Opinions (as defined in clause 4.5) have been
               expressed (or the parties have agreed (each acting reasonably)
               that all information reasonably necessary to allow the Works
               Councils to give the Works Councils Opinions has been provided
               and the Works Councils have been given all reasonable opportunity
               to give their opinions) and all of the Conditions shall have been
               fulfilled or waived (the "SATISFACTION DATE") (provided that
               there are at least three clear Business Days between the
               Satisfaction Date and the date of the Target Group's accounting
               period end date).

5.2       On Completion the Seller shall deliver to, or procure the delivery by
          the relevant Vendor, or, if the Buyer shall so agree, make available
          to the Buyer:-

          (a)  transfers in common form relating to all the Acquisition Shares
               duly executed by the registered holders thereof in favour of the
               Buyer (or as it may direct) and

               (i)  the written resolutions of the sole participants of the
                    Czech Company authorising the transfer of 100% of the
                    ownership interests therein to the Buyer duly executed
                    before a Czech notary public;

                                      -17-
<PAGE>   21

              (ii)   the Ownership Interest Transfer Agreement, duly executed
                     before a Czech notary public by or on behalf of the sole
                     participants of the Czech Company; and

              (iii)  a deed duly executed by Draftex Industries Limited and
                     Draftex Industries No. 1 Limited before a notary pursuant
                     to which Draftex Industries Limited and Draftex Industries
                     No. 1 Limited irrevocably transfer their entire
                     shareholding in Draftex Beteiligungsgesellschaft mbH to a
                     member of the Buyer's Group nominated by the Buyer and a
                     unanimous resolution of the shareholders' meeting of
                     Draftex Beteiligungsgesellschaft mbH authorising the
                     transfer of the shares to the member of the Buyer's Group
                     nominated by the Buyer; and

              in relation to the Acquisition Shares of the French Target Group,
              only:

              (iv)   original share transfer forms (ordres de mouvement) of the
                     French Target Group Company dated as of the Completion Date
                     and duly signed by the registered owners thereof in favour
                     of the Buyer or as the latter may direct;

              (v)    share transfer registers and shareholders' accounts for
                     each French Target Group Company (written up to but not
                     including Completion), showing the Vendor as the owner of
                     all of each French Target Group Company's shares and
                     containing no indication of the existence of any
                     Encumbrances over or in respect of any of the French Target
                     Group Company's Shares;

              (vi)   records of proceedings of the board of directors of each of
                     the French Target Group Companies and the minutes of
                     general meetings of each of the French Target Group
                     Companies, together with the attendance registers for
                     meetings of the board of directors and the attendance
                     sheets for the general meetings of the shareholders of each
                     such company as are in the possession of the French Target
                     Group Companies;

              (vii)  resignations in agreed terms from each of the members of
                     the board of the French Target Group Company retiring from
                     office with effect from Completion and confirming that they
                     have no claim against the French Target Group Company for
                     compensation; and

              (viii) resolutions of a general meeting of the shareholders of
                     each French Target Group Company appointing such persons as
                     the Buyer shall nominate as members of the board of the
                     French Target Group Company and copies of certified as true
                     and complete minutes of such general meetings by the
                     chairman of the meeting; and

              (ix)   (if applicable) provide a certified copy of the minutes of
                     the EGM held by Snappon SA to adopt new Articles to permit
                     the free transfer of any Snappon Director's shares in
                     Snappon SA.

          (b)  share certificates relating to the Acquisition Shares;

                                      -18-
<PAGE>   22

          (c)  any waivers or consents by members of any Target Group Company or
               other persons which the Buyer has specified prior to Completion
               in the agreed terms so as to enable the Buyer or its nominees to
               be registered as the holders of the Acquisition Shares;

          (d)  resignations duly executed as deeds of such of the directors and
               the secretary of any Target Group Company as the Buyer shall
               request in writing from their offices as director or secretary of
               any Target Group Company containing a confirmation that they have
               no claims (whether statutory, contractual or otherwise) against
               any Target Group Company for compensation for loss of office
               together with delivery to the Buyer of all property of any Target
               Group Company in their possession or under their control;

          (e)  the written resignations of the auditors of each Target Group
               Company;

          (f)  the common seals, certificates of incorporation and statutory
               books, share certificate books and cheque books of each Target
               Group Company;

          (g)  the Tax Deed duly executed by the Seller; and

          (h)  counterparts of each of the required Intellectual Property
               Assignments duly executed by the relevant assignor in each
               instance;

          (i)  a counterpart of the Intellectual Property Deed duly executed by
               the Seller;

          (j)  a counterpart of the IT Transitional Services Procurement
               Agreement duly executed by Draftex S.A;

          (k)  counterparts of the Supply Agreements duly executed by the
               relevant member of the Seller's Group;

          (l)  powers of attorney in the customary form for each relevant
               jurisdiction;

          (m)  a deed duly executed before a German notary pursuant to which
               Jurgen Hartman irrevocably transfers his entire shareholding in
               Draftex Verwaltungs GmbH to Draftex Beiteilligungsgesellschaft
               mbH and a unanimous resolution of the shareholders' meeting of
               Draftex Verwaltungsgesellschaft mbH authorising the transfer of
               the shares to a member of the Buyer's Group nominated by the
               Buyer;

          (n)  a deed duly executed before a notary pursuant to which Martin
               Kellett irrevocably transfers his entire shareholding in Draftex
               International European Technical Centre GmbH to a member of the
               Buyer's Group nominated by the Buyer and a unanimous resolution
               of the shareholders' meeting of Draftex International European
               Technical Centre GmbH authorising the transfer of the shares to a
               member of the Buyer's Group nominated by the Buyer; and

          (o)  licences with respect to the Third Party Software and the Atos
               Software (provided however that the Seller does not undertake to
               procure the delivery of or make available to the Buyer a licence
               in the terms of clause 2.3 of the IT Transitional Services
               Procurement Agreement for any Atos Software which is not software
               owned by the Seller or the Seller's Group).

                                      -19-
<PAGE>   23

5.3       At or prior to Completion (and prior to the taking effect of the
          resignations of the directors referred to in clause 5.2(d) above) the
          Seller shall procure the passing of board resolutions (and/or passing
          of shareholder resolutions where relevant) of each relevant Target
          Group Company (where appropriate) under relevant local laws :-

          (a)  sanctioning for registration (subject where necessary to due
               stamping) the transfers in respect of the Acquisition Shares and
               any shares to which clause 5.2 refers;

          (b)  authorising the delivery to the Buyer of share certificates in
               respect of the Acquisition Shares;

          (c)  appointing such persons as are nominated by the Buyer to be the
               directors and secretary of each Target Group Company (if
               applicable);

          (d)  tendering and accepting the resignations and acknowledgements of
               the directors and secretary referred to in clause 5.2(d);

          (e)  tendering and accepting the resignation of the auditors and
               appointing auditors nominated by the Buyer as new auditors of
               each of the Target Group Companies.

5.4       As soon as practicable following Completion (and in any event within 3
          months of Completion), the Seller shall procure the passing of board
          resolutions and special resolutions of any member of the Seller's
          Group which bear or include the name "Draftex" in their corporate
          name, changing their corporate name so that it does not include or
          bear the "Draftex" name.

5.5       Upon compliance by the Seller with the provisions of clauses 5.2, and
          5.3 the Buyer shall:-

          (a)  In relation to the Czech Company

               (i)  deliver to the Seller the counterparts of the Ownership
                    Interest Transfer Agreement, duly executed by or on behalf
                    of the Buyer before a notary public;

               (ii) deliver to the Seller the written resolutions of the Buyer
                    as the new sole participant in the Czech Company resolving
                    (a) to remove the current executives and replace them with
                    new executives and (b) in notarial deed form amending the
                    current Czech Company Memoranda of Association to change the
                    name of the Czech Company removing "Draftex" therefrom; and

               (iii) deliver petitions to the relevant Czech court reflecting
                    the transfer of the ownership interests in the Czech Company
                    duly signed on behalf of the Czech Company.

          (b)  provide for the transfer by CHAPS of an amount in Euro equal
               to the Estimated Consideration less the Deferred Amount to the
               Seller's Account (the Seller receiving such transfer as agent
               for the Vendors) at HSBC Bank plc, of 27-32 Poultry,
               London EC2P 2BX, Sort Code 40-05-15, Account No. 39117105;

                                      -20-
<PAGE>   24

          (c)  in respect of Intra-Group Debt provide on behalf of the relevant
               member(s) of the Target Group for the transfer by CHAPS of an
               amount in Euro equal to the Estimated Intra-Group Debt to the
               Seller's Account (the Seller receiving such transfer on behalf
               the relevant member of the Seller's Group) at HSBC Bank plc, of
               27-32 Poultry, London EC2P 2BX, Sort Code 40-05-15, Account No.
               39117105;

          (d)  deliver to the Seller a counterpart of the Tax Deed duly executed
               by the Buyer;

          (e)  deliver to the Seller a counterpart of the Intellectual Property
               Deed duly executed by the Buyer;

          (f)  a counterpart of the IT Transitional Services Procurement
               Agreement duly executed by the Buyer; and

          (g)  counterparts of the Supply Agreements duly executed by the
               relevant member of the Target Group.

5.6       The Seller acknowledges that, immediately following Completion until
          such time as the transfer(s) of the Acquisition Shares (and the
          transfers of the entire issued share capital of each of Draftex
          International European Technical Centre GmbH and Draftex
          Verwaltungsgesellschaft mbH) have been registered in the register of
          members of the relevant Target Group Company, the Seller or a member
          of the Seller's Group will hold those Acquisition Shares (and those
          shares in the share capital of each of Draftex International European
          Technical Centre GmbH and Draftex Verwaltungsgesellschaft mbH)
          registered in its name on trust for and as nominee for the Buyer or
          its nominees and undertakes to hold all dividends and distributions
          and exercise all voting rights available in respect of those shares in
          accordance with the directions of the Buyer or its nominees and if the
          Seller is in breach of the undertakings contained in this clause the
          Seller irrevocably authorises the Buyer to appoint some person or
          persons as its attorney to execute all instruments or proxies
          (including consents to short notice) or other documents which the
          Buyer or its nominees may reasonably require and which may be
          necessary to enable the Buyer or its nominees to attend and vote at
          general meetings of the relevant Target Group Company and to do any
          thing or things necessary to give effect to the rights contained in
          this clause.

5.7       At or prior to Completion, the Seller shall procure that all Tax
          sharing agreements and arrangements to which a Target Group Company is
          party shall be terminated or, to the extent not so terminated, that
          the relevant Target Group Company (or Companies as the case may be)
          shall with effect from Completion cease to be party to and/or liable
          in respect of any such agreements or arrangements.

5.8       Notwithstanding any other provision of this clause 5:

          (a)  if the Seller is unable to deliver to the Buyer on the Completion
               Date any immaterial item (as reasonably determined by the Buyer)
               required to be delivered to the terms of this clause 5, then at
               the Buyer's option: (1) the parties can proceed to Completion
               against the provision of appropriate assurances and/or
               undertakings in a form reasonably satisfactory to the Buyer; or
               (2) Completion shall be deferred to a date not more than 15
               Business Days after the Completion Date (and so that the
               provisions of this clause 5.8, apart from this clause 5.8(a),
               shall apply to Completion as so

                                      -21-
<PAGE>   25

               deferred) by means of a notice to that effect in writing served
               by the Buyer on the Seller;

          (b)  if the Buyer is unable to deliver to the Seller on the Completion
               Date any immaterial item (as reasonably determined by the Seller)
               required to be delivered to the terms of this clause 5, then at
               the Seller's option: (1) the parties can proceed to Completion
               against the provision of appropriate assurances and/or
               undertakings in a form reasonably satisfactory to the Seller; or
               (2) Completion shall be deferred to a date not more than 15
               Business Days after the Completion Date (and so that the
               provisions of this clause 5.8, apart from this clause 5.8(b),
               shall apply to Completion as so deferred) by means of a notice to
               that effect in writing served by the Seller on the Buyer.

5.9       If Completion has not occurred by the Long Stop Date, this agreement
          shall automatically terminate save that the rights and liabilities of
          the parties under clauses 12, 13 and 17 to 23 (inclusive) only shall
          continue to subsist.

6.        CAPITAL EMPLOYED AND COMPLETION ACCOUNTS

6.1       The Buyer and the Seller shall use all reasonable endeavours to
          procure that, promptly after Completion, Completion Accounts together
          with the statement (the "STATEMENT") of the Capital Employed, Cash,
          Intra-Group Debt and Third Party Debt as at Completion, are prepared
          in accordance with the provisions of this clause 6. The Completion
          Accounts shall be prepared on the basis of the Accounting Policies and
          procedures set out in schedule 8.

6.2       The Buyer shall:-

          (a)  as soon as practicable, and in any event within 30 Business Days
               after Completion, procure that each of the Target Group Companies
               undertakes a stocktake and valuation of its stock as at the
               Completion Date. The Seller shall be entitled to have its
               representative present at each stocktake and valuation; and

          (b)  arrange for the Completion Accounts and the Statement to be
               prepared by the Buyer in conjunction with each Target Group
               Company with a view to such draft Completion Accounts and
               Statement being delivered to the Seller within 45 Business Days
               of Completion.

6.3       The Seller shall notify the Buyer within 30 Business Days of receipt
          of such draft Completion Accounts and the Statement whether or not it
          accepts them for the purposes of this agreement.

6.4       If the Seller notifies the Buyer that it does not accept such draft
          Completion Accounts and the Statement:-

          (a)  it shall, at the same time, set out in a notice in writing its
               reasons for such non-acceptance and specify the adjustments
               which, in its opinion, should be made to the draft Completion
               Accounts and the Statement in order to comply with the
               requirements of this agreement and deliver a copy of such notice
               to the Buyer; and

                                      -22-
<PAGE>   26

          (b)  the parties shall use all reasonable endeavours to meet and
               discuss the objections of the Seller and to reach agreement upon
               the adjustments (if any) required to be made to the draft
               Completion Accounts and the Statement within 30 Business Days of
               delivery of the notice referred to in (a) above. In the event
               that agreement on some (or all) of the adjustments cannot be
               reached, the parties shall produce within a further period of 10
               Business Days, a list of disputed items (the "MATTERS IN
               DISPUTE") which for the avoidance of doubt shall be limited to
               items which were notified to the Seller under clause 6.4(a).

6.5       If the Seller is satisfied with the draft Completion Accounts and the
          Statement (either as originally submitted or after adjustments agreed
          between the Seller and the Buyer) or if the Seller fails to notify the
          Buyer of its non-acceptance of the draft Completion Accounts and the
          Statement giving reasons for such non-acceptance within the 30
          Business Day period referred to in clause 6.3, then the draft
          Completion Accounts and the Statement (incorporating any agreed
          adjustments) shall constitute the Final Completion Accounts and the
          Statement for the purposes of this agreement which shall be final and
          binding on the parties.

6.6       If the Seller and the Buyer do not reach agreement within 30 Business
          Days of the Seller's notice of non-acceptance pursuant to clause 6.4
          then the Matters in Dispute and only those shall be referred, on the
          application of either party, for determination by an appropriately
          qualified partner of KPMG or, if KPMG is unable or unwilling to act,
          by an appropriately qualified partner at an internationally recognised
          firm of chartered accountants to be agreed upon by the Seller and the
          Buyer or, failing agreement, to be selected, on the application of
          either party, by the President for the time being of the Institute of
          Chartered Accountants in England and Wales or his duly appointed
          deputy (the "INDEPENDENT ACCOUNTANT"). The Seller and the Buyer shall
          use all reasonable endeavours to agree with the Independent Accountant
          the precise terms of reference to apply to his role hereunder within
          10 Business Days of his appointment. The following provisions shall
          apply to the Independent Accountant's role in any event:-

          (a)  the Buyer and/or the Buyer's accountants and the Seller and/or
               the Seller's accountants shall each promptly prepare a written
               statement setting out their respective positions on the Matters
               in Dispute ("OPENING SUBMISSIONS") and shall, within 15 Business
               Days of the appointment of the Independent Accountant, submit to
               him their respective Opening Submissions (together with any
               necessary and relevant supporting documentation). At the same
               time, the Buyer and the Seller (or their respective accountants)
               shall deliver to the other party (for their respective
               accountants) a copy of their Opening Submissions and supporting
               documentation, in the same form as that submitted to the
               Independent Accountant;

          (b)  within 30 Business Days following the completion of (a) above,
               the Seller and the Buyer shall each be entitled to comment in
               writing upon the Opening Submissions and documentation submitted
               by the other party ("SUBMISSIONS IN REPLY"). Such Submissions in
               Reply should be addressed and delivered to the Independent
               Accountant, with a copy being simultaneously delivered to the
               other party or its accountants;

          (c)  in giving his determination, which the Independent Accountant
               shall use his best endeavours to deliver simultaneously to each
               of the parties not later than 30 Business

                                      -23-
<PAGE>   27

               Days after submission to him of the Submissions in Reply referred
               to above, the Independent Accountant shall state in writing what
               adjustments (if any) are necessary to be made to the draft
               Completion Accounts and the Statement in respect of the Matters
               in Dispute in order to comply with the requirements of this
               agreement and to determine finally the Completion Accounts and
               the Statement;

          (d)  the Independent Accountant shall act as an expert (and not as an
               arbitrator) in making any such determination, which shall be
               final and binding on the parties (in the absence of manifest
               error);

          (e)  the Seller and the Buyer expressly waive, to the extent permitted
               by law, any rights of recourse to the courts they may otherwise
               have to challenge the Independent Accountant's determination
               hereunder;

          (f)  although each party shall initially bear the costs and expenses
               of all counsel and other advisers, witnesses and employees
               retained by it, as well as 50% of any interim invoices rendered
               by the Independent Accountant, ultimate liability for all such
               costs and expenses shall be apportioned between the Buyer and the
               Seller at the absolute discretion of the Independent Accountant
               who will, when determining this issue, have regard to the outcome
               of his determination and the manner in which the parties have
               conducted themselves and co-operated with the provisions of this
               clause 6. If, for any reason, the Independent Accountant fails to
               make a determination on this issue, the costs and expenses of the
               Independent Accountant shall be borne equally as between the
               Seller and the Buyer and each of the Seller and the Buyer shall
               bear its own costs and expenses incurred hereunder.

6.7       When the Seller and the Buyer reach (or pursuant to clause 6.6 are
          deemed to reach) agreement on the Completion Accounts and the
          Statement or when the Completion Accounts and the Statement are
          finally determined at any stage in accordance with the procedures set
          out in this clause 6:-

          (a)  the Completion Accounts and the Statement as so agreed or
               determined shall be the Completion Accounts and the Statement for
               the purposes of this agreement and shall be final and binding on
               the parties; and

          (b)  the Capital Employed and the Cash, Intra-Group Debt and Third
               Party Debt as at the Completion Date shall be as set out in the
               Statement.

6.8       Subject to any rule of law or any regulatory body or any provision of
          any contract or arrangement entered into prior to the date of this
          agreement to the contrary, the Buyer shall procure that the Target
          Group shall, promptly provide the Seller, its advisers, and the
          Independent Accountant and the Seller's accountants with all
          information (in their respective possession or control) relating to
          the operations of the Target Group, as the case may be, including
          access at all reasonable times on Business Days to all Target Group
          employees, books and records, and all co-operation and assistance, as
          may in any such case be reasonably necessary to:-

          (a)  enable the production of the Completion Accounts and the
               Statement; and

          (b)  enable the Independent Accountant to determine the Completion
               Accounts and the Statement.

                                      -24-
<PAGE>   28

          The Buyer hereby authorises the Seller's respective advisers and the
          Independent Accountant (and those members of his firm assisting with
          his determination) to take copies of all information which it has
          agreed to procure to provide under this clause 6.8.

6.9       The Buyer shall not be entitled to set off against any consideration
          otherwise due to the Seller pursuant to this agreement the amount of
          any claims made under this agreement save in accordance with this
          clause 6.

7.        RELEASE

7.1       The Seller shall procure following Completion that each Target Group
          Company (and for the avoidance of doubt, the whole of its Properties
          and assets and undertakings) is released in the agreed terms from any
          guarantee, indemnity, bond, letter of comfort or Encumbrance or other
          similar obligation given or incurred by it which relates in whole or
          in part to debts or other liabilities or obligations, whether actual
          or contingent, of any member of the Seller's Group and shall produce
          evidence of such release following Completion in the form acceptable
          to the Buyer acting reasonably. Prior to such release the Seller shall
          keep each member of the Buyer's Group indemnified against any and all
          liabilities arising under any such guarantee, indemnity, bond letter
          of comfort, Encumbrance or other similar obligation.

7.2       Following Completion the Buyer shall use its best endeavours to
          procure that each member of the Seller's Group (and for the avoidance
          of doubt, the whole of its Properties and assets and undertakings) is
          released from any guarantee, indemnity, bond, letter of comfort or
          Encumbrance or other similar obligation given by it or incurred by it
          which relates in whole or in parts to debts or other liabilities or
          obligations, whether actual or contingent, of any member of the Target
          Group and shall produce evidence of such release following Completion
          in the form acceptable to the Seller acting reasonably. Prior to such
          release the Buyer shall keep each member of the Seller's Group
          indemnified against any and all liabilities arising under any such
          guarantee, indemnity, bond letter of comfort, Encumbrance or other
          similar obligation.

8.        WARRANTIES

8.1       As duly authorised agent on behalf of:-

          (a)  Laird Inc., the Seller warrants to the Buyer (as trustee for the
               Relevant Member) in the terms of the Warranties (as applicable)
               in relation to Draftex Inc.;

          (b)  Draftex Industries Ltd, the Seller warrants to the Buyer (as
               trustee for the Relevant Member) in the terms of the Warranties
               (as applicable) in relation to Draftex Beteiligungsgesellschaft
               mbH ((as to 75 per cent.), Draftex International GmbH & Co KG,
               Draftex - MTech GmbH, Draftex International GmbH, Draftex Optimit
               SRO, Draftex Verwaltgungs GmbH, Draftex International European
               Technical Center GmbH & Co KG and Draftex International European
               Technical Center GmbH and Beijing Wanyuan-Draftex Sealing
               Products Company Limited;

          (c)  Draftex Industries (No. 1) Limited, the Seller warrants to the
               Buyer (as trustee for the Relevant Member) in the terms of the
               Warranties (as applicable) in relation to Draftex
               Beteiligungsgesellschaft mbH (as to 25 per cent.) and Draftex
               International

                                      -25-
<PAGE>   29

               GmbH & Co KG, Draftex - MTech GmbH, Draftex International GmbH,
               Draftex Optimit SRO, Draftex Verwaltgungs GmbH, Draftex
               International European Technical Center GmbH & Co KG and Draftex
               International European Technical Center GmbH and Beijing
               Wanyuan-Draftex Sealing Products Company Limited;

          (d)  Draftex SRO, the Seller warrants to the Buyer (as trustee for the
               Relevant Member)in the terms of the Warranties (as applicable) in
               relation to Draftex International (Pribor) SRO; and

          (e)  Draftex SA, the Seller warrants to the Buyer (as trustee for the
               Relevant Member) in the terms of the Warranties (as applicable)
               in relation to Slic Corvol SA., Slic Gruchet SA., Snappon SA.,
               and Draftex International Iberica SA.

8.2       Each of the Warranties shall be construed as a separate warranty.

8.3       Any claim under the Warranties is subject to the terms and provisions
          of this clause 8 and schedule 4.

8.4       Neither the Seller nor any member of the Seller's Group shall be under
          any liability under the Warranties in relation to any matter forming
          the subject matter of a claim thereunder to the extent that the same
          or circumstances giving rise thereto are fairly disclosed in the
          Disclosure Letter.

8.5       The Buyer warrants to the Seller that (and each such warranty shall be
          construed as a separate warranty):-

          (a)  the execution and delivery of this agreement and the Completion
               of the transactions contemplated hereby, have, where required,
               been duly and validly authorised and no other proceedings or
               action on the part of the Buyer is necessary to authorise the
               agreement or to complete the transactions contemplated; and

          (b)  it has disclosed to the Seller all agreements, arrangements and
               understandings (whether verbal or in writing) between any member
               of the Buyer's Group and any director, employee, contractor or
               agent of any member of the Target Group.

8.6       Any payment by a Vendor in satisfaction of a claim for breach of
          Warranty shall be treated as a reduction in the relevant part of the
          consideration payable hereunder (and any such reduction in
          consideration shall either be attributed to those Acquisition Shares
          to which the claim for breach of Warranty relates or as the parties
          may otherwise agree).

9.        PROTECTION OF GOODWILL

9.1       The Seller hereby undertakes to procure that (except as otherwise
          agreed in writing with the Buyer) no member of the Seller's Group will
          either solely or jointly with any other person (either on its own
          account or as the agent of any other person):-

          (a)  for a period of 2 years from Completion carry on or be engaged or
               concerned (except as the holder of shares in a listed company
               which confer not more than five per cent. of the votes which can
               generally be cast at a general meeting of the company) interested
               directly or indirectly in a business which competes with the type
               of

                                      -26-
<PAGE>   30

               business carried on by any member of the Target Group at
               Completion in the countries and industries where any Target Group
               Company operates;

          (b)  for a period of 2 years from Completion induce, solicit or
               endeavour to entice to leave the service or employment of any
               member of the Target Group, any person who during the period of
               12 months prior to Completion was a consultant or an employee of
               any member of the Target Group occupying a senior or managerial
               position (a "MANAGER") likely (in the opinion of the Buyer) to
               be:-

               (i)  in possession of confidential information relating to; or

               (ii) able to influence the customer relationships or connections
                    of

               any member of the Target Group; or

          (c)  for a period of two years from Completion solicit or entice the
               custom of any person in respect of existing goods or services
               manufactured or supplied by any member of the Target Group
               immediately prior to Completion, such person having been a
               customer of the Target Group in respect of such goods or services
               during such period; or

          (d)  for a period of two years from Completion solicit or entice the
               custom of any person in respect of existing goods or services
               manufactured or supplied to any member of the Target Group
               immediately prior to Completion, such person having been a
               supplier of the Target Group in respect of such goods or services
               during such period; or

          (e)  use or attempt to use any trade or domain name, trade or service
               mark, design or logo or e-mail address used by any member of the
               Target Group at any time during the 2 years immediately preceding
               the date of this agreement or any other name intended or likely
               to be confused with any such trade or domain name, or trade or
               service mark, design or logo or e-mail address.

9.2       Nothing in clause 9 shall prevent or restrict any member of the
          Seller's Group from:-

          (a)  carrying on or being engaged in or economically interested in any
               business which, at the date of this agreement, it currently
               carries on or is engaged in or economically interested in or any
               reasonable extension or development thereof (other than the car
               body seals businesses as operated by the Target Group immediately
               preceding the date of this agreement and being sold hereunder);

          (b)  carrying on or being engaged in or economically interested in any
               business referred to in clause 9.1(a) after such time as the
               Buyer's Group ceases to carry on or be engaged in or economically
               interested in such business to any material extent;

          (c)  being the holder of shares (conferring not more than five per
               cent. of the votes which would normally be cast at a general
               meeting of that company) or debentures of a company which is
               engaged in any business referred to in clause 9.1(a);

                                      -27-
<PAGE>   31

          (d)  acquiring the whole or any part of a business which, or the share
               capital of a company or group of companies whose business or a
               part of whose business, includes operations the carrying on of
               which would otherwise amount to a breach of the undertaking
               contained in clause 9.1 (the "COMPETITIVE OPERATIONS"), as part
               of a larger acquisition or series of related acquisitions if the
               Competitive Operations comprise a minor part of the business or
               the business of such company, group of companies or businesses
               acquired or in which the Seller's Group has acquired an interest
               and for the purpose of this clause 13.2 a "MINOR PART" of the
               business of such company, group of companies or business shall be
               part of its overall business in which the turnover of the
               Competitive Operations does not exceed 10 per cent. of the gross
               turnover of the company, group of companies or business acquired;
               and

          (e)  generally soliciting to the public for employment with the
               Seller's Group and to which any Managers and Senior Executives
               responded without any other solicitation or prompting and without
               such general solicitation being directed at employees, or any of
               them, of the Buyer's Group or the Target Group.

9.3       The Seller agrees that the undertakings contained in this clause 13
          are reasonable and are entered into for the purpose of protecting the
          goodwill of the business of each member of the Target Group.

9.4       Each undertaking contained in this clause 13 is and shall be construed
          as separate and severable and if one or more of the undertakings is
          held to be against the public interest or unlawful or in any way an
          unreasonable restraint of trade or unenforceable in whole or in part
          for any reason the remaining undertakings or parts thereof, as
          appropriate, shall continue to bind the Seller.

9.5       If any undertaking contained in this clause 13 shall be held to be
          void but would be valid if deleted in part or reduced in application,
          such undertaking shall apply with such deletion or modification as may
          be necessary to make it valid and enforceable which as far as possible
          has the same legal and commercial effect as that which it replaces.
          Without prejudice to the generality of the foregoing, such period (as
          the same may previously have been reduced by virtue of this clause
          9.5) shall take effect as if reduced by six months until the resulting
          period shall be valid and enforceable.

9.6       Nothing in this agreement shall give the Buyer any rights to the names
          "The Laird Group Public Limited Company" or "Laird" or any related or
          similar trade names, trade marks, service marks or logos to the extent
          that the same incorporate the names "The Laird Group Public Limited
          Company" or "Laird" or any confusingly similar variation thereof and
          the Buyer acknowledges that the Seller is and will remain the owner of
          all such names, trade marks, service marks, logos and confusingly
          similar variations thereof.

10.       CONFIDENTIAL INFORMATION

10.1      The Seller shall not and shall procure that no other member of the
          Seller's Group shall use or disclose to any person Confidential
          Information.

10.2      Clause 10.1 does not apply to:-

                                      -28-
<PAGE>   32

          (a)  disclosure of Confidential Information to the Buyer's Group or
               its advisers in the disclosure process including the disclosure
               of the Data Room Information, the Information Memorandum, the
               Vendor Due Diligence Assistance Reports and any information
               relating to any Target Group Company disclosed to the Buyer's
               Group or its adviser during meetings with the management of the
               Target Group or the Seller or at the written request of the
               Buyer;

          (b)  use or disclosure of Confidential Information required to be
               disclosed by law, regulation, any revenue authority or the London
               Stock Exchange, or the UK Listing Authority, or the Unites States
               Securities and Exchange Commission or the New York Stock
               Exchange;

          (c)  disclosure of Confidential Information to professional advisers
               for the purpose of advising the Seller; or

          (d)  Confidential Information which is in the public domain other than
               by the Seller's breach of clause 10.1.

11.       PENSIONS

          On and from Completion the Buyer shall be and become responsible for
          all of the pensions liabilities of the Target Group.

12.       ANNOUNCEMENTS

12.1      Neither party shall disclose the making of this agreement nor its
          terms nor any other agreement referred to in this agreement (except
          those matters set out in the press release in the agreed terms) and
          each party shall procure that each of its Related Persons and its
          professional advisers shall not make any such disclosure without the
          prior consent of the other party unless disclosure is:-

          (a)  to its professional advisers;

          (b)  made to the Independent Accountant (and those members of his firm
               assisting with his determination) pursuant to Clause 6 of this
               agreement; or

          (c)  required by law or the rules or standards of the London Stock
               Exchange, the Listing Rules of the UK Listing Authority, the
               United States Securities and Exchange Commission or the New York
               Stock Exchange or the rules and requirements of any other
               regulatory body including governmental or regulatory authorities
               in the countries where the Target Group is authorised to do
               business and disclosure shall then only be made by that party:-

               (i)  after it has taken all such steps as may be reasonable in
                    the circumstances to agree the contents of such announcement
                    with the other party before making such announcement and
                    provided that any such announcement shall be made only after
                    notice to the other party; and

               (ii) to the person or persons and in the manner required by law
                    or the London Stock Exchange or the UK Listing Authority or
                    of the United States Securities

                                      -29-
<PAGE>   33

                    and Exchange Commission or of the New York Stock Exchange or
                    such other regulatory body or as otherwise agreed between
                    the parties

          provided that this clause 16.1 does not apply to announcements,
          communications or circulars made or sent by the Buyer after Completion
          to customers, clients or suppliers of any Target Group Company to the
          extent that it informs them of the Buyer's acquisition of the
          Acquisition Shares or to any announcements containing only information
          which has become generally available.

12.2      The restrictions contained in clause 16.1 shall apply without limit of
          time and whether or not this agreement is terminated.

13.       COSTS

13.1      Unless expressly otherwise provided in this agreement each of the
          parties shall bear its own legal, accountancy and other costs, charges
          and expenses connected with the sale and purchase of the Acquisition
          Shares.

13.2      The Buyer shall be solely responsible for and shall pay any and all
          sales, excise, transfer, registration, stamp duty or other similar tax
          or fee imposed on any transaction effected pursuant to clause 2.1 save
          only in respect of the fees payable to the public notary in respect of
          the acquisition by the Buyer of the shares of Draftex International
          Iberica SA which fees the Buyer and the Seller agree to share in equal
          proportions.

13.3      The Buyer will indemnify the Seller (and any member of the Seller's
          Group) from all liabilities, costs, expenses and claims which arise as
          a result of the Buyer's failure to meet its obligations under clause
          13.2.

14.       EFFECT OF COMPLETION

14.1      The terms of this agreement including the Warranties of the Vendor
          (insofar as not performed at Completion and subject as specifically
          otherwise provided in this agreement) shall continue in force after
          and notwithstanding Completion.

14.2      The remedies of the Buyer in respect of any breach of any of the
          Warranties shall continue to subsist notwithstanding Completion.

15.       FURTHER ASSURANCES

15.1      Each of the parties shall from time to time upon request from the
          other do or procure the doing of all acts and/or execute or procure
          the execution of all such documents in so far as each is reasonably
          able and in a form reasonably satisfactory to the party concerned for
          the purpose of transferring to the Buyer the Acquisition Shares and
          otherwise giving the other party the full benefit of this agreement.

15.2      Following Completion, the Seller agrees to procure that the relevant
          member(s) of the Seller's Group, and the Buyer agrees to procure that
          the relevant member(s) of the Buyer's Group (including members of the
          Target Group), use all reasonable endeavours to procure that (if any)
          all contracts involving the business of the Target Group immediately
          before Completion and to which Draftex SA is a party (save in respect
          of any contracts with Atos

                                      -30-
<PAGE>   34

          Infogerance SA) are novated to a member of the Buyer's Group on terms
          that all members of the Seller's Group are released from all and any
          obligations thereunder, and pending the later of such novation and
          release:

          (a)  the Buyer agrees to indemnify and hold harmless all members of
               the Seller's Group, from all losses, liabilities, costs and
               claims arising out of any such contracts; and

          (b)  the Seller agrees to procure that the benefit(s) (if any) that
               any member of the Seller's Group receives under such contracts
               are held as trustee and are paid or delivered to the Buyer.

15.3      The Seller agrees that, on the Completion Date each Target Group
          Company shall be provided with physical and electronic copies of all
          source code, owned by and in the possession of the Seller or any
          member of the Seller's Group, required to understand, maintain,
          develop, modify, correct and enhance the version of the object code
          related to that source code in use on each computer system used by
          that Target Group Company as at the Completion Date.

15.4      The Seller undertakes to the Buyer that, for the period of 12 months
          from the Completion Date, neither the Seller nor any member of the
          Seller's Group shall perform any act, or omit to perform any act,
          which has the effect of restricting in any way the access that each
          Target Group Company has to the network services used by it as at the
          Completion Date.

16.       INDEMNITIES

16.1      (a)  Within 30 days of the date of this agreement the Buyer undertakes
               to notify the Seller in writing which (if any) of each of S.
               Bennett, J. Joy, M. Kellett, P. Muller, D. Norgrove, R. Presley
               and G. Roberts (each a "UK EMPLOYEE") it wishes to employ within
               the Buyer's Group, (each UK Employee notified by the Buyer being
               a "NOTIFIED EMPLOYEE") and the Buyer with effect from the
               Completion Date will indemnify and keep the Seller (and any
               member of the Seller's Group) indemnified against all
               liabilities, obligations, costs, claims and demands arising
               directly or indirectly as a result of the employment and/or
               termination of employment of each Notified Employee (including
               for the avoidance of doubt any such liabilities, obligations,
               costs, claims and demands arising from the provision of
               retirement and death benefits).

          (b)  In respect of each UK Employee who is not a Notified Employee,
               the Seller shall be liable for the costs (including for the
               avoidance of doubt any such liabilities, obligations, costs,
               claims and demands arising from the provision of retirement and
               death benefits) of that UK Employee's employment until the Seller
               (or the relevant member of the Seller's Group) terminates the
               contract of employment of that UK Employee within nine months of
               the Completion Date in which event the Buyer and the Seller shall
               each bear one half of the total liabilities, obligations, costs
               and claims and demands of any nature (including for the avoidance
               of doubt any such liabilities, obligations, costs, claims and
               demands arising from the provision of retirement and death
               benefits) (including for the avoidance of doubt any such
               liabilities, obligations, costs, claims and demands arising from
               the provision of retirement and death benefits)arising from or in
               respect of or in relation to such termination, provided that the
               Buyer's total liability arising under this clause 16 shall not
               exceed (Euro) 0.5m.

                                      -31-
<PAGE>   35

16.2      The Seller agrees to indemnify the Buyer (and any member of the
          Buyer's Group) against all reasonable legal costs and expenses arising
          out of proceedings commenced within 12 months of the Completion Date
          challenging the Buyer's acquisition of its indirect interest in the
          PRC Company following Completion.

16.3      (a)  In the event that a Target Group Company shall be lawfully
               prevented from occupying and/or using any freehold Property set
               out against its name in schedule 5 whether such use or occupation
               is or stands to be materially interfered with or curtailed by
               legal proceedings or any order or direction of a competent court
               or authority (or the lawful threat of any of the same) instituted
               in connection with or arising from the fact that the relevant
               Target Group Company does not actually have good and marketable
               title to such freehold Property; or

          (b)  if it shall transpire that any relevant Target Group Company
               shall not have good and marketable title to any freehold Property
               and/or not be the legal and beneficial owner thereof; or

          (c)  if it shall transpire that the relevant Target Group Company's
               interest in any freehold Property is subject to any encumbrance
               of any nature which has not at the date of this agreement been
               specifically disclosed to the Buyer (it being agreed for the
               avoidance of doubt that deemed disclosure of any matter that the
               Buyer has not actually seen or been told of specifically at the
               date hereof shall not count as disclosure for these purposes);

          then in any such case the Seller shall indemnify the Buyer and the
          Buyer's Group and each relevant Target Group Company from and against
          all losses, costs, damages, claims and demands of whatever nature
          incurred by whichever of them is or are relevant arising out of any
          such matters or circumstances as are referred to in (a) to (c) above
          (but such costs and damages, claims and demands shall not include any
          consequential loss or loss of profit or any matter against which the
          Buyer or other relevant person shall have insured or loss in value of
          the freehold Property) but the Seller may to the extent that the
          relevant Target Group Company shall not have good and marketable title
          free from such encumbrances at its own cost obtain such good and
          marketable legal and beneficial title free from such encumbrances for
          the relevant Target Group Company and thereupon the scope of the
          indemnity hereunder shall be adjusted accordingly (other than in
          respect of any losses, costs, damages, claims or demands previously
          incurred or suffered by the Buyer or any such persons lasting beyond
          the date on which good and marketable title is obtained as aforesaid);

          Provided that:

              (i)    the Buyer shall (subject to being fully indemnified by the
                     Seller for all reasonable costs and expenses of whatever
                     nature reasonably incurred in so doing) take all reasonable
                     appropriate steps to mitigate its loss and take all
                     reasonable steps to assist the relevant Vendor in
                     performing its obligations under this clause 16.3, provided
                     that there shall be no obligation on the Buyer to act to
                     its own detriment or the detriment of any member of the
                     Buyer's Group or any Target Group Company; and

                                      -32-
<PAGE>   36

              (ii)   the Buyer shall not reveal to any other party (except to
                     the extent required by law, or to its professional advisers
                     and/or for any purposes in connection with raising finance)
                     the existence of this clause 16.3; and

              (iii)  so long as the Seller is not in breach of its obligations
                     under this sub-clause 16.3 the Buyer shall not (where the
                     matter is in its control) do any act or thing to worsen the
                     position of the Buyer or the Buyer's Group or the relevant
                     Target Group Company in respect of any such Property and
                     shall not make any compromise or settlement with any other
                     party in respect of any such matter except with the prior
                     written consent of the Seller (which shall not be
                     unreasonably withheld or delayed); and

              (iv)   the Buyer shall not be entitled to make any claim under
                     this provision and again under the Warranties in connection
                     with the Property it being agreed that the Buyer shall not
                     be entitled to recover twice in respect of the same loss or
                     damage.

17.       ENTIRE AGREEMENT

          Each party on behalf of itself and as agent for each of its Related
          Persons acknowledges and agrees with the other party (each such party
          acting on behalf of itself and as agent for each of its Related
          Persons) that:-

          (a)  this agreement together with the Tax Deed, the Disclosure Letter,
               the Intellectual Property Deed, the Intellectual Property
               Assignments, the IT Transitional Services Procurement Agreement
               and the Supply Agreements (together the "TRANSACTION DOCUMENTS")
               constitutes the entire and only agreement between the parties and
               their respective Related Persons relating to the subject matter
               of the Transaction Documents;

          (b)  neither it nor any of its Related Persons have been induced to
               enter into any Transaction Document in reliance upon, nor have
               they been given, any warranty, representation, statement,
               assurance, covenant, agreement, undertaking, indemnity or
               commitment of any nature whatsoever other than as are expressly
               set out in the Transaction Documents and, to the extent that any
               of them have been, it (acting on behalf of itself and as agent on
               behalf of each of its Related Persons) unconditionally and
               irrevocably waives any claims, rights or remedies which it might
               otherwise have had in relation thereto

          PROVIDED THAT the provisions of this clause 21 shall not exclude any
          liability which either of the parties or, where appropriate, its
          Related Persons would otherwise have to the other party or, where
          appropriate, to that party's Related Persons or any right which either
          party them may have to rescind this agreement in respect of any
          statements made fraudulently by any of them prior to the execution of
          this agreement or any rights which any of them may have in respect of
          fraudulent concealment by the other party or its Related Persons.

                                      -33-
<PAGE>   37

18.       VARIATIONS

          This agreement may be varied only by a document signed by each of the
          Seller and the Buyer.

19.       WAIVER

19.1      A waiver of any term, provision or condition of, or consent granted
          under, this agreement shall be effective only if given in writing and
          signed by the waiving or consenting party and then only in the
          instance and for the purpose for which it is given.

19.2      No failure or delay on the part of any party in exercising any right,
          power or privilege under this agreement shall operate as a waiver
          thereof, nor shall any single or partial exercise of any such right,
          power or privilege preclude any other or further exercise thereof or
          the exercise of any other right, power or privilege.

19.3      No breach of any provision of this agreement shall be waived or
          discharged except with the express written consent of the Seller and
          the Buyer.

19.4      Subject to clause 4.3 the rights and remedies herein provided are
          cumulative with and not exclusive of any rights or remedies provided
          by law.

20.       INVALIDITY

20.1      If any provision of this agreement is or becomes invalid, illegal or
          unenforceable in any respect under the law of any jurisdiction:-

          (a)  the validity, legality and enforceability under the law of that
               jurisdiction of any other provision; and

          (b)  the validity, legality and enforceability under the law of any
               other jurisdiction of that or any other provision,

          shall not be affected or impaired in any way.

21.       NOTICES

21.1      Any notice, demand or other communication given or made under or in
          connection with the matters contemplated by this agreement shall be in
          writing and shall be delivered personally or sent by fax or prepaid
          first class post (air mail if posted to or from a place outside the
          United Kingdom):-

          In the case of the Buyer to:-

          PO Box 537012
          Sacramento
          CA 95853-7012
          U.S.A
          Fax:                                         001 916 351 8668
          Attention:                                   Terry Hall

                                      -34-
<PAGE>   38

          In the case of the Seller (for itself and
          on behalf of the Vendors) to:-

          3 St James's Square
          London SW1Y 4JU
          Fax:                                         0207 839 2921
          Attention:                                   Company Secretary

          and shall be deemed to have been duly given or made as follows:-

          (a)  if personally delivered, upon delivery at the address of the
               relevant party;

          (b)  if sent by first class post, two Business Days after the date of
               posting;

          (c)  if sent by air mail, 10 Business Days after the date of posting;
               and

          (d)  if sent by fax, when despatched;

          provided that if, in accordance with the above provisions, any such
          notice, demand or other communication would otherwise be deemed to be
          given or made after 5.00 p.m. on a Business Day such notice, demand or
          other communication shall be deemed to be given or made at 9.00 a.m.
          on the next Business Day.

21.2      A party may notify the other party to this agreement in writing of a
          change to its name, relevant addressee, address or fax number for the
          purposes of clause 25.1 provided that such notification shall only be
          effective on:-

          (a)  the date specified in the notification as the date on which the
               change is to take place; or

          (b)  if no date is specified or the date specified is less than five
               Business Days after the date on which notice is given, the date
               falling five Business Days after notice of any such change has
               been given.

22.       COUNTERPARTS

          This agreement may be executed in any number of counterparts which
          together shall constitute one agreement. Any party may enter into this
          agreement by executing a counterpart and this agreement shall not take
          effect until it has been executed by all parties.

23.       GOVERNING LAW AND JURISDICTION

23.1      This agreement (and any dispute, controversy, proceedings or claim of
          whatever nature arising out of or in any way relating to this
          agreement or its formation) shall be governed by and construed in
          accordance with English law.

23.2      Each of the parties to this agreement irrevocably agrees that the
          courts of England shall have non-exclusive jurisdiction to hear and
          decide any suit, action or proceedings, and/or to settle any disputes,
          which may arise out of or in connection with this agreement
          (respectively,

                                      -35-
<PAGE>   39

          "PROCEEDINGS" and "DISPUTES") and, for these purposes, each party
          irrevocably submits to the jurisdiction of the courts of England.

23.3      Each party irrevocably waives any objection which it might at any time
          have to the courts of England being nominated as the forum to hear and
          decide any Proceedings and to settle any Disputes and agrees not to
          claim that the courts of England are not a convenient or appropriate
          forum for any such Proceedings or Disputes and further irrevocably
          agrees that a judgment in any Proceedings or Disputes brought in any
          court referred to in this clause 27 shall be conclusive and binding
          upon the parties and may be enforced in the courts of any other
          jurisdiction.

23.4      Without prejudice to any other permitted mode of service the parties
          agree that service of any claim form, notice or other document
          ("DOCUMENTS") for the purpose of any Proceedings begun in England
          shall be duly served upon it if delivered personally or sent by
          registered post, in the case of:-

          (a)  the Seller (for itself and on behalf of the Vendors) to 3 St
               James's Square London SW1Y 4JU (marked for the attention of the
               Company Secretary); and

          (b)  the Buyer to 21 Wilson Street, London EC2M 2TX (marked for the
               attention of Simmons & Simmons (Ref: X76579/CRF/SXS))

          or such other person and address in England and/or Wales as the Seller
          shall notify the Buyer in writing or vice versa from time to time.

24.       THIRD PARTY RIGHTS

24.1      Any person (other than the parties to this agreement) who is given any
          rights or benefits under clause 21 and/or paragraph 1 of schedule 4 (a
          "THIRD PARTY") shall be entitled to enforce those rights or benefits
          against the parties in accordance with the Contracts (Rights of Third
          Parties) Act 1999.

24.2      Save as provided in clause 28.1above the operation of the Contracts
          (Rights of Third Parties Act) 1999 is hereby excluded.

24.3      The parties may amend, vary or terminate this agreement in such a way
          as may affect any rights or benefits of any Third Party which are
          directly enforceable against the parties under the Contracts (Rights
          of Third Parties) Act 1999 without the consent of such Third Party.

24.4      Any Third Party entitled pursuant to the Contracts (Rights of Third
          Parties) Act 1999 to enforce any rights or benefits conferred on it by
          this agreement may not veto any amendment, variation or termination of
          this agreement which is proposed by the parties and which may affect
          the rights or benefits of the Third Party.

25.      ASSIGNMENT

25.1      The Buyer may assign its rights hereunder to any other member of the
          Buyer's Group provided that if as a result of any such assignment any
          amount payable by any member of the Seller's Group hereunder is
          increased, such assignee shall only be entitled to recover the amount
          which would have been recoverable by the Buyer as the original
          beneficiary of the

                                      -36-
<PAGE>   40

          right in question and that if the assignee ceases to be a member of
          the Buyer's Group then the assignee shall immediately cease to enjoy
          the benefit of this agreement which shall revert to the Buyer (as the
          assignor).

25.2      Subject as provided in clause 29.1, the rights and benefits of the
          parties hereunder are personal to them and may not be assigned at law
          or in equity without the prior written consent of other the other of
          them.

IN WITNESS whereof this agreement has been executed on the date first above
written.

                                      -37-
<PAGE>   41

                                   SCHEDULE 1
                             TARGET GROUP COMPANIES

TARGET GROUP COMPANY                                       VENDOR(S)

Draftex Inc                                                Laird Inc.

Draftex Beteiligungsgesellschaft mbH                       Draftex Industries
                                                           Limited (as to 75%)
                                                           and Draftex
                                                           Industries No. 1
                                                           Limited (as to 25%)

Beijing Wanyuan-Draftex Sealing Products Co Ltd            n/a

Draftex International European Technical Center GmbH &     n/a
Co. KG

Draftex International European Technical Center GmbH       n/a

Draftex International GmbH & Co KG                         n/a

Draftex International GmbH                                 n/a

Draftex-Optimit SRO (awaiting registration of the change   n/a
of name to Draftex International SRO)

Draftex International (Pribor) SRO                         Draftex SRO

Draftex Verwaltgungsgessellchaft mbH                       n/a

Draftex - MTech GmbH                                       n/a

Draftex International Iberica SA                           Draftex SA (as to
                                                           99.78%) Draftex
                                                           Industries Limited
                                                           (as to 0.22%)

Slic Corvol SA                                             Draftex SA

Slic Gruchet SA                                            Draftex SA

Snappon SA                                                 Draftex SA

                                      -38-
<PAGE>   42

                                   SCHEDULE 2
                 PARTICULARS RELATING TO TARGET GROUP COMPANIES
                                                                          U.S.A.
                                  DRAFTEX INC.
                                  ------------

REGISTERED OFFICE:                    2121 Heilig Road, Salisbury NC 28146

FEDERAL I.D. NUMBER:                  38-8283550

DATE OF INCORPORATION:                5 February 1996

AUTHORISED SHARE CAPITAL:             1000 shares (US$0.01 par value)

ISSUED SHARE CAPITAL:                 10 shares

SHAREHOLDERS:                         Laird, Inc.

OFFICERS:                             G C G Wilkinson, President
                                      I M Arnott, Chairman
                                      G L Christopher, Vice President Finance,
                                      Secretary and Treasurer

DIRECTORS:                            G.C.G. Wilkinson
                                      I M Arnott
                                      C Repsher, Senior Vice President

SECRETARY:                            G L Christopher

ASSISTANT SECRETARY:                  N/A

MORTGAGES/CHARGES:                    Nil

GENERAL NOTES:                        None

                                      -39-
<PAGE>   43

                                                                         Germany

                      DRAFTEX BETEILIGUNGSGESELLSCHAFT MBH
                      ------------------------------------

REGISTERED OFFICE:            41748 Viersen, Am Schluff 18-20

REGISTERED NUMBER:            HR B 1096

DATE OF INCORPORATION:        13 July 1965

AUTHORISED SHARE CAPITAL:     DM 60,000,000

ISSUED SHARE CAPITAL:         DM 60,000,000

SHAREHOLDERS:                 Draftex Industries Limited         DM45,000,000.00
                              Draftex Industries (No.1) Limited  DM15,000,000.00

DIRECTORS:                    Ian McPherson Arnott
                              Bryan Stanley Ronan

SECRETARY:                    None

ASSISTANT SECRETARY:          None

MORTGAGES/CHARGES:            None

GENERAL NOTES:                None

                                      -40-
<PAGE>   44

                                                                           China

           BEIJING WANYUAN - DRAFTEX SEALING PRODUCTS COMPANY LIMITED
           ----------------------------------------------------------

REGISTERED OFFICE:                    43 Feng Tai Road, Feng Tai High Technology
                                      Development Zone, Beijing, People's
                                      Republic of China, 100071 Beijing.

COMPANY NUMBER:                       011099

DATE OF BUSINESS LICENCE:             28 December 1995

STARTED TRADING:                       1 February 1996

TERM OF COMPANY:                      50 years

TOTAL INVESTMENT:                     RMB 150,000,000

REGISTERED CAPITAL:                   RMB 100,000,000

INVESTORS:                            Draftex Beteiligungsgesellschaft mbH
                                                60%
                                      Beijing Wanyuan Sealing Device Factory 40%

DIRECTORS:                            Ian McPherson Arnott - Chairman
                                      Edward Evans
                                      Bai Meizhang
                                      Li Liu
                                      Martin Kellett

OFFICERS:                             Fengchi Liu - General Manager
                                      Lu Zai Ping - Deputy General Manager

SECRETARY:                            None

ASSISTANT SECRETARY:                  None

MORTGAGES/CHARGES:                    None

GENERAL NOTES:                        None

                                      -41-
<PAGE>   45

                                                                         Germany

          DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER GMBH & CO. KG
          -------------------------------------------------------------

REGISTERED OFFICE:            Moenchengladbach

REGISTERED NUMBER:            HRA 3584

DATE OF REGISTRATION WITH     6 June 2000
COMMERCIAL REGISTER:

AUTHORISED SHARE CAPITAL:     Euro 100,000

ISSUED SHARE CAPITAL:         None

PARTNERS:                     LIMITED PARTNER: Draftex Beteiligungsgesellschaft
                              mbH (Registered in Viersen under HRB 1096) Capital
                              Contribution Euro 100,000 (owns all shares and has
                              all votes)
                              GENERAL PARTNER: Draftex International European
                              Technical Center GmbH (Registered in
                              Moenchengladbach under HRB 6388) (owns no shares
                              and has no votes)

DIRECTORS:                    Martin Kellett

SECRETARY:                    None

ASSISTANT SECRETARY:          None

MORTGAGES/CHARGES:            None

GENERAL NOTES:                None

                                      -42-
<PAGE>   46

                                                                         Germany

              DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTRE Gmbh
              ----------------------------------------------------

REGISTERED OFFICE:               Monchengladbach

REGISTERED NUMBER:               HRB 6388

DATE OF REGISTRATION WITH        18 May 2000
COMMERCIAL REGISTER::

AUTHORISED SHARE CAPITAL:        50,000 DM

ISSUED SHARE CAPITAL:            50,000 DM

SHAREHOLDERS:                    Martin Kellett (99%)
                                 Draftex Beteiligungsgesellschaft mbH (1%)

DIRECTORS:                       Martin Kellett

SECRETARY:                       N/A

ASSISTANT SECRETARY:             N/A

MORTGAGES/CHARGES:               None

GENERAL NOTES:                   Previous name: "Philomela"
                                 VermogensverwaltgungsgessellschaftmbH

                                      -43-
<PAGE>   47

                                                                         Germany

                       DRAFTEX INTERNATIONAL Gmbh & CO. KG
                       -----------------------------------

REGISTERED OFFICE:             41748 Viersen, Am Schulff 18-20

REGISTERED NUMBER:             HRA 3015

DATE OF REGISTRATION WITH      18 February 1987
COMMERCIAL REGISTER:

AUTHORISED SHARE CAPITAL:      DM 60,000,000.00

ISSUED SHARE CAPITAL:          DM 60,000,000.00

PARTNERS                       Limited Partner - Draftex Beteiligunggesellschaft
                               mbH 100% (owns all shares and has 60,000 votes)

                               General Partner - Draftex Verwaltungsgesellschaft
                               mbH (owns no shares but has 1,000 votes)

                               Draftex Verwaltungsgesellschaft mbH represented
                               by Mr J. Hartmann

SECRETARY:                     None

ASSISTANT SECRETARY:           None.

MORTGAGES/CHARGES:             None.

GENERAL NOTES:                 Name changed from Draftex GmbH & Co KG June 1999

                               Changed name to Draftex International GmbH & Co
                               KG wef 20.4.99

                                      -44-
<PAGE>   48

                                                                         Germany

                           DRAFTEX INTERNATIONAL GMBH
                           --------------------------

REGISTERED OFFICE:                      Dusseldorf

REGISTERED NUMBER:                      HRB 39102

DATE OF REGISTRATION WITH               2 June 2000
COMMERCIAL REGISTER:

AUTHORISED SHARE CAPITAL:               Euro 25,000

ISSUED SHARE CAPITAL:                   Euro 25,000

SHAREHOLDERS:                           Draftex Beteiligungsgesellschaft mbH

DIRECTORS:                              Martin Kellett -Director
                                        Bryan Stanley Ronan - Director

SECRETARY:                              None

ASSISTANT SECRETARY:                    None

MORTGAGES/CHARGES:                      None

GENERAL NOTES:                          None

                                      -45-
<PAGE>   49

                                                                  Czech Republic

                             DRAFTEX-OPTIMIT S.R.O.
                             ----------------------
   (AWAITING REGISTRATION OF THE CHANGE OF NAME TO DRAFTEX INTERNATIONAL SRO)

REGISTERED OFFICE:                    VitKovska 391, 742 35 Odry, Czech Republic

REGISTERED NUMBER:                    48 39 32 23

DATE OF INCORPORATION:                Registered 16 November 1993

AUTHORISED SHARE CAPITAL:             1,000,000 Kc

ISSUED SHARE CAPITAL:                 1,000,000 Kc

SHAREHOLDERS:                         Draftex Beteiligungsgesellschaft mbH
                                      1,000,000

DIRECTORS:                            C. Kirkham-Sandy
                                      Zdenek Piskytl
                                      Milan Tomas (resigned 9 June, 2000 but
                                      still registered as a director pending the
                                      registration of Manuel Setien Rivero as
                                      director).

SECRETARY:                            N/A

ASSISTANT SECRETARY:                  N/A

MORTGAGES/CHARGES:                    None

GENERAL NOTES:                        - Joint acting of Directors
                                      - Change of Name not yet registered
                                        (expected 10/2000)

                                      -46-
<PAGE>   50

                                                                  Czech Republic

                      DRAFTEX INTERNATIONAL (PRIBOR) S.R.O.
                      -------------------------------------

REGISTERED OFFICE:             Praha 1, Karoliny Svetle 25, Czech Republic

REGISTERED NUMBER:             26 16 21 48

DATE OF INCORPORATION:         8 March 2000

AUTHORISED SHARE CAPITAL:      100,000 CZK (one hundred thousand Czech Crowns)

ISSUED SHARE CAPITAL:          CZK100,000

SHAREHOLDERS:                  Draftex s.r.o.

REPRESENTATIVES:               Christopher Kirkham-Sandy
                               Ing Zdenek Piskytl

SECRETARY:                     N/A

ASSISTANT SECRETARY:           N/A

MORTGAGES/CHARGES:             None

GENERAL NOTES:                 Directors may act independently

                                      -47-
<PAGE>   51

                                                                         Germany

                       DRAFTEX VERWALTUNGSGESELLSCHAFT MBH
                       -----------------------------------

REGISTERED OFFICE:                    41748 Viersen, Am Schluff 18-20

REGISTERED NUMBER:                    HRB 1890

DATE OF REGISTRATION WITH             30 December 1986
COMMERCIAL REGISTER:

AUTHORISED SHARE CAPITAL:             DM 50,000

ISSUED SHARE CAPITAL:                 DM 50,000

SHAREHOLDERS:                         Draftex Beteiligungsgesellschaft mbH
                                      DM 500 (1%)
                                      Jurgen Hartmann         DM 49,500 (99%)

DIRECTORS:                            Jurgen Hartmann

SECRETARY:                            None

ASSISTANT SECRETARY:                  None

MORTGAGES/CHARGES:                    None

GENERAL NOTES:                        None

                                      -48-
<PAGE>   52

                                                                         Germany

                               DRAFTEX-MTECH GMBH
                               ------------------

REGISTERED OFFICE:                    41748 Viersen, Am Schluff 18-20

REGISTERED NUMBER:                    HRB 3081

DATE OF REGISTRATION WITH             3 January 2000
COMMERCIAL REGISTRY:

AUTHORISED SHARE CAPITAL:             EUR 100,000

ISSUED SHARE CAPITAL:                 EUR 100,000

SHAREHOLDERS:                         Draftex International GmbH & Co. KG

DIRECTORS:                            Thomas Potschka

SECRETARY:                            None

ASSISTANT SECRETARY:                  None

MORTGAGES/CHARGES:                    None

GENERAL NOTES:                        None

                                      -49-
<PAGE>   53

                                                                           Spain

                       DRAFTEX INTERNATIONAL IBERICA S.A.
                       ----------------------------------

REGISTERED OFFICE:              c./dels Mercaders
                                9-11 Poligono Riera de Caldes
                                08184 Palau de Plegamans
                                Barcelona
                                Spain

REGISTERED NUMBER:              CIF A 58 53 35 55

DATE OF INCORPORATION:          11 March 1988

AUTHORISED SHARE CAPITAL:       Pts 3,444,700,000

ISSUED SHARE CAPITAL:           Pts 3,444,700,000 divided into 344,470 shares
                                Of 10,000 pts each

SHAREHOLDERS:                   Draftex Industries Limited:       770 shares
                                Draftex S.A.                  343,700 shares

DIRECTORS:                      I.M. Arnott
                                A. Nossek
                                M. Setien

SECRETARY:                      Merce Sorribas Barrera

ASSISTANT SECRETARY:            Carlos Foncillas de Puig

MORTGAGES/CHARGES:              None

GENERAL NOTES:                  Name changed from Draftex Iberica S.A. June 1999

                                      -50-
<PAGE>   54

                                                                          France

                                SLIC CORVOL S.A.
                                ----------------

REGISTERED OFFICE:              Grande Rue, 58460 Corvol L'Orgueilleux, France

REGISTERED NUMBER:              Nevers B331 875 856B.

DATE OF INCORPORATION:          1 January 1985

AUTHORISED SHARE CAPITAL:       FF 10,500,000

ISSUED SHARE CAPITAL:           FF 10,500,000

SHAREHOLDERS                    *DRAFTEX S.A.                        104,994
                                D.I.L.                               1
                                I.M. ARNOTT                          1
                                G.C.G. WILKINSON                     1
                                J.C. SILVER                          1
                                D.J.L. HUDSON                        1
                                Draftex Industries No 1 Limited      1

DIRECTORS:                      I.M. ARNOTT
                                G. WILKINSON      PDG
                                D.I.L.            Represented by A. Wilson
                                *DRAFTEX          Represented by T. Laurore

SECRETARY:                      N/A

ASSISTANT SECRETARY:            N/A

MORTGAGES/CHARGES:              None

GENERAL NOTES:                  Converted from S.A.R.L. to S.A. with effect
                                23.12.1992

                                *    Previously Atko
                                ** The Commercial Court of Clanecy and the
                                Commercial Court of Nevers were merged
                                with effect from 01.01.2000

                                      -51-
<PAGE>   55

                                                                          France

                                SLIC GRUCHET S.A.
                                -----------------

REGISTERED OFFICE:           33 Rue du Couvent, 76210 Gruchet Le Valasse, France

REGISTERED NUMBER:           Le Havre B 332 024 132 B

DATE OF INCORPORATION:       12 July 1985

AUTHORISED SHARE CAPITAL:    FF 10,500,000

ISSUED SHARE CAPITAL:        FF 10.500.000

SHAREHOLDERS:                *DRAFTEX S.A.                 104,994
                             D.I.L.                              1
                             I.M. ARNOTT                         1
                             G.C.G. WILKINSON                    1
                             J.C. SILVER                         1
                             D.J.L. HUDSON                       1
                             Draftex Industries No 1 Limited     1

DIRECTORS:                   D.J.L. HUDSON     PDG
                             G.C.G. WILKINSON
                             D.I.L.            Represented by A. Wilson
                             DRAFTEX           Represented by T. Laurore

SECRETARY:                   Draftex           Represented by Legalloudec

ASSISTANT SECRETARY:         N/A

MORTGAGES/CHARGES:           Secured tax privilege of FF 6,584,637
                             Secured Social Security privilege of FF 126,196

GENERAL NOTES:               Converted from S.A.R.L. to S.A. with effect
                             23.12.1992

                             *  Previously Atko

                                      -52-
<PAGE>   56

                                                                          France

                                  SNAPPON S.A.
                                  ------------

REGISTERED OFFICE:                8 rue Edmond Poillot, 28000 Chartres, France.

REGISTERED NUMBER:                Chartres B 807.020.458

AUTHORISED SHARE CAPITAL:         FF 30,000,000

ISSUED SHARE CAPITAL:             FF 30,000,000

SHAREHOLDERS:                     DRAFTEX S.A.*                       299,994
                                  D.I.L.                                    1
                                  LAIRD                                     1
                                  I.M. ARNOTT                               1
                                  D.J.L. HUDSON                             1
                                  J.C. SILVER                               1
                                  Draftex Industries No.1 Limited         1

DIRECTORS:                        I.M. ARNOTT         Chairman
                                  D.I.L.              Represented by A. Wilson
                                  D.J.L. HUDSON
                                  DRAFTEX*            Represented by T. Laurore

SECRETARY:                        N/A

ASSISTANT SECRETARY:              N/A

MORTGAGES/CHARGES:                Secured tax privilege of FF 3,529,436

GENERAL NOTES:                    * previously Atko

                                      -53-
<PAGE>   57

                                   SCHEDULE 3

                                 THE WARRANTIES

For the purpose of this schedule 3:

in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Laird Inc., the "Target Group Company" means Draftex Inc.;

in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex Industries Limited, the "Target Group Company" means Draftex
Beteiligungsgesellschaft mbH (as to 75 per cent.), Draftex International GmbH &
Co KG, Draftex - MTech GmbH, Draftex International GmbH, Draftex Verwaltgungs
GmbH, Draftex International European Technical Center GmbH & Co KG, Draftex
International European Technical Center GmbH and Beijing Wanyuan-Draftex Sealing
Products Company Limited;

in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex Industries (No 1) Ltd, "Target Group Company" means Draftex
Beteiligungsgesellschaft mbH (as to 25 per cent.) and Draftex International GmbH
& Co KG, Draftex - MTech GmbH, Draftex International GmbH, Draftex Optimit SRO,
Draftex Verwaltgungs GmbH, Draftex International European Technical Center GmbH
& Co KG and Draftex International European Technical Center GmbH and Beijing
Wanyuan-Draftex Sealing Products Company Limited;

in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex SRO, "Target Group Company" means Draftex International
(Pribor) SRO;

in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex SA, "Target Group Company" means Draftex International Iberica
SA, Slic Corvol SA, Slic Gruchet SA and Snappon SA.

Any Warranty expressed to be given "to the best of the Vendor's knowledge and
belief" or "so far as the Vendor is aware" or otherwise qualified by reference
to the knowledge of the relevant Vendor means so far as is within the actual
knowledge, of the following persons Brian S Ronan, Martin Kellett, Roger
Presley, Gilbert Wulfhugel, John Joy, Yves Cabanis and Carl Repsher and shall be
deemed to include an additional statement that it has been made after due and
careful enquiry by such person.

1.        VENDOR'S CAPACITY

1.1       AUTHORISATIONS

          Each of the Vendors has obtained all corporate authorisations and all
          other applicable governmental, statutory, regulatory or other
          consents, licences, waivers or exemptions required to empower and
          authorise it to enter into and to perform its obligations under this
          agreement and the Transaction Documents.

2.        THE TARGET GROUP, THE SHARES AND THE SUBSIDIARIES

2.1       INCORPORATION AND EXISTENCE

          (a)  The Target Group Companies are incorporated or formed under the
               law shown in schedule 2 and have been in continuous existence
               since incorporation or formation

                                      -54-
<PAGE>   58

               and in good standing in their respective jurisdictions of
               formation/incorporation, and are duly qualified to do business as
               a foreign company in each others' jurisdiction in which either
               the ownership or properties by them, or the actions carried by
               them, requires such qualification.

          (b)  The particulars of each of the Target Group Company set out in
               schedule 2 are true and complete.

2.2       THE SHARES

          (a)  The shareholder(s) of the Target Group Company as listed in
               schedule 2 is/are the only legal and beneficial owner(s) of the
               Target Group Company.

          (b)  The Target Group Company has not allotted any shares other than
               the shares as shown in schedule 2 and such shares are fully paid
               or credited as fully paid.

          (c)  There is no Encumbrance in relation to any of the shares as shown
               in schedule 2 or unissued shares in the capital of any Target
               Group Company.

          (d)  Other than this agreement, there is no agreement, arrangement or
               obligation requiring the allotment, sale, transfer, redemption or
               repayment of, or the grant to a person of the right (conditional
               or not) to require the allotment, sale, transfer, redemption or
               repayment of, a share in the capital of the Target Group
               (including an option or right of pre-emption or conversion).

          (e)  No Target Group Company has any subsidiary which is not itself a
               Target Group Company.

3.        ACCOUNTS

3.1       GENERAL

          (a)  The Accounts show a true and fair view of the state of affairs at
               the Accounts Date of the Target Group Companies.

          (b)  The Accounts for each Target Group Company have been prepared in
               accordance with the accounting principles, standards and
               practices generally accepted in the United Kingdom.

3.2       ACCOUNTING AND OTHER RECORDS

          (a)  The books of account and other records of the Target Group
               Company are up-to-date and have been maintained in all respects
               in accordance with the law and applicable standards, principles
               and practices generally accepted in the country in which each
               Target Group Company is incorporated and in accordance with the
               accounting principles, standards and practices generally accepted
               in the United Kingdom.

          (b)  All deeds and documents (properly stamped where stamping is
               necessary for enforcement thereof) belonging to the Target Group
               Company and which by law

                                      -55-
<PAGE>   59

               ought to be in the possession of the Target Group Company are in
               the possession of the Target Group Company.

3.3       ACCOUNTING REFERENCE DATE

          The accounting reference date of the Target Group Company is, and
          during the last three years has always been, 31 December.

3.4       MANAGEMENT ACCOUNTS

          (a)  The management accounts of the Target Group Company in the agreed
               terms have been prepared by the Target Group with due care and
               attention and show with reasonable accuracy the state of affairs
               and profit or loss of the Target Group Company as at and for the
               period in respect of which they have been prepared and the
               balance sheet of the Target Group Company as at 30 September 2000
               but it is hereby acknowledged that they are not prepared on a
               statutory basis, but that they have been prepared in accordance
               with the accounting principles, standards and practices generally
               accepted in the United Kingdom and on a basis consistent with
               management accounts prepared in the preceding year.

          (b)  The level of Third Party Debt of the Target Group Company as at
               the date of this agreement is not materially different from the
               level of Third Party Debt of the Target Group Company shown in
               the Management Accounts of the Target Group Company for September
               2000.

4.        CHANGES SINCE THE ACCOUNTS DATE

4.1       GENERAL

          Since the Accounts Date:-

          (a)  the Target Group Company has carried on its business in the
               ordinary and usual course and so as to maintain the business as a
               going concern;

          (b)  there has been no material adverse change in the financial or
               trading position of the Target Group Company.

4.2       SPECIFIC

          Since the Accounts Date:-

          (a)  the Target Group Company has not made, or agreed to make, capital
               expenditure exceeding in total (Euro)100,000 or incurred, or
               agreed to incur, a commitment or connected commitments involving
               capital expenditure exceeding in total (Euro)100,000 other than
               as disclosed in the Disclosure Letter;

          (b)  no substantial supplier representing more than ten per cent. of
               supplies or substantial customer representing ten per cent. of
               sales has ceased or substantially reduced its trade with the
               Target Group Company or has materially altered the terms of trade
               to

                                      -56-
<PAGE>   60

               the Target Group Company's disadvantage other than as disclosed
               in the Disclosure Letter;

          (c)  the Target Group Company has not declared, paid or made a
               dividend or other distribution except to the extent provided in
               the Accounts other than as disclosed in the Disclosure Letter;

          (d)  no resolution of the shareholders of the Target Group Company has
               been passed (except for those representing the ordinary business
               of an annual general meeting) other than as disclosed in the
               Disclosure Letter;

          (e)  the Target Group Company has not repaid or redeemed share or loan
               capital, or made (whether or not subject to conditions) an
               agreement or arrangement or undertaken an obligation to do any of
               those things other than as disclosed in the Disclosure Letter;

          (f)  the Target Group Company has not paid nor is under an obligation
               to pay any management charges other than as disclosed in the
               Disclosure Letter.

5.        ASSETS

          TITLE AND CONDITION

5.1       There are no Encumbrances, nor has the Target Group Company agreed to
          create any Encumbrances, over any part of its assets and each asset
          included in the Accounts or acquired by it so far as the Vendor is
          aware since the Accounts Date (other than assets sold in the ordinary
          course of business):-

          (a)  is legally and beneficially owned by the Target Group Company;
               and

          (b)  where capable of possession, in the possession of the Target
               Group Company.

5.2       Save as disclosed or save where expressly provided for and/or agreed
          in this agreement, the Target Group Company owns or entitled to use in
          conjunction with the other Target Group Companies, all of the assets
          which are necessary to carry on the car body sealings business of the
          Seller as currently conducted.

5.3       So far as the Vendor is aware all fixed assets of the Target Group
          Company including, without limitation, all fixed and movable plant and
          machinery, vehicles, and other equipment used in, or in connection
          with, the business of the Target Group Company are in working order
          and in a condition which is not materially different to the prevailing
          standards of the car body seals industry (taking into account fair
          wear and tear).

6.        INTELLECTUAL PROPERTY

          GENERAL

6.1       All the registered Intellectual Property which (i) is within the
          definition of Business IP or (ii) is owned by the Target Group (the
          "ACQUIRED REGISTERED IP"), is listed in Annex 1 of the Disclosure
          Letter.

                                      -57-
<PAGE>   61

6.2       All Intellectual Property which (i) is within the definition of
          Business IP or (ii) is owned by the Target Group (the "ACQUIRED IP")
          is free from Encumbrances.

6.3       In each case, the Acquired Registered IP is registered in the name of
          a member of the Seller's Group or a member of the Target Group.

6.4       The Licensed Patents (as defined in the Intellectual Property Deed)
          and the Intellectual Property listed in Attachment B of the Disclosure
          Letter is legally and beneficially owned by and registered in the name
          of a member of the Seller's Group or the Target Group.

6.5       The Vendor has not received notice of and is not aware of the validity
          or ownership of any of the Acquired IP being challenged or opposed by
          any third party.

6.6       So far as the Vendor is aware, from Completion the Buyer and the
          Target Group Company will have available to it all the Intellectual
          Property which is needed for the purpose of operating the business of
          the Target Group Company as such business has been operated during the
          12 months prior to the date of this agreement.

          RENEWALS/MAINTENANCE

6.7       So far as the Vendor is aware, all registration and renewal fees have
          been paid in relation to the Acquired Registered IP, and there are no
          deadlines for renewal which fall due within 6 months of the date of
          this agreement

          LICENCES

6.8       True and correct copies of all licences of the Acquired IP which have
          been granted to third parties and which are material to the Target
          Group Company have been provided to the Buyer and are identified in
          the Disclosure Letter. The Vendor has not been notified of and is not
          aware of any material breach of such licences.

6.9       Other than software licences, true and correct copies of all licences
          relating to Intellectual Property used in or on behalf of the business
          of the Target Group have been provided to the Buyer and are identified
          in the Disclosure Letter. The Vendor has not been notified of and is
          not aware of any material breach of such licences.

6.10      The Seller has the power and authority to license or procure the
          licence to the Buyer of the Intellectual Property licensed under
          clause 3.1(a) or 3.1(b) of the Intellectual Property Deed on the terms
          of the Intellectual Property Deed.

INFRINGEMENT

6.11      So far as the Vendor is aware, the activities comprised within the
          business of the Target Group do not infringe the rights of any third
          party and have not done so during the last three years.

6.12      There are no claims for infringement of third party rights which have
          been settled by any of the Seller's Group or the Target Group by the
          giving of undertakings which remain in force.

                                      -58-
<PAGE>   62

6.13      So far as the Vendor is aware, no third party is infringing either the
          Acquired IP or any Intellectual Property licensed under clauses 3.1(a)
          or 3.1(b) of the Intellectual Property Deed, nor have such third
          parties done so oar threatened to do so during the last three years.

CONFIDENTIALITY AGREEMENTS

6.14      The know how and confidential information within the Acquired IP is
          kept strictly confidential and has not been disclosed to third parties
          other than in the ordinary course of business and subject to
          appropriate obligations of confidentiality.

7.        EFFECT OF SALE

          Neither the execution nor performance of this agreement or any
          document to be executed at or before Completion will so far as the
          Vendor is aware:-

          (a)  conflict with, or result in a material breach of an agreement,
               arrangement or obligation to which the Target Group Company is a
               party; or

          (b)  result in any substantial customer cease dealing with the Target
               Group Company; or

          (c)  result in any substantial supplier cease supplying to the Target
               Group Company;

          (d)  result in any officer or senior employee leaving the Target Group
               Company; or

          (e)  make the Target Group Company liable to transfer or purchase any
               assets, including shares held by it in other bodies corporate
               under their articles of association or any agreement or
               arrangement.

          (f)  cause the Target Group Company to lose the benefit of any
               licence, consent, permit, approval or authorisation (public or
               private) or any right, grant, subsidy or privilege it presently
               enjoys or relieve any person of any obligation to the Target
               Group Company (whether contractual or otherwise), or require the
               repayment of a grant or subsidy, or enable any person to
               determine any such obligation or any contractual right or benefit
               now enjoyed by the Target Group Company or to exercise any right
               whether under an agreement with the Target Group Company or
               otherwise in each case which is material to the operation of the
               Target Group Company;

          (g)  result in any present or future indebtedness of the Company
               becoming due or capable of being declared due and payable prior
               to its stated maturity;

          (h)  save as disclosed in the Disclosure Letter, give rise to or cause
               to become exercisable any right of pre-emption or right of
               termination;

          (i)  result in a breach of, or constitute a default under any
               provision of the memorandum or articles of association of the
               Company; or

          (j)  result in a breach of, or constitute a default under any order,
               judgement or decree of any court or government agency by which
               the Company is bound or subject.

8.        CONSTITUTION

                                      -59-
<PAGE>   63

8.1       INTRA VIRES

          The Target Group Company has the power to carry on its business as now
          conducted.

8.2       MEMORANDUM AND ARTICLES

          The memorandum and articles of association or equivalent
          constitutional documentation of each Target Group Company in the form
          annexed to the Disclosure Letter are true and complete.

8.3       POWERS OF ATTORNEY

          The Target Group Company has not executed any power of attorney or
          conferred on any person other than its directors, officers and
          employees any authority to enter into any transaction on behalf of or
          to bind the Target Group Company in any way and which power of
          attorney remains in force or was granted or conferred within one year
          of the Completion Date.

8.4       STATUTORY BOOKS AND FILINGS

          (a)  The statutory books of the Target Group Company are up to date,
               in its possession and are true and complete in accordance with
               the law.

          (b)  All resolutions, annual returns and other documents required to
               be delivered to the Registrar of Companies (or other relevant
               regulatory authority) have been properly prepared and filed and
               the common seal of the Target Group Company is in its possession.

9.        INSURANCE

9.1       POLICIES

          The Disclosure Letter contains a list of current insurance and
          indemnity policies in respect of which the Target Group has an
          interest (together the "POLICIES"). So far as the Vendor is aware each
          of the Policies is valid and enforceable and is not void or voidable.

9.2       CLAIMS

          No claim is outstanding under any of the Policies and so far as the
          Vendor is aware no matter exists which might give rise to a claim
          under any of the Policies.

9.3       MAINTENANCE

          All the Target Group Company's insurances are in full force and effect
          and will be maintained in full force without alteration pending
          Completion and all premiums have been paid on time. So far as the
          Vendor is aware, there are no circumstances which might lead to any
          liability under any of the Target Group Company's insurances being
          avoided by the insurers or the premiums being increased otherwise than
          as a result of general market increases.

                                      -60-
<PAGE>   64

10.       CONTRACTUAL MATTERS

10.1      VALIDITY OF AGREEMENTS

          (a)  No party with whom the Target Group Company has entered into any
               agreement, arrangement or obligation which is material to the
               operation of the business of the Target Group Company has given
               notice of its intention to terminate, or has sought to repudiate
               or disclaim, such agreement, arrangement or obligation.

          (b)  So far as the Vendor is aware no party with whom the Target Group
               Company has entered into an agreement or arrangement which is
               material to the operation of the business of the Target Group is
               in material breach of such agreement or arrangement. So far as
               the Vendor is aware no matter exists which might give rise to
               such breach.

          (c)  So far as the Vendor is aware the Target Group Company is not in
               breach of any agreement or arrangement which is material to the
               operation of the business of the Target Group Company and so far
               as the Vendor is aware no matter exists which might give rise to
               such breach.

10.2      MATERIAL AGREEMENTS

          (a)  The Target Group Company is not a party to and is not liable
               under any contract, transaction, arrangement or liability which
               was entered into other than by way of a bargain at arm's length
               or outside the Target Group Company ordinary course of business.

          (b)  The Target Group Company is not a party to and is not liable
               under:-

               (i)  an agreement, arrangement or obligation by which the Target
                    Group is a member of a joint venture, consortium,
                    partnership or association (other than a bona fide trade
                    association); or

               (ii) a distributorship, agency, marketing, licensing or
                    management agreement or arrangement.

          (c)  The Target Group Company is not a party to or subject to any
               agreement, transaction, obligation, commitment, understanding,
               arrangement or liability which:

               (i)  is of a length that is greater than is customary in
                    businesses of a similar nature to that of the Target Group
                    Company and which is material in the context of the Target
                    Group Company; or

               (ii) is dependent on the guarantee or covenant of or security
                    provided by any member of Seller's Group and which is
                    material in the context of the Target Group Company; or

               (iii) is a contract for the sale of shares or assets comprising a
                    business undertaking which contains warranties or
                    indemnities under which the Target Group Company still has a
                    remaining liability or obligation; or

                                      -61-
<PAGE>   65

               (iv) can be terminated as a result of any change in the
                    underlying ownership or control of the Target Group Company,
                    or would be materially affected by such change; or

               (v)  is in any way otherwise than in the ordinary course of the
                    Target Group Company's business.

10.3      SUBSTANTIAL OR SIGNIFICANT CONTRACTS

          No contract, agreement, transaction, obligation, commitment,
          understanding, arrangement or liability entered into by the Target
          Group Company and now outstanding or unperformed involves the supply
          by or to the Target Group Company of products or services whether by
          way of lease or outright sale or otherwise to any one customer such
          that the value of such supplies exceeds or is likely to exceed ten per
          cent. of the total turnover of the Target Group Company in the
          financial year ending 31 December 1999.

11.       INFORMATION TECHNOLOGY

11.1      In the twelve months prior to the date hereof the Target Group Company
          has not suffered any material failures or breakdowns of any computer
          hardware or software used in connection with its business which have
          caused any substantial disruption or interruption to their business.

11.2      There have been no Year 2000 issues which have interfered with
          business to a material extent.

11.3      The Target Group Company has the benefit of maintenance and support
          agreements for its material computer systems which are all in force
          and not terminable by the contractor by less than six months' notice.
          None of the maintenance and support agreements for the computer
          systems are terminable as a result of the transaction.

11.4      The computer systems of the Target Group Company have, and the Vendor
          has no reason to believe that the computer systems will not after
          Completion continue to have, adequate capability and capacity for all
          the processing and other functions required by the Target Group
          Company immediately prior to Completion.

11.5      Each Target Group Company has disaster recovery procedures or
          contracts which ensure or provide that the computer systems and the
          data can be replaced or substituted without material disruption to the
          business of the Target Group Company.

11.6

          (a)  In relation to third party software, the Vendor is unaware of any
               reason why, in the event that any person providing maintenance or
               support services for the computer systems of the Target Group
               Company is unable to do so, the Target Group Company would be
               unable to procure another person to carry out such services; and

          (b)  In relation to all other software, in the event that any person
               providing maintenance or support services for the computer
               systems of the Target Group Company is unable

                                      -62-
<PAGE>   66

               to do so, the Target Group Company has all necessary rights and
               information to procure the carrying out of such services by
               employees or by a third party.

11.7      The Target Group Company has, a sufficient number of technically
          competent and trained employees to ensure proper handling, operation,
          monitoring and use of the Target Group Company's computer systems and
          the Vendor is aware of no reason why each the Target Group Company
          will not have a sufficient number of so technically competent and
          trained employees following Completion.

11.8      The Target Group Company has implemented reasonable procedures to
          ensure internal and external security of its computer systems and data
          including (without limitation) procedures for preventing unauthorised
          access, preventing the introduction of a virus and/or loss of data and
          for taking and storing on-site and off-site back-up copies of software
          and data. So far as the Vendor is aware no viral infection subsists in
          any of the computer systems or data of the Target Group Company.

11.9      The hardware of the Target Group Company is the absolute property of
          the Target Group Company free from encumbrances.

11.10     Where any of the records of the Target Group Company are stored
          electronically, the Target Group Company has all necessary software
          licences and access to all hardware to enable it to keep, copy,
          maintain and use such records in the course of its business. Except
          for software, hardware and/or computer systems the subject of a
          facilities management agreement between Draftex SA and ATOS dated 31
          May 1997, the Target Group Company does not share any hardware or
          software relating to the records with any person and no third party
          enjoys any right or permission to copy or hold such records.

          In the above warranties:

          (a)  "COMPUTER SYSTEM" means the hardware and the software;

          (b)  "DATA" means any data or information used by or for the benefit
               of the Target Group Company at any time and stored electronically
               at any time;

          (c)  "HARDWARE" means any computer equipment used by or for the
               benefit of the Target Group Company at any time including,
               without limitation, parts of computer equipment such as firmware,
               screens, terminals, keyboards, disks and including cabling and
               other peripheral and associated equipment but excluding all
               software;

          (d)  "SOFTWARE" means any software and associated documentation and
               materials created by or on behalf of or used in the business of
               the Target Group Company.

12.       LIABILITIES

12.1      DEBTS OWED BY THE TARGET GROUP COMPANY TO THIRD PARTIES

          (a)  The Target Group Company has not received any notice to repay
               under any agreement relating to any borrowing or indebtedness in
               the nature of borrowing from a person other than a member of the
               Seller's Group (a "third party") which is repayable on demand.

                                      -63-
<PAGE>   67

          (b)  There has not occurred any event of default or any other event or
               circumstance which would entitle any person to call for early
               repayment under any agreement relating to any borrowing or
               indebtedness of the Target Group Company to a third party or to
               enforce any security given by the Target Group Company to a third
               party.

12.2      GUARANTEES AND INDEMNITIES

          (a)  The Target Group Company is not a party to any option,
               pre-emption, guarantee, indemnity, or suretyship with respect to
               the obligations of any member of the Seller's Group;

          (b)  No part of the loan capital, borrowing or indebtedness in the
               nature of borrowing of the Target Group Company is dependent on
               the guarantee or indemnity of, or security provided by, any
               member of the Seller's Group.

12.3      BORROWING POWERS

          (a)  The total amount borrowed by the Target Group Company from its
               bankers does not exceed its facilities and the total amount
               borrowed by the Target Group Company from whatsoever source does
               not exceed any limitation on its borrowing contained in its
               articles of association, or in any debenture or loan stock deed
               or other instrument.

          (b)  The particulars attached to the Disclosure Letter show the third
               party bank facilities of the Target Group Company.

12.4      OFF-BALANCE SHEET FINANCING

          The Target Group Company has not engaged in any borrowing or financing
          not required to be reflected in the Accounts.

13.       PERMITS

13.1      The Target Group Company has obtained all material licences,
          approvals, permissions, authorisations (public and private) and
          consents required for carrying on its business in the places and in
          the manner in which such business is now carried on.

13.2      The licences, approvals, permissions, authorisations and consents
          referred to in paragraph 13.1 are in full force and effect and have
          been complied with in all material respects. So far as the Vendor is
          aware no such licence, consent, permit approval or authorisation is
          likely to be suspended, cancelled or revoked or not renewed upon
          expiry.

14.       INSOLVENCY

14.1      WINDING UP

          No order has been made, petition presented or resolution passed for
          the winding up of the Target Group Company or for the appointment of a
          provisional liquidator to the Target Group Company.

                                      -64-
<PAGE>   68

14.2      ADMINISTRATION

          No administration order has been made and no petition for an
          administration order has been presented in respect of the Target Group
          Company.

14.3      RECEIVERSHIP

          No receiver, receiver and manager or administrative receiver has been
          appointed of the whole or part of the Target Group Company's business
          or assets.

14.4      COMPROMISES WITH CREDITORS

          No Target Group Company has proposed or had approved (by its members,
          creditors and/or a court, as appropriate) any compromise or
          arrangement with its general body of creditors (or any class of them)
          in respect of the payment of creditors claims.

14.5      UNSATISFIED JUDGMENTS

          No distress, execution or other process been levied against the Target
          Group Company or action taken to repossess goods in the Target Group
          Company's possession which has not been satisfied in full. No
          unsatisfied judgment is outstanding against the Target Group Company.

14.6      ANALOGOUS EVENTS

          No event analogous to any of the foregoing has occurred in or outside
          England.

15.       LITIGATION AND COMPLIANCE WITH LAW AND PRODUCT LIABILITY

          LITIGATION

          (a)  The Target Group Company during the 12 months ending on the date
               of this agreement has not been involved in any civil, criminal,
               arbitration, administrative or other proceeding in any
               jurisdiction which is material to the operation of its business.
               So far as the Vendor is aware no civil, criminal, arbitration,
               administrative or other proceeding in any jurisdiction is pending
               or threatened by or against the Target Group Company which is
               material to the operation of its business.

          (b)  There is no outstanding judgment, arbitral award or decision of a
               court, tribunal, arbitrator or governmental agency in any
               jurisdiction against the Target Group Company which is material
               to the operation of its business.

15.2      COMPLIANCE WITH LAW

          So far as the Vendor is aware the Target Group Company has conducted
          its business and dealt with its assets in all material respects in
          accordance with applicable legal and administrative requirements in
          any jurisdiction (including the Health and Safety at Work Act 1974).

                                      -65-
<PAGE>   69

15.3      INVESTIGATIONS

          So far as the Vendor is aware the Target Group Company is not and has
          not been subject to any investigation, enquiry or disciplinary
          proceeding (whether judicial, quasi-judicial or otherwise) in any
          jurisdiction which is material to the operation of its business. The
          Target Group has not received any request for information from, any
          court or governmental authority (including any national competition
          authority and the Commission of the European Communities and the EFTA
          Surveillance Authority) under any anti-trust or similar legislation in
          any jurisdiction. So far as the Seller is aware no matter exists which
          might give rise to such an investigation, enquiry, proceeding or
          request for information.

15.4      PRODUCT LIABILITY

          There is no claim in respect of Product Liability (as hereinafter
          defined) outstanding or threatened against or expected by the Target
          Group Company in relation to its business which is material in the
          context of the Target Group Company as a whole and so far as the
          Vendor is aware there are no circumstances which are likely to give
          rise to any such claim. For this purpose "Product Liability" means a
          liability arising out of death, personal injury or damage to property
          caused by a defective product or defective services sold, supplied or
          provided by the Target Group in the course of its business on or prior
          to the date hereof.

16.       BROKERAGE OR COMMISSIONS

          No person is entitled to receive from the Target Group Company a
          finder's fee, brokerage or commission in connection with this
          agreement or anything in it and the Target Group Company is not liable
          to pay to any of its directors, employees, agents and advisers any sum
          whatsoever in connection with the sale of the Acquisition Shares.

17.       OFFICERS AND EMPLOYEES

17.1      PARTICULARS OF SENIOR EXECUTIVES

          The particulars of each Senior Executive annexed to the Disclosure
          Letter show the names, job title, date of commencement of employment,
          and date of birth of every Senior Executive of the Target Group
          Company and no other person is a direct or shadow director of the
          Target Group Company.

17.2      REMUNERATION AND BENEFITS

          The particulars annexed to the Disclosure Letter show all remuneration
          (including particulars of all profit sharing, incentive, bonus and
          commission arrangements) and other benefits (including for the
          avoidance of doubt any right to payment or compensation howsoever
          arising):-

          (a)  actually provided; and/or

          (b)  which the Target Group Company is bound to provide (whether now
               or in the future)

          to each Senior Executive of the Target Group Company.

                                      -66-
<PAGE>   70

17.3     TERMS AND CONDITIONS

          (a)  The Disclosure Letter contains examples of all the standard terms
               and conditions, staff handbooks and policies which apply to
               Senior Executives and employees of the Target Group Company.

          (b)  There are no terms and conditions in any contract with any Senior
               Executive or employee of the Target Group Company pursuant to
               which such person will be entitled to receive any payment or
               benefit or such person's rights will change as a direct or
               indirect consequence of the transaction contemplated by this
               agreement.

          (c)  So far as the Seller is aware all employees have only one
               employment contract with one of the Target Group Company and do
               not have an employment relationship with either another Target
               Group Company or any third party.

17.4      NOTICE PERIODS

          The terms of employment of all employees of the Target Group Company
          and the terms on which the service of any persons are provided to the
          Target Group Company are such that their employment may be terminated
          by not more than six months' (but in any event not less than 30 days')
          notice given at any time without liability for any payment including
          by way of compensation or damages (except in the case of employees, an
          economic compensation payment if required by Chinese Labour Law (for
          China only), a statutory redundancy payment or for all countries
          except France unfair dismissal) except in the case of the Senior
          Executives whose notice periods are disclosed in the Disclosure
          Letter.

17.5      LOANS

          There are no amounts owing or agreed to be loaned or advanced by any
          of the Target Group Company to any Senior Executives of the Target
          Group Company (other than amounts representing remuneration accrued
          due for the current pay period, accrued extraordinary pay (for Spain
          only) accrued holiday pay for the current holiday year or for
          reimbursement of expenses).

17.6      INDUSTRIAL RELATIONS

          (a)  No trade union, staff association or any other body representing
               workers is recognised by the Target Group Company for the
               purposes of collective bargaining.

          (b)  The Disclosure Letter contains copies of any agreements
               (collective or otherwise) between the Target Group Company and
               any trade union, works council, staff association or any other
               body representing workers ("Collective Agreements").

          (c)  The Target Group Company are not engaged or involved in any trade
               dispute, industrial action (whether official or unofficial,
               current or threatened) and/or any industrial relations matter
               (whether or not referred to any government or other recognised
               agency within each jurisdiction which specialises in providing
               advisory, conciliation or arbitration services) with any
               employee, trade union, staff association or any other body
               representing workers.

                                      -67-
<PAGE>   71

          (d)  So far as the Vendor is aware the Target Group Company is not
               engaged or involved in any review or supervision by or dispute
               with any governmental body which could claim any form of payment
               from the Target Group Company.

17.7      NOTICE OF TERMINATION AND LEAVE OF ABSENCE

          (a)  No Senior Executive of the Target Group Company has given notice
               to terminate his employment.

          (b)  None of the Senior Executives is under notice of dismissal nor is
               there any liability outstanding to Senior Executives or former
               Senior Executives arising out of or in connection with their
               contract of employment, its termination or otherwise.

          (c)  There are no Senior Executives of the Target Group Company who
               are on secondment, maternity leave or absent on grounds of
               disability or other leave of absence (other than normal holidays
               or absence of no more than one week due to illness).

          (d)  The Target Group Company does not have any proposals, plans,
               commitments or agreements to dismiss any employees and there are
               no present or planned consultations or discussions with any trade
               union, staff association, works council or representatives of the
               employees in respect of any such proposal, plan, commitments or
               agreements.

17.8      CLAIMS BY OFFICERS AND EMPLOYEES

          No past or present Senior Executive or employee of the Target Group
          Company or any predecessor in business has instigated or threatened
          any claim or right of action against the Target Group Company
          including any claim:-

          (a)  in respect of any accident or injury which is not fully covered
               by insurance; or

          (b)  for breach of any contract of services or for services; or

          (c)  for loss of office or arising out of or connected with the
               termination of his office or employment, his contract of
               employment or otherwise.

17.9      COMPLIANCE WITH LAW

          So far as the Vendor is aware the Target Group Company has complied in
          all material respects during the past two years (except in the case of
          France and Spain which shall be five years) with the relevant
          provisions of the Treaty of Rome, EC Directives, EC Regulations,
          statutes (including for the avoidance of doubt any regulating working
          time or minimum salary levels), regulations, codes of conduct,
          Collective Agreements, terms and conditions of employment, contracts,
          applicable redundancy procedures, social security regulations, filing
          requirements, mandatory insurance requirements, legal requirements
          relating to health and safety, orders, declarations and awards
          relevant to the Target Group Company's employees or persons whose
          services are provided to the Target Group Company or the relations
          between the Target Group Company and any trade union, staff
          association or any other body

                                      -68-
<PAGE>   72

          representing workers including its statutory obligations to inform and
          consult appropriate representatives as required by law.

17.10     REDUNDANCIES

          So far as the Vendor is aware there is (and in the case of France
          there has not been over the past 5 years) no plan, scheme, commitment,
          policy, custom or practice (whether legally binding or not) relating
          to redundancy affecting any of the employees of the Target Group
          Company more generous than the statutory redundancy requirements.

17.11     CHANGES SINCE ACCOUNTS DATE

          Since the Accounts Date, no change has been made in (i) the rate of
          remuneration, or the emoluments or pension benefits or other
          contractual benefits, of any Senior Executive of the Target Group
          Company or (ii) the terms of engagement of any such Senior Executive.

17.12     PAYMENT UP TO COMPLETION

          All salaries and wages and other benefits of all employees of the
          Target Group Company have, to the extend due, been paid or discharged
          in full.

17.13     PAYMENTS ON COMPLETION

          So far as the Vendor is aware none of the Senior Executives will
          become entitled by virtue of their contract of employment (or other
          formal or informal agreement) to any payment or enhancement in or
          improvement to their remuneration, benefits or terms and conditions of
          service only by reason of the execution of this agreement or of
          completion of the sale and purchase under or pursuant to this
          agreement.

17.14     HEALTH AND SAFETY

          So far as the Vendor is aware no action has been taken by any
          enforcing authority in relation to any actual or alleged breach by the
          Target Group Company of any legal requirements relating to health and
          safety and the Target Group Company are not in receipt of any claim by
          an employee or past employee in relation to such breach and the Target
          Group Company are not aware of any circumstances which may lead to
          such action or claim.

17.15     The headcount reduction required to reduce actual employees to the
          planned headcount set out in the business plan for December 2000 in
          the Target Group Company operating in Germany (the "GERMAN TARGET
          GROUP COMPANIES") is less than the total number of temporary, leased
          or short term contract workers in the German Target Group Companies
          whose contracts can be terminated on short notice with no cost and no
          social plan, as illustrated below:

          Actual employees end September 2000 (or whenever)            1,782

          Planned headcount end December 2000                          1,574

          Headcount reduction to take place in October,                  208

                                      -69-
<PAGE>   73

           November, December 2000 after closure of plant 3

          Existing pool of temporary leased or short term contract       311
          workers which can be terminated and short notice with no
          cost and no social plan

18.       PROPERTIES

18.1      ALL PROPERTIES

          The Properties comprise all the property owned, used or occupied by
          and all property rights vested in the Target Group and/or the relevant
          Target Group Companies.

18.2      TITLE

          The Target Group Company has good and marketable title to each of the
          Properties set against its name in schedule 5 and is the legal and
          beneficial owner thereof.

18.3      OCCUPATION

          The Target Group Company is in sole and exclusive occupation (and is
          entitled to sole and exclusive occupation) of the entirety of each
          Property set out against its name in schedule 5 and no Property is, so
          far as the Target Group Company and/or the Vendors are aware, subject
          to any encumbrances which could materially inhibit the current use of
          the relevant Property or its occupation or any use or occupation
          currently intended by the Target Group Company.

18.4      RIGHTS

          The Target Group Company has sufficient interest and right to entitle
          it to occupy and use exclusively each Property set out against its
          name in schedule 5 for its present use and enjoyment (and any use
          currently intended by the Target Group Company) and there are
          appurtenant to each Property all such rights and easements and other
          matters reasonably necessary for such use and enjoyment and none of
          the same are capable of withdrawal modification or termination by any
          person (except for breach of the Target Group Company's obligation in
          respect of a leasehold interest save where the general law of any
          particular jurisdiction provides that Leases may be determined for
          other reasons and such law mandatorily applies). The Target Group
          Company has not received any notification from any third party
          challenging its right to occupy any Property (set out against its name
          in schedule 5) which it leases.

18.5      CONSENTS

          The Properties benefit from and comply with all necessary consents
          required for the occupation thereof for the purposes of the Target
          Group Company's business and for the use to which each Property is
          currently put and no such consents or approvals have been given on a
          temporary or personal basis nor do any of them require removal at any
          time of any works so authorised.

                                      -70-
<PAGE>   74

18.6      ONEROUS MATTERS

          There are no agreements or restrictions or other matters which are of
          an unusual or onerous nature which would adversely affect the
          occupation and use of the Properties their value or marketability.

18.7      OBLIGATIONS

          So far as the Target Group Company and the Vendor are aware the Target
          Group Company has duly and substantially performed in all material
          respects in relation to the Property set against its name in schedule
          5 and the conduct of the business of the Target Group Company therein
          all obligations relating to such Property and the conduct of such
          business whether to a landlord or to statutory or other public
          authority or any other person and is not aware of any alleged material
          breach of any such obligations.

18.8      DISPUTES

          Neither the Target Group Company nor the Vendor is aware of any
          outstanding current material dispute or complaint relating to any
          Property set against the Target Group Company's name in schedule 5 or
          the conduct of the Target Group Company's business therein.

18.9      UNUSUAL EXPENDITURE

          Neither the Target Group Company nor the Vendor is aware of any
          requirement (whether by a landlord a statutory or other public
          authority or any other person) which would result in the Target Group
          Company having to pay charges or outgoings (not being rent) of
          material amount in excess of the sums currently paid in relation to
          each Property set against its name in schedule 5 or in excess of usual
          real estate rates and taxes.

18.10     CHANGE OF CONTROL

          So far each as the Target Group Company and the Vendor are aware no
          change of control of (or transfer of ownership or any interest in the
          shares of the Target Group Company and/or any rights in them) requires
          in relation to property any consent or authorisation from any party
          and no such change of control or transfer will give rise to any right
          of any person to terminate or curtail any interest in or connected
          with any of the Properties or otherwise adversely affect the
          Properties their use and enjoyment or the running of the businesses of
          the Target Group Company provided that it is agreed that for the
          purposes of this paragraph 18.10 the foregoing provisions shall be
          subject to any general law of the jurisdiction in which Properties are
          located which (i) provides that leases or consents may be terminated
          for reasons other than breach of obligation and (ii) is of mandatory
          application.

18.11     FURTHER TITLE ISSUES

          (a)  So far as the Target Group Company and the Vendor are aware the
               particulars of the Properties shown in schedule 5 are true and
               correct. The Target Group Company has not entered into any
               agreement to acquire or dispose of any land or premises or any
               interest therein nor has it entered into any agreements for
               material construction, demolition or refurbishment of any
               buildings or facilities.

                                      -71-
<PAGE>   75

          (b)  Each Property is held free from any Encumbrance, lease,
               sub-lease, tenancy, licence or right of occupation, rent charge,
               exception, reservation, easement, quasi-easement, privilege,
               pre-emption agreement, option or other encumbrance (or agreement
               for any of the same) including without limitation in the case of
               Properties in the United States any zoning or deed restriction
               materially adversely affecting the use or occupation of the
               Property, or its value or marketability

          (c)  The leases, sub-leases, tenancies, licences (or agreements for
               any of the same) under which any of the Properties are held are
               valid and subsisting against all persons.

18.12     MATTERS AFFECTING PROPERTIES

          (a)  None of the Properties is affected by any of the following
               matters or is to the knowledge of the Target Group Company or the
               Vendor likely to become so affected:

               (i)  any exception, reservation, right, covenant, restriction or
                    condition which is of an unusual nature or which affects or
                    might in the future affect the use of any of the Properties
                    for the purpose for which it is now used (the "CURRENT USE")
                    or any other use or enjoyment currently planned or
                    contemplated by the Target Group Company or which affects or
                    which could affect the value or marketability of any
                    Property but this warranty shall not apply (in the case of
                    properties located in Germany) to restrictions of use
                    deriving from covenants and restrictions customary and usual
                    in building permits and/or administrative permits and
                    administrative restrictions of the type referable to the
                    German Property in question;

               (ii) any notice, order, demand, complaint, prosecution,
                    requirement or proposal of which the Target Group Company or
                    the Vendor have notice or of the Vendor or the Target Group
                    or any Target Group Company or the Vendor are aware made or
                    issued by or on behalf of any authority, agency or
                    department or body;

               (iii) any outstanding material unusual claim or liability
                    (contingent or otherwise);

               (iv) (save in respect of leasehold Properties) the requirement
                    for consent from any party to the encumbering of the
                    Properties or any of them.

          (b)  So far as the Target Group Company and the Vendor are aware, as
               to each of the Properties there are no development works
               redevelopment works or fitting out works outstanding.

          (c)  There are no restrictive covenants or provisions, orders
               specifically affecting any Property, charges, restrictions,
               agreements, conditions or other matters which preclude or limit
               the use of any of the Properties except (in the case of Property
               in Germany which comprises industrial plant) covenants
               restrictions or conditions usually contained in building permits
               and administrative restriction of industrial plant.

                                      -72-
<PAGE>   76

          (d)  Any necessary or appropriate action to protect the interests of
               each relevant Target Group Company has been taken in relation to
               rent reviews and/or lease renewals and all appropriate time
               limits have been complied with in all material respects and no
               rent reviews are outstanding at the date hereof or exercisable
               prior to Completion.

          (e)  In relation to any lease, sub-lease, tenancy or agreement for any
               of the same under which the Target Group Company is the landlord:

               (1)  the rents collected have not exceeded the sums lawfully
                    recoverable;
               (2)  no forfeiture proceedings have been taken or are
                    contemplated;
               (3)  no notice has been served which is still outstanding;
               (4)  no works have been carried out which could give rise to a
                    claim against the Target Group or any Target Group Company
                    for compensation or which would have to be disregarded on
                    any rent review;
               (5)  all consents and conditions contained therein or relating
                    thereto have been observed and performed to date and all
                    necessary consents for the grant of the lease or other
                    instrument have been obtained; and
               (6)  brief details of all such leases, sub-leases, tenancies or
                    agreements for any of the same are set out at the end of
                    schedule 5 and such details are true and correct

          (f)  Where the interest in any of the Properties is leasehold (which
               shall include any Properties held under a finance lease or credit
               bail) there is no right for the landlord to determine the lease
               (or finance lease or credit bail) except in the event of
               non-payment of rent or other breach of covenant by the tenant.

          (g)  Provided that it is agreed that for the purposes of this
               paragraph 18.12 the foregoing provisions shall be subject to any
               general law of the jurisdiction in which Properties are located
               which (i) provides that leases or consents may be terminated for
               reasons other than breach of obligation and (ii) is of mandatory
               application.

          (h)  In relation to any freehold property in the Czech Republic there
               are so far as the Target Group Company and the Vendor are aware,
               no claims or proceedings relating to restitution or whereby any
               third party claims ownership of or an interest in that Property.

18.13     OUTSTANDING PROPERTY LIABILITIES

          Except in relation to the Properties listed in schedule 5 and the
          documents relating to them disclosed in the Data Room or disclosed in
          writing by the Target Group Company's lawyers to the Buyer's lawyers
          the Target Group Company has no material liabilities (actual or
          contingent) arising out of or relating to land or premises or an
          interest in land or premises, (including, without limitation,
          leasehold premises sold, assigned or otherwise disposed of).

18.14     CHINA

          In relation to the Properties in China the landlords thereof had good
          and sufficient title to grant the leases thereof and the Target Group
          Company is legally entitled to occupy the relevant Property.

                                      -73-
<PAGE>   77

18.15     BOUNDARIES

          The buildings and improvements of each Property in the United States
          are located within the legal boundary lines of each Property are not
          in material violation of applicable setback requirements, zoning laws
          and ordinances and none of the Properties or buildings or improvements
          thereon are subject (in the case of Properties in the United States)
          to "permitted non-conforming use" or "permitted non-conforming
          structure" classifications and do not encroach on any easement that
          may burden the Property.

19.       PENSIONS

19.1      PENSIONS ARRANGEMENTS DISCLOSED

          Save under the Pension Schemes and the state pension schemes
          (together, the "BENEFIT SCHEMES"), the Target Group Company is under
          no obligation to provide any Applicable Benefit to or in respect of
          any employee or former employee of the Target Group Company or its
          subsidiaries (a "RELEVANT EMPLOYEE") or for any widow, widower,
          spouse, child or dependant of any Relevant Employee. For the purposes
          of this paragraph 19, "APPLICABLE BENEFIT" means any pension, lump
          sum, gratuity, or other like benefit given or to be given:

          (A)  on retirement or on death; or

          (B)  in connection with past employment, after retirement or on or
               after death; or

          (C)  in anticipation of or in connection with retirement or death.

19.2      EX GRATIA PAYMENTS

          The Target Group Company is not making, and will not before Completion
          make, any voluntary or ex gratia payments of any Applicable Benefits
          to or in respect of any Relevant Employee.

19.3      NO ASSURANCES ETC.

          None of the companies in the Seller's Group or the Target Group:

          (A)  have (except as disclosed in the Disclosure Letter) given any
               undertaking or assurance (whether legally enforceable or not) to
               any Relevant Employee or to any widow, widower, child or
               dependant of any Relevant Employee as to the continuance,
               introduction, improvement or increase of any Applicable Benefit;
               or

          (B)  is paying or has in the last two years paid any Applicable
               Benefit (except under the Benefit Schemes) to any Relevant
               Employee or to any widow, widower, child or dependant of any
               Relevant Employee.

19.4      DISCLOSURE OF DOCUMENTS

          In respect of each Pension Scheme, the Buyer or its advisers have been
          supplied with the documentation governing such Pension Scheme. Such
          documentation and all material details

                                      -74-
<PAGE>   78

          relating to benefits and contributions of the Relevant Employees under
          the Pension Schemes and the obligations of employers participating in
          the Pension Schemes are disclosed in the Disclosure Letter.

19.5      AUGMENTATION

          Except as disclosed in the Disclosure Letter, no power under the
          Pension Schemes has been exercised in relation to any Relevant
          Employee who is in employment with any company within the Seller's
          Group or with the Target Group Company:

          (A)  to provide terms of membership of the Pension Schemes (whether as
               to benefits or contributions) which are different from those
               generally applicable to the members of the Pension Schemes; or

          (B)  to provide any benefits which would not but for the exercise of
               that power have been payable under the Pension Schemes; or

          (C)  to augment any benefits under the Pension Schemes.

19.6      PAYMENT OF CONTRIBUTIONS AND EXPENSES

          Contributions to the Benefit Schemes are not paid in arrears and all
          contributions and other amounts which have fallen due for payment have
          been paid. The Target Group Company has paid all the expenses of the
          Benefit Schemes for which it is liable.

19.7      LEGAL COMPLIANCE

          The Pension Schemes are in all material respects administered in
          accordance with and comply with applicable legislation and
          requirements.

19.8      SELLER'S VENDORS' AND TARGET GROUP COMPANY'S OBLIGATIONS

          The Vendors and the Target Group Company have observed and performed
          those provisions of the Benefit Schemes which apply to them.

19.9      CLAIMS AND LITIGATION

          No claim has been made by or in respect of any Relevant Employee
          against the Vendor or the trustees of the Pension Schemes which
          remains outstanding (other than routine claims for benefits and
          enquiries). So far as the Vendor and the Target Group Company are
          aware, there are no facts likely to give rise to any such claim.

19.10     NO EARLY RETIREMENT PROGRAMMES

          There are no special early retirement programmes in relation to any of
          the employees of the Target Group Company other than as disclosed in
          the Disclosure Letter.

19.11     EMPLOYEES OF BEIJING WANYUAN-DRAFTEX SEALING PRODUCTS CO LTD

                                      -75-
<PAGE>   79

          In relation to employees of Beijing Wanyuan-Draftex Sealing Products
          Co Ltd, the Vendor warrants that Beijing Wanyuan-Draftex Sealing
          Products Co Ltd is not liable to make payment of any Applicable
          Benefits directly to such employees.

19.12     EMPLOYEES OF THE GERMAN TARGET GROUP COMPANIES

          In relation to employees of the Target Group Companies incorporated
          and Operating in Germany (the "GERMAN TARGET GROUP COMPANIES"), the
          Vendor and the Target Group Company warrant that the Pension Schemes
          (insofar as such schemes are applicable to the employees of the German
          Target Group Companies) have been validly substituted (if substitution
          has occurred) for any other pension scheme in which the employees of
          the German Target Group Companies have at any time participated.

20.       TAXATION

20.1      RETURNS AND DISPUTES

          The Target Group Company has in the six years (or ten years in the
          case of the PRC Company the Czech Company and Draftex Optimit SRO)
          prior to the date hereof made all returns and supplied all information
          and given all notices to the relevant Taxation Authority as required
          by law within any requisite period and so far as the Seller is aware
          all such returns and information and notices are correct and accurate
          in all material respects and are not the subject of any dispute and so
          far as the Seller is aware there are no facts or circumstances likely
          to give rise to or be the subject of any such dispute.

20.2      Each Target Group Company has in all material respects in the six
          years (or ten years in the case of the PRC Company and the Czech
          Company and Draftex Optimit SRO) prior to the date hereof paid all
          Taxes due and has not been liable to any material penalty or interest
          in respect of any such Taxes and the Vendor is not aware that there
          are or have been any circumstances which would give rise to any such
          penalty or interest.

20.3      ACCOUNTS

          The Accounts make proper provision or reserve in respect of any period
          ended on or before the Accounts Date for all tax assessed or liable to
          be assessed on the Target Group Company or for which it is accountable
          at the Accounts Date or in respect of which it is liable to make
          payment to any member of the Vendor's Group under any Tax sharing
          arrangements.

20.4      SECONDARY LIABILITY

          So far as the Vendor is aware, no transaction or event has occurred in
          consequence of which the Target Group Company is or may be held liable
          for any Tax or deprived of relief or allowances otherwise available to
          it in consequence of any Tax or may otherwise be held liable for or to
          indemnify any person (other than any Target Group Company) in respect
          of any Tax, where some other company or person is or may become
          primarily liable for the Tax in question (whether by reason of any
          such other company being or having been a member of the same group of
          companies or otherwise).

20.5      PAYROLL TAXES

                                      -76-
<PAGE>   80

          So far as the Vendor is aware, the Target Group Company has in all
          material respects properly operated the relevant system for the
          deduction of payroll taxes.

20.6      CAPITAL GAINS AND CAPITAL ALLOWANCES

          The Target Group Company has sufficient records to be able to
          calculate as well as any justification for proper deferral of any
          capital gain, where applicable any liability to corporate tax on gains
          (whether recognised as an income or capital receipt) arising as a
          result of the disposal of any capital asset as well as any
          justification for proper deferral of any capital gain, where
          applicable.

20.7      VALUE ADDED TAX

          (a)  The Target Group Company is a registered taxable person in each
               jurisdiction it carries on business and is required to be
               registered for the purpose of the VAT Legislation and has been
               treated as a member of a group of companies for such purpose. So
               far as the Vendor is aware no circumstances exist whereby the
               Target Group Company would or might become liable for the value
               added tax as an agent or otherwise;

          (b)  So far as the Vendor is aware the Target Group Company has
               complied in all material respects with the requirements and
               provisions of the VAT Legislation and has made and maintained
               accurate and up to date records invoices accounts and other
               documents required by or necessary for the purposes of the VAT
               Legislation and each Target Group Company has at all times
               punctually paid and made all payments and returns required
               thereunder.

20.8      CUSTOMS DUTY

          So far as the Vendor is aware, the Target Group Company has paid all
          customs duties payable and was made and maintained up-to-date records
          in respect of customs duties.

20.9      STAMP DUTY

          So far as the Vendor is aware all documents in the possession of the
          Target Group Company in the enforcement of which the Target Group
          Company is or may be interested have been duly stamped, registered and
          filed with the competent Tax Authority in due course.

20.10     FOREIGN ELEMENT

          So far as the Vendor is aware, the Target Group Company has always
          been resident in the territory in which it was incorporated and has
          never been resident in any other territory or treated as so resident
          for the purposes of any double Tax agreement.

20.11     WITHHOLDINGS

          Each Target Group Company has deducted Tax from all material payments
          made where required by applicable legislation and accounted to the
          relevant taxation authority for Tax so deducted.

                                      -77-
<PAGE>   81

                                      -78-
<PAGE>   82

                                   SCHEDULE 4
                            VENDOR PROTECTION CLAUSES

1.        Each of the Vendors and Seller hereby undertake to and for the benefit
          of the Buyer that they will not make or pursue any claim or action
          howsoever arising against the Target Group Companies or any of the
          directors, employees, agents or advisers of the Target Group Companies
          in respect of any loss or liability the Vendors may incur pursuant to
          the Warranties (or any other document referred to herein) or otherwise
          in connection with the sale of the Acquisition Shares to the Buyer or
          the preparation of the Disclosure Letter provided that the Seller or
          the Vendors shall not be precluded from bringing any such claim
          against the same in respect of fraud or willful concealment.

2.        Save in the case of fraud or fraudulent concealment by the Vendor, the
          Vendors shall be under no liability in respect of any claim under the
          Warranties or the Tax Deed and any such claim shall be wholly barred
          and unenforceable unless written notice of such claim setting out
          reasonable details as are available to the Buyer including as far as
          reasonably practicable an estimate of the maximum amount of the claim
          shall have been served upon the Seller (on behalf of the relevant
          Vendor) by the Buyer promptly after it becomes likely that a claim
          will be made, and in any event:-

          (a)  in the case of a claim under the Warranties other than the
               Warranties relating to Tax, by not later than 5.00 p.m. on the 21
               month anniversary of the date of Completion; and

          (b)  in the case of a claim under the Warranties relating to Tax or
               the Tax Deed by not later than 5.00 p.m. on the date 6 months
               after the date on which the relevant statutory limitation for
               claims by a Taxation Authority expires;

          (c)  in the case of a claim under the indemnity at clause 4.8(c) by
               not later than 5.00pm on the fifth anniversary of the date
               hereof,

          and the liability of the Vendor for any claim specified in such notice
          shall absolutely determine and cease (unless the amount payable in
          respect of the relevant claim has been agreed by the Seller within six
          months of the date of such written notice) if legal proceedings have
          not been instituted in respect of such claim by the due service of
          process on the relevant Vendor within six months of the date of such
          written notice; or

2.2       For the purpose of this paragraph 2 legal proceedings shall not be
          deemed to have been commenced unless they shall have been properly
          issued and validly served upon the relevant Vendor.

2.3       Save in the case of fraud or fraudulent concealment the Vendor shall
          be under no liability in respect of any claim under the Warranties,
          the indemnity at clause 4.8(c) or the Tax Deed:-

          (a)  where the liability of the Vendor in respect of that claim (and
               all other claims arising out of the same subject matter) would
               (but for this paragraph) have been less than (Euro)50,000; or

          (b)  unless and until and only to the extent that the liability in
               respect of that claim (not being a claim for which liability is
               excluded under paragraph 22.3(a) above) when

                                      -79-
<PAGE>   83

               aggregated with the liability of all of the Vendors in respect of
               all other such claims shall exceed (Euro)1,500,000.

2.4       (a)  Save in the case of fraud or fraudulent concealment the aggregate
               maximum liability of the Vendors (and the Seller's Group) in
               respect of all claims under the Indemnities and the Warranties
               and the Tax Deed shall not in any circumstances exceed (Euro)
               180,000,000.

          (b)  Without prejudice to the generality of the provisions of this
               schedule, the Vendors (and any member of the Seller's Group)
               shall not be liable in respect of any liability under the Tax
               Warranties (a "TAX WARRANTY CLAIM"):-

               (i)  where the Tax Warranty Claim in question would (but for this
                    paragraph) have been less than (Euro)50,000 per claim;

               (ii) unless and until and only to the extent that the liability
                    in respect of that Tax Warranty Claim (not being a Tax
                    Warranty Claim for which liability is excluded under this
                    schedule and in particular under paragraph 2.4(b)(i) above)
                    when aggregated with the liability of the Vendors (and the
                    Seller) in respect of all other such Tax Warranty Claims and
                    all claims under the Tax Deed exceeds (Euro)5,000,000;

2.5       The Vendors shall be under no liability in respect of any claim under
          the Warranties if the facts or circumstances giving rise thereto are
          fairly disclosed in the Disclosure Letter, or provided for or
          otherwise known to be exceptions under the terms of this agreement or
          are otherwise actually known (but subject to the qualification in
          paragraph 2.14) to any member of the Buyer's Group due diligence team,
          comprising T Hall, J Gray, Y Seyal, E Hasler, G Lonergan, M
          Hastings-Hale, C Conley, M Martin, W Phillips and B Hall (the "BUYER'S
          DUE DILIGENCE TEAM") at the date hereof.

2.6       No liability (whether in contract, tort or otherwise) shall attach to
          the any of the Vendors in respect of any claim under the Warranties to
          the extent that:-

          (a)  the claim or the events giving rise to the claim would not have
               arisen but for an act, omission or transaction of the Buyer's
               Group otherwise than in the ordinary and proper course of the
               business of the Target Group as at present carried on which could
               reasonably have been avoided and which the Buyer was aware (or
               reasonably should have been aware) could give rise to a claim or
               which would not have arisen but for any claim, election or
               surrender or disclaimer made or omitted to be made or notice or
               consent given or omitted to be given by the Buyer's Group under
               the provisions of any statutes relating to Tax;

          (b)  the claim is based upon a liability which is contingent only,
               unless and until such contingent liability becomes an actual
               liability save that this paragraph 2.6(b) shall not prevent
               liability attaching to the Vendor where the claim, albeit
               contingent, was notified within the time periods referred to in
               paragraph 2(a) or 2(b) but becomes an actual liability outside
               those times;

          (c)  provision or reserve in respect of the matter giving rise to the
               claim shall have been made in the Completion Accounts;

                                      -80-
<PAGE>   84

          (d)  the claim occurs wholly or partly out of or the amount thereof is
               increased as a result of:-

               (i)  any change in the accounting principles or practices of the
                    Buyer's Group introduced or having effect after the date of
                    this agreement unless the same is introduced to bring the
                    accounting principles and practices into line with generally
                    accepted accounting principles and practices in [the UK] in
                    relation to a business of the type carried on by the Buyer's
                    Group; or

               (ii) any increase in the rates of taxation made after the date
                    hereof; or

               (iii) any change in law or regulation or in its interpretation or
                    administration by any relevant court or by any other fiscal,
                    monetary or regulatory authority (whether or not having the
                    force of law) first published after the date hereof;

          (e)  the loss or damage giving rise to the claim is recoverable by the
               Buyer's Group under any policy of insurance or would have been so
               recoverable but for any change in the terms of insurance since
               the date of this agreement;

          (f)  the claim relates to a claim or liability for taxation and would
               not have arisen but for any winding-up or cessation after
               Completion of any business or trade carried on by the Buyer's
               Group except to the extent that such winding-up or cessation is
               occasioned by the facts or circumstances giving rise to one or
               more claims under the Warranties;

          (g)  the claim or the events giving rise to the claim would not have
               arisen but for an act, omission or transaction carried out at the
               written request of or with the written consent of the Buyer prior
               to Completion.

2.7       In assessing any liabilities, damages or other amounts recoverable by
          the Buyer as a result of any claim under the Warranties against the
          Vendor(s) there shall be taken into account any benefit accruing to
          the Buyer's Group including, without prejudice to the generality of
          the foregoing, the net present value of any tax relief obtained by the
          Buyer's Group and any amount by which any taxation for which the
          Buyer's Group is or may be liable to be assessed or accountable is
          reduced or extinguished, arising directly or indirectly in consequence
          of the matter which gives rise to such claim.

2.8       No liability will arise and no claim may be made under any of the
          Warranties to the extent that the matter giving rise to such claim is
          remediable unless within the period of 30 days following the Buyer
          becoming aware of such matter the Buyer shall have given written
          notice thereof to the Seller and such matter shall not have been
          remedied to the reasonable satisfaction of the Buyer within the period
          of 30 days following the date of service of such notice.

2.9       Paragraph 2.10 shall apply in circumstances where:-

          (a)  any claim is made against the Buyer's Group which may give rise
               to a claim by the Buyer against the Seller (on behalf of the
               relevant Vendor) under the Warranties other than the Warranties
               applying to Taxation (the "GENERAL WARRANTIES"); or

                                      -81-
<PAGE>   85

          (b)  the Buyer's Group is or may be entitled to make recovery from
               some other person any sum in respect of any facts or
               circumstances by reference to which the Buyer has or may have a
               claim against the Seller (on behalf of the relevant Vendor) under
               the General Warranties; or

          (c)  the Seller or the Vendor shall have paid to the Buyer an amount
               in respect of a claim under the General Warranties and subsequent
               to the making of such payment the Buyer's Group becomes or shall
               become entitled to recover from some other person a sum which is
               referable to that payment.

          For the avoidance of doubt any claim under any Warranty relating to
          Tax (a "TAX WARRANTY") shall be governed by clause 7 of the Tax Deed.

2.10      The Buyer shall and shall procure that each member of the Buyer's
          Group shall:-

          (a)  (subject to the Buyer being indemnified to its reasonable
               satisfaction by the Seller or by a member of the Seller's Group
               against all reasonable costs and expenses which may properly be
               incurred by reason of such action) promptly and diligently take
               all such action as the Seller may reasonably request (including
               but not limited to the institution of proceedings and the
               instruction of professional advisers approved by the Seller to
               act on behalf of the Buyer or the Buyer's Group) to avoid,
               dispute, resist, compromise, defend or appeal against any such
               claim against the Buyer's Group as is referred to in paragraph
               2.922.9 or to make such recovery by the Buyer's Group as is
               referred to in paragraph 2.9(a) or 2.9(c) as the case may be, in
               accordance with the reasonable instructions of the Seller and
               giving reasonable consideration to all representations made to
               the Seller in relation thereto; and

          (b)  not settle or compromise any liability or claim to which such
               action is referable without the prior written consent of the
               Seller which consent shall not be unreasonably withheld or
               delayed; and

          (c)  in the case of paragraph 2.9(c) only, promptly repay to the
               Seller an amount equal to the amount so recovered or, if lower,
               the amount paid by the Seller or the Vendor to the Buyer

          Provided that paragraphs 2.10(a) and 2.10(b) only shall not apply
          where in the reasonable view of the Buyer any material adverse effect
          on the business or commercial relationships of a member of the Target
          Group and a material customer or supplier of the Target Group may be
          directly caused by acting in accordance with those clauses.

2.11      The Buyer shall as soon as reasonably practicable:-

          (a)  inform the Seller (on behalf of the relevant Vendor) in writing
               of any fact, matter, event or circumstance which comes to its
               notice or to the notice of the Buyer's Group whereby it appears
               that the Seller (on behalf of the relevant Vendor) is or may be
               liable to make any payment in respect of any claim under the
               General Warranties or whereby it appears the Buyer's Group shall
               become or may become entitled to recover from some other person a
               sum which is referable to a payment already made by the Vendor in
               respect of such a claim; and

                                      -82-
<PAGE>   86

          (b)  thereafter keep the Seller (on behalf of the relevant Vendor)
               fully informed of all material developments in relation thereto;
               and

          (c)  provide all such information and documentation (no matter how it
               is recorded or stored) as the Seller (on behalf of the relevant
               Vendor) shall reasonably request in connection therewith and also
               in connection with any proceedings instituted by or against the
               Buyer's Group under these clauses.

2.12      The only remedies available to the Buyer (and, where appropriate, to
          its Related Persons) in respect of this agreement together with any
          other documents referred to in this agreement (the "TRANSACTION
          DOCUMENTS") are damages for breach of contract (subject to the
          limitations set out in this agreement and the Tax Deed) and, for the
          avoidance of doubt, neither it (nor its Related Persons, where
          appropriate) have any right to rescind or terminate any Transaction
          Documents (save as provided herein) either for breach of contract or
          for negligent or innocent misrepresentation or otherwise PROVIDED THAT
          the provisions of this paragraph 2.12 shall not exclude any liability
          which any of the parties or, where appropriate, their Related Persons
          would otherwise have to any other party or, where appropriate, to any
          other party's Related Persons or any right which any of them may have
          to rescind this agreement in respect of any statements made
          fraudulently by any of them prior to the execution of this agreement
          or any rights which any of them may have in respect of fraudulent
          concealment by any of them.

2.13      In the event that the Seller at any time after the date hereof shall
          wish to take out insurance against its liability hereunder the Buyer
          undertakes to provide such information as the prospective insurer may
          reasonably require before effecting such insurance.

2.14      The Buyer hereby warrants that the Buyer's Due Diligence Team has no
          actual knowledge of any fact which might lead to claims against the
          Vendor under the Warranties, the Seller acknowledging on behalf of
          each Vendor that knowledge of a fact or circumstance solely through
          its inclusion in any draft of the disclosure letter would not provide
          a defence to any action taken by the Buyer or qualify, limit or
          restrict in any manner any claim made by the Buyer, for breach of any
          of the Warranties unless the Disclosure Letter also contained a
          reference to that fact or circumstance.

2.15      Nothing in this agreement shall or shall be deemed to relieve the
          Buyer of any common law or other legal duty to mitigate any loss or
          damage incurred by it.

2.16      Any liability of the Vendor in respect of any claim under the
          Warranties which is based upon or referable to:

          (a)  a shortfall, insufficiency or reduction of earnings, revenues or
               profits (whether or not consolidated, or before or after tax or
               extraordinary, exceptional or non-recurring items) of the Target
               Group; or

          (b)  an adverse effect on any such earnings, revenues or profits

          arising in each case by virtue of the subject matters of the claim
          shall not exceed the amount of such shortfall, insufficiency,
          reduction or adverse effect which has occurred at the date of such
          claim.

                                      -83-
<PAGE>   87

                                      -84-
<PAGE>   88

                                   SCHEDULE 5
                                     PART 1
                                 THE PROPERTIES
DRAFTEX
-------

<TABLE>
<CAPTION>
------------------------ -------------------------------- -------------- --------------------------- -------------
COMPANY                  ADDRESS                          TENURE         LANDLORD                     SQM.

------------------------ -------------------------------- -------------- --------------------------- -------------
<S>                      <C>                              <C>            <C>                         <C>
Draftex                  Buropark Hansastem               Leasehold      Iduna Vereinigte
International            Fritz-Vomfelde-Str. 12                          Lebensversicherung AG Fur   832
Worldwide                40547 Dusseldorf                                Handwerk Handel und
Headquarters                                                             Gewerbe
Lessor Draftex                                                           Neu Rabenstrasse 15-19
International GmbH &                                                     20354 Hamburg
Co KG

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex                  Grefrath, Industrie 2            Leasehold      Draftex International                780
International                                                            GmbH & Co. KG.
GmbH & Co KG

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex                  Plant II                         Freehold,                                        20,760
International GmbH &     41747 Viersen                    encumbered
Co KG                    Greefsallee 60, Bachstrasse      with land
                                                          charges in
                                                          the total
                                                          amount of DM
                                                          6 million
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex                  Plant IV                         Freehold                                         49,181
International GmbH &     47929 Grefrath,
Co KG                    Bahnstrasse 29

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex                  Plant VI                         Freehold                                         27,821
International GmbH &     41747 Viersen
Co KG                    Helmholtzstrasse 26/27

------------------------ -------------------------------- -------------- --------------------------- -------------
DIETC                    Erkelenzer Strasse 50            Leasehold      Company                           13,310
                         41179 Monchengladbach                           Schafhorst,
                                                                         Monchengladbach

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Optimit s.r.o.   Vitouska 391                     Leasehold      Semperflex Optimit a.s.           12,892
                         742 35 Odry
                         Czech Republic

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International    Mistecka 1111                    Leasehold      Tatra Pribor a.s                  21,963
(Pribor) s.r.o.          742 58  Pribor                                  Pribor
                         Czech Republic                                  Mistecka 111
                                                                         Czech Republic
                         -------------------------------- -------------- --------------------------- -------------
                         Mistecka 1111                    Freehold       Purchase Agreement signed          4,870
                         742 58 Pribor                                   on 15 September 2000.
                         Czech Republic                                  Currently awaiting
                                                                         registration of the title
------------------------ -------------------------------- -------------- --------------------------- -------------
SLIC Corvol SA           Grande Rue                       Freehold                                          6,200
                         58460 Corvol L'Orgueilleux

------------------------ -------------------------------- -------------- --------------------------- -------------
SLIC Gruchet SA          Lieudit "le GrandPre",           Freehold       Auxicomi
------------------------ -------------------------------- -------------- --------------------------- -------------
</TABLE>

                                      -85-
<PAGE>   89

<TABLE>
<CAPTION>
------------------------ -------------------------------- -------------- --------------------------- -------------
COMPANY                  ADDRESS                          TENURE         LANDLORD                     SQM.

------------------------ -------------------------------- -------------- --------------------------- -------------
<S>                      <C>                              <C>            <C>                         <C>
                         76170 Saint Nicolas de la        Subject to a   27-31 avenue du General     10,870
                         Taille                           finance lease  LECLERC
                                                                         94710 Maison Alfort
                                                                         France

------------------------ -------------------------------- -------------- --------------------------- -------------
Snappon SA               Rue Edmond Poillot               Freehold                                         16,300
                         28011 Chartres Cedex

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International    Rambla de Catalunya, 105         Leasehold      Fincas Simeon Gestion de     Approx. 150
Iberica SA               Barcelona,                                      Patrimonios
                         Spain
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International    Poligono Riera de Caldes         Freehold                                         51,710
Iberica SA               C./dels Mercaders
                         9-11 E-08184 Palau de Plegamans                                                  (22,300
                         Barcelona                                                                         built)

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International    Polgono Industrial de Valls      Freehold                                         37,229
Iberica SA               Carrer Manyans
                         S/n 43800 Valls Tarragona                                                        (24,185
                         Spain                                                                             built)

------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Inc.             2121 Heilig Road                 Freehold                                        450,000
                         Salisbury                                                                        (Sq ft)
                         North Carolina, NC 28146
                         USA
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Inc.             Suite 206                        Leasehold      Ericar Co.                         5,365
                         40000 Grand River                                                                (Sq ft)
                         Novi
                         Oakland County
                         Michigan

------------------------ -------------------------------- -------------- --------------------------- -------------
Beijing                  No. 1 Nan Da Hong Men Road       Leasehold      CALT                               14740
Wanyuan                  Feng Tai District                               No. 1 Nan Da Hong Men Road
Draftex Sealing          Beijing PO Box 9200-58                          Feng Tai District
Products Company         Post Code 10 0076                               Beijing PO Box 9200-58
Limited                                                                  Post Code 10 0076

------------------------ -------------------------------- -------------- --------------------------- -------------

</TABLE>

                                      -86-
<PAGE>   90

                                   SCHEDULE 5
                                     PART 2
                             THE EXCLUDED PROPERTIES

<TABLE>
<CAPTION>
------------------------ ------------------------------- ------------- ----------------------------- ------------
        COMPANY                     ADDRESS                 TENURE               LANDLORD               SQM.
------------------------ ------------------------------- ------------- ----------------------------- ------------
<S>                      <C>                             <C>            <C>                           <C>
Draftex                  Plant I                         Freehold                                         18,075
International GmbH       41748 Viersen
& Co KG                  Am Schluff 18-20
------------------------ ------------------------------- ------------- ----------------------------- ------------
Draftex International    Plant III                       Freehold                                         43,059
GmbH & Co KG             41747 Viersen
                         Helmholtzstrasse 19
------------------------ ------------------------------- ------------- ----------------------------- ------------
Draftex                  Plant V                         Freehold
International GmbH &     41747 Viersen
Co KG                    Grefraather Strasse 69

------------------------ ------------------------------- ------------- ----------------------------- ------------
SLIC Gruchet SA          33 rue de Couvent B.P. 15.      Freehold                                         10,200
                         76210 Gruchet le Valasse

------------------------ ------------------------------- ------------- ----------------------------- ------------
</TABLE>

SUB-LET PROPERTIES

<TABLE>
<CAPTION>
--------------- ------------- --------- ----------------  ----- ----------------- ----------- -------------------
LESSOR          LESSEE        DATE OF   ADDRESS           SQ.M  FEES              TERM        NOTICE PERIOD
                              LEASE
--------------- ------------- --------- ----------------  ----- ----------------- ----------- -------------------
<S>             <C>           <C>       <C>               <C>   <C>               <C>         <C>
Draftex         Gebr.         15/12/99  2 store houses    600   DM5,181.72        01.02.2000- the lease will be
International   Hackbarth               "Industrie-       180   (DM4,467 net +    31.05.2005  extended by
GmbH & Co KG    GmbH                    strasse 2,              DM714.72 VAT)                 further periods
                                        Grefrath"                                             of five years
                                                                                              unless the lease
                                                                                              is terminated six
                                                                                              months prior to
                                                                                              the end of the
                                                                                              contractual term
--------------- ------------- --------- ----------------  ----- ----------------- ----------- -------------------
Draftex         Mr Heinz      27/06/91  parking area      20    DM50 plus VAT     Indefinite  1 month to the
International   Kreuels                 of Plant 1                                            end of each
GmbH & Co. KG                           Oberrahser-                                           calendar month
                                        strasse, Viersen
--------------- ------------- --------- ----------------  ----- ----------------- ----------- -------------------
</TABLE>

                                      -87-
<PAGE>   91

                                   SCHEDULE 6

                              [Intentionally blank]

                                      -88-
<PAGE>   92

                                   SCHEDULE 7
                          PRO FORMA COMPLETION ACCOUNTS

<TABLE>
<CAPTION>
                                                                                           FOR INFORMATION ONLY
------------------------------------------------------------------------------------------------------------------------
                                                       31/12/1999                             30/06/2000
      SEALS TOTAL                                                  AS DEFINED                              AS DEFINED
                                              ACTUAL  ADJUSTMENTS    IN SPA         ACTUAL   ADJUSTMENTS     IN SPA
      Balance Sheet

      EURO 000
------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>           <C>           <C>           <C>         <C>            <C>
      BALANCE SHEET

      Stock & WIP                             38,687                    38,687      39,081                       39,081
      Trade debtors                           49,395                    49,395      58,267                       58,267
      Other debtors                           10,821                    10,821       7,796                        7,796
      Group trade debtors                     52,068                    52,068      44,924                       44,924
------------------------------------------------------------------------------------------------------------------------
      Trade creditors                       (52,430)                  (52,430)    (38,658)                     (38,658)
      Current taxation                         5,890     (10,806)      (4,916)       (331)       (7,435)        (7,766)
      Other creditors                       (24,735)                  (24,735)    (33,151)                     (33,151)
      Group trade creditors                 (29,166)                  (29,166)    (17,805)                     (17,805)
------------------------------------------------------------------------------------------------------------------------
      Net current assets                      50,529     (10,806)       39,723      60,123       (7,435)         52,688
      Fixed assets                           226,079                   226,079     228,186                      228,186
      Fixed assets creditors- external       (4,349)                   (4,349)     (1,914)                      (1,914)
      Fixed assets creditors- group               42                        42       (814)                        (814)
      Intangibles                               (47)                      (47)        (66)                         (66)
      Goodwill                                     0                         0           0                            0
      Other non current assets                   259                       259         288                          288
      Provisions                            (16,073)                  (16,073)        (93)                         (93)
      Other non current liabilities          (8,833)                   (8,833)    (10,940)                     (10,940)
      less tax
      Taxation (greater than) 1 year          1,265       (1,265)           0           0             0              0
      Deferred taxation                      (4,689)                   (4,689)     (4,645)                      (4,645)

------------------------------------------------------------------------------------------------------------------------
      Total assets less liabilities          244,183     (12,071)      232,112     270,125       (7,435)        262,690
------------------------------------------------------------------------------------------------------------------------

      Share capital                           66,365                    66,365      66,593                       66,593
      Reserves                                29,163     (12,071)       17,092      26,014       (7,435)         18,579
      Net borrowings / (cash)                (1,844)                   (1,844)     (1,404)                      (1,404)
      Group loans                            150,499                   150,499     178,921                      178,921

------------------------------------------------------------------------------------------------------------------------
      AGREED CAPITAL EMPLOYED                244,183     (12,071)      232,112     270,125       (7,435)        262,690
------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
      RESERVES
      Share premium                               18                        18          18                           18
      Revaluation                              5,424                     5,424       5,745                        5,745
      Exchange differences                     (277)                     (277)       (282)                        (282)
      Revenue- C Year - A/c no 30000          11,280                    11,280       (477)                        (477)
      Revenue- Other - A/c no 95000           12,718     (12,071)          647      21,010       (7,435)         13,575
                                       ---------------------------------------------------------------------------------
      Total reserves                          29,163     (12,071)       17,092      26,014       (7,435)         18,579
                                       ---------------------------------------------------------------------------------
      As per balance sheet above              29,163     (12,071)       17,092      26,014       (7,435)         18,579
                                       ---------------------------------------------------------------------------------
      Difference                                   0            0            0           0             0              0
                                       ---------------------------------------------------------------------------------

      NET BORROWINGS / (CASH)
      (Cash)/overdrafts                     (19,131)                  (19,131)    (16,431)                     (16,431)
      (Cash investments)                           0                         0           0                            0
      Loans (less than) 1 year                12,341                    12,341       9,965                        9,965
      Loans (less than) 1 year                 4,945                     4,945       5,062                        5,062
                                       ---------------------------------------------------------------------------------
      Total                                  (1,844)            0      (1,844)     (1,404)             0        (1,404)
                                       ---------------------------------------------------------------------------------
      As per balance sheet above             (1,844)            0      (1,844)     (1,404)             0        (1,404)
                                       ---------------------------------------------------------------------------------
      Difference                                   0            0            0           0             0              0
                                       ---------------------------------------------------------------------------------
      Finance leases included within           2,643                     2,643       2,550                        2,550
      LOANS
                                       ---------------------------------------------------------------------------------

      GROUP LOANS
      Laird Group                             20,510                    20,510     156,500                      156,500
      Other Group loans                      129,989                   129,989      22,421                       22,421
                                       ---------------------------------------------------------------------------------
      Total                                  150,499            0      150,499     178,921             0        178,921
                                       ---------------------------------------------------------------------------------
      As per balance sheet above             150,499            0      150,499     178,921             0        178,921
                                       ---------------------------------------------------------------------------------
      Difference                                   0            0            0           0             0              0
                                       ---------------------------------------------------------------------------------
</TABLE>

                                      -89-
<PAGE>   93

<TABLE>
<CAPTION>
                                                                             AT 31 DECEMBER 1999
    SEALS TOTAL                    Exchange rates versus EURO:
                                          DM       EURO        DM     PESETA       CZK       CZK        FF         FF         FF
    Balance Sheet                      1.960      1.000     1.960    166.400    35.994    35.994     6.560      6.560      6.560
                                                                                                   TOTAL
    Euro 000                 TOTAL    KG       DIETC      WWHQ     IBERICA    OPTIMIT  OPT - MI   FRANCE    SNAPPON    GRUCHET
----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>       <C>               <C>       <C>  <C>         <C>         <C>   <C>        <C>        <C>
    BALANCE SHEET
    Stock & WIP             38,687    14,471          0         0      5,086     1,856         0     6,481      2,701      2,502
    Trade debtors           49,395    20,059          0         0      9,146     1,206         0       151       (90)        163
    Other debtors           10,821     2,336          0         0        677       177         0     3,129      1,493        930
    Group trade debtors     52,068     8,028          0         0      7,022       314         0    36,381     16,719     14,857
----------------------------------------------------------------------------------------------------------------------------------
    Trade creditors       (52,430)  (12,582)          0         0   (17,228)   (1,247)         0  (12,056)    (5,941)    (4,083)
    Current taxation         5,890   (2,052)          0         0    (2,455)     (449)         0     1,529          0      1,419
    Other creditors       (24,735)  (12,538)          0         0    (1,276)     (430)       (0)   (5,451)    (3,387)    (1,679)
    Group trade           (29,166)   (3,160)          0         0      (518)   (1,707)         0  (13,858)    (6,288)    (5,913)
    creditors
----------------------------------------------------------------------------------------------------------------------------------
    Net current assets      50,529    14,563          0         0        453     (280)       (0)    16,305      5,208      8,196
    Fixed assets           226,079    74,844          0         0     35,935     9,285         0    26,136     10,480     12,091
    Fixed assets           (4,349)   (4,113)          0         0          0     (108)         0     (129)       (37)       (63)
    creditors- external
    Fixed assets                42     (827)          0         0        869         0         0         0          0          0
    creditors- group
    Intangibles               (47)         0          0         0          0      (47)         0         0          0          0
    Goodwill                     0         0          0         0          0         0         0         0          0          0
    Other non current          259     6,421          0         0          0        94         0         9          0          0
    assets
    Provisions            (16,073)  (15,136)          0         0          0         0         0     (122)          0      (122)
    Other non current      (8,833)         0          0         0          0         0   (1,460)   (3,455)    (1,130)    (1,440)
    liabilities less tax
    Taxation greater than
       1 year               1,265          0          0         0          0         0         0     1,265      1,265          0
    Deferred taxation      (4,689)         0          0         0    (1,279)     (262)         0         0          0          0

----------------------------------------------------------------------------------------------------------------------------------
    TOTAL ASSETS LESS      244,183    75,752          0         0     35,977     8,682   (1,460)    40,009     15,787     18,663
    LIABILITIES
----------------------------------------------------------------------------------------------------------------------------------

    Share capital           66,365    30,612          0         0     20,701        28       (7)     7,825      4,573      1,651
    Reserves                29,163    25,053          0         0     26,412     5,520   (1,453)    14,908      1,907      6,859
    Net borrowings/        (1,844)       102          0         0    (8,073)     (158)         0     2,027         47      2,630
    (cash)
    Group loans            150,499    19,985          0         0    (3,063)     3,293         0    15,248      9,260      7,522

----------------------------------------------------------------------------------------------------------------------------------
    Capital employed       244,183    75,752          0         0     35,977     8,682   (1,460)    40,009     15,787     18,663
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
    RESERVES
    Share premium               18         0          0         0         18         0         0         0          0          0
    Revaluation              5,424         0          0         0      1,882         0         0     3,304      2,444        668
    Exchange differences     (277)         0          0         0          0         0         0         1          0          0
    Revenue- C Year -       11,280    22,288          0         0      5,015     2,171     (604)   (2,370)    (1,822)      (714)
    A/c no 30000
----------------------------------------------------------------------------------------------------------------------------------
    Revenue- Other - A/c    12,718     2,765          0         0     19,497     3,349     (849)    13,973      1,285      6,905
    no 95000
                          --------------------------------------------------------------------------------------------------------
    Total reserves          29,163    25,053          0         0     26,412     5,520   (1,453)    14,908      1,907      6,859
                          --------------------------------------------------------------------------------------------------------
    As per balance sheet    29,163    25,053          0         0     26,412     5,520   (1,453)    14,908      1,907      6,859
    above
                          --------------------------------------------------------------------------------------------------------
    Difference                   0         0          0         0          0         0         0         0          0          0
                          --------------------------------------------------------------------------------------------------------

    NET BORROWINGS /
    (CASH)
    (Cash)/               (19,131)   (6,218)          0         0    (8,073)     (158)         0     (615)         47       (12)
    overdrafts
    (Cash investments)           0         0          0         0          0         0         0         0          0          0
    Loans less than 1 year  12,341     3,807          0         0          0         0         0       210          0        210
    Loans less than 1 year   4,945     2,513          0         0          0         0         0     2,432          0      2,432
                          --------------------------------------------------------------------------------------------------------
    Total                  (1,844)       102          0         0    (8,073)     (158)         0     2,027         47      2,630
                          --------------------------------------------------------------------------------------------------------
    As per balance sheet   (1,844)       102          0         0    (8,073)     (158)         0     2,027         47      2,630
    above
                          --------------------------------------------------------------------------------------------------------
    Difference                   0         0          0         0          0         0         0         0          0          0
                          --------------------------------------------------------------------------------------------------------
    Finance leases           2,643         0          0         0          0         0         0     2,643          0      2,643
    included within loans
                          --------------------------------------------------------------------------------------------------------

    GROUP LOANS
    Laird Group             20,510    23,554          0         0    (3,044)         0         0         0          0          0
    Other Group loans      129,989   (3,569)          0         0       (19)     3,293         0    15,248      9,260      7,522
                          --------------------------------------------------------------------------------------------------------
    Total                  150,499    19,985          0         0    (3,063)     3,293         0    15,248      9,260      7,522
                          --------------------------------------------------------------------------------------------------------
    As per balance sheet   150,499    19,985          0         0    (3,063)     3,293         0    15,248      9,260      7,522
    above
                          --------------------------------------------------------------------------------------------------------
    Difference                   0         0          0         0          0         0         0         0          0          0
                          --------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Exchange rates versus EURO:                    AT 31 DECEMBER 1999
    SEALS TOTAL                                                       Pound
                                 FF       RMB        RMB       US$    Sterling     EURO
    Balance Sheet             6.560     8.302      8.302     1.002     0.622       1.000

    Euro 000               CORVOL    WANYUAN  WANY - MI     INC       UK        ADJS
-----------------------------------------------------------------------------------------
<S>                           <C>       <C>          <C>   <C>           <C>       <C>
    BALANCE SHEET
    Stock & WIP               1,278     1,098          0     9,694         0           1
    Trade debtors                77     3,131          0    15,702         0           0
    Other debtors               707     1,009          0     3,492         0           0
    Group trade debtors       4,805         0          0       322         0           1
-----------------------------------------------------------------------------------------
    Trade creditors         (2,033)     (509)          0   (8,808)         0           0
    Current taxation            110         0          0     9,277        40           0
    Other creditors           (385)     (423)        (0)   (4,416)         0       (201)
    Group trade             (1,657)     (567)          0   (9,357)         0           0
    creditors
-----------------------------------------------------------------------------------------
    Net current assets        2,902     3,740        (0)    15,906        40       (199)
    Fixed assets              3,564    13,258          0    66,615         0           6
    Fixed assets               (29)         0          0         0         0           0
    creditors- external
    Fixed assets                  0         0          0         0         0           0
    creditors- group
    Intangibles                   0         0          0         0         0           0
    Goodwill                      0         0          0         0         0           0
    Other non current             9         0          0         0         0     (6,265)
    assets
    Provisions                    0     (615)          0     (200)         0           0
    Other non current         (886)         0    (4,116)         0         0         198
    liabilities less tax
    Taxation greater than
       1 year                     0         0          0         0         0           0
    Deferred taxation             0         0          0   (3,148)         0           0

-----------------------------------------------------------------------------------------
    TOTAL ASSETS LESS         5,560    16,383    (4,116)    79,174        40     (6,260)
    LIABILITIES
-----------------------------------------------------------------------------------------

    Share capital             1,601    12,048    (4,670)     6,094         0     (6,265)
    Reserves                  6,142   (1,603)        555  (40,441)       207           5
    Net borrowings/           (650)     5,938          0   (1,513)     (167)           0
    (cash)
    Group loans             (1,533)         0          0   115,035         0           0

-----------------------------------------------------------------------------------------
    Capital employed          5,560    16,383    (4,116)    79,174        40     (6,260)
-----------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------
    RESERVES
    Share premium                 0         0          0         0         0           0
    Revaluation                 192         0          0       238         0           0
    Exchange differences          1      (80)      (197)         0         0           0
    Revenue- C Year -           166     2,224      (896)  (16,549)         0           0
    A/c no 30000
-----------------------------------------------------------------------------------------
    Revenue- Other - A/c      5,784   (3,746)      1,648  (24,131)       207           5
    no 95000
                          ---------------------------------------------------------------
    Total reserves            6,142   (1,603)        555  (40,441)       207           5
                          ---------------------------------------------------------------
    As per balance sheet      6,142   (1,603)        555  (40,441)       207           5
    above
                          ---------------------------------------------------------------
    Difference                    0         0          0         0         0           0
                          ---------------------------------------------------------------

    NET BORROWINGS /
    (CASH)
    (Cash)/                   (650)   (2,386)          0   (1,513)     (167)           0
    overdrafts
    (Cash investments)            0         0          0         0         0           0
    Loans less than 1 year        0     8,324          0         0         0           0
    Loans less than 1 year        0         0          0         0         0           0
                          ---------------------------------------------------------------
    Total                     (650)     5,938          0   (1,513)     (167)           0
                          ---------------------------------------------------------------
    As per balance sheet      (650)     5,938          0   (1,513)     (167)           0
    above
                          ---------------------------------------------------------------
    Difference                    0         0          0         0         0           0
                          ---------------------------------------------------------------
    Finance leases                0         0          0         0         0           0
    included within loans
                          ---------------------------------------------------------------

    GROUP LOANS
    Laird Group                   0         0          0         0         0           0
    Other Group loans       (1,533)         0          0   115,035         0           0
                          ---------------------------------------------------------------
    Total                   (1,533)         0          0   115,035         0           0
                          ---------------------------------------------------------------
    As per balance sheet    (1,533)         0          0   115,035         0           0
    above
                          ---------------------------------------------------------------
    Difference                    0         0          0         0         0           0
                          ---------------------------------------------------------------
</TABLE>

                                      -90-
<PAGE>   94

<TABLE>
<CAPTION>
                                                                         AT 30 JUNE 2000          FOR INFORMATION ONLY
     SEALS TOTAL                      Exchange rates versus
                                      EURO:
                                            DM     EURO       DM  PESETA     CZK     CZK       FF      FF       FF      FF      RMB
     Balance Sheet                       1.960    1.000    1.960 166.400  35.631  35.631    6.560   6.560    6.560   6.560    8.154
                                                                                          TOTAL
     Euro 000                   TOTAL    KG     DIETC     WWHQ   IBERICA OPTIMIT  OPT-MI   FRANCE SNAPPON  GRUCHET  CORVOL  WANYUAN
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>       <C>               <C>       <C>  <C>         <C>         <C>   <C>        <C>        <C>
     BALANCE SHEET

     Stock & WIP               39,081   13,695      220       0    4,616   2,248       0    6,928   2,530    2,922   1,476    1,368
     Trade debtors             58,267   24,615        0       0    9,115   2,737       0    (233)   (349)       39      77    3,448
     Other debtors              7,796      539        0       0    2,253     224       0    3,602   2,610      597     395      909
     Group trade debtors       44,924    5,519    1,082       0    2,486     225       0   35,612  14,358   15,720   5,533        0
------------------------------------------------------------------------------------------------------------------------------------
     Trade creditors         (38,658)  (7,324)        0       0 (10,419) (1,178)       0 (10,745) (5,221)  (3,323) (2,200)    (757)
     Current taxation           (331)  (3,328)        0       0  (4,408)    (70)       0    2,371   1,284    1,158    (72)        0
     Other creditors         (33,151) (15,984)    (401)       0  (1,547) (1,724)     (0)  (7,847) (5,195)  (1,992)   (661)  (1,216)
     Group trade creditors   (17,805)  (2,363)    (865)       0  (1,944) (1,287)       0  (9,488) (3,838)  (4,638) (1,012)    (479)
------------------------------------------------------------------------------------------------------------------------------------
     Net current assets        60,123   15,369       36       0      153   1,177     (0)   20,199   6,179   10,484   3,536    3,273
     Fixed assets             228,186   75,901      252     937   35,652  11,542       0   25,961   9,979   12,452   3,530   13,009
     Fixed assets             (1,914)  (1,617)        0       0        0   (141)       0    (156)    (97)     (75)      15        0
     creditors- external
     Fixed assets               (814)      224        0       0        0 (1,039)       0        0       0        0       0        0
     creditors- group
     Intangibles                 (66)        0        0       0        0    (66)       0        0       0        0       0        0
     Goodwill                       0        0        0       0        0       0       0        0       0        0       0        0
     Other non current            288    6,521        0       0        0     132       0        0       0        0       0        0
     assets
     Provisions                  (93)        0        0    (62)        0       0       0     (30)       0     (30)       0        0
     Other non current       (10,940)  (2,053)        0       0        0       0       0  (2,849) (1,190)    (972)   (687)        0
     liabilities less tax
     Taxation greater than
         1 year                     0        0        0       0        0       0       0        0       0        0       0        0
     Deferred taxation        (4,645)        0        0       0  (1,184)   (264)       0        0       0        0       0        0

------------------------------------------------------------------------------------------------------------------------------------

     Total assets less        270,125   94,345      288     875   34,620  11,341     (0)   43,125  14,872   21,858   6,395   16,282
     liabilities
------------------------------------------------------------------------------------------------------------------------------------

     Share capital             66,593   30,612      100       0   20,701      28       0    7,825   4,573    1,651   1,601   12,267
     Reserves                  26,014   33,315  (1,387) (3,081)   30,984   5,039     (0)   12,595 (1,375)    7,369   6,601    (701)
     Net borrowings / (cash)  (1,404)   10,479    (776)       0  (13,960)  2,599       0    2,382      31    2,545   (195)    4,716
     Group loans              178,921   19,939    2,351   3,956  (3,106)   3,675       0   20,324  11,643   10,293 (1,612)        0

------------------------------------------------------------------------------------------------------------------------------------
     Capital employed         270,125   94,345      288     875   34,620  11,341     (0)   43,125  14,872   21,858   6,395   16,282
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
     RESERVES
     Share premium                 18        0        0       0       18       0       0        0       0        0       0        0
     Revaluation                5,745        0        0       0    1,882       0       0    3,621   2,433      997     192        0
     Exchange differences       (282)        0        0       0        0       0       0        1       0        0       1     (82)
     Revenue- C Year - A/c      (477)    9,450  (1,387) (3,081)    4,573     656       0  (2,631) (3,271)      181     459      931
     no 30000
     Revenue- Other - A/c      21,010   23,865        0       0   24,512   4,383     (0)   11,604   (537)    6,191   5,950  (1,550)
     no 95000
                             -------------------------------------------------------------------------------------------------------
     Total reserves            26,014   33,315  (1,387) (3,081)   30,984   5,039     (0)   12,595 (1,375)    7,369   6,601    (701)
                             -------------------------------------------------------------------------------------------------------
     As per balance sheet      26,014   33,315  (1,387) (3,081)   30,984   5,039     (0)   12,595 (1,375)    7,369   6,601    (701)
     above
                             -------------------------------------------------------------------------------------------------------
     Difference                     0        0        0       0        0       0       0        0       0        0       0        0
                             -------------------------------------------------------------------------------------------------------

     NET BORROWINGS / (CASH)
     (Cash)/overdrafts       (16,431)    4,453    (776)       0  (13,960)  2,599       0    (168)      31      (4)   (195)  (1,735)
     (Cash investments)             0        0        0       0        0       0       0        0       0        0       0        0
     Loans less than 1 year     9,965    3,514        0       0        0       0       0        0       0        0       0    6,451
     Loans less than 1 year     5,062    2,513        0       0        0       0       0    2,550       0    2,550       0        0
                             -------------------------------------------------------------------------------------------------------
     Total                    (1,404)   10,479    (776)       0  (13,960)  2,599       0    2,382      31    2,545   (195)    4,716
                             -------------------------------------------------------------------------------------------------------
     As per balance sheet     (1,404)   10,479    (776)       0  (13,960)  2,599       0    2,382      31    2,545   (195)    4,716
     above
                             -------------------------------------------------------------------------------------------------------
     Difference                     0        0        0       0        0       0       0        0       0        0       0        0
                             -------------------------------------------------------------------------------------------------------
     Finance leases             2,550        0        0       0        0       0       0    2,550       0    2,550       0        0
     included within loans
                             -------------------------------------------------------------------------------------------------------

     GROUP LOANS
     Laird Group              156,500   23,643    2,351   1,592  (3,089)     219       0        0       0        0       0        0
     Other Group loans         22,421  (3,705)        0   2,364     (17)   3,455       0   20,324  11,643   10,293 (1,612)        0
                             -------------------------------------------------------------------------------------------------------
     Total                    178,921   19,939    2,351   3,956  (3,106)   3,675       0   20,324  11,643   10,293 (1,612)        0
                             -------------------------------------------------------------------------------------------------------
     As per balance sheet     178,921   19,939    2,351   3,956  (3,106)   3,675       0   20,324  11,643   10,293 (1,612)        0
     above
                             -------------------------------------------------------------------------------------------------------
     Difference                     0        0        0       0        0       0       0        0       0        0       0        0
                             -------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                  AT 30 JUNE 2000
                               FOR INFORMATION ONLY
                            Exchange rates versus EURO:
     SEALS TOTAL
                                           Pound
                               RMB    US$  Sterling    EURO
     Balance Sheet           8.154  0.987   0.633   1.000

     Euro 000               WANY-MI    INC     UK     ADJS
----------------------------------------------------------
<S>                        <C>     <C>       <C>      <C>
     BALANCE SHEET

     Stock & WIP                 0 10,006       0       0
     Trade debtors               0 18,584       0       0
     Other debtors               0    269       0       0
     Group trade debtors         0      0       0       0
----------------------------------------------------------
     Trade creditors             0 (8,235)      0       0
     Current taxation            0  5,064      39       0
     Other creditors           (0) (4,431)      0       0
     Group trade creditors       0 (1,380)      0       0
----------------------------------------------------------
     Net current assets        (0) 19,877      39       0
     Fixed assets                0 64,932       0       0
     Fixed assets                0      0       0       0
     creditors- external
     Fixed assets                0      0       0       0
     creditors- group
     Intangibles                 0      0       0       0
     Goodwill                    0      0       0       0
     Other non current           0      0       0 (6,365)
     assets
     Provisions                  0      0       0       0
     Other non current     (4,563)      0       0 (1,475)
     liabilities less tax
     Taxation greater than
        1 year                   0      0       0       0
     Deferred taxation           0 (3,196)      0       0

----------------------------------------------------------

     Total assets less     (4,563) 81,613      39 (7,840)
     liabilities
----------------------------------------------------------

     Share capital         (4,755)  6,187       0 (6,372)
     Reserves                  192 (49,678)   204 (1,468)
     Net borrowings / (cas       0 (6,680)  (164)       0
     Group loans                 0 131,783      0       0

----------------------------------------------------------
     Capital employed      (4,563) 81,613      39 (7,840)
----------------------------------------------------------

----------------------------------------------------------
     RESERVES
     Share premium               0      0       0       0
     Revaluation                 0    242       0       0
     Exchange differences    (200)      0       0       0
     Revenue- C Year - A/c   (372) (8,616)      0       0
     no 30000
     Revenue- Other - A/c      765 (41,304)   204 (1,468)
     no 95000
                          --------------------------------
     Total reserves            192 (49,678)   204 (1,468)
                          --------------------------------
     As per balance sheet      192 (49,678)   204 (1,468)
     above
                          --------------------------------
     Difference                  0      0       0       0
                          --------------------------------

     NET BORROWINGS / (CAS
     (Cash)/overdrafts           0 (6,680)  (164)       0
     (Cash investments)          0      0       0       0
     Loans less than 1 year      0      0       0       0
     Loans less than 1 year      0      0       0       0
                          --------------------------------
     Total                       0 (6,680)  (164)       0
                          --------------------------------
     As per balance sheet        0 (6,680)  (164)       0
     above
                          --------------------------------
     Difference                  0      0       0       0
                          --------------------------------
     Finance leases              0      0       0       0
     included within loans
                          --------------------------------

     GROUP LOANS
     Laird Group                 0 131,783      0       0
     Other Group loans           0      0       0       0
                          --------------------------------
     Total                       0 131,783      0       0
                          --------------------------------
     As per balance sheet        0 131,783      0       0
     above
                          --------------------------------
     Difference                  0      0       0       0
                          --------------------------------
</TABLE>

                                      -91-
<PAGE>   95

                                   SCHEDULE 8
         ACCOUNTING POLICIES AND PROCEDURES FOR THE COMPLETION ACCOUNTS

1.        The Completion Accounts for each Target Group Company shall:-

1.1       be prepared on a going concern basis as if the period beginning with
          the day following 31 December 1999 and ending on the Completion Date
          was a financial year of each Target Group Company and as if an
          accounting period had ended on the Completion Date;

1.2       state the assets and liabilities of each Target Group Company;

1.3       except as otherwise specifically provided in this schedule, be
          prepared on a basis consistent with the accounting policies, bases,
          practices and methodologies actually applied in the preparation of the
          Accounts, and in accordance with generally accepted accounting
          standards, principles and policies in the country where the relevant
          Group Company is incorporated and as adjusted to comply with UK GAAP
          as at the Completion Date. In the case of the new WWHQ and DIETC
          divisions the accounting principles, policies, bases, and
          methodologies to be followed are to be those applied in respect of the
          German division in the Accounts and in accordance with UK GAAP;

1.4       be prepared in accordance with the specific accounting policies set
          out in paragraph 2 below and so that, in the case of any conflict,
          such specific accounting policies shall override the provisions of
          paragraph 1.3 above;

1.5       not re-appraise the value of any of the assets of any Target Group
          Company as a result of the change in ownership of the share capital of
          the Target Group (or any changes in the business of the Target Group
          since the Completion Date following such change in ownership) except
          only as specifically set out in this schedule 8; and

1.6       shall exclude the effects of the change of ownership except as
          required in paragraph 2 below.

2.        SPECIFIC ACCOUNTING POLICIES

          The following specific accounting policies shall be applied:-

          Intangible assets

-    Intangible assets which were included in the Accounts, including but not
     limited to goodwill, shall be included in the Completion Accounts in the
     same amount subject only and where applicable to amortisation at the rates
     which, when annualised, equate to the same rates as were used in the
     preparation of the Accounts.

-    Intangible fixed assets acquired or arising after 31 December 1999 shall be
     included in the Completion Accounts and amortised using the same rates
     adopted in the Accounts for similar assets.

-    Tangible fixed assets

-    Tangible fixed assets included in the Accounts which have not been sold
     outside the Group by the Completion Date shall be included in the
     Completion Accounts in the same

                                      -92-
<PAGE>   96

     amount subject only and where applicable to depreciation at the rates
     which, when annualised, equate to the same rates as were used in the
     preparation of the Accounts.

-    Fixed assets shall be depreciated at the rates which, when annualised,
     equate to the same rates as were used in the preparation of the Accounts.

-    There shall be no reassessment of the impairment of fixed assets since 31
     December 1999 in preparing the Completion Accounts on the basis of
     attributable operating cashflows as would otherwise be the case were UK
     GAAP applied (FRS11) but for the avoidance of doubt any assessments of the
     impairment of fixed assets based on current or future use can be reflected
     in the Completion Accounts using the accounting policies, bases, practices
     and methodologies used in the Accounts and UK GAAP on a consistent basis.

-    There shall be no reassessment of the economic lives and residual values of
     fixed assets in preparing the Completion Accounts on the basis of
     attributable operating cashflows as would otherwise be the case were UK
     GAAP applied (FRS11) but for the avoidance of doubt, any reassessments of
     the economic lives and residual values can be reflected in the Completion
     Accounts using the accounting policies, bases, practices and methodologies
     used in the Accounts and UK GAAP on a consistent basis.

-    Tangible fixed assets acquired or which come into use after 31 December
     1999 shall be included in the Completion Accounts at cost and depreciated
     using the same rates adopted in the Accounts for similar assets.

-    Costs at the Completion Date of any fixed assets under construction shall
     be capitalised in the Completion Accounts following the same principles,
     policies, bases and methodologies adopted by each respective division for
     the purposes of the Accounts, and depreciation shall commence from the date
     on which they are brought into use.

Transfer of assets

-    Assets transferred from one company or division to another shall be
     transferred at the book value of the transferring company or division at
     the date of transfer.

-    The book value relating to any land or properties included in the Excluded
     Assets and which are included in the Completion Accounts shall be deducted
     from the Capital Employed.

Fixed and current asset reclassifications

-    There shall be no reclassifications between fixed and current assets in
     preparing the Completion Accounts.

Environmental

-    A general provision in respect of liabilities for Environmental Issues,
     excluding Environmental Issues relating to Former Properties and Excluded
     Properties, of (Euro) 9.5m shall be included in the Completion Accounts.

Finance and operating leases

                                      -93-
<PAGE>   97

-    Finance leases which were capitalised in the Accounts should be treated on
     the same basis in the Completion Accounts. Any lease agreements entered
     into since 31 December 1999 shall be accounted for as prescribed in SSAP
     21.

Stocks and work in progress

-    Stocks and work in progress shall be valued according to accounting
     principles, policies, bases, practices and methodologies used in the
     valuation of stocks and work in progress held by each company or division
     for the purposes of the Accounts. Standard costs used in the Completion
     Accounts shall be those used for the respective company or division in the
     Accounts.

-    Provisions in relation to obsolescence of stock and work in progress shall
     be assessed and valued according to accounting principles, policies, bases,
     practices and methodologies used in the assessment and valuation of
     provisions for obsolescence held by each company for the purpose of the
     Accounts and in accordance with UK GAAP on a consistent basis or, taking
     into account the bases for stocks detailed in Appendix A, subject to the
     accounting principles, policies, bases, practices and methodologies used in
     the Accounts and in accordance with UK GAAP on a consistent basis which
     shall override the bases in Appendix A in the event of any conflict.

Debtors

-    Debtors in the Completion Accounts shall be included at the amount recorded
     as due in accordance with the accounting principles, policies, bases,
     practices and methodologies used in the Accounts, and which are summarised
     in Appendix A to this schedule and in accordance with UK GAAP on a
     consistent basis. The Buyer will take all reasonable steps to collect
     amounts due.

Intercompany Accounts

-    Transactions between members of the Target Group, and between the Target
     Group and The Laird Group plc and its subsidiaries, shall be recorded in
     relevant Intercompany Accounts in the Target Group's accounts as per the
     Accounts and in accordance with schedule 7. Such Intercompany Accounts
     shall be reconciled and in agreement with the balance shown by the
     counter-party, on a consolidated basis, for the Target Group, and with the
     Target Group and the Laird Group plc and its subsidiaries.

Prepayments

-    Prepayments shall be assessed and valued according to the accounting
     principles, policies, bases, practices and methodologies used to assess
     prepayments held by each company for the purposes of the Accounts.

Tooling revenue and costs

-    The revenue and costs shall be recognised over four years at the following
     percentages:

                                 YEAR 1      YEAR 2      YEAR 3    YEAR 4
                                 %           %           %         %

         Turnover (P&L)          44          19          19        18

         Direct Costs (P&L)      25          25          25        25

                                      -94-
<PAGE>   98

         The Completion Accounts shall reflect the deferred income and deferred
         costs arising from the above applicable percentages.

Provisions and accruals

-    Provisions and accruals for liabilities at the Completion Date shall be
     calculated in accordance with UK GAAP (FRS 12).

-    No further Provisions will be required for amounts indemnified or
     specifically warranted in this agreement.

-    Retirement indemnities payable to employees on retirement shall be
     accounted for using the same accounting principles, policies, bases,
     practices and methodologies adopted by each respective division for the
     purposes of the Accounts and applied on a consistent basis.

Pensions

-    Pension assets and liabilities and costs shall be included in the
     Completion Accounts on the same basis, using the same methods and actuarial
     assumptions as used in arriving at the pension assets and liabilities and
     costs in the Accounts and applied on a consistent basis.

Recognition of income

-    Income shall be recognised for the purpose of the Completion Accounts using
     the same principles, policies, bases and methodologies adopted by each
     respective division for the purposes of the Accounts.

Post balance sheet events

-    Adjusting post balance sheet events as defined in SSAP 17 shall be taken
     into account up until the date that the draft Completion Accounts are
     provided to the Vendor by the Purchaser

Holiday pay

-    Provisions for holiday pay shall be included according to the accounting
     principles, policies, bases, practices and methodologies used to assess
     provisions for holiday pay in the Accounts.

Tax and deferred tax

-    Tax in the Completion Accounts shall be calculated as if the Completion
     Accounts Date were an Accounting Reference Period.

-    Deferred Tax provision shall be included according to the accounting
     principles, policies, bases, practices and methodologies used to assess
     deferred tax provisions in each company in the Accounts and in particular
     the deferred tax provision shall not be based on a full liability basis of
     deferred tax accounting.

                                      -95-
<PAGE>   99

-    A general provision of (Euro) 5.0m in respect of Tax liabilities shall be
     included in the Completion Accounts.

Foreign currencies

-    Foreign currency monetary assets and liabilities shall be translated into
     Euros at rates of exchange ruling at the Completion Accounts Date. Foreign
     currency non-monetary assets and liabilities shall be translated into Euros
     in the Completion Accounts at the rates applicable at Completion except for
     the rate applying to the Capital Employed of Draftex Inc. which shall be
     translated into Euros at US$0.925 to 1 Euro. For the avoidance of doubt the
     equivalent exchange rate at the Accounts Date was US$1.002 to 1 Euro as
     reflected in schedule 7.

3.        PRINCIPLES USED IN DETERMINING THE AGREED CAPITAL EMPLOYED AND TO BE
          USED IN THE COMPLETION ACCOUNTS IN DETERMINING THE CAPITAL EMPLOYED

3.1       Cash and Intra-Group Debt and Third Party Debt were excluded from all
          calculations to establish the Agreed Capital Employed and shall be
          excluded in all calculations to establish the Capital Employed. Cash
          and Intra-Group Debt and Third Party Debt will, however, be included
          in the Completion Accounts.

3.2       Subject to clause 3.3 below taxes were included in all calculations to
          establish the Agreed Capital Employed and shall be included in all
          calculations to establish the Capital Employed.

3.3       Corporate Tax Assets were excluded from all calculations to establish
          the Agreed Capital Employed and shall be excluded from the Capital
          Employed.

3.4       In calculating the Capital Employed, goodwill and other intangible
          assets shall be included at a value equal to that attributed thereto
          in the Agreed Capital Employed as set out in schedule 7, save for
          amortisation calculated in accordance with the Accounting Policies.
          Changes (since the Accounts Date) to intangible assets representing
          cash investments, such as purchases of software, shall be added to the
          Agreed Capital Employed.

3.5       All calculations shall be presented in the format set out in schedule
          7.

                                      -96-
<PAGE>   100

                                   APPENDIX A
                                     DRAFTEX

SPAIN
-----

Stocks are reviewed monthly for technical and commercial obsolescence. Stock
provisions will only be made for specifically (item by item) identified obsolete
items.

Specific bad debts validly disputed by the customer in writing are specifically
provided for, and are identified on a monthly review for specific
non-recoverability.

General risks are not provided for in general provisions. In the event of an
issue which may give rise for the need to create a provision it is done on the
basis that the specific risk area is identified and the specific provision is
made.

GERMANY
-------

Specific bad debts validly disputed by the customer in writing are specifically
provided for.

A general provision exists for the remainder of the debt balances on the
following basis :-

-    100% of any balances over 2 years

-    50% of balances over 1 year

-    25% of balances over 6 months

-    1% of the remainder of the balances

STOCK

RAW MATERIALS

A full provision is made for raw materials which have had no consumption for
more than one year. No provision is made for any other raw materials stocks,
providing the type of raw material stocks has been used in the current year.

MIXED RAW MATERIALS

Any mixed raw material batches for trials, laboratory or development identified
as non current are specifically provided for.

WORK IN PROGRESS

No specific or general provision is made for stock obsolescence.

FINISHED GOODS

No specific or general provision is made for stock obsolescence.

The value of finished goods stocks is adjusted downwards in the event that the
manufacturing costs of specific goods exceeds the sales price minus packaging,
freight and admin costs of those goods.

CZECH REPUBLIC
--------------

A general provision for debtors is provided on the following basis:-

                                      -97-
<PAGE>   101

Of the debt outstanding excluding packaging:

-    if greater than 1 year -100%
-    if greater than 6 months - 50%.

STOCK

Periodic review of stocks for obsolescence. Specific provisions, if required,
are made on a specific (item by item) basis.

USA
---

Stocks are reviewed periodically for obsolescence. Specific provisions are made
on a specific (item by item) basis.

Debtors are reviewed monthly. A general provision is held and adjusted based
upon an assessment of the total risk.

FRANCE
------

STOCK

Stock reviewed monthly for obsolescence. Provision provided for all stock items
not utilised within twelve month period.

DEBTORS

Debtors are reviewed on a monthly basis. 100% of amounts validly disputed by the
customer in writing are provided.

                                      -98-
<PAGE>   102

                                   SCHEDULE 9
                           ALLOCATION OF CONSIDERATION

The consideration for the sale of the Acquisition Shares shall be apportioned
between the Acquisition Shares in accordance with this schedule, save that in
the event of any adjustment of the consideration in accordance with the
provisions of clause 2 the parties shall agree such consequential adjustment as
shall be required to those valuations as are consistent therewith (or, failing
any such agreement, either Party shall be entitled to refer the matter to be
resolved by an independent firm of internationally recognised chartered
accountants to be agreed upon by the Seller and the Buyer or, failing agreement,
to be selected, on the application of either the Seller or the Buyer, by the
President for the time being of the Institute of Chartered Accountants in
England and Wales or his duly appointed deputy, in which event the provisions of
clauses 6.6(a)-(d) inclusive shall apply).

<TABLE>
<CAPTION>
TARGET GROUP COMPANY                  PURCHASE      INTRA-GROUP THIRD       CASH   %                CONSIDERATION
                                      PRICE             DEBT    PARTY DEBT         DEFERRED
                                                                                   AMOUNT
------------------------------------- ------------- ----------  ----------- ------ ---------------- -----------------------
<S>                                   <C>           <C>         <C>         <C>       <C>           <C>
Draftex Inc                           (Euro) 70m    x           y           z          28.81        (Euro) 70m-(x+y)+z

Draftex International Iberica         (Euro) 26m    a           b           c          10.7         (Euro) 26m-(a+b)+c

Slic Corvol                           (Euro) 12.5m  d           e           f           5.14        (Euro) 12.5m-(d+e)+f

Slic Gruchet                          (Euro) 25m    g           h           i          10.29        (Euro) 25m-(g+h)+i

Snappon                               (Euro) 12.5m  j           k           l           5.14        (Euro) 12.5m-(j+k)+l

Draftex Berteilligungs                (Euro) 97m    m           n           o          39.92        (Euro) 97m-(m+n)+o
Gesellschaft mbH

Draftex International (Pribor) SRO    (Euro) 1                                                      (Euro) 1
</TABLE>

                                      -99-
<PAGE>   103

                                   SCHEDULE 10

                                     -100-
<PAGE>   104

                                   SCHEDULE 11
                                SENIOR EXECUTIVES

DRAFTEX INC

SALISBURY PLANT
Plant Manager                             - Carl Repsher
Manufacturing Manager                     - Larry Johnson
Finance Manager                           - Michael Click
Project Management                        - Stuart Imrie
Engineering Manager                       - Ed Lewis
Quality manager                           - Bill Kibe
HR Manager                                - Fred Schmidt

NOVI SALES AND ENGINEERING SUPPORT OFFICE
Sales & Marketing                         - Jack Pogorzelski

DRAFTEX BETEILIGUNGSGESELLSCHAFT MBH
Nil

BEIJING WANYUAN - DRAFTEX SEALING PRODUCTS CO LTD
General Manager                           - Liu Feng Chi
Deputy General Manager                    - Lu ZaiPing
Financial Manager                         - Hu DaZhong
Sales Manager                             - Chen FuYuan
HR Manager                                - Tian Lijun
Engineering Manager                       - T Fengman
Manufacturing Manager                     - Cao Jingshi
Quality Manager                           - Z Jianming

DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER MBH & CO KG

HR Manager                                - Jurgen Bongartz
Manager Finance & Contracts               - Heinz Lennartz
Manager Engineering                       - Karsten Meise
Project management                        - Graham Roberts*
Quality Manager                           - Paul Sullivan

DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER GMBH
Nil

DRAFTEX INTERNATIONAL GMBH & CO KG
Manager Commercial                        - Sungur Derturk
Finance Manager                           - John O'Hara
Manufacturing Manager                     - Jurgen Hartmann
Manager Quality & Safety                  - Gernot Kretzschmar
HR Manager                                - Friedhelm Reimer

                                     -101-
<PAGE>   105

Manager Order Processing                  - Michael Baumann
Manager Production Engineering            - Jurgen Breuer

DRAFTEX INTERNATIONAL GMBH
Chairman                                  - Bryan Stanley Ronan*
Deputy Chief Executive officer            - Martin Kellett*
Executive Vice President HR               - Steve Bennett*
Executive Vice President Finance          - Roger Presley*
Executive Vice President Commercial       - John Joy*
Executive Vice President Project
& Marketing                               - Gilbert Wolfhugel
Executive Vice President Manufacturing    - Mogens Andersen
Executive Vice President Quality          - Peter Muller*

DRAFTEX-OPTIMIT SRO (AND DRAFTEX INTERNATIONAL (PRIBOR) SRO)
Plant Manager                             - Piskytl Zdenek
Manufacturing Manager                     - Alois Matusu
Engineering Manager                       - Josef Sima
HR Manager                                - Jiri Hrabovsky
Finance Manager                           - Jiri Pinkas
Manager Projects                          - Josef Kozak
Quality Manager                           - Vladimir Sima

DRAFTEX VERWALTUNGSGESELLSCHAFT
Nil

DRAFTEX - MTECH GMBH
Plant Manager                             - Thomas Potschka

DRAFTEX INTERNATIONAL IBERICA SA
Plant Manager                             - Manuel Setien
Manufacturing Manager                     - J M Arcas
HR Manager                                - J Lamarca
Finance Manager                           - F Gonzalez
Manager Projects                          - U Kaiser
Quality Manager                           - J Moreno
Chemical Laboratory Manager               - F Dominguez Pino

SLIC CORVOL SA
Site Manager                              - Jacques Lefebvre
Technical Head                            - Andre Beaufils
Head of Mixtures                          - Fabrice Godard
Head of Personnel Administration          - Marie-Francoise Lefebvre
Head of Quality                           - Michel Marchal

SLIC GRUCHET SA
Divisional general manager                - Yves Cabanis

                                     -102-
<PAGE>   106

Divisional quality manager                - Yves Chasset
Divisional financial manager              - Frank Dupont
Site Manager                              - Alain Koening
Head of Methods                           - Olivier Hugonnet
Head of Quality                           - Thierry Cinqueux
Assistant Head of Manufacturing           - Jean-Francois Boivin
Head of Human Resources                   - Ivan Macanovic
Financial Controller                      - Bruno Le Bourhis

SNAPPON SA
Site Manager                              - Gerard Meignen
Project Manager                           - Jean-Paul Richard
Financial Controller                      - Pascal Mrozinski
Divisional Controller                     - Patrick Biehler

* English employment agreements.  Not employed by the company.

                                     -103-
<PAGE>   107

Signed by Gary McRae                              )
for and on behalf of                              )     (signed)
THE LAIRD GROUP PUBLIC LIMITED COMPANY            )
In the presence of :                              )
R Gubbins                                         )
5, Appold St
London EC2

Signed by Terry L. Hall                           )
for and on behalf of GENCORP INC.                 )     (signed)
in the presence of :-                             )
C Fuller
21 Wilson St
London EC2

                                     -104-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]