Document:

<PAGE>   1

                                                                   EXHIBIT 10.26

                                 January 7, 2000

Charles Thomas
Chairman and Chief Executive Officer
Net2000 Communications Services, Inc.
2180 Fox Mill Road
Herndon, VA  20171

      Re:   PROPOSED ACQUISITION OF CERTAIN OF THE ASSETS OF NET2000

Dear Mr. Thomas:

      The purpose of this letter is to outline a proposed acquisition by Access
One Communications Corp. ("Access One") of certain of the assets of Net2000
Communications Services, Inc. ("Net2000").

      1. Assets Acquired. Access One proposes to acquire a minimum of 10,000 of
the off-net access lines ("Access Lines") of Net2000 (the "Assets"). "Off-net
access lines" shall mean access lines purchased from Bell Atlantic for resale to
end users without use of any Net2000 network facilities. Notwithstanding the
foregoing, Access One has the right to reject any Access Line for any reason,
including, but not limited to, an Access Line with an outstanding balance due in
excess of 90 days; provided, however, that each such rejected item shall be
reviewed on a case by case basis and must be made in good faith so as not to
undermine the mutual intent set forth in this Letter of Intent.

      2.    Purchase Price.

            (a) For and in consideration of the proposed acquisition of the
      Assets, Access One shall pay Net2000 an amount in cash equal to $750 per
      Access Line (the "Purchase Price Per Line") acquired, subject to downward
      adjustment, as provided below (the "Purchase Price"). At Closing, Access
      One will pay Net2000 $2 million in cash. The Purchase Price shall be
      adjusted downward if the following gross margin targets are not met within
      90 days from the Closing, as defined below, and Access One has entered
      into interconnection agreements with Bell Atlantic that offer a resale
      discount percentage that is equal to or greater than the discount
      percentage currently offered to Net2000:

<PAGE>   2
<TABLE>
<CAPTION>

            Gross Margin                        Purchase Price Per Line
            ------------                        -----------------------
<S>         <C>                                       <C>
            36% or greater                            $750
            34% - 35.99%                              $650
            32% - 33.99%                              $600
            30% - 31.99%                              $550
            29.99% or less                            $500
</TABLE>

      Gross margin is defined as the Price to the Customer as under contract
      with Net2000 less the actual cost of discountable services from Bell
      Atlantic divided by the Price to Customers. for purposes of this
      calculation, federal surcharges, taxes, PICC and other miscellaneous,
      non-discountable charges will not apply.

      In no event shall the Purchase Price Per Line be less than $500 per Access
      Line. In consideration of the agreed upon Purchase Price, the balance of
      the Purchase Price, as adjusted, shall be payable in the form of an
      interest free Promissory Note payable over a period of three calendar
      quarters from the Closing Date.

                  (i) Attrition. Such Promissory Note shall be reduced by the
            lesser of (I) ten (10%) percent of the Purchase Price or (II) the
            product of the Purchase Price Per Line times the total number of
            Access Lines terminated during the ninety (90) day period
            immediately following the Closing Date (the "Adjustment Period").
            Notwithstanding the foregoing, any customer who pays at least one
            invoice to Access One and subsequently terminates service shall not
            be included in the Attrition calculation defined herein.

            (b) Provided the twelve month historical collection rate is greater
      than or equal to 90%, Access One will also acquire such of Net2000's
      accounts receivable with respect to the Assets in consideration for the
      payment to Net2000 at Closing of an amount equal to 75% of Net2000's then
      outstanding accounts receivable.

            (c) Access One will, at the Closing, enter into a multi-year
      wholesale agreement with Net2000 allowing Access One to resell Net2000's
      network based services on commercially reasonable terms.

      3. Right of First Refusal. From and after the Closing, Access One shall,
for a period of two years, have a right of first refusal to acquire, on the same
terms and conditions as then offered by Net2000, any future off-net customers as
may be offered for sale by Net2000.

      4. Management Agreement. In further consideration of the agreed upon
Purchase Price, the parties shall enter into a management agreement on mutually
acceptable terms and conditions, to cover the period post-Closing.
                                                                               2
<PAGE>   3
      5. Closing. It is contemplated that a Closing of any transaction would
take place within 90 days of this Letter of Intent. In connection with all
matters discussed herein, it is expressly agreed that all parties will timely
pursue a Closing and negotiate in good faith to achieve the objectives of this
Letter of Intent.

      6.    Conditions to the Proposed Acquisition.

            (a) Commencing on the counter-execution hereof by Net2000 and for a
      period not to exceed thirty days, Access One shall conduct and complete a
      comprehensive due diligence analysis and review satisfactory to Access
      One, including, but not limited to, obtaining access to and review of all
      financial and operational statements and projections, contracts, books and
      records, agreements, and access to any and all appropriate personnel and
      vendors of the Company with knowledge of the foregoing;

            (b) Negotiation and execution by the parties of an Asset Purchase
      Agreement and Bill of Sale and such other agreements and documents
      containing standard representations and warranties, covenants and
      conditions satisfactory to the parties, including, but not limited to,
      eighteen month non-compete and three year non-solicitation provisions in
      Maryland and Virginia, and indemnities;

            (c) Approval of the Board of Directors of each of Access One and
      Net2000, and each of its respective shareholders, as and if required; and

            (d) Obtaining any and all required state and/or federal regulatory
      approval prior to transfer of the Assets.

         7. Confidentiality. Except as required by law, neither party nor the
principals thereof shall disclose to any third party, other than on a "need to
know basis", the existence of this proposal or the terms hereof, or any other
information related to this proposal without the prior written consent of the
other party. Notwithstanding the foregoing, either party may disclose the terms
of this offer and any information relating to the transaction contemplated
herein to such party's partners, officers, directors, employees, agents,
accountants, lenders, attorneys, investment bankers, consultants and other
representatives only for the purposes of evaluating, analyzing, negotiating and
consummating any transaction pursuant to the proposal as contemplated herein.
Further, the parties hereto expressly acknowledge that the terms of this
transaction, including any definitive documents executed in connection herewith,
may be disclosed in any document publicly filed by Net2000. In the event Net2000
in any way publicizes this transaction in a presentation to third parties
utilizing any of the material terms hereof, it will seek the prior written
consent of Access One, which consent shall not be unreasonably withheld.
                                                                               3
<PAGE>   4
      8. Operation of the Business. Upon the Net2000 counter-execution of this
Letter of Intent, Net2000 will be required to agree not to offer any of the
Assets for sale, other than to continue to conduct its business in the ordinary
course without any material deviation in the services it renders, or otherwise
conduct discussions or negotiations with third parties other than Access One
with a view toward a disposition of all or part of such Assets.

      9.    Expenses.

            (a) In the event the Closing does not take place within 10 days of
      the Closing Date, as provided above, due to no fault of Access One,
      Net2000 shall owe Access One its reasonable and documentable expenses in
      an amount not to exceed $25,000.

            (b) In the event the Closing does not take place within 10 days of
      the Closing Date, as provided above, due to no fault of Net2000, Access
      One shall owe Net2000 its reasonable and documentable expenses in an
      amount not to exceed $25,000.

      10. Assignment. Access One may assign all of its rights and obligations
under this Letter of Intent in its sole and absolute discretion, which assignee
must agree to abide by all of the terms and conditions contained herein. Net2000
may not assign any of its rights.

      11. Governing Law. This Letter of Intent shall be interpreted in
accordance with its terms and otherwise in accordance with the laws of the State
of New York, applicable to contracts entered into and to be performed entirely
within such state, without regard to conflicts of laws.

      12. Entire Agreement. This Letter of Intent constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings, representations and statements,
if any whether written or oral, with respect to the subject matter hereof. This
Letter of Intent may only be modified by a written instrument signed on behalf
of each party hereto by its respective authorized officer.

      13. Counterparts. This Letter of Intent may be executed in counterparts,
each of which shall be deemed an original, but both of which shall constitute
the same instrument.

                                                                               4
<PAGE>   5
      If you are in agreement with the foregoing, please execute this Letter of
Intent in the space provided below and return the original to my attention.

                                    Very truly yours,

                                    ACCESS ONE COMMUNICATIONS CORP.

                                        By: /s/ Kenneth Baritz
                                        -----------------------
                                        Name:   Kenneth Baritz
                                        Title:  Chairman and CEO

Agreed to and Accepted
this 7th day of January, 2000

Net2000, Inc.

By: /s/ Clayton A. Thomas, Jr.
-----------------------------
Name:   C. A. Thomas, Jr.
Title:  CEO

                                                                               5<PAGE>   1

                                                                    Exhibit 10.1

              THE MARLEY COMPANY ACQUISITION OF CERTAIN ASSETS FROM
                THE RIVAL COMPANY, PATTON ELECTRIC COMPANY, INC.
                       AND PATTON BUILDING PRODUCTS, INC.

                                DECEMBER 21, 1999

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>      <C>                                                                                                     <C>
1.0      PURCHASE AND SALE OF BUSINESS AND ASSETS.................................................................2
         1.1      Assets Transferred..............................................................................2
         1.2      Excluded Assets.................................................................................4
         1.3      Seller's Use of Intellectual Property...........................................................4

2.0      ASSUMPTION OF LIABILITIES................................................................................4

3.0      CLOSING; PURCHASE PRICE..................................................................................5
         3.1      Time and Place of Closing.......................................................................5
         3.2      Calculation and Payment of Purchase Price.......................................................5
         3.3      Allocation of Purchase Price....................................................................9

4.0      EQUIPMENT: DAMAGE, MALFUNCTION AND RISK OF LOSS..........................................................9
         4.2      Inspection of Equipment at Purchaser's Facilities...............................................9
         4.3      Risk of Loss, Damage Malfunction...............................................................10
         4.4      Seller's Rights and Purchaser's Remedies.......................................................11

5.0      REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR..................................................12
         5.1      Corporate Organization.........................................................................12
         5.2      Corporate Authorization, Certain Corporate Actions, No Conflicts...............................12
         5.3      Financial Information..........................................................................13
         5.4      Operations of the Business; Adequacy of Purchased Assets.......................................13
         5.5      Absence of Certain Changes or Events...........................................................14
         5.6      Undisclosed Liabilities........................................................................14
         5.7      Properties.....................................................................................14
         5.9      Intellectual Property..........................................................................15
         5.10     Labor Matters..................................................................................16
         5.11     Compliance with Laws...........................................................................16
         5.12     Taxes..........................................................................................16
         5.13     Contracts......................................................................................16
         5.14     Inventories....................................................................................18
         5.15     Backlog........................................................................................18
         5.16     Consents, Approvals, etc.......................................................................18
         5.17     Licenses and Permits...........................................................................18
         5.18     Transactions with Interested Persons...........................................................18
         5.19     Environmental Matters..........................................................................18
         5.20     Equipment Leases...............................................................................19
         5.21     Defects in Products or Designs; Products.......................................................19
         5.22     Customers and Suppliers........................................................................19
         5.23     Letters of Credit, Surety Bonds, Guarantees....................................................20
         5.24     All Material Information; Disclosure...........................................................20
         5.25     Brokers........................................................................................20
         5.26     Certain Defined Items..........................................................................20

6.0      REPRESENTATIONS AND WARRANTIES OF PURCHASER.............................................................20
         6.1      Corporate Organization.........................................................................20
         6.2      Corporate Authorization, Certain Corporate Actions,  No Conflicts..............................21
         6.4      Consents, Approvals, etc.......................................................................21
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<CAPTION>
<S>      <C>                                                                                                     <C>
         6.5      All Material Information; Disclosure...........................................................21
         6.6      Brokers........................................................................................21

7.0      DELIVERIES AT CLOSING...................................................................................22
         7.1      Deliveries by Seller and Guarantor.............................................................22
         7.2      Deliveries by Purchaser........................................................................22

8.0      POST-CLOSING OBLIGATIONS................................................................................23
         8.1      Product Marking................................................................................23
         8.2      Access After Closing...........................................................................23
         8.3      Covenant Not to Compete........................................................................23
         8.4      Exceptions to Covenant.........................................................................25
         8.5      Confidentiality and Non-Solicitation...........................................................25
         8.6      Press Release..................................................................................26
         8.8      Warranty Returns or Credits....................................................................26

9.0      EMPLOYEES...............................................................................................26

10.0     AUTHORIZATIONS..........................................................................................26

11.0     CONSENTS AND APPROVALS..................................................................................27

12.0     BULK SALES COMPLIANCE...................................................................................27

13.0     INDEMNIFICATION.........................................................................................27
         13.1     Seller's and Guarantor's Indemnification.......................................................28
         13.2     Purchaser's Indemnification....................................................................28
         13.3     Limitations on Indemnification.................................................................29
         13.4     Procedure......................................................................................30
         13.5     Indemnification as Exclusive Remedy............................................................31

14.0     SURVIVAL OF REPRESENTATIONS AND WARRANTIES..............................................................31

15.0     ARBITRATION.............................................................................................31

16.0     NOTICES.................................................................................................32

17.0     MISCELLANEOUS...........................................................................................33
         17.1     Entire Agreement; Modification.................................................................33
         17.2     Waiver.........................................................................................33
         17.3     Binding Effect.................................................................................33
         17.4     Numbers and Headings...........................................................................33
         17.5     Exhibits and Schedules.........................................................................33
         17.7     Counterparts...................................................................................34
         17.8     Expenses.......................................................................................34
         17.9     Validity of Provisions.........................................................................34
         17.10    Governing Law..................................................................................34
         17.11    Guaranty.......................................................................................34
</TABLE>

------------------ COMPARISON OF FOOTERS ------------------

                                       ii
<PAGE>   4

                    AGREEMENT OF PURCHASE AND SALE OF ASSETS

     THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS (the "Agreement") is dated
this 21st day of December, 1999, by and among THE RIVAL COMPANY, a Delaware
corporation ("Rival"), PATTON ELECTRIC COMPANY, INC., an Indiana corporation
("Patton Electric"), PATTON BUILDING PRODUCTS, INC., a Delaware corporation
("Patton Building") (Patton Electric and Patton Building together with Rival,
"Seller"); THE HOLMES GROUP, INC., a Massachusetts corporation (the
"Guarantor"); and THE MARLEY COMPANY, a Delaware corporation on behalf of its
Marley Electric Heating division (the "Purchaser").

                              BACKGROUND STATEMENT

A.   Guarantor owns 100% of the capital stock of Rival and is a party to this
     Agreement for the purpose of making representations, warranties and
     covenants to Purchaser as provided herein and guarantying all of Seller's
     obligations hereunder.

B.   The transaction contemplated by this Agreement relates to the sale of
     assets of Rival's industrial products division, which is part of Rival and
     Patton Electric and which encompasses a line of electrical fans, drum
     blowers and heaters sold through industrial distribution channels under the
     Patton(R), and Titan(R), and Power Cat(R)brand names (the "Industrial
     Division"), and building supply products division, which is part of Rival
     and Patton Building and which encompasses a line of residential building
     products sold through building supply wholesalers and electrical and
     plumbing supply distributors also under the Patton brand name (the
     "Building Supply Division"). While the Industrial Division and the Building
     Supply Division have been operated by Rival through separate divisions, for
     purposes of this Agreement they will be referred to collectively as the
     "Business." Rival continues to operate a retail products division for the
     manufacture, marketing and sale of products into consumer markets, certain
     of which include the designs, functions and brand names of products
     manufactured, marketed and sold through the Industrial Division.

C.   Seller desires to sell assets necessary to operate the Business at its
     projected level of capacity (including certain product lines sold under the
     "Patton", "Titan," and "Power Cat" tradenames) in order to focus on
     consumer and retail products and Purchaser desires to purchase such assets
     of the Business, specifically excluding the Excluded Assets (as hereinafter
     defined) for the Purchase Price (as hereinafter defined) and upon the terms
     and subject to the conditions hereinafter set forth.

<PAGE>   5

                             STATEMENT OF AGREEMENT

     In consideration of the mutual covenants and agreements hereinafter set
forth, the parties hereby agree as follows:

1.0  PURCHASE AND SALE OF BUSINESS AND ASSETS.

1.1  ASSETS TRANSFERRED. Seller hereby sells, assigns and delivers to Purchaser
     free and clear of all liabilities, obligations, liens and encumbrances of
     any kind other than the Assumed Liabilities, and Purchaser hereby purchases
     and acquires from Seller, or, with respect to delivery only, at such later
     time as mutually agreed upon by the parties as provided in the Interim
     Service and Supply Agreement of even date herewith (the "Interim Services
     Agreement"), all right, title and interest in and to the following
     properties, assets and rights of Seller, excluding the Excluded Assets
     (collectively, the "Purchased Assets"):

     (a)  all inventories of raw materials, work in process, finished products,
          goods, spare parts, replacement and component parts held by Seller on
          the Closing Date or such later date as such inventories are shipped by
          Seller pursuant to the Interim Services Agreement and having a product
          number or product code identified on SCHEDULE 1.1(a) (collectively,
          the "Inventories"), including (i) Inventories in transit to Seller,
          (ii) Inventories on consignment, (iii) Inventories at any location,
          whether or not controlled by Seller, (iv) Inventories acquired by
          Seller pursuant to "Seller Purchase Orders" (as defined below) and (v)
          Inventories subject to purchase orders placed by Seller for
          Inventories after the Closing which remain unfilled at the date of
          transfer of Inventories pursuant to the Interim Services Agreement;

     (b)  the equipment, machinery, tools, dies and molds specified on SCHEDULE
          1.1(b), and the related spare parts, replacement parts, component
          parts and similar property directly relating thereto, whether or not
          listed on SCHEDULE 1.1(b) (collectively, the "Equipment");

     (c)  all rights (i) to sell finished goods products having a product number
          or product code identified on SCHEDULE 1.1(a) and (ii) to sell the
          products under research or development by the Business as of the date
          hereof (collectively, "Products");

     (d)  all transferable rights (including rights that become transferable
          pursuant to ARTICLE 11.0 of this Agreement or otherwise pursuant to
          the consent or approval of third parties) of Seller relating to the
          Purchased Assets or the Business under all written or oral contracts,
          arrangements, license and technology agreements (including all rights
          under licensing agreements with Joseph Armbruster or otherwise
          relating to the "Power Cat" tradename or products), distribution
          agreements, sales representative arrangements and other agreements,
          but excluding purchase orders placed by Seller with third parties for
          finished goods or raw materials ("Seller Purchase Orders"); including
          without limitation any right to receive payment for products sold or
          services rendered following Closing, and to

                                       2
<PAGE>   6

          receive goods and services following Closing pursuant to such
          contracts and to assert claims and take other rightful actions in
          respect of breaches, defaults and other violations of such contracts
          and otherwise (collectively, the "Contracts"), including without
          limitation those set forth on SCHEDULE 1.1(d);

     (e)  [Intentionally left blank]

     (f)  (i) all patents and patent applications necessary to the operation of
          the Business, including but not limited to those identified on
          SCHEDULE 1.1(f)(i), (ii) all trademarks, service marks and trade names
          necessary to the operation of the Business, including but not limited
          to those identified on SCHEDULE 1.1(f)(ii)(A), other than (A) the
          Patton, Titan and Bionaire names and (B) trademark and other rights in
          the trade dress relating to those Products which have substantially
          identical designs and trade dress to products which Seller will
          continue to manufacture and sell and any other products, based on or
          derived therefrom as provided on SCHEDULE 1.1(f)(ii)(B) (the
          "Cross-Over Products"), (iii) an undivided joint ownership interest in
          any and all trademark and other rights in the trade dress relating to
          the Cross-Over Products, and (iv) all copyright registrations and
          applications for copyright registrations, and any other non-registered
          copyrights necessary to the operation of the Business, including but
          not limited to those identified on SCHEDULE 1.1(f)(iv) (the items
          described in clauses (i), (ii), (iii) and (iv) are collectively
          referred to as the "Intellectual Property");

     (g)  (i) all designs, plans, product drawings, trade secrets, inventions,
          data, processes, procedures, technology, techniques, blueprints,
          drawings, surveys, research and development files, computer files,
          research records, manufacturing know-how, manufacturing formulae, and
          similar information, wherever located, relating to the Business or the
          manufacture of Products by Rival or by third parties other than the
          Cross-Over Products and (ii) an undivided joint ownership interest in
          any or all of the foregoing relating to the Cross-Over Products
          (collectively, the "Know-How");

     (h)  to the extent relating to the Business, all books, records, manuals,
          information, computer files and other catalogs, mailing lists, price
          lists, lists of customers, distribution lists, contacts, market
          information, cost information, photographs, production data,
          scheduling, supplying, marketing, advertising and promotional
          materials and records, purchasing materials and records, manufacturing
          and quality control records and procedures, records, media materials,
          sales orders files, computer files (whether on discs, tapes or
          otherwise), parts reference guides, project files, and other similar
          materials, including, without limitation, any such materials
          maintained by the Seller, Guarantor or any subsidiary or affiliate
          thereof or any officer, director or key employee thereof
          (collectively, "Seller's Group"); and

                                       3
<PAGE>   7

     (i)  to the extent their transfer is permitted by law, all governmental
          licenses, permits, approvals, license applications and product
          registrations ("Permits").

1.2  EXCLUDED ASSETS. Seller retains and does not transfer (a) cash and cash
     equivalents of Seller, Guarantor or the Business, (b) any accounts
     receivable of Seller, Guarantor or the Business, (c) the Patton, Titan and
     Bionaire trademarks in all configurations and styles, except to the extent
     licensed under the License Agreement and (d) proceeds from any litigation
     relating to the Business which arose and was settled prior to the Closing
     (as defined below) (collectively, the "Excluded Assets").

1.3  SELLER'S USE OF INTELLECTUAL PROPERTY. Purchaser acknowledges and agrees
     that Seller will continue to manufacture the Cross-Over Products following
     Closing, and that the manufacture, marketing and sale of Cross-Over
     Products may utilize and involve certain patents and copyrights that are
     contained within Intellectual Property that is being conveyed by Seller to
     Purchaser hereunder. Purchaser agrees that Seller may use, and to the
     extent necessary hereby grants to Seller a perpetual, royalty-free,
     non-exclusive and irrevocable license to such patents and copyrights to the
     extent necessary to manufacture, market and sell the Cross-Over Products
     solely within the Patton Retail Lines (as defined below).

2.0  ASSUMPTION OF LIABILITIES. Subject to the terms and conditions of this
     Agreement and the Interim Services Agreement, as of the Closing Date
     Purchaser hereby assumes and agrees to perform and discharge the following,
     and only the following liabilities of Seller incurred in the ordinary
     course of operating the Business (the "Assumed Liabilities"):

     (a)  all liabilities arising from and after the Closing Date under and
          pursuant to all Contracts;

     (b)  all liabilities for commissions payable to sales representatives for
          sales shipped following the Closing Date;

     (c)  all liabilities and responsibility for warranty and breach of warranty
          obligations and claims for products manufactured by Seller in
          connection with the Business prior to the Closing Date ("Seller
          Products"), including, without limitation, warranty returns, service,
          replacement or reimbursement obligations, PROVIDED HOWEVER that
          Purchaser shall have no liability or responsibility for warranty
          claims where the warranty granted by Seller exceeds the standard
          warranties for such products in terms of duration, scope or remedy,
          and PROVIDED FURTHER that Seller shall be solely liable and
          responsible for any and all obligations arising from or related to (i)
          product recalls or withdrawals (A) suggested by Seller, Purchaser or
          the Consumer Products Safety Commission ("CPSC") to which the other
          party (or, in the case of a CPSC suggestion, both parties), in the
          exercise of prudent business judgement in a manner consistent with its
          past practices, consents or (B) required by the CPSC or (ii) product
          liability claims or threatened claims, losses or damages, in either
          case arising from or related to products

                                       4
<PAGE>   8

          manufactured by Seller before or after the Closing Date (collectively,
          "Excluded Product Liability Matters"); and

     (d)  all liabilities for any claims, losses and damages resulting from
          injury or death of any person, or any damage to property, caused by
          any Seller Product included within the Inventories if such Seller
          Product shall have been altered or damaged in any way after shipment
          from Seller to Purchaser or Purchaser's designee.

     Except as expressly set forth above, Purchaser does not assume, and Seller
     and Guarantor will pay, honor and discharge, all liabilities, obligations
     and commitments of any kind relating to or arising out of the operation of
     the Business prior to the Closing Date and the Excluded Product Liability
     Matters (the "Excluded Liabilities").

3.0  CLOSING; PURCHASE PRICE.

3.1  TIME AND PLACE OF CLOSING. The closing of the sale of the Purchased Assets
     (the "Closing") is taking place simultaneously with the execution of this
     Agreement at the offices of Smith Helms Mulliss & Moore, L.L.P., 201 North
     Tryon Street, Charlotte, North Carolina 28202 on December 21, 1999 (the
     "Closing Date"). Closing shall be effective as of 12:00:01 a.m. on the
     Closing Date.

3.2  CALCULATION AND PAYMENT OF PURCHASE PRICE.

     (a)  PREPARATION OF CLOSING DATE BALANCE SHEET. Seller hereby delivers to
          Purchaser a balance sheet dated as of the Closing Date (the "Closing
          Date Balance Sheet") which reflects the net book value of the
          Inventories, Equipment and other assets included in the Purchased
          Assets as of the dates specified therein, LESS a warranty reserve in
          the aggregate amount of $927,406.65 as shown on SCHEDULE 3.2(a). The
          value of Equipment as stated on the Closing Date Balance Sheet is the
          net book value thereof as of October 31, 1999, determined in
          accordance with United States generally accepted accounting principles
          ("GAAP") as shown on SCHEDULE 1.1(b) and the value of Inventories is
          as follows:

          (A)  finished goods Inventories listed in Seller's most recent product
               catalog determined by the parties to be saleable within the first
               two (2) years after the Closing Date based on the 1/1/99 -
               12/13/99 actual sales have been valued at 100% of the Rival
               Standard Cost (as defined in the Interim Services Agreement) as
               of the Closing Date, as detailed in the column entitled "Cal-99
               Two Years Inventory" on SCHEDULE 1.1(a),

          (B)  finished goods Inventories listed in Seller's most recent product
               catalog determined by the parties to be saleable from three (3)
               years to five (5) years after the Closing Date based on the
               1/1/99 - 12/13/99 actual sales have been valued at 25% of the
               Rival Standard Cost as of the Closing Date, as detailed in the
               column entitled "Cal-99 Inv 2-5 Years" on SCHEDULE 1.1(a),

                                       5
<PAGE>   9

          (C)  finished goods Inventories listed in Seller's most recent product
               catalog and determined by the parties not to be saleable until
               five (5) years after the Closing Date based on the 1/1/99 -
               12/13/99 actual sales and finished goods Inventories not listed
               in Seller's most recent product catalog have been valued at 0% of
               the Rival Standard Cost as of the Closing Date,

          (D)  raw material and work in process Inventories, excluding obsolete
               and inactive Inventories as designated by Seller, usable within
               the first two (2) years after the Closing Date based on two
               times (2x) the greater of usage over the last 12 months or the
               usage as shown on the forecast contained in schedule 1.1(a) have
               been valued at 100% of Seller's net book value as of the Closing
               Date,

          (E)  raw material and work in process Inventories, excluding obsolete
               and inactive Inventories as designated by Seller, usable during
               the third year after the Closing Date based on the 1/1/99 -
               12/13/99 actual sales have been valued at 50% of Seller's net
               book value as of the Closing Date, and

          (F)  (x) obsolete and inactive raw material and work in process
               Inventories as designated by Seller and (y) raw material and work
               in process Inventories usable after the third year after the
               Closing Date based on the greater of (i) the usage of such
               Inventories over the 12-month period immediately preceding the
               date of the Closing Date Balance Sheet or (ii) projected usage
               from January 1, 2000 to December 31, 2000 have been valued at 0%
               of Seller's net book value as of the Closing Date.

          The valuation of Equipment has been extracted from the financial
          statements of Seller prepared on a basis consistent with the past
          practices of Seller and previously delivered by Seller to the
          Purchaser, and further calculated in accordance with the principles
          and procedures set forth in this Agreement. For purposes of this
          SECTION 3.2(a), the time periods in which Inventories are deemed
          "saleable" and "usable" have been mutually agreed to by the parties
          and do not constitute a representation or warranty of Seller.

     (b)  CALCULATION AND PAYMENT OF PRELIMINARY PURCHASE PRICE. In
          consideration of the sale, assignment and delivery of the Purchased
          Assets by Seller to Purchaser, Purchaser hereby pays to Seller in cash
          or immediately available funds an amount equal to the value of the
          Inventories and Equipment included in the Purchased Assets as set
          forth on the Closing Date Balance Sheet; less the amount of the
          warranty reserve; plus Four Million Dollars ($4,000,000) (the
          "Preliminary Purchase Price") and less the Escrow Funds (defined
          below) which shall be deposited with First Union National Bank (the
          "Escrow Agent") on the Closing Date. The Escrow Funds shall consist of
          the following: (x) $1,000,000 (the "Performance Escrow Funds") and (y)
          the amount equal to the sum of 25% of the value of raw material and
          work in process Inventories, 10% of the value of

                                       6
<PAGE>   10

          finished goods Inventories, and 25% of the value of Equipment all as
          shown on the Closing Date Balance Sheet (the "Asset Escrow Funds")
          (the Performance Escrow and the Asset Escrow Funds are collectively
          referred to as the "Escrow Funds"). The Escrow Agent shall hold the
          Escrow Funds in escrow for the benefit of the parties pursuant to an
          Escrow Agreement, the form of which is attached as EXHIBIT 3.2(B) to
          this Agreement (the "Escrow Agreement"). All interest on Escrow Funds,
          or portion thereof, shall be paid to the party ultimately entitled to
          payment of such Escrow Funds, or portion thereof.

     (c)  INTERIM RELEASES OF ESCROW FUNDS

          (i)  INTERIM RELEASES OF ASSET ESCROW FUNDS. Within five (5) business
               days after the end of each full calendar month after the Closing
               Date, Purchaser and Seller pursuant to a Joint Written Direction
               (as defined in the Escrow Agreement) will direct the Escrow Agent
               to release Asset Escrow Funds to Seller in the amount equal to
               the sum of:

                    (A) 25% of the raw material and work in process Inventories
                    and 10% of the finished goods Inventories (I) received by
                    Purchaser, (II) shipped by Seller to a customer designated
                    by Purchaser and reflected on a customer invoice, (III)
                    received by Purchaser but identified by the Working Group to
                    have been damaged in transit to Purchaser's facility or (IV)
                    shipped by Seller to Purchaser and reflected on a bill of
                    lading but lost in transit; and

                    (B) 25% of the Equipment delivered by Purchaser to a carrier
                    for shipment at Seller's facility,

               in each case occurring during the preceding month, with such
               Inventories and Equipment to be valued in accordance with SECTION
               3.2(a); provided that the final release of Asset Escrow Funds
               shall correspond with the final release of Escrow Funds pursuant
               to SECTION 3.2(e).

          (ii) INTERIM RELEASES OF PERFORMANCE ESCROW FUNDS. Subject to SECTION
               10 of the Interim Services Agreement, within five (5) business
               days after the Working Group (as defined in the Interim Services
               Agreement) agrees that a Transition Stage (as defined in the
               Interim Services Agreement) has been completed, the Purchaser and
               Seller pursuant to a Joint Written Direction will direct the
               Escrow Agent to release 33% of the Performance Escrow Funds to
               Seller; provided that the final release of Performance Escrow
               Funds shall correspond with the final release of Escrow Funds
               pursuant to SECTION 3.2(e).

     (d)  CALCULATION OF PURCHASE PRICE ADJUSTMENT. Within thirty (30) days
          after the Working Group agrees that the final Transition Stage has
          been completed, but not

                                       7
<PAGE>   11

          earlier than the completion of any remedy period available to Seller
          under SECTION 4.4 hereof (the "Adjustment Calculation Date"), the
          parties shall calculate the "Purchase Price Adjustment" based on the
          amounts reflected on the Closing Date Balance Sheet. Such Purchase
          Price Adjustment shall be equal to the value of the Inventory and
          Equipment included in the Purchased Assets as set forth on the Closing
          Date Balance Sheet; LESS the value of (A) the Inventory (I) received
          by Purchaser, (II) shipped by Seller to a customer designated by
          Purchaser and reflected on a customer invoice, (III) received by
          Purchaser but identified by the Working Group to have been damaged in
          transit to Purchaser's facility or (IV) shipped by Seller to Purchase
          and reflected on a bill of lading but lost in transit, and (B)
          Equipment delivered by Purchaser to a carrier for shipment at Seller's
          facility, in each case included in the Purchased Assets and, with
          respect to Equipment valued in accordance with SECTION 3.2(a) through
          the Adjustment Calculation Date and, with respect to Inventories
          valued in accordance with the spreadsheet model presented in SCHEDULE
          1.1(a), PROVIDED THAT: (i) no further depreciation and amortization
          shall be taken with respect to the Equipment from and after October
          31, 1999; (ii) to the extent Inventories described in SECTION
          1.1(a)(v), together with other Inventories on hand, exceed two years
          inventory, such two year limit shall not be applicable, and (iii) the
          Purchase Price Adjustment shall not take into account any remedies
          which may be available to Purchaser relating to visible damage,
          malfunctioning or failure to meet "Sufficiency Standards" (as defined
          below) of the Equipment. The Preliminary Purchase Price, as adjusted
          by any Purchase Price Adjustment, is referred to as the "Purchase
          Price."

     (e)  PAYMENT OF PURCHASE PRICE ADJUSTMENT AND FINAL RELEASE OF ESCROW
          FUNDS. In the event the Purchase Price Adjustment is positive (a
          "Purchaser Adjustment"), upon completion of calculation of the
          Purchase Price Adjustment the parties shall direct the Escrow Agent to
          release to Purchaser from the Escrow Funds an amount equal to the
          Purchaser Adjustment, and release any remaining Escrow Funds to
          Seller; provided that, if the Escrow Funds shall be less than the
          Purchaser Adjustment, Seller shall pay the remaining balance of the
          Purchaser Adjustment to Purchaser in cash or immediately available
          funds within three (3) business days after such amount has been
          finally determined. In the event the Purchase Price Adjustment is
          negative (a "Seller Adjustment"), upon completion of calculation of
          the Purchase Price Adjustment the parties shall direct the Escrow
          Agent to release to Seller from the Escrow Funds an amount equal to
          the Seller Adjustment; provided that, if the Escrow Funds shall be
          less than the Seller Adjustment, Purchaser shall pay the remaining
          balance of the Seller Adjustment to Seller in cash or immediately
          available funds within three (3) business days after such amount has
          been finally determined.

     (f)  RESOLUTION OF DISPUTES REGARDING CLOSING DATE BALANCE SHEET. In the
          event the parties cannot resolve any accounting issues relating to the
          Closing Date Balance Sheet or the Purchase Price Adjustment, the
          parties shall submit the accounting issues in dispute to binding
          arbitration with the accounting firm of Deloitte &

                                       8
<PAGE>   12

          Touche serving as arbitrator, to be agreed upon between the parties.
          Any issue other than accounting issues shall be arbitrated as set
          forth in ARTICLE 15.0 of this Agreement.

     (g)  RESOLUTION OF DISPUTES WITHIN WORKING GROUP. If the Working Group is
          unable to reach agreement as to any matter as to which its
          determination is required under this SECTION 3, the dispute
          resolution mechanisms set forth in SECTION 12 of the Interim Services
          Agreement shall be followed.

3.3  ALLOCATION OF PURCHASE PRICE. Seller and Purchaser shall allocate the
     Purchase Price among the Purchased Assets for tax purposes in accordance
     with SCHEDULE 3.3 subject to calculation of the Purchase Price pursuant to
     SECTION 3.2.

4.0  EQUIPMENT: DAMAGE, MALFUNCTION AND RISK OF LOSS.

4.1  INSPECTION OF EQUIPMENT AT SELLER'S FACILITIES. Following the Closing, the
Equipment will remain on Seller's premises, pending removal by Purchaser
pursuant to the Transition Stages and to the other terms and conditions of the
Interim Services Agreement. Immediately prior to Purchaser's disassembly,
packing and loading of each item of the Equipment ("Disassembly"),
representatives of Seller and Purchaser designated by the Working Group (the
"Inspection Team") shall visually inspect each such item to determine whether
any "visible damage" exists. Furthermore, with respect to Equipment that is an
item of equipment or machinery, rather than tooling, dies or molds
("Machinery"), the Inspection Team shall determine at Disassembly whether each
such item of Machinery is "functioning." The Inspection Team shall maintain a
log of each item of Equipment loaded by Purchaser for shipment from a Seller
facility and any visible damage or malfunction identified at Disassembly. In the
event the Inspection Team is unable to agree as to whether any item is visibly
damaged or, as to Machinery, malfunctioning, the dispute shall be resolved
through mechanisms of SECTION 12 of the Interim Services Agreement. No Equipment
shall be deemed visibly damaged or, as to Machinery, malfunctioning if not
identified at the time of Disassembly.

     For purposes of this Agreement (i) the terms "visible damage," "visibly
damaged" and the like mean damage that can be observed without testing the
function of the Equipment and which is not material to the function of the
Equipment; (ii) the terms "function," "functioning" and the like mean that an
item of Equipment, when operated together with other appropriate Equipment, is
capable of producing Products that conform within acceptable tolerances
reasonable to the use intended and to the product specifications of Seller's
current product catalog, with the exceptions specified on SCHEDULE 10(f) of the
Interim Services Agreement and (iii) the terms "malfunction," "malfunctioning"
and the like mean that an item of Equipment does not "function." Any item of
Machinery that is "functioning" immediately prior to Disassembly and does not
operate in materially the same manner at the time of Assembly shall be deemed to
be "malfunctioning" as of the time following Disassembly for purposes of this
Agreement.

4.2  INSPECTION OF EQUIPMENT AT PURCHASER'S FACILITIES. Within six (6) months of
Purchaser's removal of Equipment from Seller's facilities, Purchaser shall
assemble all items of Equipment and either commence manufacturing or test
manufacturing capability of the Equipment,

                                       9
<PAGE>   13

including testing all tooling ("Tooling") to determine whether or not it
functions ("Assembly"). The Inspection Team shall inspect all Equipment in
operation to determine any Tooling malfunction or any failure by the Equipment
to operate in accordance with the "Sufficiency Standards" (as defined in SECTION
5.4 below). In the event the Inspection Team is unable to agree as to whether
any Equipment, as utilized in manufacturing products, does not meet the
Sufficiency Standards or, as to Tooling, malfunctions, the dispute shall be
resolved through mechanisms of SECTION 12 of the Interim Services Agreement. No
Equipment shall be deemed to have failed to meet the Sufficiency Standard or, as
to Tooling, malfunctioning if not identified within six (6) months of
Purchaser's removal of Equipment from Seller's facilities.

4.3  RISK OF LOSS, DAMAGE, MALFUNCTION. The risk of loss, damage or malfunction
of Equipment shall be borne by the parties as follows:

     (a)  LOSS OF EQUIPMENT. Seller shall bear the risk of loss of any items of
          Equipment from Closing until (but not including) Disassembly, and
          Purchaser shall bear the risk thereafter to the extent that any such
          loss is not caused by the negligence or willful misconduct of Seller,
          its employees or agents.

     (b)  DAMAGED EQUIPMENT. Seller shall bear the risk of any damage to any
          items of Equipment from Closing until (but not including) Disassembly,
          and Purchaser shall bear the risk thereafter to the extent that any
          such damage is not caused by the negligence or willful misconduct of
          Seller, its employees or agents.

     (c)  MALFUNCTIONING MACHINERY. Seller shall bear the risk of any
          malfunctioning Machinery from Closing until (but not including)
          Disassembly, and Purchaser shall bear the risk thereafter to the
          extent that any such malfunction is not caused by the negligence or
          willful misconduct of Seller, its employees or agents.

     (d)  MALFUNCTIONING TOOLING. Seller shall bear the risk of any
          malfunctioning Tooling from Closing through Assembly to the extent
          that any such malfunction is not caused by the negligence or willful
          misconduct of Purchaser, its employees or agents, which malfunctioning
          does not result from any visible damage, and Purchaser shall bear the
          risk thereafter to the extent that any such malfunction is not caused
          by the negligence or willful misconduct of Seller, its employees or
          agents.

     (e)  SUFFICIENCY OF ASSETS. Seller shall bear the risk that the Equipment,
          at the time of Assembly, fails to meet the Sufficiency Standard, to
          the extent that any such failure to meet the Sufficiency Standard is
          not caused by the negligence or willful misconduct of Seller, its
          employees or agents and which failure does not result from any visibly
          damaged Equipment or any malfunctioning Equipment, and Purchaser shall
          bear the risk thereafter.

                                       10
<PAGE>   14

4.4  SELLER'S RIGHTS AND PURCHASER'S REMEDIES.

     (a)  LOSS OF EQUIPMENT. In the event of the loss of any item of Equipment
          for which Seller bears the risk, Seller shall, at its sole cost and
          expense, replace the lost item of Equipment with an item of Equipment
          of comparable age, quality and function.

     (b)  DAMAGED MACHINERY. Subject to the limitations of the "Cap" as set
          forth in SECTION 13.3(b), in the event of visible damage to any item
          of Machinery for which Seller bears the risk, Seller shall have the
          opportunity within thirty (30) days of such visible damage being
          identified to repair such visible damage. If Seller does not repair
          such visible damage, Purchaser's remedy shall be limited to one
          hundred percent (100%) of the replacement cost of an item of Machinery
          of comparable age, quality and function. Notwithstanding the
          foregoing, if the Working Group agrees that any visible damage to
          Machinery occurred between the Closing and Disassembly and did not
          result from Seller's gross negligence or willful misconduct,
          Purchaser's remedy shall be limited to fifty percent (50%) of the
          replacement cost of an item of Machinery of comparable age, quality
          and function (visible damage excepted).

     (c)  MALFUNCTIONING MACHINERY. Subject to the limitations of the Cap as set
          forth in SECTION 13.3(b), in the event any item of Machinery is
          malfunctioning for which Seller bears the risk, Seller shall have the
          opportunity within thirty (30) days of such malfunction being
          identified to replace or repair such Machinery. If Seller does not
          replace or repair such malfunctioning Machinery, Purchaser's remedy
          shall be limited to one hundred percent (100%) of the replacement cost
          of an item of Machinery of comparable age, quality and function
          (malfunction excepted). Notwithstanding the foregoing, if the Working
          Group agrees that any Machinery became malfunctioning between the
          Closing and Disassembly and did not result from Seller's gross
          negligence or willful misconduct, Purchaser's remedy shall be limited
          to fifty percent (50%) of the replacement cost of an item of Machinery
          of comparable age, quality and function (malfunction excepted).

     (d)  VISIBLY DAMAGED OR MALFUNCTIONING TOOLING. In the event any item of
          Tooling is visibly damaged or malfunctioning for which Seller bears
          the risk, Seller shall have the opportunity for a period of thirty
          (30) days after the visible damage or malfunction is identified to
          remedy such visible damage or malfunction, by means of reengineering,
          repair, or replacement. Purchaser agrees reasonably to cooperate with
          Seller in Seller's attempts to effect such remedy. If Seller is unable
          to remedy such visible damage or malfunction, Purchaser's remedy with
          respect to any individual item of Tooling shall be limited to seventy
          five percent (75%) of the replacement cost of a new item of Tooling of
          comparable quality and function (damage and malfunction excepted);
          PROVIDED HOWEVER, that Seller's aggregate liability to Purchaser with
          respect to visibly damaged or malfunctioning Tooling shall not exceed
          One Million Dollars ($1,000,000).

                                       11
<PAGE>   15

     (e)  SUFFICIENCY OF ASSETS. In the event that after Assembly the Equipment
          fails to meet the Sufficiency Standard, Seller shall have the
          opportunity for a period of thirty (30) days after the insufficiency
          is identified to remedy such insufficiency, by means of reengineering,
          repair, replacement, providing additional items of equipment or other
          means. Purchaser agrees reasonably to cooperate with Seller in
          Seller's attempts to effect such remedy. If Seller is unable to remedy
          such insufficiency, Purchaser's remedy shall be as set forth in, and
          subject to the limitations of, ARTICLE 13 hereof.

     (f)  TOOLING NOT UTILIZED IN MANUFACTURE OF PRODUCTS. Notwithstanding
          anything in this Agreement to the contrary, Seller shall have no
          liability to Purchaser whatsoever with respect to any visible damage,
          malfunction or failure to meet Sufficiency Standards of Tooling that
          is not utilized in the manufacture of Products ("Extra Tooling").

     (g)  INSURANCE PROCEEDS. Any insurance proceeds relating to the loss,
          damage or other casualty loss to Equipment shall be payable to the
          party who bears the risk of loss for such Equipment.

     (h)  PROVISIONS CONTROLLING. To the extent that this ARTICLE 4 provides
          additional rights to Seller, or restrictions on remedies of Purchaser,
          to those provided elsewhere in this Agreement, including without
          limitation ARTICLE 13 hereof, the provisions of this ARTICLE 4 shall
          control.

5.0  REPRESENTATIONS AND WARRANTIES OF SELLER AND GUARANTOR. Seller and
     Guarantor, jointly and severally, hereby represent and warrant to Purchaser
     that:

5.1  CORPORATE ORGANIZATION. Seller and Guarantor are each corporations duly
     organized, validly existing and in good standing under the laws of their
     respective jurisdiction of incorporation and each has all requisite power
     and authority to own, lease, license and operate its properties and assets
     and to conduct the business now owned, leased, licensed and operated by it.
     Seller is duly qualified, licensed or domesticated and in good standing in
     each jurisdiction where the nature of its activities or the character of
     the properties owned, leased or operated by it in connection with the
     Business, require such qualification, licensing or domestication, except
     where such failure to qualify would not have a Material Adverse Effect on
     the Condition of the Business.

5.2  CORPORATE AUTHORIZATION, CERTAIN CORPORATE ACTIONS, NO CONFLICTS. Seller
     and Guarantor each have all requisite power and authority to execute and
     deliver this Agreement and all necessary corporate proceedings have been
     taken to authorize the execution, delivery and performance by Seller and
     Guarantor of this Agreement and the transactions described herein. This
     Agreement is the legal, valid and binding obligation of Seller and
     Guarantor, and is enforceable as to Seller and Guarantor in accordance with
     its terms, except as such validity, binding effect or enforcement may be
     limited by bankruptcy, insolvency or similar laws affecting creditors'
     rights generally or by equitable principles relating to the availability of
     remedies. Except as set forth on the DISCLOSURE SCHEDULE, neither the

                                       12
<PAGE>   16

     execution, delivery nor performance of this Agreement by Seller or
     Guarantor, nor consummation of the transactions contemplated hereby, will,
     with or without the giving of notice or the passage of time, or both,
     either (i) conflict with, result in a default, right to accelerate or loss
     of rights under, or result in the creation of any lien, charge or
     encumbrance pursuant to, any provision of Seller's or Guarantor's charter,
     bylaws or any franchise, mortgage, deed of trust, lease, license,
     agreement, understanding, law, rule or regulation or any order, judgment,
     or decree to which Seller or Guarantor is a party or by which Seller or
     Guarantor or any of their properties may be bound or affected or (ii)
     except as set forth on the DISCLOSURE SCHEDULE, require any waiver,
     consent, approval, authorization or action of or filing with any third
     party.

5.3  FINANCIAL INFORMATION. Included as SCHEDULE 5.3 are the summary financial
     schedules for the Business for the eleven months ending May 31, 1999, the
     twelve months ending June 30, 1997, June 30, 1998 and June 30, 1999, and
     the four months ending October 31, 1999, as previously provided to
     Purchaser, and the year-to-date sales by major product line as of November
     30, 1999 (the "Financial Statements"). The Financial Statements, and all
     other financial information of the Seller (including without limitation the
     profit/loss, sales and inventory information and analysis prepared by
     Pricewaterhouse Coopers) delivered to the Purchaser, fairly present the
     results of operations of the Business as of said dates, having been
     extracted from the financial statements of Seller, which financial
     statements of Seller have been prepared in accordance with GAAP, applied on
     a basis consistent with prior applications of those principles, subject to
     year end adjustments and footnotes in the case of any interim financial
     statements. Seller further represents, and Purchaser acknowledges, that due
     to the fact that the Business is comprised of divisions of Seller, the
     Financial Information reflects pro rata allocations for the Business'
     portion of certain expenses of Seller, such as corporate overhead, space,
     information systems, taxes and other support functions, rather than actual
     expenses relating to the Business.

5.4  OPERATIONS OF THE BUSINESS; ADEQUACY OF PURCHASED ASSETS. As of the Closing
     Date, the Business is operated only through Seller and not through any
     other direct or indirect subsidiary or affiliate of Seller, Guarantor,
     other member of Seller's Group or otherwise. Except as set forth in the
     DISCLOSURE SCHEDULE and provided that Purchaser utilizes human and capital
     resources that are consistent with such resources utilized by Seller in its
     manufacture of Products, the Purchased Assets comprise all the assets,
     properties and rights of every type and description, used in or necessary
     to the operation of the Business in the ordinary course and, except as set
     forth in the DISCLOSURE SCHEDULE, are adequate to support the Rival Master
     Forecasts at Closing and the MEH Master Forecasts (both as defined in the
     Interim Services Agreement) (the "Sufficiency Standard"), and, except as
     set forth in the DISCLOSURE SCHEDULE, no Person (as defined in SECTION 5.26
     below) other than the Seller has any ownership interest in any such assets.
     Except as disclosed in the DISCLOSURE SCHEDULE, as of the Closing Date all
     items of Equipment (except for the Extra Tooling) are in operating
     condition, are fit for the purposes intended and have been maintained in
     accordance with good industry standards (the "Closing Condition"). All
     Extra Tooling is sold "AS IS."

                                       13
<PAGE>   17

5.5  ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the DISCLOSURE
     SCHEDULE, since October 31, 1999 there has not been any Material Adverse
     Change in the Condition of the Business (as defined in SECTION 5.26 below),
     or event or development likely to give rise to a Material Adverse Change in
     the Condition of the Business, and Seller has not, in any amount or manner
     with respect to the Business (a) sold, transferred, leased to others or
     otherwise disposed of any of the assets necessary to operate the Business,
     except for inventory sold in the ordinary course of business; (b) waived or
     released any right of value relating to the Business except in the ordinary
     course of business; (c) received any notice of termination of or otherwise
     lost any contract, lease, license or other agreement relating to the
     Business or failed to perform in all material respects all of its
     obligations, or suffered or permitted any material default to exist, under,
     any contract, lease, agreement or license material to the Business; (d) had
     any actual or threatened employee strikes, work stoppages, slow-downs or
     lockouts affecting the Business; (e) transferred or granted any rights
     under, or entered into any settlement regarding the breach or infringement
     of, or otherwise failed to preserve or permit to lapse, any license,
     patent, copyright, trademark, trade name, invention or similar right
     relating to the Business, or modified any existing right with respect
     thereto; (f) made any change in the rate of compensation, commission, or
     other direct or indirect remuneration payable, or paid or agreed or orally
     promised to pay, conditionally or otherwise, any bonus, extra compensation,
     pension, severance or vacation pay, to any salesman, distributor,
     representative or agent of Seller relating to the operation of the Business
     except in the ordinary course of business; (g) made any capital
     expenditures or capital additions or betterments in excess of an aggregate
     of Twenty-Five Thousand Dollars ($25,000); (h) made any purchase commitment
     in excess of the normal, ordinary and usual requirements of the Business or
     at any price in excess of the then current market price or upon terms and
     conditions more onerous than those usual and customary in the industry, or
     made any change in its selling, pricing, advertising or personnel practices
     inconsistent with prudent business practices; (i) made any change in
     accounting methods in any way affecting the Purchased Assets; (j) made any
     change in its business or operations or in the manner of conducting its
     business or incurred any obligations or liabilities, except in each case in
     the ordinary course of business consistent with past practices; (k)
     permitted or allowed any of the Purchased Assets to be mortgaged, pledged
     or subjected to any lien, encumbrance, restriction or charge of any kind;
     or (l) entered into any agreement or made any commitment to take any of the
     types of action described in subparagraphs (a) through (l) above.

5.6  UNDISCLOSED LIABILITIES. As of the Closing Date, Seller in its operation of
     the Business does not have any outstanding material liabilities incurred
     outside the ordinary course of business, including debts, liabilities or
     obligations, or relating to any warranty, infringement, taxes, employee
     liabilities, product liability, litigation, or environmental matter, except
     as described in the DISCLOSURE SCHEDULE.

5.7  PROPERTIES. Except as disclosed in the DISCLOSURE SCHEDULE, Seller has
     good, marketable and legal title to, or holds by valid and existing lease
     or license, free and clear of all mortgages, pledges, liens, or security
     interests, each piece of property included as a

                                       14
<PAGE>   18

     Purchased Asset (including without limitation each asset listed on the
     Closing Date Balance Sheet).

5.8  LITIGATION; ORDERS. Except for pending product liability claims required to
     be disclosed pursuant to Section 5.21 hereof, there is no material claim,
     legal action, administrative proceeding, governmental investigation,
     arbitration or other proceeding (collectively, "Litigation") pending, nor
     to Seller's Knowledge threatened, against Seller or Guarantor or any other
     member of Seller's Group arising from or otherwise relating to the
     Business, and Seller has no reason to be aware of any basis for the same
     except as consistent with past Litigation arising from or otherwise
     relating to the operation of the Business in the ordinary course. As of the
     date hereof, there is no judgment or outstanding order, injunction, decree,
     stipulation or award (whether rendered by a court or administrative agency,
     or by arbitration) against Seller, Guarantor or any other member of
     Seller's Group relating to the Business that would prohibit the
     consummation of the transaction contemplated by this Agreement. No
     citations, fines or penalties have been asserted against Seller, Guarantor
     or any other member of Seller's Group with respect to operation of the
     Purchased Assets in the Business since January 1, 1996, under a federal,
     state or local law relating to air or water pollution or other
     environmental protection matters, or relating to occupational health or
     safety.

5.9  INTELLECTUAL PROPERTY. SCHEDULES 1.1(f)(i), 1.1(f)(ii) AND 1.1(f)(iv)
     contain complete and correct lists of all the patents, registered
     trademarks and registered copyrights and applications for the foregoing,
     both domestic and foreign, presently owned and used by Seller relating
     exclusively to the Business. All of the Intellectual Property and Know-How
     is valid and in full force and effect and, except as set forth in the
     DISCLOSURE SCHEDULE, Seller has not received any notice or claim that any
     of the Intellectual Property or Know-How is invalid or unenforceable by it.
     Except as set out in the DISCLOSURE SCHEDULE, the Intellectual Property and
     Know-How are owned by Seller free and clear of any license, sublicense,
     agreement, right, understanding, judgment, order, decree, stipulation,
     lien, charge or encumbrance of any kind. The rights being transferred to
     Purchaser pursuant to this Agreement (including the limited rights to the
     "Patton" and "Titan" tradenames transferred pursuant to the License
     Agreement of even date herewith between the Seller and Purchaser (the
     "License Agreement") and the license agreement with Joseph Armbruster
     assigned to Purchaser and more particularly described in the SCHEDULE
     1.1(d)), including rights to the Intellectual Property and Know-How,
     constitute all such rights necessary to produce, market, support and sell
     the Products of the Business as produced, marketed, supported and sold by
     Seller and to conduct the Business as currently conducted by the Seller.
     None of the Intellectual Property or any of the technology covered thereby
     or any of the Know-How has been misappropriated from any Person. Seller is
     not infringing upon or otherwise acting adversely to any intellectual
     property owned by any other Person, and there is no material claim or
     action by any Person pending, or to Seller's Knowledge threatened, with
     respect thereto. Except as described in the DISCLOSURE SCHEDULE, to
     Seller's Knowledge there is no infringement or improper use by any third
     party of the Intellectual Property or the Know-How relating to the
     Business, and there is no action or proceeding instituted by Seller pending
     in which an act constituting an infringement of any of the rights to such
     Intellectual Property or

                                       15
<PAGE>   19

     Know-How was alleged to have been committed by a third party. Seller has
     not taken or omitted to take any action that would have the effect of
     waiving any rights to any Intellectual Property or Know-How related to the
     Business. The DISCLOSURE SCHEDULE lists all licenses, sublicenses or
     agreements relating to the use by third parties of the Intellectual
     Property and Know-How, or the use by the Business of the Intellectual
     Property of another Person, and there is no default under any such license,
     sublicense or agreement.

5.10 LABOR MATTERS. As of the date hereof, at Seller's facilities where the
     Business is operated and relating to the manufacturing of products
     utilizing the Purchased Assets, (a) there is no collective bargaining
     agreement or any labor dispute involving employees of the Business and (b)
     there is no labor strike or work stoppage pending or, to Seller's
     Knowledge, threatened.

5.11 COMPLIANCE WITH LAWS. Except as disclosed in the DISCLOSURE SCHEDULE, (a)
     the conduct of the Business materially complies with all applicable
     statutes, laws, regulations, ordinances, rules, judgments, orders or
     decrees applicable thereto, and (b) to Seller's Knowledge, there are no
     proposed laws, rules, regulations, ordinances, orders, judgments, decrees,
     governmental takings, condemnations or other proceedings that would be
     applicable to the Business as operated by Seller and that could have a
     Material Adverse Effect on the Condition of the Business as operated by
     Seller.

5.12 TAXES. Except as disclosed in the DISCLOSURE SCHEDULE, other than liens for
     taxes not yet due and payable, there are no unpaid taxes, deficiencies,
     assessments, penalties, interest or other governmental charges relating to
     the income, receipts, payrolls, transactions, capital or other operations
     of the Business which are or could become a lien on any of the Purchased
     Assets. There have been no examinations pending against, no claims have
     been asserted against, and there are no unexpired waivers of any statute of
     limitations with respect to any taxes, deficiencies, assessments,
     penalties, interest or other governmental charges which could become liens
     on any of the Purchased Assets.

5.13 CONTRACTS.

     (a)  Except for the Contracts listed or described in SCHEDULE 1.1(d), none
          of the Contracts included in Purchased Assets:

          (i)   relates to a mortgage, indenture, security agreement or other
                agreement or instrument relating to the borrowing of money by,
                or any extension of credit to, or any guarantee by, Seller, or
                any obligation to which Seller is directly or contingently
                liable;

          (ii)  contains or relates to covenants or other provisions limiting
                Seller's (or any other Person's) right to compete in any line of
                business or with any person or in any area;

          (iii) is or relates to a license agreement, either as licensor or
                licensee;

                                       16
<PAGE>   20

          (iv)   is or relates to a consulting arrangement, employment agreement
                 or similar type arrangement;

          (v)    provides for or relates to any sharing of profits with others
                 or any joint venture or similar enterprise;

          (vi)   involves any remaining or unsatisfied obligation outside of the
                 ordinary course of business (i) to make capital expenditures
                 (whether through the purchase of real or personal property or
                 otherwise) involving Twenty Thousand Dollars ($20,000) or more
                 in the case of any one item or group of items, (ii) to purchase
                 goods involving Twenty Thousand Dollars ($20,000) or more in
                 the case of any one item or group of items, or (iii) to supply
                 products or provide services involving Twenty Thousand Dollars
                 ($20,000) or more in the case of any one item or group of
                 items;

          (vii)  involves any sales agency, manufacturer's representative,
                 distributorship, marketing, consignment or similar type
                 arrangement or agreement (whether foreign or domestic);

          (viii) is any other agreement, contract, lease or commitment outside
                 the ordinary course of business that in any case involves
                 payment or receipts of more than Twenty Thousand Dollars
                 ($20,000) or relates to suppliers of the Business (whether
                 foreign or domestic) or that is in any way material to the
                 Business.

     (b)  Except for agreements and arrangements listed in SCHEDULE 1.1(d) or
          the DISCLOSURE SCHEDULE, Seller is not a party to any agreements (i)
          relating to the Purchased Assets or (ii) with any employees who will
          be employed by Purchaser after Closing.

     (c)  Except as disclosed in the DISCLOSURE SCHEDULE , the Contracts are
          legal, valid, and effective in accordance with their terms, do not
          require any consent or assignment to transfer to Purchaser and there
          does not exist thereunder any default or event or condition which,
          after notice or lapse of time or both, would constitute a default
          thereunder by any party thereto.

     Except as disclosed in the DISCLOSURE SCHEDULE, neither Seller nor any
     other party to a Contract is in material breach thereof or default
     thereunder, and to Seller's Knowledge there does not exist any event which,
     with the giving of notice or the lapse of time, would constitute such a
     breach or default. Except as otherwise set forth in the DISCLOSURE
     SCHEDULE, all Contracts described or reflected therein are in full force
     and effect. To the extent any Contract (other than purchase orders or sales
     orders) requires the consent, notice or approval of another party to be
     transferred, such necessary consent, notice or approval requirement is
     designated on the DISCLOSURE SCHEDULE. Seller has provided Purchaser true,
     complete and correct copies of all written Contracts other than open

                                       17
<PAGE>   21

     purchase orders or sales orders, PROVIDED THAT Seller has provided a copy
     of the form agreement used with regard to representatives and distributors
     only.

5.14 INVENTORIES. Except for raw material, components or work in process
     utilized in Seller's manufacture of finished goods or components for
     Purchaser under the Interim Services Agreement, as to which the
     representations and warranties contained in the Interim Services Agreement
     only are made, all Inventories are of a quality usable and salable in the
     ordinary course of business and have been valued in accordance with SECTION
     3.2(a), provided that Company does not warrant that Inventories consisting
     of finished goods will be free of customer or consumer warranty claims.
     Company makes no representation or warranty with respect to the salability
     of the Inventories except as expressly provided herein. All Inventories are
     located at the locations set forth on the DISCLOSURE SCHEDULE.

5.15 BACKLOG. The DISCLOSURE SCHEDULE lists all of Seller's open orders to
     supply goods or services which were not complete on December 14, 1999.

5.16 CONSENTS, APPROVALS, ETC. There are no filings required to be made by
     Seller, Guarantor or any other member of Seller's Group with, and there are
     no consents, approvals, permits or authorizations required to be obtained
     by Seller, Guarantor or any other member of Seller's Group from,
     governmental and regulatory authorities or instrumentalities of the United
     States, the several states or any other jurisdiction in connection with the
     execution and delivery of this Agreement by Seller and Guarantor and the
     consummation by Seller and Guarantor of the transactions contemplated
     hereby.

5.17 LICENSES AND PERMITS. Seller has all material governmental licenses and
     permits necessary to conduct the Business, each of which is set forth on
     the DISCLOSURE SCHEDULE. Such licenses and permits are valid and in full
     force and effect. There is not any proceeding pending or threatened to
     limit, suspend or revoke any such license or permit.

5.18 TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth on the DISCLOSURE
     SCHEDULE, Seller has no agreement, understanding, obligation, indebtedness,
     contract or commitment in connection with or affecting the Business or the
     Purchased Assets with any member of Seller's Group (i) that is not
     cancelable by Seller on notice of not longer than 30 days without
     liability, penalty or premium and (ii) the cancellation of which will have
     a Material Adverse Effect on the Condition of the Business.

5.19 ENVIRONMENTAL MATTERS. Without in any manner limiting the scope of the
     representations set forth elsewhere in this Agreement, except as set forth
     on the DISCLOSURE SCHEDULE, the manufacturing operations of the Business
     with the Purchased Assets currently are in material compliance with, and
     Seller (with respect to the Business and Purchased Assets only) has not
     received written notice of violations under or notice of any fact upon
     which any material violation could be based under, any federal, state or
     local environmental laws as enacted, re-authorized and amended or
     regulation, guidance, orders or decrees promulgated or issued pursuant to
     any such law, except for any noncompliance that would not have a Material
     Adverse Effect on the Condition of the Business.

                                       18
<PAGE>   22

5.20 EQUIPMENT LEASES. There are no Leases for Equipment included in the
     Purchased Assets.

5.21 DEFECTS IN PRODUCTS OR DESIGNS; PRODUCTS.

     (a)  To Seller's Knowledge, except for those product features (or lack
          thereof) that have been alleged to constitute a defect in design or
          manufacture of Products in those product warranty and product
          liability matters set forth on the DISCLOSURE SCHEDULE, or which
          relate to Seller's past warranty claim experience, there are no
          defects in the design or manufacture of Products that would materially
          adversely affect the performance or quality of the Products.

     (b)  The DISCLOSURE SCHEDULE sets forth the summary warranty cost data of
          Seller since July 1, 1997. The products manufactured and sold by
          Seller have been designed and manufactured in compliance with all
          regulatory, engineering, industrial and other codes generally
          recognized as being applicable thereto. Except as set forth on the
          Disclosure Schedule, since January 1, 1996, none of the Products has
          been the subject of any voluntary or involuntary recall campaign
          performed by Seller or any voluntary or involuntary recall campaign
          required by, or performed in cooperation with, any governmental
          agency, that would adversely affect the performance or quality of such
          Products. Seller has received no written statements, citations or
          decisions by any governmental or regulatory body specifically stating
          that any Product made, manufactured, constructed, distributed, sold,
          leased, supported or installed at any time by Seller is defective or
          unsafe or fails to meet any standards promulgated by any such
          governmental or regulatory body. Except as set forth on the DISCLOSURE
          SCHEDULE, no product liability claims are presently pending (as to
          which Seller has been properly served) or, to Seller's Knowledge,
          threatened. To Seller's Knowledge and except as disclosed on the
          DISCLOSURE SCHEDULE, no fact exists relating to any Product that may
          impose upon the Seller or Purchaser a duty to recall any Product or a
          duty to warn customers of a defect in any Product.

5.22 CUSTOMERS AND SUPPLIERS. The DISCLOSURE SCHEDULE lists, by dollar volume
     paid for the twelve month period ended June 30, 1999, the ten (10) largest
     customers of the Business, with dollar volume listed ("Customers") and the
     ten (10) largest suppliers of the Business ("Suppliers"). Seller has
     received no written notice from any of the Customers or Suppliers that such
     Customer or Supplier will discontinue a substantial portion of the business
     it conducts with the Business, which notice states a schedule or time
     period for such discontinuation and, to Seller's Knowledge (i) no Customer
     or Supplier has informed any of the individuals named in SECTION 5.26 that
     such Customer or Supplier will discontinue a substantial portion of the
     business it conducts with the Business and has informed such individual of
     a schedule or time period for such discontinuation (ii) no Customer has
     informed any of such individuals that such Customer will discontinue
     purchasing Products as a result of Purchaser's acquisition of the Purchased
     Assets and the continuation of the Business following the Closing and (iii)
     no Supplier has informed any of such individuals that such Supplier will
     discontinue supplying materials for the

                                       19
<PAGE>   23

     Business as a result of Purchaser's acquisition of the Purchased Assets and
     the continuation of the business following the Closing.

5.23 LETTERS OF CREDIT, SURETY BONDS, GUARANTEES. There are no letters of
     credit, performance or payment bonds, guaranty arrangements and surety
     bonds of any nature relating solely to the Business.

5.24 ALL MATERIAL INFORMATION; DISCLOSURE. To Seller's Knowledge, all matters
     which are not generally known to the public or to the industry in which
     Seller operates the Business and which could reasonably have a Material
     Adverse Effect on the Condition of the Business, have been disclosed to
     Purchaser. No representation or warranty made herein by Seller or
     Guarantor, and no statement contained in any certificate or other
     instrument furnished or to be furnished to Purchaser in connection with the
     transaction contemplated by this Agreement (all of which statements shall
     be deemed to have been made by Seller and Guarantor for all purposes of
     this Agreement), contains or will contain any untrue statement of a
     material fact or omits or will omit to state any material facts necessary
     to make the information contained therein not misleading.

5.25 BROKERS. Neither the Seller nor the Guarantor has entered into any
     arrangement for the provision of services in connection with this Agreement
     or the transactions contemplated hereby that may give rise to an obligation
     to pay any brokers' or finders' fees or other commissions, except with
     respect to Seller's arrangement with Goldsmith-Agio-Helms (for which Seller
     and Guarantor shall remain exclusively liable).

5.26 CERTAIN DEFINED ITEMS. References in SECTIONS 5.1 THROUGH 5.25 and
     elsewhere in this Agreement to (i) "Seller's Knowledge" shall mean the
     facts and circumstances that Seller or Guarantor knew or should have known
     after appropriate inquiry, PROVIDED THAT appropriate inquiry of employees
     of Seller and Guarantor shall be deemed to have been made by inquiry of the
     following individuals: Ira B. Morgenstern; Michael Pignataro; Dennis
     Neibrook, Roger Vesser, Bill Yager, Ann Thompson, Donald Long, Edward
     Johnson and Joyce Moritz, except that with respect to SECTION 5.21 the list
     of such individuals shall also include Darrell Sanders and Ayekut Ozgunay;
     each of these named individuals has reviewed this Article 5.0 and has
     provided to Seller the information known to such individuals regarding the
     representations and warranties contained herein; (ii) "Material Adverse
     Change in the Condition of the Business" or "Material Adverse Effect on the
     Condition of the Business" shall mean a change or effect that likely would
     have a material adverse change or effect on the Purchased Assets or the
     results of operations of the Business; and (iii) "Person" shall mean any
     individual, corporation, limited liability company, partnership,
     proprietorship, trust or other entity of any kind.

6.0  REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
     and warrants to Seller that:

6.1  CORPORATE ORGANIZATION. Purchaser is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware and
     has all requisite power and authority to own, lease, license and operate
     its properties and assets and to conduct the

                                       20
<PAGE>   24

     businesses now owned, leased, licensed and operated by it. Purchaser is
     duly qualified, licensed or domesticated and in good standing in each
     jurisdiction where the nature of its activities or the character of its
     properties require such qualification, licensing or domestication.

6.2  CORPORATE AUTHORIZATION, CERTAIN CORPORATE ACTIONS, NO CONFLICTS. Purchaser
     has all requisite power and authority to execute and deliver this Agreement
     and all necessary corporate proceedings have been taken to authorize the
     execution, delivery and performance by Purchaser of this Agreement and the
     transaction described herein. This Agreement is the legal, valid and
     binding obligation of Purchaser, and is enforceable as to Purchaser in
     accordance with its terms, except as such validity, binding effect or
     enforcement may be limited by bankruptcy, insolvency or similar laws
     affecting creditors' rights generally or by equitable principles relating
     to the availability of remedies. Neither the execution, delivery, nor
     performance of this Agreement by Purchaser will, with or without the giving
     of notice or the passage of time, or both, conflict with, result in a
     default, right to accelerate or loss of rights under, or result in the
     creation of any lien, charge or encumbrance pursuant to, any provision of
     Purchaser's certificate of incorporation or bylaws or any franchise,
     mortgage, deed of trust, lease, license, agreement, understanding, law,
     rule or regulation or any order, judgment, or decree to which Purchaser is
     a party or by which Purchaser may be bound or affected.

6.3  LITIGATION; ORDERS. As of the date hereof, there is no judgment or
     outstanding order, injunction, decree, stipulation or award, or pending or
     threatened claims, suits or litigation against Purchaser that would
     prohibit the consummation of the transaction contemplated by this
     Agreement.

6.4  CONSENTS, APPROVALS, ETC. There are no filings required to be made by
     Purchaser with, and there are no consents, approvals, permits or
     authorizations required to be obtained by Purchaser from, governmental and
     regulatory authorities or instrumentalities of the United States, the
     several states or any other jurisdiction in connection with the execution
     and delivery of this Agreement by Purchaser and the consummation by
     Purchaser of the transaction contemplated hereby.

6.5  ALL MATERIAL INFORMATION; DISCLOSURE. No representation or warranty made
     herein by Purchaser, and no statement contained in any certificate or other
     instrument furnished or to be furnished to Seller in connection with the
     transaction contemplated by this Agreement (all of which statements shall
     be deemed to have been made by Purchaser for all purposes of this
     Agreement), contains or will contain any untrue statement of a material
     fact or omits or will omit to state any material facts necessary to make
     the information contained therein not misleading.

6.6  BROKERS. Purchaser has not entered into any arrangement for the provision
     of any services in connection with this Agreement or the transactions
     contemplated thereby that may give rise to an obligation to pay brokers' or
     finders' fees or other commissions.

                                       21
<PAGE>   25

7.0  DELIVERIES AT CLOSING

7.1  DELIVERIES BY SELLER AND GUARANTOR. Seller and Guarantor hereby deliver the
     following to Purchaser:

     (a)  certificates executed by an executive officer of Seller and Guarantor,
          respectively, as to authorization, incumbency and the investigations
          required by the provisions of Article 5.0, in the form attached as
          EXHIBIT 7.1(a);

     (b)  an opinion of legal counsel to Seller and Guarantor, substantially in
          the form of EXHIBIT 7.1(b);

     (c)  the Bill of Sale and Assignment in the form attached as EXHIBIT
          7.1(c), duly executed by an executive officer of Seller and all other
          documents, certificates and agreements necessary to transfer to
          Purchaser good, marketable and legal title to the Purchased Assets,
          free and clear of any and all liens thereon including, in addition to
          such Bill of Sale and Assignment and without limitation;

     (d)  assignments of all Intellectual Property and Contracts in the forms
          attached as EXHIBIT 7.1(d), duly executed by an executive officer of
          Seller;

     (e)  the License Agreement, duly executed by an executive officer of
          Seller;

     (f)  the Interim Services Agreement, duly executed by an executive officer
          of Seller;

     (g)  evidence of release of all liens, charges and encumbrances on the
          Purchased Assets; AND

     (h)  the Closing Date Balance Sheet is a form satisfactory to Purchaser.

7.2  DELIVERIES BY PURCHASER. Purchaser hereby delivers the following to Seller:

     (a)  a certificate executed by an executive officer of Purchaser as to
          authorization and incumbency, in the form attached as EXHIBIT 7.2(a);

     (b)  an opinion of legal counsel to Purchaser, substantially in the form of
          EXHIBIT 7.2(b);

     (c)  assignments of all Intellectual Property and Contracts in the forms
          attached as EXHIBIT 7.1(d), to the extent required to be executed by
          an executive officer of Purchaser;

     (d)  the License Agreement, duly executed by an executive officer of
          Purchaser;

                                       22
<PAGE>   26

     (e)  the Interim Services Agreement, duly executed by an executive officer
          of Purchaser; and

     (f)  the Preliminary Purchase Price to the Seller and the Escrow Funds to
          the Escrow Agent as described herein.

8.0  POST-CLOSING OBLIGATIONS.

8.1  PRODUCT MARKING. Following Closing, all products manufactured by, or
     manufactured by third parties pursuant to orders of, Purchaser relating in
     any way to the Business, including without limitation, Products, shall be
     indelibly imprinted, stamped or otherwise tagged with a distinctive
     identifying mark which distinguishes all such products from products
     manufactured by Seller either prior to or after Closing.

8.2  ACCESS AFTER CLOSING. After the Closing, upon reasonable written notice,
     Purchaser, Seller and Guarantor shall furnish or cause to be furnished to
     each other and their respective accountants, counsel and other
     representatives reasonable access, during normal business hours, to such
     information (including records pertinent to the Business) and assistance
     relating to the Business as is reasonably necessary for operations,
     financial reporting and accounting matters, the preparation and filing of
     any returns, reports or forms or the defense of any tax claim or
     assessment. In the case of Seller and Guarantor, such assistance shall
     include access to any and all documents, records, files and correspondence
     relating to the Business, and Seller and Guarantor will use reasonable
     efforts to maintain at their offices or in offsite storage for the longer
     of seven (7) years from its date or two (2) years after the Closing Date
     any such documents, records, files and correspondence that could be needed
     by Purchaser. In the case of Purchaser, such assistance shall include
     reasonably prompt written response to reasonable written inquiries of
     Seller related to such financial reporting, accounting and tax matters,
     cooperation in responding to audit reports made by taxing authorities to
     Seller regarding the Business, assisting Seller (including making its
     employees reasonably available (consistent with and subject to their normal
     business activities) at reasonable expense to Seller) in defending any
     lawsuits or claims against Seller with respect to Excluded Liabilities or
     relating to the operation of the Business by Seller prior to the Closing
     Date and, at Seller's request and expense, participation in audits
     conducted with respect to Seller. Purchaser shall use reasonable efforts to
     retain the books and records of Seller included in the Purchased Assets for
     a period of seven (7) years after the Closing. After the end of such
     respective retention period, before disposing of such books or records,
     Purchaser, Guarantor, Seller, as the case may be, shall use their best
     efforts to give notice to such effect to Guarantor, Seller or Purchaser, as
     the case may be, and such parties, within a reasonable time after the
     receipt of such notice, will notify the others whether to destroy such
     documents or whether it will, at its cost and expense, remove and retain
     all or any part of such books or records as it may select.

8.3  COVENANT NOT TO COMPETE. The parties acknowledge and agree that Purchaser
     is acquiring, and the consideration paid by Purchaser hereunder reflects,
     the goodwill of the Business associated with the manufacture, marketing
     and/or sale of (A) those air

                                       23
<PAGE>   27

     circulators, heaters, work lights, ventilators and other products under the
     Patton brand name identified in the product brochures attached hereto as
     EXHIBIT 8.3(i) (together with any products designed, manufactured, marketed
     and sold by Purchaser based on the designs and manufacturing processes of
     such products, whether or not under the Patton name, the "Patton Industrial
     Lines") into and through "Industrial and Commercial Channels" (as defined
     below), and (B) products offered through the Building Supply Division.
     Seller has devoted significant design, product development and promotion
     efforts to the manufacture, marketing and sale of retail and consumer air
     circulators, which have substantially identical designs and manufacturing
     processes to air circulators in the Patton Industrial Lines listed on
     Schedule 8.3 (including options) and which are sold under the Patton name
     (the "Patton Retail Lines"), into and through "Retail and Consumer
     Channels" (as defined below). The parties further acknowledge and agree
     that Seller intends to continue the manufacture, marketing and sale of the
     Patton Retail Lines, and that the consideration received by Seller
     hereunder reflects the retention by Seller of the goodwill associated
     therewith. Therefore, as an inducement to enter into this Agreement and in
     partial consideration for the payment to Seller of the Purchase Price and
     the transfer of the Purchased Assets to Purchaser, the parties agree that
     for a period of two (2) years following the Closing Date:

     (a)  Neither Seller, Guarantor nor any other member of Seller's Group
          (excluding for these purposes any individuals; the "Seller Covenant
          Group") will engage in any business which competes with (a) the
          manufacture, marketing and/or sale of products in the Patton
          Industrial Lines through Industrial and Commercial Channels or (b) the
          manufacture, marketing and sale of products currently offered through
          the Building Supply Division, or products substantially similar
          thereto, through any distribution channels, other than manufacturing
          by Seller for Purchaser as contemplated by the Interim Services
          Agreement; and

     (b)  Neither Purchaser, nor any parent, subsidiary or affiliate thereof
          (excluding for these purposes any individuals; the "Purchaser Covenant
          Group") will engage in any business which competes with the
          manufacture, marketing and/or sale of products in the Patton Retail
          Lines through Retail and Consumer Channels.

     For purposes of this Agreement: (i) the term "compete" includes (A) owning
     or controlling any financial interest in any corporation, partnership, firm
     or other form of business organization (collectively, an "Entity") which is
     so engaged, (B) consulting with, advising or assisting in any way any
     Entity which is now or becomes a competitor of Purchaser or Seller, as the
     case may be, in the business areas where these noncompetition covenants are
     effective, (C) manufacturing products on a private label basis for, or
     licensing Know-How or Intellectual Property or otherwise transferring to,
     any such Entity, and (D) engaging in any practice, the sole intent of which
     is to evade the provisions of these covenants not to compete; (ii) the term
     "Industrial and Commercial Channels means those distribution channels which
     do not normally sell products directly to homeowners, including without
     limitation industrial wholesale distributors, electrical wholesalers,
     contract and plumbing supply distributors and other non-consumer,
     non-retail distribution channels; and (iii) the term "Retail and Consumer
     Channels" means

                                       24
<PAGE>   28

     those distribution channels which normally sell products directly to
     consumers, including hardware stores and consumer oriented building supply
     stores, such as Home Depot, Home Base and Lowes, and mass merchandising
     stores, such as Wal-Mart, Target and K-Mart. The parties acknowledge and
     agree that the Industrial and Commercial Channels and the Retail and
     Consumer Channels are mutually exclusive, and an individual distributor,
     wholesaler, store or other final distribution channel cannot be included
     within both Channels. However, to the extent that a single distribution
     entity engages in both distribution Channels by maintaining two distinct
     entities with no significant crossover as to personnel, buying strategies,
     attendance at trade shows, etc., such distinct entities can be deemed to be
     in separate distribution Channels for purposes of this Agreement. Seller
     acknowledges that Purchaser currently markets and sells certain products
     under the "Southern Comfort", "Farenheat", and "Kensington" brand name
     through the Retail and Consumer Channels (the "Current Purchaser
     Products"). Seller acknowledges that nothing herein shall prohibit
     Purchaser from continuing to market and sell such the Current Purchaser
     Products through the Retail and Consumer Channels.

8.4  EXCEPTIONS TO COVENANT.

     (a)  In the event that any member of the Seller Covenant Group or the
          Purchaser Covenant Group, as the case may be, acquires an entity or
          business, or an interest in an entity or business, a part or division
          of which engages in a business that would be violative of the
          covenants contained in SECTION 8.3, such member shall have a period of
          six (6) months after closing of such acquisition to divest of all
          operations that violate such covenants, and such acquisition and
          divestiture shall not be prohibited by or deemed a breach of this
          Agreement.

     (b)  Seller may market, distribute and sell, in its sole discretion and
          without limitation, any products included in inventory not included
          within the Inventories purchased by Purchaser as part of the Purchased
          Assets.

     (c)  Seller's Group may continue to manufacture, market and sell lines of
          ceiling fans into the Retail and Consumer Channels.

8.5  CONFIDENTIALITY AND NON-SOLICITATION. As an further inducement to Purchaser
     to enter into this Agreement and in partial consideration of the payment to
     Seller of the Purchase Price, the Seller and Guarantor agree that for a
     period of five (5) years after the date hereof that neither Seller,
     Guarantor nor any other member of Seller's Group will:

     (a)  Divulge to any person, firm or corporation any confidential
          information relating to the Business, including without limitation
          customers, customer lists, Know-How, contracts, prices, suppliers or
          other business practices, unless and until (i) such information shall
          have ceased to be confidential as evidenced by general public
          knowledge or availability through public sources, (ii) such disclosure
          is required in order for Seller or any member of Seller's Group to
          continue its business operations as contemplated by and not in
          violation of this Agreement and (iii) disclosure is required under
          order of a court or other body having jurisdiction,

                                       25
<PAGE>   29

          provided that Seller shall have given prior notice to Purchaser of any
          hearing or other proceeding in which the matter of such disclosure is
          to be heard; or

     (b)  Without the prior written approval of Purchaser, offer employment to
          or attempt to induce the termination of the employment relationship
          with Purchaser of any of Seller's former employees who are employed by
          Purchaser after Closing.

8.6  PRESS RELEASE. The parties agree to issue only those press releases and
     such other forms of public notification announcing the transaction
     contemplated hereby as is consented to in advance by the other party, such
     consent not to be unreasonably withheld.

8.7  FURTHER ASSURANCES. After the Closing and for no further consideration,
     Seller and Guarantor (on the one hand), and Purchaser (on the other) shall
     (a) perform all reasonable acts (including without limitation, the use of
     their commercially reasonable efforts to enable the other party to
     accomplish transfer registration, permits, approvals, and the like as
     contemplated by this Agreement), and (b) execute, acknowledge and deliver
     such assignments, transfers, consents and other documents and instruments
     as the other party or its counsel may reasonably request, in each case, to
     vest in Purchaser or protect Purchaser's right, title and interest in, and
     enjoyment of, the Purchased Assets or to carry out the provisions and
     purposes of this Agreement.

8.8  WARRANTY RETURNS OR CREDITS. Subject to SECTION 2.0(d) with regard to
     Excluded Product Liability Matters, in the event that any Seller Products
     or any other products as to which Purchaser bears warranty liability are
     returned or delivered to Seller or any member of Seller's Group, Seller
     shall follow Purchaser's instructions with regard to such products and
     Purchaser shall process such returns or deliveries in accordance with its
     customary business practices. Subject to SECTION 2.0(d) with regard to
     Excluded Product Liability Matters, if any customer of Seller credits the
     value of any warranty claims against any of its accounts payable to Seller
     with respect to Seller Products, Seller and Purchaser shall reasonably
     cooperate to make appropriate adjustment to the Purchase Price or otherwise
     to reimburse Seller in the amount of Purchaser's obligation for such
     credit.

9.0  EMPLOYEES.

     Purchaser has offered employment to those employees listed on SCHEDULE 9.0,
     which Schedule sets forth the date on which Seller will terminate the
     employment of such employees. Upon termination, Seller shall release such
     employees from any post-employment non-competition covenants. Purchaser
     does not assume any employee-related liabilities or expenses based on
     events or pursuant to service by such employees prior to Closing, including
     without limitation under any employee benefit plans, and Seller does not
     assume any such liabilities or expenses for any period after Closing.

10.0 AUTHORIZATIONS. Seller, Guarantor and Purchaser, as promptly as practicable
     after the date hereof, shall (a) cooperate to make, or cause to be made,
     all such filings and submissions under laws, rules and regulations
     applicable to them and their affiliates, as may be required in conjunction
     with the consummation of the transfer of the Purchased

                                       26
<PAGE>   30

     Assets contemplated hereby in accordance with the terms of this Agreement,
     (b) use commercially reasonable efforts to obtain, or cause to be obtained,
     all authorizations, approvals, consents and waivers from all Persons,
     employee groups and governmental authorities necessary to be obtained by
     them or their affiliates in conjunction with such transaction, and (c) use
     commercially reasonable efforts to take, or cause to be taken, all other
     actions necessary, proper or advisable in order to fulfill their
     obligations hereunder and to carry out the intentions of the parties
     expressed herein. Seller, Guarantor and Purchaser will coordinate and
     cooperate with one another in exchanging such information and supplying
     such reasonable assistance as may be reasonably requested by each in
     connection with the foregoing.

11.0 CONSENTS AND APPROVALS. This Agreement shall not constitute an agreement to
     assign or transfer any interest in any instrument, contract, lease, permit
     or other agreement or arrangement or any claim, right or benefit arising
     thereunder or resulting therefrom, if an assignment or transfer or an
     attempt to make such an assignment or transfer without the consent of a
     third-party would constitute a breach or violation thereof or would affect
     adversely the rights of Purchaser or Seller thereunder. Any transfer or
     assignment to Purchaser by Seller of any interest under any instrument,
     contract, lease, permit or other agreement or arrangement that requires the
     consent of a third party shall be made subject to such consent or approval
     being obtained. In the event any such consent or approval has not obtained
     on or prior to the Closing Date, Seller and Guarantor shall continue to use
     commercially reasonable efforts to obtain any such approval or consent
     after the Closing Date until such time as such consent or approval has been
     obtained. Seller and Guarantor will cooperate with Purchaser in any lawful
     and economically feasible arrangement to provide that Purchaser shall
     receive Seller's interest in the benefits under any such instrument,
     contract, lease, permit or other agreement or arrangement, including a
     subcontract, sublease or performance by Seller as agent, provided that
     Purchaser shall undertake to pay or satisfy the corresponding liabilities
     for the enjoyment of such benefit to the extent Purchaser would have been
     responsible therefor if such consent or approval had been obtained. In the
     case of an instrument, contract, lease, permit or other agreement or
     arrangement with respect to which Purchaser subcontracts or subleases from
     Seller, Purchaser will be liable only to the extent agreed in such
     subcontract or sublease. Each party will pay its own costs of seeking to
     obtain or obtaining any necessary or desirable consent or approval whether
     before or after the Closing Date.

12.0 BULK SALES COMPLIANCE. Purchaser hereby waives compliance by Seller with
     the provisions of the bulk sales laws of the State of Missouri, and Seller
     warrants and agrees to pay and discharge when due all claims of creditors
     that could be asserted against Purchaser by reason of such non-compliance
     and to indemnify Purchaser in accordance with SECTION 13.1 for any damages
     suffered by Purchaser as a result of such non-compliance.

13.0 INDEMNIFICATION. The indemnification provisions set forth in this ARTICLE
     13.0 are independent of and in addition to any purchase price adjustment
     contained in ARTICLE 3.0 of this Agreement.

                                       27
<PAGE>   31

13.1 SELLER'S AND GUARANTOR'S INDEMNIFICATION. Seller and Guarantor, jointly and
     severally, hereby agree to indemnify and hold Purchaser harmless from,
     against and in respect of:

     (a)  any and all loss, liability, or damage, including reasonable
          attorneys' fees and expenses (collectively "Damages") suffered or
          incurred by Purchaser by reason of any breach of representation or
          warranty or non-fulfillment or non-performance of any covenant or
          agreement of Seller or Guarantor contained herein or in any
          certificate, document, instrument or agreement delivered to Purchaser
          pursuant hereto or in connection herewith;

     (b)  any and all Damages suffered or incurred by Purchaser in respect of or
          in connection with any Excluded Liabilities;

     (b)  any and all Damages suffered or incurred by Purchaser by reason of or
          in connection with any claim for finder's fee or brokers or other
          commission arising by reason of any services alleged to have been
          rendered to or at the instance of Seller or Guarantor or any agent or
          representative thereof, including without limitation all amounts owed
          to Goldsmith-Agio-Helms with respect to this Agreement or any of the
          transactions contemplated hereby; and

     (c)  any and all Damages suffered or incurred by Purchaser by reason of or
          in connection with any and all actions, suits, proceedings, claims,
          demands, assessments, judgments, costs and expenses, including,
          without limitation, reasonable legal fees and expenses, incident to
          any of the foregoing or incurred in investigating or attempting to
          avoid the same or to oppose the imposition thereof, or in enforcing
          this indemnity.

13.2 PURCHASER'S INDEMNIFICATION. Purchaser hereby agrees to indemnify and hold
     Seller harmless from, against, and in respect of:

     (a)  any and all Damages suffered or incurred by Seller or Guarantor by
          reason of any breach of representation or warranty or non-fulfillment
          or non-performance of any covenant or agreement by Purchaser contained
          herein or in any certificate, document, instrument or agreement
          delivered to Seller pursuant hereto or in connection herewith;

     (b)  any and all Damages suffered or incurred by Seller or Guarantor by
          reason of or in connection with any claim for finder's fee or brokers
          or other commission arising by reason of any services alleged to have
          been rendered to or at the instance of Purchaser with respect to this
          Agreement or any of the transactions contemplated hereby;

     (c)  any and all Damages suffered or incurred by Seller or Guarantor by
          reason or in connection with Purchaser's operation of the Business
          following Closing; or

                                       28
<PAGE>   32

     (d)  any and all Damages suffered or incurred by Seller or Guarantor by
          reason of or in connection with any and all actions, suits,
          proceedings, claims, demands, assessments, judgments, costs and
          expenses, including, without limitation, reasonable legal fees and
          expenses, incident to any of the foregoing or incurred in
          investigating or attempting to avoid the same or to oppose the
          imposition thereof, or in enforcing this indemnity.

13.3 LIMITATIONS ON INDEMNIFICATION.

     (a)  Notwithstanding SECTION 13.1 above and subject to the earlier time
          limitations set forth in SECTIONS 4.1 AND 4.2 hereof Seller and
          Guarantor shall not be liable to indemnify Purchaser for Purchaser's
          Damages, and notwithstanding SECTION 13.2 above Purchaser shall not be
          liable to indemnify Seller for Seller's Damages, in either case
          arising from or relating to a breach of a representation or warranty
          set forth in this Agreement unless the indemnified party notifies the
          indemnifying party in writing of its claim or potential claim for
          indemnification not later than the day which is two (2) years after
          the Closing Date, [and except as set forth in subsection (b) below or
          ARTICLE 14.0].

     (b)  Notwithstanding SECTION 13.1 AND 13.2 above, Seller and Guarantor
          shall not be liable to indemnify or have any other liability arising
          under this Agreement or otherwise to Purchaser for Purchaser's
          Damages, and Purchaser shall not be liable to indemnify or have any
          other liability arising under this Agreement or otherwise to Seller
          for Seller's Damages, unless the aggregate of the indemnified party's
          Damages exceeds $150,000, and then only for the amount by which such
          aggregate exceeds $150,000 (the "Basket"). Furthermore, subject to the
          dollar limitations for Tooling set forth in SECTION 4.4(d) hereof,
          Seller and Guarantor shall not be liable to indemnify or have any
          other liability arising under this Agreement or otherwise to Purchaser
          for Purchaser's Damages, and Purchaser shall not be liable to
          indemnify or have any other liability arising under this Agreement or
          otherwise to Seller for Seller's Damages, in excess of a total
          aggregate amount equal to seventy percent (70%) of the Purchase Price
          (the "Cap"), PROVIDED HOWEVER, that Seller and Guarantor shall
          indemnify Purchaser for Purchaser's Damages related to or arising from
          the failure of the Equipment to meet the Sufficiency Standard up to a
          total aggregate amount of 85% of the Purchase Price including Seller's
          other indemnity obligations (the "Sufficiency Cap"). The parties
          acknowledge and agree that the Cap and the Sufficiency Cap do not
          constitute separate indemnification amounts and that, subject to the
          specific exceptions contained in this SECTION 13, Seller's and
          Guarantor's aggregate indemnification obligation hereunder shall not
          exceed the Sufficiency Cap.

     (c)  The limitations contained in SECTION 13.3(a) AND 13.3(b) shall not
          apply to any claim by a party for indemnification based on Purchaser's
          failure to receive good title to any property included in the
          Purchased Assets or to any other breach of the representations
          contained in SECTION 5.7, nor to any breach of a representation

                                       29
<PAGE>   33

          relating to taxes as set forth in SECTION 5.12. Furthermore, (i) the
          limitations contained in SECTION 13.3(b) shall not apply to breaches
          of covenants contained in SECTIONS 2.0, 8.1, 8.3 AND 8.5 and (ii) the
          Basket contained in SECTION 13.3(b) shall not apply to Seller's
          obligation to repair or replace items of Equipment under SECTIONS
          4.4(a), (b) AND (c) or Tooling under Section 4.4(d).

     (d)  Notwithstanding the foregoing, neither Seller and Guarantor nor the
          Purchaser will be entitled to indemnification with respect to
          consequential damages or with respect to punitive damages, except in
          the case of fraud or willful misconduct by the other party. Any
          indemnification amounts payable by an indemnifying party under SECTION
          13.1 OR 13.2 shall be calculated after giving effect to (i) any
          proceeds (net of retro-premium adjustments and other expenses)
          actually received by an indemnified party from insurance policies
          covering the damage that is the subject of such claim for indemnity,
          and (ii) the actual recognized tax benefit resulting from such damage.

     (e)  Notwithstanding the foregoing, any claim by Purchaser arising under a
          breach of the representation and warranty contained in SECTION 5.4
          shall be governed by the provisions of ARTICLE 4.

13.4 PROCEDURE.

     (a)  In order for a party (the "indemnified party"), to be entitled to any
          indemnification provided under this Agreement in respect of, arising
          out of or involving a claim made by any Person (other than another
          party to this Agreement -- to which this SECTION 13.4 shall not apply)
          against the indemnified party (a "Third Party Claim"), such
          indemnified party must notify the other party (the "indemnifying
          party") in writing of the Third Party Claim within fifteen (15)
          business days after receipt by such indemnified party or written
          notice of the Third Party Claim; provided, however, that failure to
          give such notification shall not affect the indemnification provided
          hereunder except to the extent the indemnifying party can demonstrate
          actual prejudice as a direct or indirect result of such failure.
          Thereafter, the indemnified party shall deliver to the indemnifying
          party, within fifteen (15) business days after the indemnified party's
          receipt thereof, copies of all notices and documents (including court
          papers) received by the indemnified party relating to the Third Party
          Claim.

     (b)  If a Third Party Claim is made against an indemnified party, the
          indemnifying party will be entitled to participate in the defense
          thereof and, if it acknowledges in writing its obligations to
          indemnify the party seeking indemnification, subject to all provisions
          of this ARTICLE 13, and so chooses to assume the defense thereof with
          counsel selected by the indemnifying party. Should the indemnifying
          party so elect to assume the defense of a Third Party Claim, the
          indemnifying party will not be liable to the indemnified party for any
          legal expenses subsequently incurred by the indemnified party in
          connection with the defense thereof. If the indemnifying party assumes
          such defense, the indemnified party shall have the

                                       30
<PAGE>   34

          right to participate in the defense thereof and to employ counsel, at
          its own expense, separate from the counsel employed by the
          indemnifying party, it being understood that the indemnifying party
          shall control such defense. The indemnifying party shall be liable for
          the fees and expenses of counsel employed by the indemnified party for
          any period during which the indemnifying party has not assumed the
          defense thereof (other than after the 15-day period described in
          SECTION 13.4(a) if the indemnified party shall have failed to give
          notice of the Third Party Claim). If the indemnifying party chooses to
          defend or prosecute a Third Party Claim, the parties hereto shall
          cooperate in the defense or prosecution thereof. Such cooperation
          shall include the retention and (upon the indemnifying party's
          request) the provision to the indemnifying party of records and
          information that are reasonably relevant to such Third Party Claim,
          and making employees available on a mutually convenient basis to
          provide additional information and explanation of any material
          provided hereunder. If the indemnifying party chooses to defend or
          prosecute any Third Party Claim, the indemnified party will consent to
          any settlement, compromise or discharge of such Third Party Claim that
          the indemnifying party may reasonably recommend and which the
          indemnifying party will pay for or perform at its sole expense. If the
          indemnifying party shall have assumed the defense of a Third Party
          Claim, the indemnified party shall not admit any liability with
          respect to, or settle, compromise or discharge, such Third Party Claim
          without the indemnifying party's prior written consent, which shall
          not be unreasonably withheld.

13.5 INDEMNIFICATION AS EXCLUSIVE REMEDY. The indemnification provided in this
     ARTICLE 13 shall be the exclusive post-closing remedy available to the
     parties for any breach of representation, warranty, covenant or agreement
     contained in this Agreement or any other documents, instruments or
     agreements executed in conjunction with the transactions contemplate
     hereby, except as may otherwise be expressly provided for in any such
     document, instrument or agreement; provided, however, that either party
     shall be entitled to seek injunctive relief to enforce the provisions of
     the Agreement or any related agreements.

14.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements, representations
     and warranties made by each of the parties hereto shall survive the Closing
     for a period of two (2) years, except the representations contained in (i)
     SECTION 5.7 and SECTION 5.12 shall survive until the expiration of the
     latest applicable statute of limitation. All indemnities, covenants and
     agreements made herein shall survive for the period expressly indicated
     herein, or, if not so indicated, indefinitely.

15.0 ARBITRATION.

     (a)  Any dispute, controversy or claim arising out of or in connection with
          or relating to, this Agreement or any other agreement entered into
          pursuant hereto, or the transactions contemplated hereby, (a
          "Dispute"), including but not limited to any breach or alleged breach
          hereof, shall be determined and settled by arbitration in Wilmington,
          Delaware pursuant to the rules then in effect of the American

                                       31
<PAGE>   35

          Arbitration Association; provided, however, that (i) in the event the
          event the Dispute involves an amount in excess of $250,000 the Dispute
          shall be heard by a panel of three arbitrators, and (ii) in the event
          the Dispute includes a disagreement under SECTION 3.2 of this
          Agreement the arbitration panel shall include at least one certified
          public accountant acceptable to both parties.

     (b)  The resolution of such arbitration shall be final and binding on the
          parties hereto and enforceable in a court of competent jurisdiction.
          The parties hereto hereby irrevocably submit to the nonexclusive
          jurisdiction of any court of competent jurisdiction for the purpose of
          enforcing any arbitration award.

     (c)  This ARTICLE 15 shall not preclude any of the parties hereto from
          seeking injunctive or other temporary relief in any court of competent
          jurisdiction in the event of a breach or threatened breach of this
          Agreement or any related agreement.

16.0 NOTICES. Any and all notices or other communications required or permitted
     to be given under any of the provisions of this Agreement shall be in
     writing and shall be deemed to have been duly given when personally
     delivered, one business day after being sent by express mail, or overnight
     courier service, five business days after being sent by first class
     registered mail, return receipt requested, or upon confirmation of receipt
     of a telefax (with a copy also sent by express mail or overnight courier
     services) addressed to parties at the addresses set forth below or at such
     other address as any party may specify by notice to the other parties, or,
     in the case of a telefax, to the telefax number indicated:

     If to Purchaser:
                    United Dominion Industries, Inc.
                    2300 One First Union Center
                    301 South College Street
                    Charlotte, North Carolina  28202
                    Attention:  Legal Department
                    Telefax:  704-347-6915

     with a copy to:
                    Marley Electric Heating
                    470 Beauty Spot Road E
                    Bennettsville, South Carolina  29512-2700
                    Attention:  Dennis K. Porzio
                    Telefax:  843-479-5205

                                       32
<PAGE>   36

     If to Seller and/or Guarantor:

                    The Holmes Group, Inc.
                    233 Fortune Blvd.
                    Milford, MA  01757
                    Attention:  Ira B. Morgenstern
                    Telefax:  508-634-1847

     with a copy to:

                    Posternak, Blankstein & Lund, L.L.P.
                    100 Charles River Plaza
                    Boston, MA  02114
                    Attention:  Donald H. Siegel, P.C.
                    Telefax:  617- 367-2315

17.0 MISCELLANEOUS.

17.1 ENTIRE AGREEMENT; MODIFICATION. This writing, together with the Interim
     Services Agreement, the Escrow Agreement and the License Agreement,
     constitutes the entire agreement of the parties with respect to the subject
     matter and supersedes any prior agreements, oral or written, hereof and may
     not be modified, amended or terminated except by written agreement
     specifically referring to this Agreement and signed by each party hereto.

17.2 WAIVER. No waiver of any breach or default hereunder shall be considered
     valid unless in writing and signed by the party giving such waiver, and no
     such waiver shall be deemed a waiver of any subsequent breach or default of
     the same or similar nature.

17.3 BINDING EFFECT. This Agreement shall be binding upon and inure to the
     benefit of each party hereto, its successors and assigns.

17.4 NUMBERS AND HEADINGS. The section and paragraph numbers and headings
     contained herein are for the purposes of reference and convenience only and
     are not intended to define or limit the contents of said paragraphs or
     sections.

17.5 EXHIBITS AND SCHEDULES. The Exhibits and Schedules referred to herein are
     hereby incorporated by reference as if set out in full and form an integral
     part of this Agreement.

17.6 TRANSACTION TAXES. Seller will pay all sales, transfer and documentary
     taxes, if any, and any and all further taxes arising by virtue of the sale,
     transfers and deliveries to be made to Purchaser as contemplated hereby.
     Notwithstanding the foregoing, gains, income and similar taxes shall be
     paid by the entity or person on which such tax is imposed.

                                       33
<PAGE>   37

17.7  COUNTERPARTS. This Agreement may be executed in one or more counterparts,
      all of which taken together shall be deemed one original. This Agreement
      and any agreements referenced herein or required pursuant to the Closing
      may be executed and delivered by facsimile signature. The parties agree to
      deliver original signatures promptly following execution by facsimile
      signature.

17.8  EXPENSES. Subject to any express provisions of this Agreement to the
      contrary, Purchaser shall bear the expenses, costs and fees incurred by
      it, and Seller and Guarantor shall bear the expenses, costs and fees
      incurred by them, in connection with the transactions contemplated hereby,
      the preparation and execution of this Agreement and compliance herewith.
      Any such payments by Seller and Guarantor shall be made out of Seller's
      assets other than the Purchased Assets and shall not reduce the Purchased
      Assets being transferred hereunder.

17.9  VALIDITY OF PROVISIONS. If any provision of this Agreement or any
      agreement referenced herein shall be held or deemed to be or shall, in
      fact, be inoperative or unenforceable as applied in any particular case
      because it conflicts with any other provision or provisions hereof or any
      constitution, statute, rule of public policy, or for any other reason,
      such circumstances shall not have the effect of rendering the provision in
      question inoperative or unenforceable in any other case or circumstance,
      or of rendering any other provision or provisions herein contained
      invalid, inoperative or unenforceable to any extent whatsoever. The
      invalidity of any one or more phrases, sentences, clauses, sections, or
      subsections of this Agreement or any other agreements referenced herein
      shall not affect the remaining portions thereof.

17.10 GOVERNING LAW. This Agreement shall be governed by and construed in
      accordance with the laws of the State of Delaware applicable to contracts
      made and to be performed therein.

17.11 GUARANTY. Without limiting the Guarantor's Obligations herein or
      elsewhere, Guarantor hereby guarantees all of Seller's obligations owing
      to Purchaser and agrees to be directly liable for all such obligations;
      provided further, this guaranty shall be a guaranty of payment and not
      merely of collection.

                               (Signatures follow)

                                       34
<PAGE>   38

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

                                            PURCHASER:

                                            THE MARLEY COMPANY

                                                /s/ James Gibbs
                                            By:____________________________

                                                 President
                                            Its:___________________________

                                    and

                                                /s/ Timothy J. Verhagen
                                            By:_________________________________

                                                 Vice President
                                            Its:________________________________

                                            SELLER:

                                            THE RIVAL COMPANY

                                                 /s/ Ira B. Morgenstern
                                            By:_________________________________

                                                 Senior Vice President - Finance
                                            Its:________________________________

                                            PATTON ELECTRIC COMPANY, INC.

                                                 /s/ Ira B. Morgenstern
                                            By:_________________________________

                                                 Senior Vice President - Finance
                                            Its:________________________________

                                            PATTON BUILDING PRODUCTS, INC.

                                                 /s/ Ira B. Morgenstern
                                            By:_________________________________

                                                 Senior Vice President - Finance
                                            Its:________________________________

                                       35
<PAGE>   39

                                            GUARANTOR:

                                            THE HOLMES GROUP, INC.

                                                 /s/ Ira B. Morgenstern
                                            By:_________________________________

                                                 Senior Vice President - Finance
                                            Its:________________________________

                                       36

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]