
<PAGE>
                          OFFER TO PURCHASE FOR CASH 
                    ALL OUTSTANDING SHARES OF COMMON STOCK 
                                      OF 
                              AMDURA CORPORATION 
                                      AT 
                             $2.30 NET PER SHARE 
                                      BY 
                             ADU ACQUISITION INC. 
                    AN INDIRECT WHOLLY OWNED SUBSIDIARY OF 
                                   FKI PLC 

- -------------------------------------------------------------------------------
         THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, APRIL 19, 1995, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------

   THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT 
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE 
THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS ALSO 
CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY 
APPLICABLE ANTITRUST WAITING PERIODS. 
                                    ------ 
   THE BOARD OF DIRECTORS OF AMDURA CORPORATION (THE "COMPANY") UNANIMOUSLY 
HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE 
BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT 
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. 
                                    ------ 
                                  IMPORTANT 

   Any stockholder desiring to tender all or any portion of such 
stockholder's shares of Common Stock, par value $.01 per share (the 
"Shares"), of the Company should either (1) complete and sign the Letter of 
Transmittal (or a facsimile thereof) in accordance with the instructions in 
the Letter of Transmittal and mail or deliver it together with the 
certificate(s) evidencing tendered Shares, and any other required documents, 
to the Depositary or tender such Shares pursuant to the procedure for 
book-entry transfer set forth in Section 3 or (2) request such stockholder's 
broker, dealer, commercial bank, trust company or other nominee to effect the 
transaction for such stockholder. Any stockholder whose Shares are registered 
in the name of a broker, dealer, commercial bank, trust company or other 
nominee must contact such broker, dealer, commercial bank, trust company or 
other nominee if such stockholder desires to tender such Shares. 

   A stockholder who desires to tender Shares and whose certificates 
evidencing such Shares are not immediately available, or who cannot comply 
with the procedure for book-entry transfer on a timely basis, may tender such 
Shares by following the procedure for guaranteed delivery set forth in 
Section 3. 

   Questions or requests for assistance may be directed to the Information 
Agent at its address and telephone numbers set forth on the back cover of 
this Offer to Purchase. Additional copies of this Offer to Purchase, the 
Letter of Transmittal and the Notice of Guaranteed Delivery may also be 
obtained from the Information Agent or from brokers, dealers, commercial 
banks or trust companies. 
                                    ------ 

March 22, 1995 

<PAGE>
                              TABLE OF CONTENTS 

<TABLE>
<CAPTION>
                                                                                                        Page 
                                                                                                       ----- 
<S>                                                                                                   <C>
INTRODUCTION  ......................................................................................       1 
    1. Terms of the Offer; Expiration Date  ........................................................       3 
    2. Acceptance for Payment and Payment for Shares  ..............................................       4 
    3. Procedures for Tendering Shares  ............................................................       5 
    4. Withdrawal Rights  ..........................................................................       7 
    5. Certain Federal Income Tax Consequences  ....................................................       8 
    6. Price Range of Shares; Dividends  ...........................................................       9 
    7. Certain Information Concerning the Company  .................................................       9 
    8. Certain Information Concerning Purchaser and Parent  ........................................      11 
    9. Financing of the Offer and the Merger  ......................................................      16 
   10. Background of the Offer; Contacts with the Company; the Merger Agreement and 
       Stockholders Agreements  ....................................................................      16 
   11. Purpose of the Offer; Plans for the Company after the Offer and the Merger  .................      24 
   12. Dividends and Distributions  ................................................................      26 
   13. Effect of the Offer on the Market for Shares, Exchange Listing and Exchange Act Registration       26 
   14. Certain Conditions of the Offer  ............................................................      27 
   15. Certain Legal Matters and Regulatory Approvals  .............................................      29 
   16. Fees and Expenses  ..........................................................................      31 
   17. Miscellaneous  ..............................................................................      31 

SCHEDULE I..........................................................................................     S-1 

</TABLE>


<PAGE>

To the Holders of Common Stock of 
AMDURA CORPORATION: 

                                 INTRODUCTION 


   ADU Acquisition Inc., a Delaware corporation ("Purchaser") and an indirect 
wholly owned subsidiary of FKI plc, a company organized under the laws of 
England ("Parent"), hereby offers to purchase all outstanding shares of 
Common Stock, par value $.01 per share (the "Shares"), of Amdura Corporation, 
a Delaware corporation (the "Company"), at a price of $2.30 per Share, net to 
the seller in cash, upon the terms and subject to the conditions set forth in 
this Offer to Purchase and in the related Letter of Transmittal (which 
together constitute the "Offer"). 

   Tendering stockholders will not be obligated to pay brokerage fees or 
commissions or, except as otherwise provided in Instruction 6 of the Letter 
of Transmittal, stock transfer taxes with respect to the purchase of Shares 
by Purchaser pursuant to the Offer. Purchaser will pay all charges and 
expenses of First Fidelity Bank, N.A. (the "Depositary") and Georgeson & 
Company Inc. (the "Information Agent") incurred in connection with the Offer. 
See Section 16. 

   THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS 
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR 
TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY AND 
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES 
PURSUANT TO THE OFFER. 

   Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), the Company's 
financial advisor, has delivered to the Board its written opinion that the 
consideration to be received by the stockholders of the Company pursuant to 
the Merger Agreement (as defined below) is fair to such stockholders from a 
financial point of view. A copy of the opinion of DLJ is contained in the 
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the 
"Schedule 14D-9"), copies of which are being mailed to stockholders herewith. 

   THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT 
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE 
SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). 
THE OFFER IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR 
TERMINATION OF ANY APPLICABLE ANTITRUST WAITING PERIODS. SEE SECTION 14, 
WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER. 

   The Offer is being made pursuant to an Agreement and Plan of Merger, dated 
as of March 15, 1995 (the "Merger Agreement"), among Parent, Purchaser and 
the Company. The Merger Agreement provides that, among other things, as soon 
as practicable after the purchase of Shares pursuant to the Offer and the 
satisfaction of the other conditions set forth in the Merger Agreement and in 
accordance with the relevant provisions of the General Corporation Law of the 
State of Delaware ("Delaware Law"), Purchaser will be merged with and into 
the Company (the "Merger"). Following consummation of the Merger, the Company 
will continue as the surviving corporation (the "Surviving Corporation") and 
will become an indirect wholly owned subsidiary of Parent. At the effective 
time of the Merger (the "Effective Time"), each Share issued and outstanding 
immediately prior to the Effective Time (other than Shares held in the 
treasury of the Company, Shares owned by Purchaser, Parent or any direct or 
indirect wholly owned subsidiary of Parent or of the Company, and Shares held 
by stockholders who shall have demanded and perfected appraisal rights under 
Delaware Law) will be cancelled and converted automatically into the right to 
receive $2.30 in cash, or any higher price that may be paid per Share in the 
Offer, without interest (the "Merger Consideration"). The Merger Agreement is 
more fully described in Section 10. 

   Simultaneously with entering into the Merger Agreement, Purchaser and 
Internationale Nederlanden (U.S.) Capital Corporation, Investors Trading AB, 
The Network Company II Limited and Orcas Limited Partnership (the 
"Stockholders") entered into a Stockholders Agreement, dated as of March 15, 
1995 (the "Stockholders Agreement"), pursuant to which, upon the terms set 
forth therein, each Stockholder has agreed to tender and sell, in accordance 
with the terms of the Offer, all Shares owned (beneficially or of record) by 
such Stockholder. As of March 15, 1995, the Stockholders owned (either 

<PAGE>

beneficially or of record) Shares constituting approximately 66.5% of the
outstanding Shares (54.2% on a fully diluted basis). Each Stockholder has agreed
not to withdraw his Shares unless (a) the Board shall have withdrawn or modified
in a manner adverse to Purchaser or Parent its approval or recommendation of the
Offer, the Merger, the Merger Agreement or any other transaction contemplated by
the Merger Agreement in order to approve any Third Party Transaction which the
Board determines in the exercise of its good faith judgment and after
consultation with independent legal counsel and the Company's financial advisors
to be more favorable to the Company's stockholders than the Offer and the Merger
taken together, (b) the Merger Agreement is terminated, (c) the Merger Agreement
is amended in any way which adversely affects such Stockholder, or (d) such
Stockholder's Shares have not been accepted for payment and paid for by June 13,
1995. "Third Party Transaction" is defined in the Merger Agreement to mean any
of the following: (i) the acquisition of the Company by merger, consolidation or
other business combination transaction by any person other than Parent,
Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by
any Third Party of 50% or more of the outstanding stock or all or a substantial
part (other than in the ordinary course of business) of the assets of a material
subsidiary of the Company; (iii) the acquisition by a Third Party of 50% or more
of the outstanding Shares, whether by tender offer, exchange offer or otherwise;
(iv) the adoption by the Company of a plan of liquidation or the declaration or
payment of an extraordinary dividend; or (v) the repurchase by the Company or
any of its subsidiaries of 50% or more of the outstanding Shares.

   In addition, simultaneously with entering into the Merger Agreement, 
Purchaser and the Stockholders other than Investors Trading AB also entered 
into a Supplemental Stockholders Agreement, dated as of March 15, 1995 (the 
"Supplemental Stockholders Agreement"), in which such Stockholders have 
agreed that if the Offer is terminated because of the failure of any 
condition thereof and the Company effects a Third Party Transaction within 
180 days thereafter, then each such Stockholder will pay to Purchaser 50% of 
the excess, if any, of the amount per Share received by such Stockholder as a 
result of such transaction over $2.30 per Share. As of March 15, 1995, the 
Stockholders who are parties to the Supplemental Stockholders Agreement owned 
(either beneficially or of record) approximately 46.6% of the outstanding 
Shares (38.0% on a fully diluted basis). 

   The Merger Agreement provides that, promptly upon the purchase by 
Purchaser of Shares pursuant to the Offer which constitute a majority of the 
outstanding Shares on a fully diluted basis, Purchaser shall be entitled to 
designate such number of directors as shall constitute a majority of the 
total number of directors on the Board. In the Merger Agreement, the Company 
has agreed to take all actions necessary to cause Purchaser's designees to be 
elected as directors of the Company, including increasing the size of the 
Board or securing the resignations of incumbent directors or both. Purchaser 
expects that such representation would permit Purchaser to exert control over 
the Company's conduct of its business and operations. 

   The consummation of the Merger is subject to the satisfaction or waiver of 
certain conditions, including the approval and adoption of the Merger 
Agreement by the requisite vote of the stockholders of the Company. See 
Section 11. Under the Company's Certificate of Incorporation and Delaware 
Law, the affirmative vote of the holders of a majority of the outstanding 
Shares will be required to approve and adopt the Merger Agreement and the 
Merger. If the Minimum Condition is satisfied, Purchaser will have sufficient 
voting power to cause the approval and adoption of the Merger Agreement and 
the transactions contemplated thereby without the affirmative vote of any 
other stockholder. 

   The Company has advised Purchaser that as of March 15, 1995, 24,665,160 
Shares were issued and outstanding, no Shares were held in the treasury of 
the Company or held by the subsidiaries of the Company, 2,151,000 Shares were 
issuable upon conversion of outstanding convertible preferred stock, 
2,936,324 Shares were issuable upon the exercise of outstanding options and 
533,052 Shares were issuable pursuant to the Stipulation of Settlement dated 
August 31, 1994 providing for the settlement of certain class actions against 
the Company and others (the "Class Action Settlement"). As a result, as of 
the date of this Offer to Purchase, the Minimum Condition would be satisfied 
if Purchaser acquired pursuant to the Offer 15,142,769 Shares. 

   THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN 
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS 
MADE WITH RESPECT TO THE OFFER. 

                                       2 

<PAGE>

1. Terms of the Offer; Expiration Date. 

   Upon the terms and subject to the conditions of the Offer (including, if 
the Offer is extended or amended, the terms and conditions of such extension 
or amendment), Purchaser will accept for payment and pay for all Shares 
validly tendered prior to the Expiration Date (as hereinafter defined) and 
not withdrawn as permitted by Section 4. The term "Expiration Date" means 
12:00 midnight, New York City time, on Wednesday, April 19, 1995, unless and 
until Purchaser (subject to the terms and conditions of the Merger Agreement) 
shall have extended the period during which the Offer is open, in which event 
the term "Expiration Date" shall mean the latest time and date at which the 
Offer, as so extended by Purchaser, shall expire. 

   Purchaser expressly reserves the right, subject to the terms and 
conditions of the Merger Agreement, at any time and from time to time, to 
extend the period of time during which the Offer is open by giving oral or 
written notice of such extension to the Depositary and by making a public 
announcement thereof. The Merger Agreement provides that the Offer may be 
extended for such period as Parent and Purchaser may determine (a) is 
required because of the failure to satisfy any of the conditions set forth in 
Section 14 or (b) could result in not less than 90% of the Shares on a fully 
diluted basis being tendered and not withdrawn (except that there shall be 
only one extension of the Offer pursuant to this clause (b) and it shall not 
exceed 10 business days from April 19, 1995), or as may be agreed to by the 
Company and Parent. During any such extension, all Shares previously tendered 
and not withdrawn will remain subject to the Offer, subject to the rights of 
a tendering stockholder to withdraw his or her Shares. See Section 4. 

   Subject to the applicable regulations of the Securities and Exchange 
Commission (the "Commission"), Purchaser also expressly reserves the right, 
in its sole discretion (but subject to the terms and conditions of the Merger 
Agreement), at any time and from time to time, (i) to delay acceptance for 
payment of, or, regardless of whether such Shares were theretofore accepted 
for payment, payment for, any Shares pending receipt of any regulatory 
approval specified in Section 15, (ii) to terminate the Offer and not accept 
for payment any Shares upon the occurrence of any of the conditions specified 
in Section 14 and (iii) to waive any condition (other than the Minimum 
Condition) or otherwise amend the Offer in any respect, by giving oral or 
written notice of such delay, termination, waiver or amendment to the 
Depositary and by making a public announcement thereof. The Merger Agreement 
provides that, without the consent of the Company, Purchaser will not (i) 
decrease the price per Share payable pursuant to the Offer, (ii) change the 
form of consideration payable in the Offer, (iii) reduce the number of Shares 
sought to be purchased in the Offer, (iv) impose conditions to the Offer in 
addition to those set forth in Section 14, (v) amend or change the terms and 
conditions of the Offer in any manner adverse to the holders of Shares or 
(vi) change or waive the Minimum Condition. Purchaser acknowledges that (i) 
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the 
"Exchange Act"), requires Purchaser to pay the consideration offered or 
return the Shares tendered promptly after the termination or withdrawal of 
the Offer and (ii) Purchaser may not delay acceptance for payment of, or 
payment for (except as provided in clause (i) of the first sentence of this 
paragraph), any Shares upon the occurrence of any of the conditions specified 
in Section 14 without extending the period of time during which the Offer is 
open. 

   Any such extension, delay, termination, waiver or amendment will be 
followed as promptly as practicable by public announcement thereof, such 
announcement, in the case of an extension, to be made no later than 9:00 
a.m., New York City time, on the next business day after the previously 
scheduled Expiration Date. Subject to applicable law (including Rules 
14d-4(c) and 14d-6(d) under the Exchange Act, which require that material 
changes be promptly disseminated to stockholders in a manner reasonably 
designed to inform them of such changes) and without limiting the manner in 
which Purchaser may choose to make any public announcement, Purchaser shall 
have no obligation to publish, advertise or otherwise communicate any such 
public announcement other than by issuing a press release to the Dow Jones 
News Service. 

   If Purchaser makes a material change in the terms of the Offer or the 
information concerning the Offer, or if it waives a material condition of the 
Offer, Purchaser will extend the Offer to the extent required by Rules 
14d-4(c) and 14d-6(d) under the Exchange Act. 

   Subject to the terms of the Merger Agreement, if, prior to the Expiration 
Date, Purchaser should decide to increase the consideration being offered in 
the Offer, such increase in the consideration being offered will be 
applicable to all stockholders whose Shares are accepted for payment pursuant 

                                       3 

<PAGE>

to the Offer and, if, at the time notice of any such increase in the
consideration being offered is first published, sent or given to holders of such
Shares, the Offer is scheduled to expire at any time earlier than the period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer will be extended at least until the
expiration of such ten-business-day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.

   The Company has provided Purchaser with the Company's stockholder list and 
security position listings for the purpose of disseminating the Offer to 
holders of Shares. This Offer to Purchase and the related Letter of 
Transmittal will be mailed to record holders of Shares whose names appear on 
the Company's stockholder list and will be furnished, for subsequent 
transmittal to beneficial owners of Shares, to brokers, dealers, commercial 
banks, trust companies and similar persons whose names, or the names of whose 
nominees, appear on the stockholder list or, if applicable, who are listed as 
participants in a clearing agency's security position listing. 

2. Acceptance for Payment and Payment for Shares. 

   Upon the terms and subject to the conditions of the Offer (including, if 
the Offer is extended or amended, the terms and conditions of any such 
extension or amendment), Purchaser will accept for payment, and will pay for, 
all Shares validly tendered prior to the Expiration Date and not withdrawn 
promptly after the later to occur of (i) the Expiration Date, (ii) the 
expiration or termination of any applicable waiting periods under the Hart- 
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 
and (iii) the satisfaction or waiver of the conditions to the Offer set forth 
in Section 14, including those conditions relating to the Exon-Florio Act 
(as hereinafter defined). Subject to applicable rules of the Commission, 
Purchaser expressly reserves the right to delay acceptance for payment of, or 
payment for, Shares, pending receipt of any regulatory approvals specified in 
Section 15 or in order to comply in whole or in part with any other 
applicable law. 

   In all cases, payment for Shares tendered and accepted for payment 
pursuant to the Offer will be made only after timely receipt by the 
Depositary of (i) the certificates evidencing such Shares (the "Share 
Certificates") or timely confirmation (a "Book-Entry Confirmation") of a 
book-entry transfer of such Shares into the Depositary's account at The 
Depository Trust Company, the Midwest Securities Trust Company or the 
Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility" 
and, collectively, the "Book-Entry Transfer Facilities") pursuant to the 
procedures set forth in Section 3, (ii) the Letter of Transmittal (or a 
facsimile thereof), properly completed and duly executed, with any required 
signature guarantees, or an Agent's Message (as defined below) in connection 
with a book-entry transfer and (iii) any other documents required under the 
Letter of Transmittal. 

   The term "Agent's Message" means a message, transmitted by a Book-Entry 
Transfer Facility to, and received by, the Depositary and forming a part of a 
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility 
has received an express acknowledgment from the participant in such 
Book-Entry Transfer Facility tendering the Shares, that such participant has 
received and agrees to be bound by the terms of the Letter of Transmittal and 
that the Purchaser may enforce such agreement against such participant. 

   On the date of this Offer to Purchase, Parent anticipates filing with the 
Federal Trade Commission (the "FTC") and the Antitrust Division of the 
Department of Justice (the "Antitrust Division") a Premerger Notification and 
Report Form under the HSR Act in connection with the purchase of Shares 
pursuant to the Offer. Accordingly, it is anticipated that the waiting period 
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York 
City time, on Wednesday, April 5, 1995. Prior to the expiration or 
termination of such waiting period, the FTC or the Antitrust Division may 
extend such waiting period by requesting additional information or 
documentary material from Parent. If such a request is made with respect to 
the purchase of Shares in the Offer, the waiting period will expire at 11:59 
p.m., New York City time, on the tenth calendar day after substantial 
compliance by Parent with such a request. Thereafter, the waiting period may 
only be extended by court order. The waiting period under the HSR Act may be 
terminated prior to its expiration by the FTC and the Antitrust Division. 
Parent will request early termination of the waiting period, although there 
can be no assurance that this request will be granted. Pursuant to the Merger 
Agreement, Purchaser may, but need not, extend the Offer until the applicable 
waiting period under the HSR Act shall have expired or been terminated. See 
Section 15 for additional information regarding the HSR Act. 

                                       4 

<PAGE>

   On the date of this Offer to Purchase, since the Company currently has 
contracts from the U.S. Department of Defense, Purchaser and the Company 
anticipate filing with the Committee on Foreign Investment in the United 
States of the Department of the Treasury ("CFIUS") a joint notice of the 
transactions contemplated by the Merger Agreement, pursuant to the 
regulations promulgated under Section 721 of the Defense Production Act of 
1950, as amended, popularly known as the Exon-Florio Amendment (the 
"Exon-Florio Act"). Under the Exon-Florio Act, the President of the United 
States is authorized to prohibit or suspend acquisitions, mergers or 
takeovers by foreign persons of persons engaged in interstate commerce in the 
United States if the President determines, after investigation, that such 
foreign persons in exercising control of such acquired persons might take 
action that threatens to impair the national security of the United States 
and that other provisions of existing law do not provide adequate authority 
to protect national security. A determination that an investigation is called 
for must be made within thirty days after notification of a proposed 
acquisition, merger or takeover is first filed with CFIUS. Any such 
investigation must be completed within forty-five days of such determination. 
Any decision by the President to take action must be announced within fifteen 
days of the completion of the investigation. See Section 15 for additional 
information regarding the Exon-Florio Act. 

   For purposes of the Offer, Purchaser will be deemed to have accepted for 
payment (and thereby purchased) Shares validly tendered and not withdrawn as, 
if and when Purchaser gives oral or written notice to the Depositary of 
Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon 
the terms and subject to the conditions of the Offer, payment for Shares 
accepted for payment pursuant to the Offer will be made by deposit of the 
purchase price therefor with the Depositary, which will act as agent for 
tendering stockholders for the purpose of receiving payments from Purchaser 
and transmitting such payments to tendering stockholders whose Shares have 
been accepted for payment. Under no circumstances will interest on the 
purchase price for Shares be paid, regardless of any delay in making such 
payment. 

   If any tendered Shares are not accepted for payment for any reason 
pursuant to the terms and conditions of the Offer, or if Share Certificates 
are submitted evidencing more Shares than are tendered, Share Certificates 
evidencing unpurchased Shares will be returned, without expense to the 
tendering stockholder (or, in the case of Shares tendered by book-entry 
transfer into the Depositary's account at a Book-Entry Transfer Facility 
pursuant to the procedure set forth in Section 3, such Shares will be 
credited to an account maintained at such Book-Entry Transfer Facility), as 
promptly as practicable following the expiration or termination of the Offer. 

   Purchaser reserves the right to transfer or assign, in whole at any time 
or in part from time to time, to one or more of its affiliates, the right to 
purchase all or any portion of the Shares tendered pursuant to the Offer, but 
any such transfer or assignment will not relieve Purchaser of its obligations 
under the Offer and will in no way prejudice the rights of tendering 
stockholders to receive payment for Shares validly tendered and accepted for 
payment pursuant to the Offer. 

3. Procedures for Tendering Shares. 

   In order for a holder of Shares validly to tender Shares pursuant to the 
Offer, the Letter of Transmittal (or a facsimile thereof), properly completed 
and duly executed, together with any required signature guarantees, or an 
Agent's Message in connection with a book-entry delivery of Shares, and any 
other documents required by the Letter of Transmittal, must be received by 
the Depositary at one of its addresses set forth on the back cover of this 
Offer to Purchase and either (i) the Share Certificates evidencing tendered 
Shares must be received by the Depositary at such address or such Shares must 
be tendered pursuant to the procedure for book-entry transfer described below 
and a Book-Entry Confirmation must be received by the Depositary, in each 
case prior to the Expiration Date, or (ii) the tendering stockholder must 
comply with the guaranteed delivery procedures described below. 

   THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED 
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT 
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE 
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY 
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS 
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY 
DELIVERY. 

   Book-Entry Transfer. The Depositary will establish accounts with respect 
to the Shares at the Book-Entry Transfer Facilities for purposes of the Offer 

                                       5 

<PAGE>

within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other required documents,
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

   Signature Guarantees. Signatures on all Letters of Transmittal must be 
guaranteed by a firm which is a member of the Medallion Signature Guarantee 
Program, or by any other "eligible guarantor institution," as such term is 
defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing being 
referred to as an "Eligible Institution"), except in cases where Shares are 
tendered (i) by a registered holder of Shares who has not completed either 
the box entitled "Special Payment Instructions" or the box entitled "Special 
Delivery Instructions" on the Letter of Transmittal or (ii) for the account 
of an Eligible Institution. If a Share Certificate is registered in the name 
of a person other than the person who or which signs the Letter of 
Transmittal, or if payment is to be made, or a Share Certificate not accepted 
for payment or not tendered is to be returned, to a person other than the 
registered holder(s), then the Share Certificate must be endorsed or 
accompanied by appropriate stock powers, in either case signed exactly as the 
name(s) of the registered holder(s) appear on the Share Certificate, with the 
signature(s) on such Share Certificate or stock powers guaranteed by an 
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. 

   Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to 
the Offer and such stockholder's Share Certificates evidencing such Shares 
are not immediately available or such stockholder cannot deliver the Share 
Certificates and all other required documents to the Depositary prior to the 
Expiration Date, or such stockholder cannot complete the procedure for 
delivery by book-entry transfer on a timely basis, such Shares may 
nevertheless be tendered, provided that all the following conditions are 
satisfied: 

       (i) such tender is made by or through an Eligible Institution; 

       (ii) a properly completed and duly executed Notice of Guaranteed 
   Delivery, substantially in the form made available by Purchaser, is 
   received prior to the Expiration Date by the Depositary as provided below; 
   and 

       (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing 
   all tendered Shares, in proper form for transfer, in each case together 
   with the Letter of Transmittal (or a facsimile thereof), properly 
   completed and duly executed, with any required signature guarantees (or, 
   in the case of a book-entry transfer, an Agent's Message), and any other 
   documents required by the Letter of Transmittal are received by the 
   Depositary within five New York Stock Exchange, Inc. ("NYSE") trading days 
   after the date of execution of such Notice of Guaranteed Delivery. 

   The Notice of Guaranteed Delivery may be delivered by hand or mail or 
transmitted by telegram, telex or facsimile transmission to the Depositary 
and must include a guarantee by an Eligible Institution in the form set forth 
in the form of Notice of Guaranteed Delivery made available by Purchaser. 

   In all cases, payment for Shares tendered and accepted for payment 
pursuant to the Offer will be made only after timely receipt by the 
Depositary of the Share Certificates evidencing such Shares, or a Book-Entry 
Confirmation of the delivery of such Shares, and the Letter of Transmittal 
(or a facsimile thereof), properly completed and duly executed, with any 
required signature guarantees (or, in the case of a book-entry transfer, an 
Agent's Message), and any other documents required by the Letter of 
Transmittal. 

   Determination of Validity. All questions as to the validity, form, 
eligibility (including time of receipt) and acceptance for payment of any 
tender of Shares will be determined by Purchaser in its sole discretion, 
which determination shall be final and binding on all parties. Purchaser 

                                       6 

<PAGE>

reserves the absolute right to reject any and all tenders determined by it
not to be in proper form or the acceptance for payment of which may, in the
opinion of its counsel, be unlawful. Purchaser also reserves the absolute right
to waive any condition of the Offer (other than the Minimum Condition) or any
defect or irregularity in the tender of any Shares of any particular
stockholder, whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
None of Purchaser, Parent, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.

   Other Requirements. By executing the Letter of Transmittal as set forth 
above, a tendering stockholder irrevocably appoints designees of Purchaser as 
such stockholder's proxies, each with full power of substitution, in the 
manner set forth in the Letter of Transmittal, to the full extent of such 
stockholder's rights with respect to the Shares tendered by such stockholder 
and accepted for payment by Purchaser. All such proxies shall be considered 
coupled with an interest in the tendered Shares. Such appointment will be 
effective when, and only to the extent that, Purchaser accepts such Shares 
for payment. Upon such acceptance for payment, all prior proxies given by 
such stockholder with respect to such Shares will be revoked without further 
action, and no subsequent proxies may be given nor any subsequent written 
consent executed by such stockholder (and, if given or executed, will not be 
deemed to be effective) with respect thereto. The designees of Purchaser 
will, with respect to the Shares for which the appointment is effective, be 
empowered to exercise all voting and other rights of such stockholder as they 
in their sole discretion may deem proper at any annual or special meeting of 
the Company's stockholders or any adjournment or postponement thereof, by 
written consent in lieu of any such meeting or otherwise. Purchaser reserves 
the right to require that, in order for Shares to be deemed validly tendered, 
immediately upon Purchaser's payment for such Shares, Purchaser must be able 
to exercise full voting rights with respect to such Shares. 

   The acceptance for payment by Purchaser of Shares pursuant to any of the 
procedures described above will constitute a binding agreement between the 
tendering stockholder and Purchaser upon the terms and subject to the 
conditions of the Offer. 

   UNDER THE FEDERAL INCOME TAX LAWS, THE DEPOSITARY WILL BE REQUIRED TO 
WITHHOLD 31 PERCENT OF THE AMOUNT OF ANY PAYMENTS MADE TO CERTAIN 
STOCKHOLDERS PURSUANT TO THE OFFER. TO PREVENT SUCH BACKUP FEDERAL INCOME TAX 
WITHHOLDING WITH RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE 
PRICE OF SHARES PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST 
PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER 
IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO 
BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 
IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 OF THE LETTER OF 
TRANSMITTAL. 

4. Withdrawal Rights. 

   Tenders of Shares made pursuant to the Offer are irrevocable except that 
Shares may be withdrawn by a tendering stockholder at any time prior to the 
Expiration Date and, unless theretofore accepted for payment by Purchaser 
pursuant to the Offer, may also be withdrawn by such stockholder at any time 
after June 20, 1995. If Purchaser extends the Offer, is delayed in its 
acceptance for payment of Shares or is unable to accept Shares for payment 
pursuant to the Offer for any reason, then, without prejudice to Purchaser's 
rights under the Offer, the Depositary may, nevertheless, on behalf of 
Purchaser, retain tendered Shares, and such Shares may not be withdrawn 
except to the extent that tendering stockholders are entitled to withdrawal 
rights as described in this Section 4. Any such delay will be by an extension 
of the Offer to the extent required by law. 

   For a withdrawal to be effective, a written, telegraphic, telex or 
facsimile transmission notice of withdrawal must be timely received by the 
Depositary at one of its addresses set forth on the back cover page of this 
Offer to Purchase. Any such notice of withdrawal must specify the name of the 
person who tendered the Shares to be withdrawn, the number of Shares to be 
withdrawn and the name of the registered holder of such Shares, if different 
from that of the person who tendered such Shares. If Share Certificates 
 
                                       7 

<PAGE>

evidencing Shares to be withdrawn have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer as set forth in Section 3, any notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph.

   All questions as to the form and validity (including time of receipt) of 
any notice of withdrawal will be determined by Purchaser, in its sole 
discretion, whose determination will be final and binding. None of Purchaser, 
Parent, the Depositary, the Information Agent or any other person will be 
under any duty to give notification of any defects or irregularities in any 
notice of withdrawal or incur any liability for failure to give any such 
notification. 

   Any Shares properly withdrawn will thereafter be deemed not to have been 
validly tendered for purposes of the Offer. However, withdrawn Shares may be 
re-tendered at any time prior to the Expiration Date by following one of the 
procedures described in Section 3. 

5. Certain Federal Income Tax Consequences. 

   The receipt of cash for Shares pursuant to the Offer or in the Merger will 
be a taxable transaction for federal income tax purposes and may also be a 
taxable transaction under applicable state, local or foreign tax laws. In 
general, a stockholder will recognize gain or loss for federal income tax 
purposes equal to the difference between the amount of cash received in 
exchange for the Shares sold and such stockholder's adjusted tax basis in 
such Shares. For federal income tax purposes, such gain or loss will be 
capital gain or loss if the Shares are capital assets in the hands of such 
stockholder, and will be long-term capital gain or loss if such Shares have 
been held for more than one year. A stockholder's ability to deduct capital 
losses may be limited. 

   THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF 
STOCKHOLDERS, INCLUDING FINANCIAL INSTITUTIONS, BROKER-DEALERS, STOCKHOLDERS 
WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR 
OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF 
THE UNITED STATES AND FOREIGN CORPORATIONS. 

   THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL 
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO 
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF 
THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF 
ANY STATE, LOCAL AND FOREIGN TAX LAWS. 

                                       8 

<PAGE>

6. Price Range of Shares; Dividends. 

   The Shares are listed and principally traded on the NYSE. The following 
table sets forth, for the quarters indicated, the high and low sales prices 
per Share on the NYSE as reported by the Dow Jones News Service. 

<TABLE>
<CAPTION>
                                           HIGH       LOW 
                                           ----       --- 
<S>                                     <C>        <C>
1993: 
     First Quarter  ..................    $3-3/4    $2 
     Second Quarter  .................     3-3/8     2-3/8 
     Third Quarter  ..................     3         1-7/8 
     Fourth Quarter  .................     2-1/2     1-7/8 
1994: 
     First Quarter  ..................     2-5/8     2 
     Second Quarter  .................     2-3/8     1-7/8 
     Third Quarter  ..................     2-1/8     1-1/2 
     Fourth Quarter  .................     2         1-1/2 
1995: 
     First Quarter (through 3/21/95)       2-1/4     1-5/8 
</TABLE>

   The Company has not paid any cash dividends on the Shares since it emerged 
from bankruptcy in 1991 (see Section 7 below). 

   On March 15, 1995, the last full trading day prior to the announcement of 
the execution of the Merger Agreement and of Purchaser's intention to 
commence the Offer, the closing price per Share as reported on the NYSE was 
$1-7/8. On March 21, 1995, the last full trading day prior to the 
commencement of the Offer, the closing price per Share as reported on the 
NYSE was $2-1/4. 

   STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE 
SHARES. 

7. Certain Information Concerning the Company. 

   Except as otherwise set forth herein, the information concerning the 
Company contained in this Offer to Purchase, including financial information, 
has been furnished by the Company or has been taken from or based upon 
publicly available documents and records on file with the Commission and 
other public sources. Neither Purchaser nor Parent assumes any responsibility 
for the accuracy or completeness of the information concerning the Company 
furnished by the Company or contained in such documents and records or for 
any failure by the Company to disclose events which may have occurred or may 
affect the significance or accuracy of any such information but which are 
unknown to Purchaser or Parent. 

   General. The Company is a Delaware corporation with its principal 
executive offices located at 900 Main Street South, Suite 2A, Building B, 
Southbury, Connecticut 06488-0870. The Company, through its subsidiaries, The 
Crosby Group, Inc., a Delaware corporation ("Crosby"), and The Harris Waste 
Management Group, Inc., a Delaware corporation ("Harris"), is a specialty 
manufacturer of products for the overhead lifting and waste recycling and 
disposal markets. The Company emerged from bankruptcy under Chapter 11 of the 
United States Bankruptcy Code and its plan of reorganization, as amended 
and/or modified (the "Plan") and confirmed by the United States Bankruptcy 
Court for the District of Colorado, became effective after the close of 
business on October 23, 1991. Pursuant to the Plan, the Company was 
reorganized around Crosby and Harris, which were not included in the 
Company's Chapter 11 filing and were not in bankruptcy. 

   Crosby, headquartered in Tulsa, Oklahoma, designs and manufactures lifting 
equipment, hardware and accessories, including blocks, sheaves, hooks, 
shackles, turnbuckles, load binders and other fittings, for use with wire 
rope and chain. Crosby's lifting equipment hardware is used in energy, 
construction, manufacturing, marine and transportation applications. 

   Harris, headquartered in Peachtree City, Georgia, is primarily engaged in 
the manufacture and marketing of recycling and waste management equipment 
used in the plastic, waste paper, ferrous and non-ferrous scrap metal 

                                       9 

<PAGE>

recycling industries and for solid waste disposal applications. Harris's 
major products include large capacity, high-reduction balers used for 
materials recovery and solid waste disposal facilities, metal shears and 
balers used for processing scrap steel, and balers used for baling waste 
materials. 

   Financial Information. Set forth below is certain selected consolidated 
financial information relating to the Company and its subsidiaries which has 
been excerpted or derived from the audited financial statements contained in 
the Company's annual report on Form 10-K for the fiscal year ended December 
31, 1994 (the "1994 Form 10-K"). More comprehensive financial information is 
included in the 1994 Form 10-K and other documents filed by the Company with 
the Commission. The financial information that follows is qualified in its 
entirety by reference to such reports and other documents, including the 
financial statements and related notes contained therein. Such reports and 
other documents may be examined and copies may be obtained from the offices 
of the Commission in the manner set forth below. 

                     AMDURA CORPORATION AND SUBSIDIARIES 
                 SELECTED CONSOLIDATED FINANCIAL INFORMATION 
                    (IN THOUSANDS, EXCEPT PER SHARE DATA) 

<TABLE>
<CAPTION>
                                                            Year             Year             Year 
                                                           Ended            Ended             Ended 
                                                        December 31,     December 31,     December 31, 
                                                            1994             1993             1992 
                                                      --------------   --------------    -------------- 
<S>                                                   <C>              <C>               <C>
Income Statement Data: 
   Operating revenues                                     $145,159         $129,769         $127,250 
   Income (loss) before change in accounting 
     principle                                            $  1,617         $  2,805         $(18,052) 
   Net income (loss) before change in accounting 
     principle, per common and common equivalent 
     share                                                $   0.06         $   0.11         $  (1.45) 
Balance Sheet Data (at period end): 
   Cash and cash equivalents                              $  3,765         $  4,377         $  6,909 
   Working capital                                        $ 33,556         $ 26,529         $ 23,300 
   Total assets                                           $127,766         $112,501         $118,533 
   Long-term liabilities                                  $ 33,367         $ 34,855         $ 36,692 
   Stockholders' capital                                  $ 54,562         $ 46,420         $ 46,102 
</TABLE>

                                      10 


<PAGE>

   The Shares are registered under the Exchange Act. Accordingly, the Company 
is subject to the informational filing requirements of the Exchange Act and, 
in accordance therewith, is required to file periodic reports, proxy 
statements and other information with the Commission relating to its 
business, financial condition and other matters. Information as to particular 
dates concerning the Company's directors and officers, their remuneration, 
stock options granted to them, the principal holders of the Company's 
securities and any material interest of such persons in transactions with the 
Company is required to be disclosed in proxy statements distributed to the 
Company's stockholders and filed with the Commission. Such reports, proxy 
statements and other information should be available for inspection at the 
public reference facilities maintained by the Commission at Room 1024, 450 
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for 
inspection at the Commission's regional offices located at Seven World Trade 
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West 
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials 
may also be obtained by mail, upon payment of the Commission's customary 
fees, by writing to its principal office at 450 Fifth Street, N.W., 
Washington, D.C. 20549. The information should also be available for 
inspection at the New York Stock Exchange, 20 Broad Street, New York, New 
York 10005. 

   8. Certain Information Concerning Purchaser and Parent. Purchaser is a 
newly incorporated Delaware corporation organized in connection with the 
Offer and the Merger and has not carried on any activities other than in 
connection with the Offer and the Merger. The principal offices of Purchaser 
are located c/o FKI Industries Inc., 425 Post Road, Fairfield, Connecticut 
06430-0970. Purchaser is an indirect wholly owned subsidiary of Parent. 

   Until immediately prior to the time that Purchaser will purchase Shares 
pursuant to the Offer, it is not anticipated that Purchaser will have any 
significant assets or liabilities or engage in activities other than those 
incident to its formation and capitalization and the transactions 
contemplated by the Offer and the Merger. Because Purchaser is newly formed 
and has minimal assets and capitalization, no meaningful financial 
information regarding Purchaser is available. 

   Purchaser is a wholly owned subsidiary of FKI Industries Inc., a New York 
corporation ("Industries"). Industries has its principal office at 425 Post 
Road, Fairfield, Connecticut 06430-0970. Industries' principal business is 
diversified manufacturing, primarily in engineered metal products. Industries 
operates through four business groups primarily in North America and Europe. 

   Industries' Material Handling Group, designs and manufactures material 
handling systems and equipment, chain and lifting products and forgings for a 
wide range of industrial, automotive and mining sectors from its principal 
facilities in York, Pennsylvania; Warren, Michigan; Danville, Kentucky; and 
Welland, Ontario, Canada. 

   Industries' Hardware Group headquartered in Grand Rapids, Michigan, 
manufactures and supplies decorative furniture and cabinet hardware, window 
and door hardware, casters, counterbalance mechanisms for office furniture 
and equipment, wheels and security products from its facilities in Grand 
Rapids, Michigan; Evansville, Indiana; Owatonna, Minnesota and Jamestown, New 
York. 

   Industries' Automotive Group manufactures and supplies cable controls, 
lighting systems and trim components for the international automotive 
industry and niche industrial markets from key facilities in Blythville, 
Arkansas; Milan, Tennessee; Stratford, Ontario Canada and Le Mans, France. 

   Industries' Engineering Group designs and manufactures process control 
equipment and systems for the gas water and waste water industries from its 
facilities in Watertown, Connecticut. 

   Industries is a wholly owned subsidiary of FKI Holdings Inc., a Delaware 
corporation ("Holdings"). Holdings is a holding company with its registered 
office c/o FKI Industries Inc., 425 Post Road, Fairfield, CT 06430-0970. 
Holdings is a wholly owned subsidiary of FKI USA Holdings Limited, a company 
organized under the laws of England ("USA Holdings"). USA Holdings is a 
wholly owned subsidiary of Parent and a holding company with its registered 
office c/o FKI plc, West House, King Cross Road, Halifax, West Yorkshire HX1 
1EB, England. 

   Parent is a company organized under the laws of England. Its principal 
offices are located at West House, King Cross Road, Halifax, West Yorkshire 
HX1 1EB, England. 

                                      11 

<PAGE>

   Parent, together with its subsidiaries, comprises an international group 
of autonomous manufacturing companies with four operating groups serving the 
material handling, hardware, automotive and engineering markets. The 
principal activities of Parent's groups are as follows: 

Material Handling 

Designs and manufactures material handling systems and equipment, chain and 
lifting products and forgings for a wide range of industrial, automotive and 
mining sectors worldwide. 

Hardware 

Manufactures and supplies decorative furniture and cabinet hardware, window 
and door hardware, casters, counter balance mechanisms for office furniture 
and equipment, wheels and security products. 

Automotive 

Manufactures and supplies cable controls, lighting systems and trim 
components for the international automotive industry and niche industrial 
markets. 

Engineering 

Manufactures process control equipment, power conversion equipment, high 
integrity electrical drives, propulsion systems, electrical switchgear, 
transformers, distribution equipment and dynamometers for engine and vehicle 
test systems. 

   Parent is the holding company of the group, with direct and indirect share 
interest in subsidiaries and associated companies. 

   Parent was incorporated in England on March 6, 1920 under the name Woodend 
Securities Limited under the Companies Acts 1908 to 1917 and re-registered on 
June 3, 1982 as a public limited company under the Companies Acts 1948 to 
1981. Parent currently operates under the provisions of the Companies Act 
1985 as a company limited by shares. Parent's four groups resulted from a 
number of acquisitions and divestitures in the 1980's and 1990's and in 
particular the merger with Babcock International plc in 1987 and the 
subsequent demerger of Babcock International Group PLC in 1989. 

   The name, citizenship, business address, principal occupation or 
employment, and five-year employment history for each of the directors and 
executive officers of Purchaser and Parent and certain other information are 
set forth in Schedule I hereto. 

   The principal listing of the FKI plc Ordinary Shares of 10p each is on The 
International Stock Exchange of the United Kingdom and the Republic of 
Ireland Limited (the "London Stock Exchange") in London. 

   Set forth below are certain selected consolidated financial data relating 
to Parent and its subsidiaries at March 31, 1994, March 31, 1993 and March 
31, 1992, which have been excerpted or derived from the audited financial 
statements of Parent for the fiscal years then ended. The unaudited financial 
information for the six- month periods ended September 30, 1994 and September 
30, 1993 was included in an interim report for the half year ended September 
30, 1994 issued by Parent on November 17, 1994. The following summary is 
qualified in its entirety by reference to these reports and all the financial 
statements and the related notes therein. 

   The following financial statements of Parent have been prepared in 
accordance with generally accepted accounting principles applicable in the 
United Kingdom ("UK GAAP"), which practices are described in the notes to 
such statements. UK GAAP differs in certain significant respects from 
generally accepted accounting principles applicable in the United States ("US 
GAAP"). A summary of the principal differences between US GAAP and UK GAAP 
and the necessary adjustments to reconcile UK GAAP net income and 
shareholders' equity to US GAAP net income and shareholders' equity is set 
forth below. 

                                      12 

<PAGE>

                           FKI PLC AND SUBSIDIARIES 
                     SELECTED CONSOLIDATED FINANCIAL DATA 
                     (IN MILLIONS EXCEPT PER SHARE DATA) 

Income Statement Data: 


<TABLE>
<CAPTION>
                                                  Fiscal Year Ended                                 Half Year Ended 
                                 -----------------------------------------------     ----------------------------------------------
                                  31 March     31 March    31 March    31 March      30 September     30 September     30 September 
                                    1994         1994       1993         1992            1994             1994            1993 
                                     US                                                   US 
                                 Dollars (1)               Pounds Sterling             Dollars (1)             Pounds Sterling 
                                ------------   ---------------------------------     -------------   ------------------------------
<S>                            <C>             <C>         <C>          <C>           <C>              <C>               <C>
Net Sales  ..................   1,182.2         794.5       756.1        739.1          642.9             407.7           394.1 
Operating income  ...........      89.9          60.4        45.1         35.2           57.7              36.6            25.8 
Income before taxes and 
  minority interests ........      77.8          52.3        38.0         20.7           29.5              18.7            22.1 
Net income for Ordinary 
  Shareholders ..............      54.3          36.5        27.4         11.7           14.4               9.1            15.6 
Weighted average number of 
  Ordinary Shares ........... 
   Primary  .................     443.4         443.4       441.6        441.5          446.6             446.6           442.4 
   Fully diluted  ...........     455.5         455.5       454.5        454.2          459.7             459.7           455.2 
Earnings per Ordinary Shares 
   Primary: 
     Net income  ............      0.12         8.22p       6.20p        2.65p           0.03             2.03p           3.52p 
   Fully diluted: 
     Net income  ............      0.12         8.15p       6.15p        2.73p           0.03             2.04p           3.49p 

Balance Sheet Data: 
                                   31 March     31 March   31 March       30 September     30 September   30 September 
                                     1994        1994        1993            1994              1994           1993 
                                      US                                      US 
                                   Dollars(1)    Pounds Sterling            Dollars(1)          Pounds Sterling 
                                   ----------   -------------------       ------------     ----------------------------
Current assets  .............     687.0          461.7      448.8             737.6           467.7          463.4 
Total assets  ...............   1,018.7          684.6      650.3           1,093.2           693.2          676.1 
Current liabilities  ........     483.2          324.7      262.0             515.5           326.9          284.7 
Working capital  ............     203.7          136.9      186.8             222.0           140.8          178.7 
Net indebtedness  ...........     151.3          101.7       58.6             129.8            82.3           51.6 
Shareholders' equity  .......     298.3          200.5      232.4             338.1           214.4          238.5 
</TABLE>

- ------ 
1) Pounds Sterling ("BP") is translated into US Dollars solely for the 
   convenience of the reader at the noon buying rate in New York City on the 
   date specified for cable transfers in Pounds Sterling as certified for 
   customs purposes by the Federal Reserve Bank of New York ("the Noon Buying 
   Rate"). The Noon Buying Rate in effect on 30 September 1994 was BP 1.00 = 
   $1.5770 and the Noon Buying Rate in effect on 31 March 1994 was BP 1.00 = 
   $1.4880. 

                                      13 

<PAGE>
                 PRINCIPAL DIFFERENCES BETWEEN UNITED KINGDOM 
                         AND UNITED STATES GENERALLY 
                        ACCEPTED ACCOUNTING PRINCIPLES 

   The financial information provided above was prepared in accordance with 
UK GAAP, which differs in certain significant respects from US GAAP. These 
differences that are relevant to Parent relate principally to the following 
items and the necessary adjustments, where quantifiable, are shown in the 
tables set out below. 

   Goodwill. Under UK GAAP, Parent writes off acquisition goodwill against 
retained earnings in its consolidated balance sheet in the year of 
acquisition. Through March 31, 1994, goodwill included costs of 
reorganization and restructuring both the acquired entity's business and the 
acquiror's business. Beginning in fiscal year 1995, due to a change in UK 
financial reporting requirements, goodwill may not include such costs as they 
must be expensed as incurred. 

   Under US GAAP, goodwill is recognized on the balance sheet and amortized 
by charges against income over its estimated useful life, not to exceed 40 
years. Goodwill includes costs of restructuring the acquired entity's 
business. 

   Deferred Taxation. Under UK GAAP, no provision is made for deferred 
taxation if there is reasonable evidence that such deferred taxation will not 
be payable in the foreseeable future. Under US GAAP, deferred taxation is 
provided in full on the liability method in accordance with the provisions of 
Statement of Financial Accounting Standards No. 109. 

   Revaluation of Properties. Under UK GAAP, properties may be restated on 
the basis of appraised values in financial statements prepared in all other 
respects in accordance with the historical cost convention. Such restatements 
are not generally permitted under US GAAP, except in connection with purchase 
accounting, and accordingly, adjustments to net income and shareholders' 
equity are required to eliminate the above restatements. 

   Capitalized Research and Development. Under UK GAAP, Parent capitalizes 
development expenditures on clearly defined projects whose income can be 
assessed with reasonable certainty. Amortization of such expenditure is 
commenced in the year the expenditure is incurred by reference to the lesser 
of the life of the project or three years. No such capitalization is 
allowable under US GAAP. 

   Change in Accounting Policy. Under UK GAAP, the cumulative effect of 
changes in accounting policy are treated as a prior year adjustment to 
retained earnings. Under US GAAP, such items are treated as a charge to the 
income statement in the year of introduction of the new accounting policy. 
Consequently, the introduction of Statement of Financial Accounting Standards 
No. 106 requires restating for US accounting purposes. 

                                      14 

<PAGE>

                           FKI PLC AND SUBSIDIARIES 
                       APPROXIMATE IDENTIFIABLE EFFECTS 
             ON NET INCOME OF DIFFERENCES BETWEEN UNITED KINGDOM 
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 
                                (IN MILLIONS) 

<TABLE>
<CAPTION>
                                                         Fiscal Year Ended 
                                      ------------------------------------------------------ 
                                          31 March       31 March     31 March     31 March 
                                            1994           1994         1993         1992 
                                       US Dollars (1)              Pounds Sterling 
                                      --------------   ------------------------------------- 
<S>                                   <C>              <C>           <C>          <C>
Net income per UK GAAP  ............        54.3           36.5          27.4        11.7 
US GAAP Adjustments (net of tax):  . 
Amortisation of goodwill (2)  ......        (4.0)          (2.7)         (0.9)       (1.3) 
Deferred Taxation  .................        (1.5)          (1.0)         (3.1)        3.1 
Research & Development  ............         0.3            0.2          (0.1)       (0.6) 
Effect of FAS 106  .................        --             --           (25.7)       -- 
                                          ------         ------         ------      ----- 
Net income as adjusted for US GAAP          49.1           33.0          (2.4)       12.9 
                                          ------         ------         ------      ----- 
</TABLE>

                CUMULATIVE APPROXIMATE IDENTIFIABLE EFFECTS ON 
          SHAREHOLDERS EQUITY OF DIFFERENCES BETWEEN UNITED KINGDOM 
          AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 
                                (IN MILLIONS) 

<TABLE>
<CAPTION>
                                                    31 March       31 March     31 March 
                                                      1994           1994         1993 
                                                 US Dollars (1)       Pounds Sterling 
                                                --------------   ------------------------ 
<S>                                             <C>              <C>           <C>
Shareholders' equity per UK GAAP  ............       298.3          200.5         232.4 
US GAAP Adjustments:  ........................ 
Goodwill (2)  ................................       149.4          100.4          51.7 
Deferred Taxation  ...........................       (15.0)         (10.1)         (8.9) 
Property revaluations  .......................        (0.7)          (0.5)         (0.5) 
Research & Development  ......................        (4.3)          (2.9)         (3.4) 
                                                    ------         ------         ------ 
Shareholders' equity as adjusted for US GAAP         427.7          287.4         271.3 
                                                    ------         ------         ------ 
</TABLE>

- ------ 
1) Pounds Sterling ("BP") is translated into US Dollars solely for the
   convenience of the reader at the noon buying rate in New York City on the
   date specified for cable transfers in Pounds Sterling as certified for
   customs purposes by the Federal Reserve Bank of New York ("the Noon Buying
   Rate"). The Noon Buying Rate in effect on 31 March 1994 was BP 1.00 -
   $1.4880.

2) A calculation has been made for the effects of the differences arising on the
   accounting for goodwill where it is practical to so do. For the remaining
   businesses of Babcock International plc acquired in 1987 it is no longer
   practical to make a reasonable estimate of the goodwill figure relating to
   these businesses due to the subsequent restructuring of the enlarged group
   post acquisition. Consequently, no asset value and no annual amortisation has
   been allocated in respect of goodwill to such remaining businesses in the
   above tables.

   Except as described in this Offer to Purchase, (i) none of Purchaser, 
Parent nor, to the best knowledge of Purchaser and Parent, any of the persons 
listed in Schedule I to this Offer to Purchase or any associate or 
majority-owned subsidiary of Purchaser, Parent or any of the persons so 
listed beneficially owns or has any right to acquire, directly or indirectly, 
any Shares and (ii) neither Purchaser nor Parent nor, to the best knowledge 
of Purchaser and Parent, any of the persons or entities referred to above nor 
any director, executive officer or subsidiary of any of the foregoing has 
effected any transaction in the Shares during the past 60 days. 

   Except as provided in the Merger Agreement, the Stockholders Agreement and 
the Supplemental Stockholders Agreement and as otherwise described in this 
Offer to Purchase, none of Purchaser, Parent nor, to the best knowledge of 
Purchaser and Parent, any of the persons listed in Schedule I to this Offer 

                                      15 

<PAGE>

to Purchase, has any contract, arrangement, understanding or relationship with
any other person with respect to any securities of the Company, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss, guarantees of profits, division of profits or loss or
the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since January 1, 1992, neither Purchaser nor Parent nor, to the best
knowledge of Purchaser and Parent, any of the persons listed on Schedule I
hereto, has had any business relationship or transaction with the Company or any
of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since January 1, 1992,
there have been no contacts, negotiations or transactions between any of
Purchaser, Parent, or any of their respective subsidiaries or, to the best
knowledge of Purchaser and Parent, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, an election of directors or a sale or other
transfer of a material amount of assets.

9.  FINANCING OF THE OFFER AND THE MERGER. 

   The total amount of funds required by Purchaser to consummate the Offer 
and the Merger and to pay related fees and expenses is estimated to be 
approximately $65 million. Purchaser will obtain all of such funds from 
Parent or its affiliates. 

10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT 
    AND STOCKHOLDERS AGREEMENTS. 

              BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY 

   During November 1994, Parent became aware that the Board of the Company 
was looking at the future of its Harris subsidiary and Parent determined that 
it would be interested in looking at the possibility of acquiring the 
Company's other subsidiary, Crosby. Parent was aware of Crosby as an 
operation which would fit in well with its existing material handling 
operations. 

   Parent, through Steven D. Jones, its Director of Corporate Planning, made 
contact with the Company's financial advisors, DLJ, and after signing a 
confidentiality agreement dated November 21, 1994, obtained a brief 
memorandum on the Crosby business. On January 5, 1995, Mr. Jones, Robert G. 
Beeston, Chief Executive of Parent, and Robert Sook, President of Parent's 
Material Handling Group, met with representatives of the Company, including 
Frederick W. Whitridge, Jr., Chairman, and James A. Bach, President and Chief 
Executive Officer of the Company. The possibility of Parent's purchasing 
Crosby was discussed but no agreement was reached. The possibility of Parent 
acquiring the total business of the Company was also discussed. 

   On January 23, 1995, Mr. Sook visited the major manufacturing sites of 
Harris. Following his review, Parent determined it might have an interest in 
acquiring the entire business of the Company. 

   On February 2, 1995, Jeffrey Whalley, Chairman of Parent, and Mr. Jones 
met with representatives of the Company, including Messrs. Whitridge and 
Bach, to discuss Parent's preliminary interest in acquiring the entire 
business of the Company. Following this meeting it was agreed that the 
Company would enter into an agreement with Parent under which the Company 
would not solicit third party interest in its operations while Parent 
conducted a due diligence investigation of the Company's operations. The 
parties signed that agreement on February 15, 1995. 

   On Wednesday, March 1, 1995, Mr. Jones met with Messrs. Whitridge and Bach 
and discussed various approaches to a potential acquisition of the Company by 
Parent. No agreement was reached at this meeting. 

   On March 8, 1995, a meeting of the Board of Directors of Parent was 
convened and the possible acquisition of the Company was considered. It was 
agreed that Parent should attempt to negotiate an agreement with the Company 
and certain of its major stockholders which would lead to the acquisition of 

                                      16 

<PAGE>

all of the outstanding capital stock of the Company. A special committee of the
Board of Parent consisting of Messrs. Whalley and Beeston and Eric J. Bowers,
Parent's Finance Director, was formed to negotiate with the Company. Subject to
limits on the principal terms and conditions, the Board of Parent approved the
acquisition of the Company.

   Between March 10, 1995 and March 15, 1995 various meetings took place 
among Messrs. Whalley, Beeston and Jones of Parent, Messrs. Whitridge and 
Bach and representatives of certain of the major stockholders of the Company 
to discuss the terms of a cash tender offer by Parent in the context of a 
merger agreement and stockholders agreement. 

   On March 14, 1995 and March 15, 1995, the Board met to consider the 
proposed transaction. On March 15, 1995 meeting, DLJ delivered its 
opinion addressed to the Board to the effect that the consideration to be 
received by the holders of Shares pursuant to the Merger Agreement is fair, 
from a financial point of view, to such holders and the Board, among other 
things, (i) determined by unanimous vote that the Offer and the Merger are fair
to and in the best interests of the stockholders of the Company, (ii) 
authorized and approved the Merger Agreement by unanimous vote and (iii) 
recommended by unanimous vote that the stockholders of the Company accept
the Offer and tender their Shares pursuant to the Offer. 

   Following such meetings, on March 15, 1995, Parent, Purchaser and the 
Company entered into the Merger Agreement, Purchaser and the Stockholders 
entered into the Stockholders Agreement, and Purchaser and certain 
Stockholders entered into the Supplemental Stockholders Agreement. 

                             THE MERGER AGREEMENT 

   The following is a summary of the Merger Agreement, a copy of which has 
been filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the 
"Schedule 14D-1") filed by Purchaser and Parent with the Commission in 
connection with the Offer. Such summary is qualified in its entirety by 
reference to the Merger Agreement. 

   The Offer. The Merger Agreement provides for the commencement of the Offer 
as promptly as reasonably practicable, but in no event later than five 
business days after the initial public announcement of Purchaser's intention 
to commence the Offer. The obligation of Purchaser to accept for payment 
shares tendered pursuant to the Offer is subject to the satisfaction of the 
Minimum Condition and certain other conditions that are described in Section 
14 hereof. Purchaser and Parent have agreed that no change in the Offer may 
be made which decreases the price per share payable in the Offer, which 
reduces the number of Shares sought to be purchased in the Offer, which 
imposes conditions to the Offer in addition to those set forth in Section 14 
hereof, which amends or changes the terms and conditions of the Offer in any 
manner adverse to the holders of Shares or changes or waives the Minimum 
Condition. 

   The Merger. The Merger Agreement provides that, upon the terms and subject 
to the conditions thereof, and in accordance with Delaware Law, at the 
Effective Time, Purchaser shall be merged with and into the Company. As a 
result of the Merger, the separate corporate existence of Purchaser will 
cease and the Company will continue as the Surviving Corporation and will 
become an indirect, wholly owned subsidiary of Parent. The Merger Agreement 
provides that, notwithstanding anything to the contrary contained in this 
paragraph, Parent may elect instead, at any time prior to the fifth business 
day immediately preceding the date on which the Proxy Statement (as 
hereinafter defined) is mailed initially to the Company's stockholders, to 
merge the Company into Purchaser or another direct or indirect wholly owned 
subsidiary of Parent. Upon consummation of the Merger, each issued and then 
outstanding Share (other that any Shares held in the treasury of the Company, 
Shares owned by Purchaser, Parent or any direct or indirect wholly owned 
subsidiary of Parent or of the Company, and Shares held by stockholders who 
have not voted in favor of the Merger or consented thereto in writing and who 
shall have demanded properly in writing appraisal for such Shares in 
accordance with Delaware Law) shall be cancelled and converted automatically 
into the right to receive the Merger Consideration. 

   Pursuant to the Merger Agreement, each share of Common Stock, par value 
$.01 per share, of Purchaser issued and outstanding immediately prior to the 
Effective Time shall be converted into and exchanged for one share of Common 
Stock, par value $.01 per share, of the Surviving Corporation. 

                                      17 

<PAGE>

   The Merger Agreement provides that the directors of Purchaser immediately 
prior to the Effective Time will be the initial directors of the Surviving 
Corporation and that the officers of the Company immediately prior to the 
Effective Time will be the initial officers of the Surviving Corporation. The 
Merger Agreement provides that, at the Effective Time, unless otherwise 
determined by Parent prior to the Effective Time, and subject to the 
requirements of sections of the Merger Agreement that provide for 
indemnification of directors and officers (as described herein), the 
Certificate of Incorporation and By-laws of the Company as in effect 
immediately prior to the Effective Time shall be the Certificate of 
Incorporation and By-laws of the Surviving Corporation. 

   Agreements of Parent, Purchaser and the Company. Pursuant to the Merger 
Agreement, the Company, acting through the Board, shall, subject to the 
fiduciary duties of the Board, if required in order to consummate the Merger, 
duly call, give notice of, convene and hold an annual or special meeting of 
its stockholders as soon as practicable following consummation of the Offer 
for the purpose of considering and taking action on the Merger Agreement and 
the Merger (the "Stockholders' Meeting"). 

   Proxy Statement. The Merger Agreement provides that the Company shall, as 
soon as practicable following consummation of the Offer, file with the 
Commission under the Exchange Act, and use its reasonable best efforts to 
have cleared by the Commission, a proxy statement and related proxy materials 
(the "Proxy Statement") with respect to the Stockholders' Meeting and shall 
cause the Proxy Statement to be mailed to Stockholders of the Company at the 
earliest practicable time. The Company has also agreed, subject to its 
fiduciary duties under applicable law as advised in writing by counsel, to 
include in the Proxy Statement the unanimous recommendation of the Board that 
the stockholders of the Company approve and adopt the Merger Agreement and 
the Merger and to use its reasonable best efforts to obtain such approval and 
adoption. To the extent permitted by law, Parent and Purchaser have each 
agreed to vote all shares beneficially owned by them in favor of the Merger. 

   Conduct of Business. Pursuant to the Merger Agreement, the Company has 
covenanted and agreed that, between the date of the Merger Agreement and the 
election or appointment of Purchaser's designees to the Board (as described 
in the next following paragraph) upon the purchase by Purchaser of any Shares 
pursuant to the Offer (the "Purchaser's Election Date"), unless Parent shall 
otherwise agree in writing, the businesses of the Company and its 
subsidiaries (the "Subsidiaries" and, individually, a "Subsidiary") shall be 
conducted only in, and the Company and the Subsidiaries shall not take any 
action except in, the ordinary course of business and in a manner consistent 
with past practice; and the Company shall use its reasonable best efforts to 
preserve substantially intact the business organization of the Company and 
the Subsidiaries, to keep available the services of the current officers, 
employees and consultants of the Company and the Subsidiaries and to preserve 
the current relationships of the Company and the Subsidiaries with customers, 
suppliers and other persons with which the Company or any Subsidiary has 
significant business relations. The Merger Agreement provides that by way of 
amplification and not limitation, and except as contemplated therein, neither 
the Company nor the Subsidiaries shall, between the date of the Merger 
Agreement and Purchaser's Election Date, directly or indirectly do, or 
propose to do, any of the following, without the prior written consent of 
Parent: (a) amend or otherwise change its Certificate of Incorporation or 
By-laws or equivalent organizational document; (b) issue, sell, pledge, 
dispose of, grant, encumber, or authorize the issuance, sale, pledge, 
disposition, grant or encumbrance of (i) any shares of capital stock of any 
class of the Company or any Subsidiary or any options, warrants, convertible 
securities or other rights of any kind to acquire any shares of such capital 
stock, or any other ownership interest (including, without limitation, any 
phantom interest), of the Company or any Subsidiary (except for the issuance 
of Shares issuable pursuant to Options (as hereinafter defined) outstanding 
on the date of the Merger Agreement or upon conversion of Preferred Shares 
(as hereinafter defined) or upon consummation of the Class Action Settlement) 
or (ii) any assets of the Company or any Subsidiary, except for sales of 
products in the ordinary course of business and in a manner consistent with 
past practice: (c) declare, set aside, make or pay any dividend or other 
distribution payable in cash, stock, property or otherwise, with respect to 
any of its capital stock (except for required dividends on the Preferred 
Shares and except for such declarations, set asides, dividends, and other 
distributions made from any Subsidiary to its corporate parent); (d) 
reclassify, combine, split, subdivide or redeem, purchase or otherwise 
acquire, directly or indirectly, any of its capital stock; (e) (i) acquire 
(including, without limitation, by merger, consolidation, or acquisition of 
stock or assets) any corporation, partnership, other business organization or 
any division thereof or any material amount of assets other than in the 
ordinary course of business, or (ii) except pursuant to existing credit 

                                      18 
<PAGE>

facilities, incur any indebtedness for borrowed money or issue any debt
securities or assume the obligations of any person, or make any loans or
advances, except in the ordinary course of business and consistent with past
practice; (f) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past practices in
salaries or wages of employees of the Company or any Subsidiary who are not
officers of the Company, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director, officer or other
employee of the Company or any Subsidiary, or establish, adopt, enter into or
amend any collective restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer or
employee or circulate to any employee any details of any such plan proposed to
be adopted; (g) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability; (h) pay, discharge or
satisfy any claim, liability or obligation (absolute, secured, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with past
practice, of liabilities reflected or reserved against in the consolidated
balance sheet of the Company and the Subsidiaries as at December 31, 1994
included in the 1994 Form 10-K or subsequently incurred in the ordinary course
of business and consistent with past practice; (i) settle or compromise any
pending or threatened suit, action or claim which is material or which relates
to the Offer, the Merger, or any of the transactions contemplated by the Merger
Agreement; or (j) take or offer or propose to take, or agree to take in writing,
or otherwise, any of the actions described above or any action that would result
in any of the conditions to the Offer not being satisfied (other than as
contemplated by the Merger Agreement).

   Designation of Directors. The Merger Agreement provides that, promptly 
upon the purchase by Purchaser of Shares pursuant to the Offer which 
constitute a majority of the outstanding shares on a fully diluted basis, 
Purchaser shall be entitled to designate such number of directors as shall 
constitute a majority of the total number of directors on the Board (giving 
effect to the directors elected pursuant to this sentence), and the Company 
shall, at such time, promptly take all actions necessary to cause Purchaser's 
designees to be elected as directors of the Company, including increasing the 
size of the Board or securing the resignations of incumbent directors, or 
both. The Merger Agreement also provides that, at such time, the Company 
shall use its best efforts to cause persons designated by Purchaser to 
constitute a majority of (i) each committee of the Board (some of the members 
of which may be required to be independent as required by applicable law), 
(ii) each board of directors of each domestic Subsidiary and (iii) each 
committee of each such board, in each case only to the extent permitted by 
applicable law. 

   Amendments. The Merger Agreement provides that following the election or 
appointment of Purchaser's designees in accordance with the immediately 
preceding paragraph and prior to the Effective Time, any amendment of the 
Merger Agreement or the Certificate of Incorporation or By-laws of the 
Company, any termination of the Merger Agreement by the Company, and 
extension by the Company of the time for the performance of any of the 
obligations or other acts of Parent or Purchaser or waiver of any of the 
Company's rights thereunder, will require the concurrence of a majority of 
those directors of the Company then in office who were not designated by 
Purchaser or, if no such directors are then in office, no such amendment, 
termination, extension or waiver shall be affected which is materially 
adverse to the holders of Shares (other than Parent and its subsidiaries). 

   Access to Information; Confidentiality. Pursuant to the Merger Agreement, 
from the date of the Merger Agreement until the consummation of the Offer, 
the Company shall, and shall cause the Subsidiaries and the officers, 
directors, employees, auditors and agents of the Company and the Subsidiaries 
to, afford the officers, employees and agents of Parent and Purchaser 
complete access at all reasonable times to the officers, employees, agents, 
properties, offices, plants and other facilities, books and records of the 
Company and each Subsidiary, and shall furnish Parent and Purchaser with all 
financial, operating and other data and information as Parent or Purchaser, 
through its officers, employees or agents, may reasonably request. Parent and 
Purchaser have agreed to keep such information confidential in accordance 
with the Confidentiality Agreement, dated as of November 21, 1994, between 
Parent and the Company (the "Confidentiality Agreement"). 

   The Company has agreed that, to the extent permitted by applicable law, in 
order to facilitate the continuing operation of the Company by Parent and 

                                      19 

<PAGE>

Purchaser from and after the completion of the Offer without disruption and to
assist in an achievement of an orderly transition in the ownership and
management of the Company, from the date of the Merger Agreement and until
completion of the Offer, the Company, Parent and Purchaser shall cooperate
reasonably with each other to effect an orderly transition.

   No Solicitation of Transactions. The Company has agreed that, until the 
Merger Agreement shall have been terminated according to its terms (as 
described below), neither it nor any Subsidiary shall, directly or 
indirectly, through any officer, director, agent or otherwise, solicit, 
initiate or encourage the submission of, any proposal or offer from any 
person relating to, participate in any negotiations regarding, or furnish to 
any other person any information with respect to, or otherwise cooperate in 
any way with, or assist or participate in, facilitate or encourage, any Third 
Party Transaction (as defined on page 2 hereof); provided, however, that 
nothing contained in the Merger Agreement shall prohibit the Board from 
furnishing information to, or entering into discussions or negotiations with, 
any person in connection with an unsolicited proposal by such person with 
respect to a Third Party Transaction if, and only to the extent that, (i) 
such person is, in the good faith judgment of the Board (or a duly designated 
committee thereof) after consultation with its advisors, capable of effecting 
a Third Party Transaction which would be more favorable to the stockholders 
than the Offer and the Merger taken together, and (ii) prior to furnishing 
confidential information to such person the Company obtains from such person 
an executed confidentiality agreement on terms no less favorable to the 
Company than those contained in the Confidentiality Agreement. The Company 
has also agreed to notify Parent promptly if any such proposal or offer, or 
any inquiry or contact with any person with respect thereto, is made. The 
Company has also agreed not to release any third party from any 
confidentiality or, subject to the fiduciary duties of the Board, standstill 
agreement to which the Company is or may become a party. 

   Treatment of Stock Options. At the Effective Time, each outstanding option 
to purchase Shares (in each case, an "Option") granted under the Company's 
1992 Stock Option Plan, as amended (the "Stock Option Plan"), whether or not 
then exercisable, shall be cancelled by the Company, and each holder of a 
cancelled Option shall be entitled to receive from Purchaser, at the time as 
payment for Shares is made by Purchaser in connection with the Offer, in 
consideration for the cancellation of such Option, an amount in cash equal to 
the product of (i) the number of shares previously subject to such option and 
(ii) the excess, if any, of the Merger Consideration over the exercise price 
per Share previously subject to such Option. 

   Treatment of Preferred Shares. The Merger Agreement provides that at the 
Effective Time, each share of Series B Cumulative Convertible Preferred 
Stock, par value $.01 per share, of the Company issued and outstanding 
immediately prior to the Effective Time (each a "Preferred Share") shall be 
cancelled and shall be converted automatically into the right to receive in 
cash an amount equal to $2,500.00 plus all accrued but unpaid dividends on 
such Preferred Share which shall be payable, without interest, to the holder 
of such Preferred Share upon surrender of the certificate that formerly 
evidenced such Preferred Share. 

   Indemnification and Insurance. The Merger Agreement provides that if the 
Offer is consummated, Parent, Purchaser and the Company shall, and from and 
after the Effective Time, Parent and the Surviving Corporation shall, 
maintain the rights to indemnification of officers and directors provided for 
in the By-laws of the Company as in effect on the date of the Merger 
Agreement with respect to indemnification for acts and omissions occurring 
prior to the Effective Time, including, without limitation, the transactions 
contemplated by the Merger Agreement. 

   The Merger Agreement provides that the Company shall, from and after the 
date of the Merger Agreement and to and including the Effective Time, and the 
Surviving Corporation shall, for six years from the Effective Time, maintain 
in effect the current directors' and officers' liability insurance policies 
maintained by the Company (provided that the Surviving Corporation may 
substitute therefor policies of at least the same coverage and amounts 
containing terms and conditions which are no less advantageous to such 
officers and directors so long as substitution does not result in gaps or 
lapses in coverage) with respect to matters occurring prior to the Effective 
Time; provided, however, that in no event shall the Surviving Corporation be 
required to expend more than an amount per year equal to 110 percent of the 
current annual premiums paid by the Company for such insurance (which 
premiums the Company has represented to Parent and Purchaser to be 
approximately $185,000 in the aggregate) and, in the event the cost of such 
coverage shall exceed that amount, the Surviving Corporation will purchase as 
much coverage as possible for that amount. 

   Parent, Purchaser and the Company have also agreed that in the event the 
Company or the Surviving Corporation or any of their respective successors or 

                                      20 

<PAGE>

assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company, the Surviving Corporation or
Parent, as the case may be, or at Parent's option, Parent, shall assume the
foregoing indemnity obligations.

   The Merger Agreement provides that the obligations of the Company or the 
Surviving Corporation with respect to the above-described provisions 
regarding indemnification and insurance shall not be terminated or modified 
in such a manner as to adversely affect any director, officer, employee, 
fiduciary and agent to whom the indemnification and insurance provisions 
therein apply without the consent of each affected director, officer, 
employee, fiduciary and agent. 

   The Merger Agreement provides that in the event that the Company or the 
Surviving Corporation should fail, at any time from and after the Purchaser's 
Election Date, to comply with any of the foregoing indemnification and 
insurance obligations for any reason, Parent shall be responsible therefor. 
Parent has agreed to perform such obligations unconditionally without regard 
to any defense or other basis for nonperformance which the Company or the 
Surviving Corporation may have or claim (except any claim that performance is 
prohibited by applicable Delaware Law). The Merger Agreement provides that 
Parent, Purchaser, and the Company intend that the officers, directors, 
employees, fiduciaries and agents of the Company and its Subsidiaries shall 
be fully indemnified and that the foregoing indemnification provisions shall 
be a primary obligation of Parent and not merely a guarantee by Parent of the 
obligations of the Company or Purchaser. 

   Employee Benefits. Pursuant to the Merger Agreement, Parent has agreed 
that for a period of one year following the Effective Time, Parent shall 
cause the Surviving Corporation to provide employees of the Subsidiaries 
(excluding employees covered by collective bargaining agreements) with 
pension, insurance and other similar benefits following the Effective Time 
which are, in the aggregate, at least as favorable to the employees as the 
benefits provided for such employees by the Company as of the date of the 
Merger Agreement. 

   Further Action. The Merger Agreement provides that, subject to its terms 
and conditions, each of the parties thereto shall (i) make promptly its 
respective filings, and thereafter make any other required submissions, under 
the HSR Act and the Exon-Florio Act with respect to the transactions 
contemplated by the Merger Agreement, (ii) subject to the fiduciary duties of 
the Board, use its reasonable best efforts to take, or cause to be taken, all 
appropriate action and to do or cause to be done, all things necessary, 
proper or advisable under applicable laws and regulations to consummate and 
make effective the transactions contemplated by the Merger Agreement, 
including, without limitation, using its reasonable best efforts to obtain 
all licenses, permits (including, without limitation, environmental permits), 
consents, approvals, authorizations, qualifications and orders of 
governmental authorities and parties to contracts with the Company and the 
Subsidiaries as are necessary for the consummation of the transactions 
contemplated by the Merger Agreement and to fulfill the conditions to the 
Offer and the Merger, and (iii) except as contemplated by the Merger 
Agreement, use its reasonable best efforts not to take any action, or enter 
into any transaction, which would cause any of its representations or 
warranties contained in the Merger Agreement to be untrue or result in a 
breach of any covenant made by it in the Merger Agreement. 

   Under the Merger Agreement, Parent has agreed to take all action necessary 
to cause Purchaser to perform all of Purchaser's, and the Surviving 
Corporation to perform all of the Surviving Corporation's, agreements, 
covenants and obligations under the Merger Agreement and to consummate the 
Offer and the Merger on the terms and conditions set forth in the Merger 
Agreement. The Merger Agreement provides that Parent shall be liable for any 
breach of any representation, warranty, covenant or agreement of Purchaser 
and for any breach of the foregoing covenant. 

   In case at any time after the Effective Time any further action is 
necessary or desirable to carry out the purposes of the Merger Agreement, the 
proper officers and directors of each party to the Merger Agreement then in 
office are required to use their reasonable best efforts to take all such 
action. 

   Representations and Warranties. The Merger Agreement contains various 
customary representations and warranties of the parties thereto including 
representations by the Company as to financial statements and filings with 
the Commission, the absence of certain changes or events concerning the 
Company's business, compliance with law, litigation, properties and assets, 
leases, environmental matters and brokers. 

                                      21 

<PAGE>

   Conditions to the Merger. Under the Merger Agreement, the respective 
obligations of each party to effect the Merger are subject to the 
satisfaction at or prior to the Effective Time of the following conditions 
and only the following conditions: (a) the Merger Agreement and the Merger 
shall have been approved and adopted by the stockholders of the Company to 
the extent required by Delaware law and the Company's Certificate of 
Incorporation; (b) any waiting period (and any extension thereof) applicable 
to the consummation of the Merger under the HSR Act shall have expired or 
been terminated; (c) no investigation shall be threatened or pending under 
the Exon-Florio Act with respect to any of the transactions contemplated by 
the Merger Agreement; (d) no foreign, United States or state governmental 
authority or other agency or commission or foreign, United States or state 
court of competent jurisdiction shall have enacted, issued, promulgated, 
enforced or entered any law, rule, regulation, executive order, decree, 
injunction or other order (whether temporary, preliminary or permanent) which 
is then in effect and has the effect of making the Merger illegal or 
otherwise preventing or prohibiting consummation of the Merger; and (e) 
Purchaser or its permitted assignee shall have purchased all Shares validly 
tendered and not withdrawn pursuant to the Offer; provided, however, neither 
Parent nor Purchaser shall be entitled to assert the failure of this 
condition if, in breach of the Merger Agreement or the terms of the Offer, 
Purchaser fails to purchase any Shares validly tendered and not withdrawn 
pursuant to the Offer. 


   Termination; Fees and Expenses. The Merger Agreement provides that it may 
be terminated and the Merger and the other transactions contemplated by the 
Merger Agreement may be abandoned at any time prior to the Effective Time, 
notwithstanding any requisite approval and adoption of the Merger Agreement 
and the transactions contemplated by the Merger Agreement by the stockholders 
of the Company: (a) by mutual written consent duly authorized by the Boards 
of Directors of Parent and the Company prior to Purchaser's Election Date; 
(b) by Parent, Purchaser or the Company if (i) the Effective Time shall not 
have occurred on or before September 30, 1995; provided, however, that the 
right to terminate the Merger Agreement under this clause (b) shall not be 
available to any party whose failure to fulfill any obligation under the 
Merger Agreement has been the cause of, or resulted in, the failure of the 
Effective Time to occur on or before such date, or (ii) any court or other 
governmental authority of competent jurisdiction shall have issued an order, 
decree or ruling or taken any other action restraining, enjoining or 
otherwise prohibiting the Merger and such order, decree, ruling or other 
action shall have become final and nonappealable; (c) by Parent if (i) due to 
an occurrence or circumstance that results in a failure to satisfy any 
condition set forth in Section 14 hereof, Purchaser shall have (A) failed to 
commence the Offer within 10 days following the date of the Merger Agreement, 
(B) terminated the Offer without having accepted any Shares for payment 
thereunder, or (C) failed to pay for Shares pursuant to the Offer within 90 
days following the commencement of the Offer, unless any such failure listed 
above shall have been caused by or resulted from the failure of Parent or 
Purchaser to perform in any material respect any material covenant or 
agreement of either of them contained in the Merger Agreement or the material 
breach by Parent or Purchaser of any material representation or warranty of 
either of them contained in the Merger Agreement, or (ii) prior to the 
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or 
modified in a manner adverse to Purchaser or Parent its approval or 
recommendation of the Offer, the Merger Agreement, the Merger or any other 
transaction contemplated by the Merger Agreement or shall have approved or 
recommended approval of any Third Party Transaction, or shall have resolved 
to do any of the foregoing; or (d) by the Company, upon approval of the 
Board, if (i) Purchaser shall have (A) failed to commence the Offer within 10 
days following the date of the Merger Agreement, (B) terminated the Offer 
without having accepted any Shares for payment thereunder or (C) failed to 
pay for Shares pursuant to the Offer within 90 days following the 
commencement of the Offer, unless any such failure shall have been caused by 
or resulted from the failure of the Company to satisfy the conditions set 
forth in paragraph (f) or (g) of Section 14 hereof, or (ii) prior to the 
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or 
modified in a manner adverse to Purchaser or Parent its approval or 
recommendation of the Offer, the Merger Agreement, the Merger or any other 
transaction contemplated by the Merger Agreement in order to approve any 
Third Party Transaction which the Board determines in the exercise of its 
good faith judgment and after consultation with independent legal counsel and 
the Company's financial advisors to be more favorable to the Company's 
stockholders than the Offer and the Merger taken together; provided, however, 
that such termination under this cause (ii) shall not be effective until the 
Company has made payment to Purchaser of the Fee (as hereinafter defined) and 
has deposited with a mutually acceptable escrow agent $500,000 for 
reimbursement to Parent and Purchaser of Expenses (as hereinafter defined). 

                                      22 

<PAGE>

   In the event of the termination of the Merger Agreement, the Merger 
Agreement provides that it shall forthwith become void and there shall be no 
liability thereunder on the part of any party thereto except under the 
provisions of the Merger Agreement related to fees and expenses described 
below and under certain other provisions of the Merger Agreement which 
survive termination. 

   The Merger Agreement provides that in the event that the Merger Agreement 
is terminated pursuant to the provisions described in clause (c)(ii) or 
clause (d)(ii) of the second preceding paragraph, then the Company shall pay 
Parent promptly (but in no event later than one business day after the first 
of such events shall have occurred) a fee of $2,500,000 (the "Fee"), which 
amount shall be payable in immediately available funds, plus all Expenses (as 
defined below). 

   Under the Merger Agreement, the term "Expenses" means all out-of-pocket 
expenses and fees up to $500,000 in the aggregate (including, without 
limitation, fees and expenses payable to all investment banking firms, other 
financial institutions, counsel, accountants, experts and consultants to 
Parent and Purchaser, and all printing and advertising expenses) actually 
incurred or accrued by Parent or Purchaser or on their behalf in connection 
with the transactions contemplated by the Merger Agreement, and actually 
incurred or accrued by banks, investment banking firms, other financial 
institutions and other persons and assumed by Parent and Purchaser in 
connection with the negotiation, preparation, execution and performance of 
the Merger Agreement, the structuring of the transactions contemplated by the 
Merger Agreement and any agreements relating thereto. 

   Except as set forth in the preceding four paragraphs, all costs and 
expenses incurred in connection with the Merger Agreement, the Stockholders 
Agreement, the Supplemental Stockholders Agreement and the transactions 
contemplated by the Merger Agreement shall be paid by the party incurring 
such expenses, whether or not any such transaction is consummated. 

                          THE STOCKHOLDERS AGREEMENT 

   Purchaser and the Stockholders have entered into the Stockholders 
Agreement, pursuant to which, upon the terms set forth therein, each 
Stockholder has agreed to tender and sell, in accordance with the terms of 
the Offer, all Shares owned by such Stockholder. Further, each Stockholder 
has agreed not to withdraw his Shares unless (a) the Board shall have 
withdrawn or modified in any manner adverse to Purchaser or Parent its 
approval or recommendation of the Offer, the Merger, the Merger Agreement or 
any other transaction contemplated by the Merger Agreement in order to 
approve any Third Party Transaction which the Board determines in the 
exercise of its good faith judgment and after consultation with independent 
legal counsel and the Company's financial advisors to be more favorable to 
the Company's stockholders than the Offer and the Merger taken together, (b) 
the Merger Agreement is terminated, (c) the Merger Agreement is amended in 
any way which adversely affects such Stockholder, or (d) such Stockholder's 
Shares have not been accepted for payment and paid for by June 13, 1995. As 
of March 15, 1995, the Stockholders owned (either beneficially or of record) 
Shares constituting approximately 66.5% of the outstanding Shares (54.2% on a 
fully diluted basis). 

   The Stockholders Agreement provides that each Stockholder shall not, and 
shall not offer or agree to, sell, transfer, tender, assign, hypothecate or 
otherwise dispose of, or create or permit to exist, any security interest, 
lien, claim, pledge, option, right of first refusal, agreement, limitation on 
such Stockholder's voting rights, charge or other encumbrance of any nature 
whatsoever with respect to the Stockholder's Shares owned as of the date of 
the Stockholders Agreement or that may thereafter be acquired by such 
Stockholder at any time prior to the termination of the Stockholders 
Agreement as to such Stockholder. 

   The Stockholders Agreement provides that subject to the fiduciary duties 
as a director of the Company of any representative or agent of any 
Stockholder who is such a director as contemplated in the Merger Agreement, 
each Stockholder shall not, directly or indirectly, through any agent or 
representative or otherwise, solicit, initiate or encourage the submission of 
any proposal or offer from any person relating to, participate in any 
negotiations regarding, or furnish to any other person any information with 
respect to, or otherwise cooperate in any way with, or assist or participate 
in or facilitate or encourage, any Third Party Transaction at any time prior 
to the termination of the Stockholders Agreement as to such Stockholder. 

   The Stockholders Agreement provides that, from and after the date of the 
Stockholders Agreement, Parent and Purchaser (the "Indemnifying Parties") 
jointly and severally shall indemnify and hold harmless each of the 

                                      23 

<PAGE>

Stockholders (collectively the "Indemnified Parties" and individually an 
"Indemnified Party") against any loss, damage or expense (including 
reasonable attorney's fees and disbursements) actually incurred by any such 
Indemnified Party to the extent arising from any Company stockholder or third 
party claim, suit or demand in connection with the Stockholders Agreement or 
the transactions contemplated by the Merger Agreement (a "Third Party 
Claim"). For purposes of the Stockholders Agreement, a Third Party Claim 
shall expressly exclude any claim, suit or demand brought or instituted by 
any partner, investor, stockholder or affiliate of any Indemnified Party. The 
Stockholders Agreement provides that the Indemnified Parties shall give the 
Indemnifying Parties prompt written notice of any Third Party Claim which 
they believe will give rise to indemnification; provided, however, that the 
failure to give such notice, shall not affect the liability of the 
Indemnifying Parties thereunder unless and to the extent the failure to give 
such notice adversely affects the ability of the Indemnifying Parties to 
defend themselves or to mitigate the damages sought in such Third Party 
Claim. The Stockholders Agreement provides that the Indemnifying Parties 
shall have the right to defend and to direct the defense against any such 
Third Party Claim in its name or in the name of any Indemnified Party at the 
Indemnifying Parties' expense and with counsel selected by agreement of the 
Indemnified Parties, and reasonably acceptable to Parent, which shall be the 
only counsel for the Indemnified Parties, and only the Indemnifying Parties 
will have the right to settle or compromise any such Third Party Claim; 
provided, however, that (i) the Indemnifying Parties shall only be 
responsible for the first $50,000 in fees and disbursements of such counsel 
in defending the Indemnified Parties in any such Third Party Claim and the 
Indemnified Parties shall be responsible for such legal fees and 
disbursements in excess of $50,000, and (ii) the Indemnifying Parties will 
not, without the Indemnified Parties' written consent, settle or compromise 
any claim or consent to any entry of judgment which does not include as an 
unconditional term thereof the giving by the claimant or the plaintiff to the 
Indemnified Parties a release from all liability in respect of such Third 
Party Claim. The Stockholders Agreement provides that the Indemnified Parties 
shall cooperate in the defense of any such Third Party Claim and that, if the 
Indemnifying Parties, within a reasonable time after notice of a Third Party 
Claim, fail to defend the Indemnified Parties, the Indemnified Parties shall 
be entitled to undertake the defense, compromise or settlement of such Third 
Party Claim at the expense of (subject to the limitations set forth above) 
and for the account and risk of the Indemnifying Parties subject to the 
rights of the Indemnifying Parties to assume the defense of such Third Party 
Claim at any time prior to the settlement, compromise or final determination 
thereof. The Stockholders Agreement provides that, notwithstanding the 
foregoing provisions, any Indemnified Party may engage counsel of its own 
choice; provided, however, that all of the fees and disbursements of such 
counsel shall be the sole responsibility of such Indemnified Party. 

                   THE SUPPLEMENTAL STOCKHOLDERS AGREEMENT 

   The Stockholders other than Investors Trading AB, which owned (either 
beneficially or of record) approximately 46.6% of the outstanding Shares 
(38.0% on a fully diluted basis) as of March 15, 1995, also entered into a 
Supplemental Stockholders Agreement, dated as of March 15, 1995, with 
Purchaser in which such Stockholders have agreed that if the Offer is 
terminated because of the failure of any condition thereof and the Company 
effects a Third Party Transaction within 180 days thereafter, then each such 
Stockholder will pay to Purchaser 50% of the excess, if any, of the amount 
per Share received by the Stockholder as a result of such transaction over 
$2.30 per Share. 

11. Purpose of the Offer; Plans for the Company after the Offer and the 
Merger. 

   Purpose of the Offer. The purpose of the Offer and the Merger is for 
Parent to acquire control of, and the entire equity interest in, the Company. 
The purpose of the Merger is for Parent to acquire all Shares not purchased 
pursuant to the Offer. Upon consummation of the Merger, the Company will 
become an indirect wholly owned subsidiary of Parent. The Offer is being made 
pursuant to the Merger Agreement. 

   In the Merger Agreement, the Company has agreed to take all action 
necessary to convene a meeting of its stockholders as soon as practicable 
after the consummation of the Offer for the purpose of considering and taking 
action on the Merger Agreement and the transactions contemplated thereby. 
Parent and Purchaser have agreed that all Shares owned by them and their 
subsidiaries will be voted in favor of the Merger Agreement and the 
transactions contemplated thereby. 

                                      24 

<PAGE>

   If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement 
provides that Purchaser will be entitled to designate representatives to 
constitute a majority of the directors on the Board following such purchase. 
See Section 10. Purchaser expects that such representation would permit 
Purchaser to exercise control over the Company's conduct of its business and 
operations. 

   Appraisal Rights. No appraisal rights are available in connection with the 
Offer. However, if the Merger is consummated, stockholders will have certain 
rights under Delaware law to dissent and demand appraisal of, and to receive 
payment in cash of the fair value of, their Shares. Such rights to dissent, 
if the statutory procedures are complied with, could lead to a judicial 
determination of the fair value of the Shares, as of the Effective Time 
(excluding any element of value arising from the accomplishment or 
expectation of the Merger), required to be paid in cash to such dissenting 
holders for their Shares. In addition, such dissenting stockholders could be 
entitled to receive payment of a fair rate of interest from the date of 
consummation of the Merger on the amount determined to be the fair value of 
their Shares. In determining the fair value of the Shares, the court is 
required to take into account all relevant factors. Accordingly, such 
determination could be based upon consideration other than, or in addition 
to, the market value of the Shares, including, among other things, asset 
values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme 
Court stated, among other things, that "proof of value by any techniques or 
methods which are generally considered acceptable in the financial community 
and otherwise admissible in court" should be considered in an appraisal 
proceeding. Therefore, the value so determined in any appraisal proceeding 
could be the same, more or less than the purchase price per Share in the 
Offer or the Merger Consideration. 

   In addition, several decisions by Delaware courts have held that, in 
certain circumstances, a controlling stockholder of a company involved in a 
merger has a fiduciary duty to other stockholders which requires that the 
merger be fair to such other stockholders. In determining whether a merger is 
fair to minority stockholders, Delaware courts have considered, among other 
things, the type and amount of consideration to be received by the 
stockholders and whether there was fair dealing among the parties. The 
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt 
Chemical Corp. that the remedy ordinarily available to minority stockholders 
in a cash-out merger is the right to appraisal described above. However, a 
damages remedy or injunctive relief may be available if a merger is found to 
be the product of unfairness, including fraud, misrepresentation or other 
misconduct. 

   The Commission has adopted Rule 13e-3 under the Exchange Act, which is 
applicable to certain "going private" transactions and which may under 
certain circumstances be applicable to the Merger or another business 
combination following the purchase of Shares pursuant to the Offer in which 
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser 
believes, however, that if the Merger is consummated within one year of the 
purchase of Shares pursuant to the Offer, Rule 13e-3 will not be applicable 
to the Merger. Rule 13e-3 requires, among other things, that certain 
financial information concerning the Company and certain information relating 
to the fairness of the proposed transaction and the consideration offered to 
minority stockholders in such transaction be filed with the Commission and 
disclosed to stockholders prior to consummation of the transaction. 

   Plans for the Company. It is currently expected that, following 
consummation of the Offer, the business and operations of the Company's 
Subsidiaries, Crosby and Harris, will be continued substantially as they are 
currently being conducted. Parent will continue to evaluate the business and 
operations of Crosby and Harris and, following the consummation of the Offer, 
will take such actions as it deems appropriate under the circumstances then 
existing. Parent intends to seek additional information about the Company's 
Subsidiaries during the Offer period. Thereafter, Parent intends to review 
such information as part of a comprehensive review of their business 
operations, capitalization and management with a view to maximizing their 
potential in conjunction with Parent's businesses. It is expected that the 
business and operations of Crosby and Harris would form an important part of 
Parent's future business plans. 

   Except as indicated in this Offer to Purchase, until the consummation of 
the Merger, Parent does not have any present plans or proposals which relate 
to or would result in an extraordinary corporate transaction, such as a 
merger, reorganization or liquidation, involving the Company or any 
Subsidiary or any material change in the Company's capitalization or dividend 
policy or any other material changes in the Company's corporate structure or 
business, or the composition of the Board or the Company's management. 

                                      25 

<PAGE>

12. Dividends and Distributions. 

   The Merger Agreement provides that the Company shall not, between the date 
of the Merger Agreement and the appointment of Purchaser's designees to the 
Board, without the prior written consent of Parent, (a) issue, sell, pledge, 
dispose of, grant, encumber, or authorize the issuance, sale, pledge, 
disposition, grant or encumbrance of any shares of capital stock of any class 
of the Company or any Subsidiary or any options, warrants, convertible 
securities or other rights of any kind to acquire any shares of such capital 
stock, or any other ownership interest (including, without limitation, any 
phantom interest), of the Company or any Subsidiary (except for the issuance 
of Shares issuable pursuant to Options outstanding on the date of the Merger 
Agreement or upon conversion of Preferred Shares or upon consummation of the 
Class Action Settlement); (b) declare, set aside, make or pay any dividend or 
other distribution, payable in cash, stock, property or otherwise with 
respect to any of its capital stock (except for required dividends on the 
Preferred Shares and except for such declarations, set- asides, dividends and 
other distributions made from any Subsidiary to the Company or (c) 
reclassify, combine, split, subdivide or redeem, purchase or otherwise 
acquire, directly or indirectly or indirectly, any of its capital stock. See 
Section 10. 

13. Effect of the Offer on the Market for the Shares, Exchange Listing and 
Exchange Act Registration. 

   The purchase of Shares by Purchaser pursuant to the Offer will reduce the 
number of Shares that might otherwise trade publicly and will reduce the 
number of holders of Shares, which could adversely affect the liquidity and 
market value of the remaining Shares held by the public. 

   Depending upon the number of Shares purchased pursuant to the Offer, the 
Shares may no longer meet the requirements of the NYSE for continued listing 
and may be delisted from the NYSE and deregistered under Section 12(b) of the 
Exchange Act. Parent intends to cause the delisting by the NYSE and 
deregistration of the Shares following consummation of the Offer. 

   According to the NYSE's published guidelines, the NYSE would consider 
delisting the Shares if, among other things, the number of record holders of 
at least 100 shares should fall below 1,200, the number of publicly held 
Shares (exclusive of holdings of officers, directors and their families and 
other concentrated holdings of 10 percent or more ("NYSE Excluded Holdings") 
should fall below 600,000 or the aggregate market value of publicly held 
Shares (exclusive of NYSE Excluded Holdings) should fall below $5,000,000. 
The Company has advised Purchaser that, as of March 15, 1995, there were 
24,665,160 Shares outstanding, held by approximately 2,200 holders of record. 
If, as a result of the purchase of Shares pursuant to the Offer or otherwise, 
the Shares no longer meet the requirements of the NYSE for continued listing 
and the listing of the Shares is discontinued, the market for the Shares 
could be adversely affected. 

   If the NYSE were to delist the Shares, it is possible that the Shares 
would continue to trade on another securities exchange or in the 
over-the-counter market and that price quotations would be reported by such 
exchange or through the NASDAQ Stock Market ("NASDAQ") or other sources. The 
extent of the public market therefor and the availability of such quotations 
would depend, however, upon such factors as the number of stockholders and/or 
the aggregate market value of such securities remaining at such time, the 
interest in maintaining a market in the Shares on the part of securities 
firms, the possible termination of registration under the Exchange Act as 
described below, and other factors. Purchaser cannot predict whether the 
reduction in the number of Shares that might otherwise trade publicly would 
have an adverse or beneficial effect on the market price for or marketability 
of the Shares or whether it would cause future market prices to be greater or 
less than the Merger Consideration. 

   The Shares are currently "margin securities," as such term is defined 
under the rules of the Board of Governors of the Federal Reserve System (the 
"Federal Reserve Board"), which has the effect, among other things, of 
allowing banks to extend credit on the collateral of such securities. 
Depending upon factors similar to those described above regarding listing and 
market quotations, following the Offer it is possible that the Shares might 
no longer constitute "margin securities" for purposes of the margin 
regulations of the Federal Reserve Board, in which event such Shares could no 
longer be used as collateral for loans made by banks. 

   The Shares are currently registered under the Exchange Act. Such 
registration may be terminated upon application by the Company to the 
Commission if the Shares are not listed on a national securities exchange and 

                                      26 

<PAGE>

there are fewer than 300 record holders. The termination of the registration 
of the Shares under the Exchange Act would substantially reduce the 
information required to be furnished by the Company to holders of Shares and 
to the Commission and would make certain provisions of the Exchange Act, such 
as the short-swing profit recovery provisions of Section 16(b), the 
requirement of furnishing a proxy statement in connection with stockholders' 
meetings and the requirements of Rule 13e-3 under the Exchange Act with 
respect to "going private" transactions, no longer applicable to the Shares. 
In addition, "affiliates" of the Company and persons holding "restricted 
securities" of the Company may be deprived of the ability to dispose of such 
securities pursuant to Rule 144 promulgated under the Securities Act of 1933, 
as amended. If registration of the Shares under the Exchange Act were 
terminated, the Shares would no longer be "margin securities" or be eligible 
for NASDAQ reporting. Purchaser currently intends to seek to cause the 
Company to terminate the registration of the Shares under the Exchange Act as 
soon after consummation of the Offer as the requirements for termination of 
registration are met. 

14. Certain Conditions of the Offer. 

   Notwithstanding any other provision of the Offer, Purchaser shall not be 
required to accept for payment or pay for any Shares tendered pursuant to the 
Offer, and may terminate or amend the Offer and may postpone the acceptance 
for payment of and payment for Shares tendered, if (i) the Minimum Condition 
shall not have been satisfied, (ii) any applicable waiting period under the 
HSR Act shall not have expired or been terminated prior to the expiration of 
the Offer and the Offer shall have remained outstanding for at least 30 days 
from the commencement of the Offer, (iii) (x) the review period under the 
Exon-Florio Act during which the President of the United States or his 
designee may commence an investigation of the Offer, the Merger or the other 
transactions contemplated by the Merger Agreement shall not have expired or 
otherwise been terminated without such investigation having been commenced or 
(y) such investigation shall have been commenced and (I) the period under the 
Exon-Florio Act during which such investigation must be completed shall not 
have expired or otherwise been terminated or Purchaser shall not have 
received notice that such investigation has been completed and (II) (A) the 
period under the Exon-Florio Act during which the President may announce his 
decision to take action to suspend, prohibit or place any limitations on the 
Offer, the Merger or the other transactions contemplated by the Merger 
Agreement shall not have expired or otherwise been terminated without any 
such action being threatened, announced or taken or (B) the President shall 
not have announced a decision to take any such action, in each case, prior to 
the expiration to the Offer and the Offer shall have remained outstanding for 
at least 30 days from the commencement of the Offer, or (iv) at any time on 
or after the date of the Merger Agreement, and prior to the acceptance for 
payment of Shares, any of the following conditions shall exist: 

       (a) there shall have been instituted or be pending any action or 
   proceeding brought by any governmental, administrative or regulatory 
   authority or agency, domestic or foreign, before any court or 
   governmental, administrative or regulatory authority or agency, domestic 
   or foreign, (i) challenging or seeking to make illegal or to restrain or 
   prohibit or make materially more costly the making of the Offer, the 
   acceptance for payment of, or payment for, any Shares by Parent, Purchaser 
   or any other affiliate of Parent pursuant to the Offer, or the 
   consummation of any other transaction contemplated by the Merger 
   Agreement, or seeking to obtain material damages in connection with any 
   transaction contemplated by the Merger Agreement; (ii) seeking to prohibit 
   or limit materially the ownership or operation by the Company, Parent or 
   any of their subsidiaries of all or any material portion of the business 
   or assets of the Company, Parent or any of their subsidiaries, or to 
   compel the Company, Parent or any of their subsidiaries to dispose of or 
   hold separate all or any material portion of the business or assets of the 
   Company, Parent or any of their subsidiaries, in each case as a result of 
   the transactions contemplated by the Merger Agreement; (iii) seeking to 
   impose material limitations on the ability of Parent, Purchaser or any 
   other affiliate of Parent to exercise effectively full rights of ownership 
   of any Shares, including, without limitation, the right to vote any Shares 
   acquired by Purchaser pursuant to the Offer or otherwise on all matters 
   properly presented to the Company's stockholders, including, without 
   limitation, the approval and adoption of the Merger Agreement and the 
   Merger; or (iv) seeking to require divestiture by Parent, Purchaser or any 
   other affiliate of Parent of any Shares; 

       (b) there shall have been issued any injunction, order or decree by any 
   court or governmental, administrative or regulatory authority or agency, 
   domestic or foreign, resulting from any action or proceeding brought by 
   any person other than a governmental, administrative or regulatory 

                                      27 
<PAGE>

   authority or agency, domes tic or foreign, which (i) restrains or prohibits
   the making of the Offer or the consummation of any other transaction
   contemplated by the Merger Agreement, (ii) prohibits or limits materially the
   ownership or operation by the Company, Parent or Purchaser of all or any
   material portion of the business or assets of the Company, Parent or any of
   their subsidiaries, or compels the Company, Parent or any of their
   subsidiaries to dispose of or hold separate all or any material portion of
   the business or assets of the Company, Parent or any of their subsidiaries,
   in each case as a result of the transactions contemplated by the Merger
   Agreement; (iii) imposes material limitations on the ability of Parent or
   Purchaser to exercise effectively full rights of ownership of any Shares,
   including, without limitation, the right to vote any Shares acquired by
   Purchaser pursuant to the Offer or otherwise on all matters properly
   presented to the Company's stockholders, including, without limitation, the
   approval and adoption of the Merger Agreement and the Merger; or (iv)
   requires divestiture by Parent or Purchaser of any Shares;

       (c) there shall have been any action taken, or any statute, rule, 
   regulation , order or injunction enacted, entered, enforced, promulgated, 
   amended, issued or deemed applicable to (i) Parent, the Company or any 
   subsidiary or affiliate of Parent or the Company or (ii) any transaction 
   contemplated by the Merger Agreement, by any legislative body, court, 
   government or governmental, administrative or regulatory authority or 
   agency, domestic or foreign, in the case of both (i) and (ii) other than 
   the routine application of the waiting- period provisions of the HSR Act 
   to the Offer, the Stockholders Agreement or the Merger, in each case which 
   results in any of the consequences referred to in clauses (i) through (iv) 
   of paragraph (b) above; 
     
      (d) there shall have occurred (i) any general suspension of, or 
   limitation on prices for, trading in securities on The New York Stock 
   Exchange or on the London Stock Exchange, (ii) any decline, measured from 
   the date of the Merger Agreement, in the Standard & Poor's 500 Index or 
   FTSE 100 Index by an amount in excess of 20 percent from the date of the 
   Merger Agreement, (iii) a currency moratorium on the exchange markets in 
   London or New York City, (iv) a declaration of a banking moratorium or any 
   suspension of payments in respect of banks in the United States or the 
   United Kingdom, (v) any limitation (whether or not mandatory) by any 
   government or governmental, administrative or regulatory authority or 
   agency, domestic or foreign, on the extension of credit by banks or other 
   lending institutions in the United States or the United Kingdom, (vi) a 
   commencement of a war or armed hostilities or other national or 
   international calamity involving the United States or the United Kingdom or
   (vii) in the case of any of the foregoing existing on the date of the Merger
   Agreement, a material acceleration or worsening thereof;
 
       (e) (i) it shall have been publicly disclosed or Purchaser shall have 
   otherwise learned that beneficial ownership (determined for the purposes 
   of this paragraph as set forth in Rule 13d-3 promulgated under the 
   Exchange Act) of 15 percent or more of the then outstanding Shares has 
   been acquired by any person, other than Parent or any of its affiliates or 
   (ii) (A) the Board shall have withdrawn or modified in a manner adverse to 
   Parent or Purchaser the approval or recommendation of the Offer, the 
   Merger or the Merger Agreement or approved or recommended any takeover 
   proposal or any other acquisition of Shares other than the Offer and the 
   Merger or (B) the Board shall have resolved to do any of the foregoing;
 
       (f) any material representation and warranty of the Company in the 
   Merger Agreement shall prove to be untrue or incorrect in any material 
   respect as of the date of the Merger Agreement;
 
       (g) the Company shall have failed to perform in any material respect 
   any material obligation or to comply in any material respect with any 
   material agreement or covenant of the Company to be performed or complied 
   with by it under the Merger Agreement;
 
       (h) the Merger Agreement shall have been terminated in accordance with 
   its terms; or
 
       (i) Purchaser and the Company shall have agreed that Purchaser shall 
   terminate the Offer or postpone the acceptance for payment of or payment 
   for Shares thereunder;
 
which in the judgment of Parent makes it inadvisable to proceed with the 
Offer or with such acceptance for payment or payment. 

   The foregoing conditions are for the sole benefit of Purchaser and Parent 
and may be asserted by Purchaser or Parent regardless of the circumstances 
giving rise to any such condition or may be waived by Purchaser or Parent in 
whole or in part at any time and from time to time in their sole discretion. 

                                      28 

<PAGE>

The failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.

15. Certain Legal Matters and Regulatory Approvals. 

   General. Based upon its examination of publicly available information with 
respect to the Company and the review of certain information furnished by the 
Company to Parent and discussions of representatives of Parent with 
representatives of the Company during Parent's investigation of the Company 
(see Section 10), neither Purchaser nor Parent is aware of any license or 
other regulatory permit that appears to be material to the business of the 
Company and the Subsidiaries, taken as a whole, which might be adversely 
affected by the acquisition of Shares by Purchaser pursuant to the Offer or, 
except as set forth below, of any approval or other action by any domestic 
(federal or state) or foreign governmental, administrative or regulatory 
authority or agency which would be required prior to the acquisition of 
Shares by Purchaser pursuant to the Offer. Should any such approval or other 
action be required, it is Purchaser's present intention to seek such approval 
or action. Purchaser does not currently intend, however, to delay the 
purchase of Shares tendered pursuant to the Offer pending the outcome of any 
such action or the receipt of any such approval (subject to Purchaser's right 
to decline to purchase Shares if any of the conditions in Section 14 shall 
have occurred). There can be no assurance that any such approval or other 
action, if needed, would be obtained without substantial conditions or that 
adverse consequences might not result to the business of the Company, 
Purchaser or Parent or that certain parts of the businesses of the Company, 
Purchaser or Parent might not have to be disposed of or held separate or 
other substantial conditions complied with in order to obtain such approval 
or other action or in the event that such approval was not obtained or such 
other action was not taken. Purchaser's obligation under the Offer to accept 
for payment and pay for Shares is subject to certain conditions, including 
conditions relating to the legal matters discussed in this Section 15. See 
Section 14. 

   State Takeover Laws. Under Delaware Law and the Company's Certificate of 
Incorporation, the adoption of the Merger Agreement by the Company requires 
the approval of the Board and the affirmative vote of the holders of a 
majority of the outstanding Shares. Accordingly, if the Minimum Condition is 
satisfied, Purchaser will have sufficient voting power to cause the approval 
and adoption of the Merger Agreement and the transactions contemplated 
thereby without the affirmative vote of any other stockholder. 

   Section 203 of the Delaware Law provides generally (with exceptions not 
applicable in this case) that any person who engages in a transaction which 
results in such person being the owner of 15% or more but less than 85% of 
the voting stock of a public corporation incorporated in Delaware is 
prohibited for three years thereafter from engaging in a "business 
combination" with the corporation (such as a merger or a tender offer), 
unless (i) prior to the transaction the board of directors of the corporation 
approves either the transaction or the ensuing business combination or (ii) 
at the time of or after the transaction the business combination is approved 
by the board of directors and by the vote of at least two-thirds of the 
corporation's voting stock which is not owned by such person. The Board has, 
in this case, unanimously approved the Merger Agreement, the Stockholders 
Agreement and the transactions contemplated thereby for all purposes, 
including the purpose of Section 203. 

   A number of other states have adopted laws and regulations applicable to 
attempts to acquire securities of corporations which are incorporated, or 
have substantial assets, stockholders, principal executive offices or 
principal places of business, or whose business operations otherwise have 
substantial economic effects, in such states. In Edgar v. MITE Corp., the 
Supreme Court of the United States invalidated on constitutional grounds the 
Illinois Business Takeover Statute, which, as a matter of state securities 
law, made takeovers of corporations meeting certain requirements more 
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the 
Supreme Court held that the State of Indiana could, as a matter of corporate 
law and, in particular, with respect to those aspects of corporate law 
concerning corporate governance, constitutionally disqualify a potential 
acquiror from voting on the affairs of a target corporation without the prior 
approval of the remaining stockholders. The state law before the Supreme 
Court was by its terms applicable only to corporations that had a substantial 
number of stockholders in the state and were incorporated there. 
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district 
court in Oklahoma ruled that certain Oklahoma corporate governance statutes 
were unconstitutional insofar as they applied to corporations incorporated 

                                      29 

<PAGE>

outside Oklahoma because they could subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.

   The Company, directly or through Subsidiaries, conducts business in a 
number of states throughout the United States, some of which have enacted 
takeover laws such as those described above. Purchaser does not know whether 
any of these laws will, by their terms, apply to the Offer or the Merger and 
has not necessarily complied with any such laws. Should any person seek to 
apply any state takeover law, Purchaser will take such action as then appears 
desirable, which may include challenging the validity or applicability of any 
such statute in appropriate court proceedings. In the event it is asserted 
that one or more state takeover laws is applicable to the Offer or the 
Merger, and an appropriate court does not determine that it is inapplicable 
or invalid as applied to the Offer, Purchaser might be required to file 
certain information with, or receive approvals from, the relevant state 
authorities. In addition, if enjoined, Purchaser might be unable to accept 
for payment any Shares tendered pursuant to the Offer, or be delayed in 
continuing or consummating the Offer and the Merger. In such case, Purchaser 
may not be obligated to accept for payment any Shares tendered. See Section 
14. 

   Antitrust. Under the HSR Act and the rules that have been promulgated 
thereunder by the FTC, certain acquisition transactions may not be 
consummated unless certain information has been furnished to the Antitrust 
Division and the FTC and certain waiting-period requirements have been 
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is 
subject to such requirements. See Section 2. 

   Pursuant to the HSR Act, on the date of the Offer to Purchase, Parent 
anticipates filing a Pre-Merger Notification and Report Form in connection 
with the purchase of Shares pursuant to the Offer with the Antitrust Division 
and the FTC. Under the provisions of the HSR Act applicable to the Offer, the 
purchase of Shares pursuant to the Offer may not be consummated until the 
expiration of a 15-calendar-day waiting period following the filing by 
Parent. Accordingly, it is anticipated that the waiting period under the HSR 
Act applicable to the purchase of Shares pursuant to the Offer will expire at 
11:59 p.m. New York City time, on April 5, 1995, unless such waiting period 
is earlier terminated by the FTC and the Antitrust Division or extended by a 
request from the FTC or the Antitrust Division for additional information or 
documentary material prior to the expiration of the waiting period. Pursuant 
to the HSR Act, Parent will request early termination of the waiting period 
applicable to the Offer. There can be no assurance, however, that the HSR Act 
15-day waiting period will be terminated early. If either the FTC or the 
Antitrust Division were to request additional information or documentary 
material from Parent with respect to the Offer, the waiting period with 
respect to the Offer would expire at 11:59 p.m., New York City time, on the 
tenth calendar day after the date of substantial compliance by Parent with 
such request. Thereafter, the waiting period could be extended only by court 
order. If the acquisition of Shares is delayed pursuant to a request by the 
FTC or the Antitrust Division for additional information or documentary 
material pursuant to the HSR Act, the Offer may, but need not, be extended 
and, in any event, the purchase of and payment for Shares will be deferred 
until 10 days after the request is substantially complied with, unless the 
extended period expires on or before the date when the initial 15-day period 
would otherwise have expired, or unless the waiting period is sooner 
terminated by the FTC and the Antitrust Division. Only one extension of such 
waiting period pursuant to a request for additional information is authorized 
by the HSR Act and the rules promulgated thereunder, except by court order. 
Any such extension of the waiting period will not give rise to any withdrawal 
rights not otherwise provided for by applicable law. See Section 4. It is a 
condition to the Offer that the waiting period applicable under the HSR Act 
to the Offer expire or be terminated. See Section 2 and Section 14. 

   The FTC and the Antitrust Division frequently scrutinize the legality 
under the antitrust laws of transactions such as the proposed acquisition of 
Shares by Purchaser pursuant to the Offer. At any time before or after the 
purchase of Shares pursuant to the Offer by Purchaser, the FTC or the 
Antitrust Division could take such action under the antitrust laws as its 
deems necessary or desirable in the public interest, including seeking to 
enjoin the purchase of Shares pursuant to the Offer or seeking the 
divestiture of Shares purchased by Purchaser or the divestiture of 
substantial assets of Parent, the Company or their respective Subsidiaries. 

                                      30 

<PAGE>

Private parties and state attorneys general may also bring legal action under
federal or state antitrust laws under certain circumstances. Based upon an
examination of information available to Parent relating to the businesses in
which Parent, the Company and their respective subsidiaries are engaged, Parent
and Purchaser believe that the Offer will not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, what the
results would be. See Section 14 for certain conditions to the Offer, including
conditions with respect to litigation.

   Exon-Florio Act. Under the Exon-Florio Act, the President of the United 
States is authorized to prohibit or suspend acquisitions, mergers or 
takeovers by foreign persons of persons engaged in interstate commerce in the 
United States if the President determines, after investigation, that such 
foreign persons in exercising control of such acquired persons might take 
action that threatens to impair the national security of the United States 
and that other provisions of existing law do not provide adequate authority 
to protect national security. Pursuant to the Exon-Florio Act, notice of an 
acquisition by a foreign person may be made to CFIUS ("Committee on Foreign 
Investment in the United States") either voluntarily by the parties to such 
proposed acquisition, merger or takeover or by any member of CFIUS. CFIUS is 
comprised of representatives of the Departments of the Treasury, State, 
Commerce, Defense and Justice, the Office of Management and Budget, the 
Office of Science and Technology Policy, the United States Trade 
Representative's Office and the Council of Economic Advisors, as well as the 
Assistant to the President for National Security Affairs and the Assistant to 
the President for Economic Policy. A determination that an investigation is 
called for must be made within thirty days after notification of a proposed 
acquisition, merger or takeover is first filed with CFIUS. Any such 
investigation must be completed within forty-five days of such determination. 
Any decision by the President to take action must be announced within fifteen 
days of the completion of the investigation. 

   Although the Exon-Florio Act does not require the filing of a 
notification, nor does it prohibit the consummation of an acquisition, merger 
or takeover if the notification is not made, such an acquisition, merger or 
takeover thereafter remains indefinitely subject to divestment should the 
President subsequently determine that the national security of the United 
States has been threatened or impaired. The Company currently has contracts 
from the U.S. Department of Defense and accordingly, Purchaser and the 
Company anticipate filing with CFIUS a joint notice of the transactions 
contemplated by the Merger Agreement on the date of this Offer to Purchase. 
Although Purchaser believes that the transactions contemplated by the Merger 
Agreement should not raise any national security concerns, there can be no 
assurance that CFIUS will not determine to conduct an investigation of the 
proposed transactions and, if an investigation is commenced, there can be no 
assurance regarding the outcome of such investigation. See Section 14 for 
certain conditions to the Offer. 

16. Fees and Expenses. 

   Except as set forth below, Purchaser will not pay any fees or commissions 
to any broker, dealer or other person for soliciting tenders of Shares 
pursuant to the Offer. 

   Purchaser and Parent have retained Georgeson & Company Inc. as the 
Information Agent, and First Fidelity Bank, N.A. as the Depositary, in 
connection with the Offer. The Information Agent may contact holders of 
Shares by mail, telephone, telex, telecopy, telegraph and personal interview 
and may request banks, brokers, dealers and other nominee stockholders to 
forward materials relating to the Offer to beneficial owners. 

   As compensation for acting as Information Agent in connection with the 
Offer, Georgeson & Company Inc. will be paid a fee of $10,000 and also will 
be reimbursed for certain out-of-pocket expenses and may be indemnified 
against certain liabilities and expenses in connection with the Offer, 
including certain liabilities under the federal securities laws. Purchaser 
will pay the Depositary reasonable and customary compensation for its 
services in connection with the Offer, plus reimbursement for out-of-pocket 
expenses, and will indemnify the Depositary against certain liabilities and 
expenses in connection therewith, including under federal securities laws. 
Brokers, dealers, commercial banks and trust companies will be reimbursed by 
Purchaser for customary handling and mailing expenses incurred by them in 
forwarding material to their customers. 

17. Miscellaneous. 

   The Offer is being made solely by this Offer to Purchase and the related 
Letter of Transmittal and is being made to all holders of Shares. Purchaser 

                                      31 

<PAGE>

is not aware of any jurisdiction where the making of the Offer is prohibited by
any administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good-faith effort to comply with any such state statute. If, after such
good-faith effort, Purchaser cannot comply with any such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state.

   NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY 
REPRESENTATION ON BEHALF OF PURCHASER, PARENT OR THE COMPANY NOT CONTAINED IN 
THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, 
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN 
AUTHORIZED. 

   Pursuant to Rule 14d-3 of the General Rules and Regulations under the 
Exchange Act, Parent and Purchaser have filed with the Commission the 
Schedule 14D-1, together with exhibits, furnishing certain additional 
information with respect to the Offer. The Schedule 14D-1 and any amendments 
thereto, including exhibits, may be inspected at, and copies may be obtained 
from, the same places and in the same manner as set forth in Section 7 
(except that they will not be available at the regional offices of the 
Commission). 

                                       ADU ACQUISITION INC.


March 22, 1995 

                                      32 

<PAGE>

   Facsimiles of the Letter of Transmittal will be accepted. The Letter of 
Transmittal and certificates evidencing Shares and any other required 
documents should be sent or delivered by each stockholder or his broker, 
dealer, commercial bank, trust company or other nominee to the Depositary at 
one of its addresses set forth below. 


                       The Depositary for the Offer is: 


                          First Fidelity Bank, N.A.

 
         By Mail:             By Facsimile:        By Hand/Overnight Courier: 
First Fidelity Bank, N.A.    (201) 430-4797        First Fidelity Bank, N.A.
     P.O. Box 1380                            Corporate Trust/Special Operations
Newark, New Jersey 07101      To Confirm:        10 Bank Street - 3rd Floor 
                            (201) 430-4762         Newark, New Jersey 07102
                                
                           For Information Call: 
                              (800) 458-0924 
                               (Toll-Free) 
                          
      Questions or requests for assistance may be directed to the Information 
Agent at the address and telephone numbers listed below. Additional copies of 
this Offer to Purchase, the Letter of Transmittal and the Notice of 
Guaranteed Delivery may be obtained from the Information Agent. A stockholder 
may also contact brokers, dealers, commercial banks or trust companies for 
assistance concerning the Offer. 

                    The Information Agent for the Offer is:


                                   GEORGESON
                                   & COMPANY
                                   ---------

                              Wall Street Plaza 
                           New York, New York 10005 
                           (212) 509-6240 (Collect) 
                Banks and Brokers Call Collect: (212) 440-9800 
                        CALL TOLL-FREE: 1-800-223-2064 


<PAGE>

                                                                    SCHEDULE I 

           DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER 

   1. Directors and Executive Officers of Parent. The following table sets 
forth the name and current business address, citizenship and present 
principal occupation or employment, and material occupations, positions, 
offices or employments and business addresses thereof for the past five years 
of each director and executive officer of Parent. Unless otherwise indicated, 
the current business address of each person is c/o FKI plc, West House, King 
Cross Road, Halifax, West Yorkshire HX1 1EB, England. Unless otherwise 
indicated, all other addresses are within England. Unless otherwise 
indicated, each such person is a citizen of the United Kingdom and has held 
his or her present position as set forth below for the past five years. 
Unless otherwise indicated, each occupation set forth opposite an 
individual's name refers to employment with Parent. 

<TABLE>
<CAPTION>
                                          Present Principal Occupation or 
                                          Employment; Material Positions 
                                          Held During the Past Five Years 
          Name                            and Business Addresses Thereof 
- -----------------------   ------------------------------------------------------------- 
<S>                       <C>
Jeffrey Whalley           Executive Director and Chairman since April 1991; Deputy 
                          Chairman of Babcock International Group PLC since May 1989, 
                          The Lodge, Church Street, Badminton Court, Amersham, 
                          Buckinghamshire HP7 0DD. 

Robert G. Beeston         Executive Director and Group Chief Executive since January 
                          1992; Executive Director of BTR International, August 1991 to 
                          December 1991; Managing Director of BTR Valve Group, February 
                          1987 to July 1991, Silvertown House, Vincent Square, London 
                          SW1. 

Eric J. Bowers            Executive Director and Finance Director since October 1989. 

Robert S. Murray          Non-executive Director since April 1991; Executive Director 
                          and Chairman of Omega plc since May 1992, Foxbridge Way, 
                          Normanton, Wakefield, West Yorkshire; Executive Director of 
                          The Sovereign Capital Corporation since July 1990, Foxbridge 
                          Way, Normanton, Wakefield, West Yorkshire; Executive Director 
                          of Sterling Capitol plc since May 1992, Foxbridge Way, 
                          Normanton, Wakefield, West Yorkshire. 

John S. Rodewig*          Non-executive Director since April 1993; Director of Eaton 
                          Corporation, Eaton Center, Cleveland, Ohio 44114 since 
                          January 1992; President & Chief Operating Officer-Vehicle 
                          Components of Eaton Corporation since September 1993; 
                          President and Chief Operating Officer of Eaton Corporation, 
                          January 1992 to August 1993; President Elect and Chief 
                          Operating Officer of Eaton Corporation, September 1991 to 
                          December 1991; President of the Truck Components Group of 
                          Eaton Corporation, January 1990 to August 1991. 

Arthur S. Walsh           Non-executive Director since May 1991; Deputy Chairman since 
                          May 1993; Non-executive Director and Chairman of National 
                          Transcommunications Limited since October 1991; Crawley 
                          Court, Winchester, Hampshire SQ21 2QA; Non-executive Director and 
                          Chairman of Telemetrix plc since December 1991, Knaves Beech 
                          Estate, Loudwater, High Wycombe, Buckinghamshire HP10 9QZ. 

Michael J.R. Porter       Company Secretary since October 1989. 
</TABLE>

- ------ 
* Citizen of the United States of America. 

                                     S-1 

<PAGE>

   2. Directors and Executive Officers of Purchaser. The following table sets 
forth the name, current business address, citizenship, position with 
Purchaser and present principal occupation or employment, and material 
occupations, positions, offices or employments and business addresses thereof 
for the past five years of each director and executive officer of Purchaser. 
Unless otherwise indicated, the current business address of each person is 
c/o FKI Industries Inc., 425 Post Road, Fairfield, Connecticut 06430-0970. 
Each such person is a citizen of the United States of America unless 
otherwise indicated, and, unless otherwise indicated, each occupation set 
forth opposite an individual's name refers to employment with Parent. 

<TABLE>
<CAPTION>
                                         Present Principal Occupation or 
                                          Employment; Material Positions 
                                         Held During the Past Five Years 
          Name                            and Business Addresses Thereof 
- ----------------------   -------------------------------------------------------------- 
<S>                      <C>
Robert Sook              President and Director of Purchaser; President -- FKI Material 
                         Handling Group since June 1992, 4601 Six Forks Road, Raleigh, 
                         North Carolina 27609; President -- BTR Valve Group, January 
                         1992 to May 1992, 4601 Six Forks Road, Raleigh, North Carolina 
                         27609; President -- Edwards Valve Inc., November 1989 to 
                         December 1991, 1800 South Saunders Street, Raleigh, North 
                         Carolina 27603. 

Steven D. Jones**        Vice President and Director of Purchaser; Director of 
                         Corporate Planning of Parent since April 1992, West House, 
                         King Cross Road, Halifax, West Yorkshire HX1 1EB, England; 
                         Managing Director of FKI Engineering Products Group, January 
                         1990 to March 1992, West House, King Cross Road, Halifax, West 
                         Yorkshire HX1 1EB, England. 

Robert M. Miller         Vice President, Secretary and Director of Purchaser; Vice 
                         President, Legal and Secretary and Director of Industries since
                         January 1990, 425 Post Road, Fairfield, Connecticut 06430. 

Neil Bamford**           Director of Purchaser; Group Chief Accountant of Parent since 
                         October 1989, West House, King Cross Road, Halifax, West 
                         Yorkshire HX1 1EB, England. 

Diana M. Dampsy***       Treasurer of Purchaser; Vice President -- Finance of 
                         Industries since November 1994, 425 Post Road, Fairfield, 
                         Connecticut 06430; Secretary and Treasurer and Director of
                         FKI Industries Canada Limited, April 1989 to 
                         October 1994, 234 Attwell Drive, Rexdale, Toronto, Ontario 
                         M9W 5B3, Canada. 
</TABLE>

- ------ 
 ** Citizen of the United Kingdom. 
*** Citizen of Canada. 

                                     S-2 



